Illinois Public Media News
The Illini Union Bookstore in Champaign recently unveiled a new apparel line from a company pushing to end poverty in Central America.
South Carolina-based Knights Apparel Inc. runs Alta Gracia, a manufacturing plant in the Dominican Republic. The company employs about 120 people at the factory, and pays each of them $2.83/hour, which exceeds the country's prevailing wage of $0.84/hour. In addition to this salary increase, the company has allowed the workers to form a union.
The non-profit group Workers Rights Consortium (WRC) said the company's salary boost is just enough to adequately feed and shelter a family. In a statement, the WRC said it regularly monitors the facility to make sure the building is up to code and workers are treated well.
"Formal monitoring activities - worker interviews, meetings with management, meetings with union leaders, factory inspections, and review of factory records - all take place at least monthly and in most cases weekly," WRC spokeswoman Theresa Haas said. "Less formal communications with workers and managers occur on a daily basis."
President and CEO of Knights Apparel Joe Bozich said the company makes less because its paying higher salaries, but Bozich noted that the Alta Gracia clothes are sold to consumers at prices that are comparable to other well known brands, like Nike and Adidas. Bozich said he believes this is a viable apparel option because of the social value associated with the clothing line.
"There's been a large group of students that have been asking for this," Bozich said. "They have been petitioning for this for a number of years, saying give us a product to buy that meets a higher standards in terms of corporate social responsibility."
Illini Union bookstore manager Brad Bridges began selling the clothes a couple of weeks ago. Bridges said he would consider dropping partnerships with other clothing companies if there is a large demand for the Alta Gracia apparel.
"Human rights are a big issue with a lot of our students, and we want to provide products that come from a fair wage facility," Bridges said. "I'd like for more companies out there to offer an alternative, so we don't have just one product line from one company"
The factory's clothing is currently sold on more than 200 college campuses.
Mitsubishi Motors North America plans to produce a new model at its plant in Normal, Ill., extending the life of the facility just a month after employees agreed to lower wages the company said were needed to keep it open.
Mitsubishi announced the plans as part of new, global business plan aimed at revitalizing the troubled Japanese automaker.
"One of the main pillars of this (plan) is a transition from region-specific models with all of the specifics that entails - producing for a single market, single group of consumers, a single economy - to more global models that are produced for multiple markets," Mitsubishi spokesman Dan Irvin said. "And the new model will be one of those global models."
The company plans to announce what the new model will be in the next few weeks, he said, but all four models now made at the central Illinois plant - the Galant, Eclipse and Spyder and the Endeavor sport utility vehicle - will be phased out.
Employees and local officials at the plant said they're still waiting for details on the new model and to learn whether it will keep all 1,300 plant employees on the job. But the news that one of the largest and highest-paying area employers will stay open was a relief.
"These jobs are very hard to come by and, again, particularly in this economy when most companies of this nature are just hoping to sustain their current employment levels," city manager Mark Peterson said. "These would be, I hate to say impossible, but almost impossible to replace."
The United Auto Workers said Mitsubishi's announcement was a just reward for tough pay concessions its members had little choice but to accept.
"Considering the economy, the state of the economy right now, I think the decision was pretty clear for a majority of the members," UAW local President Ralph Timan said. "It was a tough decision, and it came with sacrifices."
Two-thirds of the union's almost 1,100 members at the plant voted last month to cut a reported $1.67 an hour from their wages after the company said it needed the concessions to remain competitive.
The Illinois Department of Commerce and Economic Opportunity said at the time that it was talking with Mitsubishi about possible incentives. The agency and company continue to talk but so far no tax breaks or other incentives have been provided spokesman Mike Claffey said.
Like the auto industry in general, Mitsubishi North America has struggled with slow sales. The company's U.S. market share for 2009 was just over one half of one percent - the lowest level since 1985, according to WardsAuto.com, a web site that tracks auto industry data.
The company's new business plan, which it calls Jump 2013, is aimed at producing more vehicles to sell in emerging markets such as China and Brazil. The goal, according to a company release, is to raise sales to 1.37 million vehicles in 2013 from the roughly 1 million it expects it will sell by the end of the current fiscal year in March.
The Normal plant started making the Gallant and the other three models it now manufactures in 2005, Irvin said.
"They've been very good to us for a very long time," he said.
The plant at one point employed far more workers, but 1,200 were laid off in 2004 as part of what Mitsubishi said at the time was its last chance for survival. Those layoffs have been followed by other wage and benefit concessions.
Peterson said Thursday that he's anxiously waiting for details about what the company's new model will mean for job numbers at the 22-year-old plant.
"The questions is: Now that's one model - is that going to sustain all 1,100 existing jobs, and could it mean more out there?" he said.
Mitsubishi is announcing major changes in production that effect its auto assembly plant in Normal.
The Japanese-based automaker says, as part of its new business plan, workers at the Normal plant will begin producing a new model vehicle later this year, while production of current models will be phased out. The company is shifting its production philosophy away from a regional to a global approach, and Irvin said the new model made at the Normal plant will be sold worldwide, not just in the U.S.
Mitsubishi spokesman Dan Irvin said the move reaffirms two decades of hard work by employees of the Normal plant.
"And I think we can all really happy and pleased about that and look forward to a bright future," added Irvin.
The announcement comes two months after union workers at Mitsubishi's Normal plant agreed to wage concessions in return for a jump start in production,
Irvin said Mitsubishi will announce details of the new model at an event in Normal in a couple of weeks. He would not say if the plans call for more hiring or an addition of a second shift. He said it will not include production of an electric vehicle, although Mitsubishi's new business plan calls for the launch of eight new electric-powered vehicles.
Some auto industry publications say the new vehicle will be built on the same platform that carries the Outlander crossover and the Lancer sedan--two of the company's highest selling models.According to the new business plan, it will take three years to phase out the Eclipse, Galant and Endeavor crossover and bring the new vehicle on line.
The founder of Jimmy John's sandwich shops says he's considering moving his company's headquarters from Champaign to Florida because of Illinois' new tax increase.
Jimmy John Liautaud told the News-Gazette on Tuesday that he's gathering information on a potential move and will ask the company's board to decide.
Liautaud said he could absorb the increased costs but doesn't believe he should have to.
Gov. Pat Quinn signed the income tax increase last week to help address billions of dollars in state budget shortfalls. And during a visit to the University of Illinois Urbana campus Wednesday, the governor said he hoped Liataud would reconsider any move out of the state. Quinn said a tax increase was necessary to get Illinois out of a "fiscal emergency".
"I inherited a budget deficit of billions and billions of dollars when I became governor," Quinn said. "I was direct right from the beginning. I said we needed to use the income tax to pay our bills"
With Quinn's signing of tax hike legislation last week, Illinois' corporate income tax rate increased from 4.8 to 7.0 percent. Quinn says that's still one of the lower corporate tax rates in the Midwest. But Florida, where Liautaud is considering a move for his company, has a even lower corporate income tax rate --- a flat 5.5 percent.
Jimmy John's headquarters employs 100 people in Champaign. The privately held chain has more than 1,000 sandwich shops around the country.
Liautaud said he recently moved his family to Florida from Champaign.
(Additional reporting from the Associated Press)
Illinois' senior Senator, Dick Durbin, says concrete action can come out of the recent shootings at a congressional event in Tucson Arizona. The attack that killed six people and critically injured U.S. Rep. Gabrielle Giffords (D-Ariz) has led to a flurry of proposals in reaction, from gun control measures to a clampdown on incivility in politics. In an interview with Illinois Public Media's Tom Rogers, Durbin said he thinks some of those ideas can progress beyond the talking stage.
(Photo by Sean Powers/WILL)
Before his death last year, Urbana chocolate-maker Daniel Schreiber proposed a community kitchen that could be shared by small-scale local food producers like him. Now, an organization is seeking community input as they try to make Schreiber's dream a reality.
Lawrence Mate is one of the organizers of the Flatlander Fund --- named after Schreiber's own brand of chocolate. He said they hope to open a commercial-grade kitchen that could be rented by local entrepreneurs --- including Mate himself. Mate operates This Little Piggy, a small producer of meat products such as bacon and sausage. Mate said because he works out of his home kitchen, his operation remains a non-profit private club.
"I've had any number of places in town where they have a deli counter, who have said they would love to carry the stuff I'm making," Mate said. "But in order for them to retail it, it's got to be coming out of a kitchen certified by the Public Health District."
Mate cites the dilemma in 2009 of some local bakers who sold goods at the Urbana Farmers Market, only to discover that their home-baked goods violated public health regulations requiring a commercial kitchen. He said a shared-use community kitchen could provide a certified facility for small food-related businesses.
Laura Huth, another volunteer with the Flatlander Fund, said a community kitchen could also serve a wider public, with classes on food preparation, nutrition and related topics.
"So in addition to providing a spark for artists - food artists, really - in our community to do what they love to do, there's the educational component, the hands-on demonstrations and the business development classes," Huth said.
The Flatlander Fund launched an online survey Monday night to measure public interest in a community kitchen. Huth said that as of mid-afternoon Tuesday, they had received about 70 responses. The survey is open until February 13 on the Flatlander Fund's website.
Shared-use kitchens exist in other communities. In Danville, the Cook's Workshop opened late last year, offering kitchen and dining room space for rent, as well as cooking workshops and demonstrations.
A University of Illinois economist doesn't predict a long line of businesses leaving the state because of higher income taxes, but he said Illinois remains an uncertain place for commerce and industry.
Daniel Merriman of the Illinois Institute of government and Public Affairs said neighboring states had already begun to lure away employers concerned about Illinois' uncertain deficit situation even before lawmakers passed a 67 percent hike in personal income taxes this week. Governor Pat Quinn signed the increase into law Thursday afternoon.
Merriman said the tax increase will be one more drawback, but it still won't be enough to address all the red ink in Springfield.
"A combination of tax increases, expenditure reductions and growth is necessary to eliminate it," Merriman said. "The taxes actually do help reduce the deficit. It's just that it hasn't done enough to fully eliminate it, and they're still going to have to have expenditure reductions along the way."
Merriman said lawmakers still haven't addressed structural problems either, like fixing the underfunded pension system or revamping Medicaid and workers' compensation laws. But he said employers are not as mobile as some would believe - noting that most firms are rooted in the state and serve mainly Illinois customers.
Then there is the question of the region's overall economic health. Merriman said the pressure facing manufacturers in Illinois would face them wherever they relocate.
"A lot of the concern that people have had with the kind of business loss in Illinois has been with manufacturing establishments that have been leaving the entire Midwest, and to some extent they're just leaving the country as a whole," he said. "So it's not clear that Illinois is going to be losing that much to neighboring states. It's that manufacturing just isn't as strong as it used to be.
If you live in Illinois, your taxes have now gone up 67 percent. Governor Pat Quinn has signed the income tax package into law.
The government will get a bigger cut of your next paycheck. Illinois' flat income tax rate is now 5 percent, up from 3 percent. Someone making 40 thousand dollars a year will now pay another 800 dollars in state taxes, not counting deductions or federal tax breaks.
It will stay that way for at least four years when the rate is scheduled to go down. The corporate rate jumps from 4.8 percent to 7 percent, with a similar reversion in four years.
Democrats passed the measure in the wee hours Wednesday morning, among the final acts of the lame duck session. The move is meant to help close a $15 billion budget deficit that threatens to cripple state government.
Governor Pat Quinn says Illinois' fiscal house was burning. "We have an emergency, a fiscal emergency," Quinn said. "Our state was careening towards bankruptcy and fiscal insolvency."
The increase is retroactive, covering all wages earned since Jan. 1 of this year.
Republican legislators are already trying to get the law repealed, and governors of other states are lining up to lure Illinois' businesses, upset that the corporate tax rate is also going up.
(Additional reporting from The Associated Press)
Democratic leaders are fresh off their victory in getting an income tax hike through both chambers of the Illinois General Assembly, but now Republicans in the state Senate are challenging the legislation by calling for its repeal.
State Senator Matt Murphy (R-Palatine) joined his fellow GOP lawmakers in voting against the tax hike, and he is now crafting legislation to repeal the tax increase. Murphy said he is confident an ample number of his colleagues will support the plan, noting that Republicans have more seats in the new legislature. He also said several of the Democratic Senators who voted against the tax hike will continue serving.
"Do I expect the Senate President to allow this bill to move, or the Speaker, or the Governor to sign it?" Murphy said. "I don't, but nobody ever got somewhere by saying I might as well not get started because it probably won't happen."
The legislation calls for a 67-percent increase in the state's income tax along with a spike in the corporate tax. Murphy said the move will cost the state jobs.
It is eliminated that Illinois' budget deficit could reach $15 billion this year. State Senator Dale Righter (R-Mattoon), who serves as the Senate's deputy minority leader, said a tax increase is not something he would make a pledge to block in every situation, but he said in this case, lawmakers have failed to go through the budget line-by-line, and make cuts.
"The tax increase was wrong in the first place," Righter said. "I think it's going to make things worse. It's going to fuel more government spending, and it's going to lead to greater job loss and diminish economic activity."
Governor Pat Quinn says he will sign the income tax legislation, calling it a necessary step to generate revenue.
"It's important for the state government not to be a fiscal basket case, and that's what I confronted when I arrived," Quinn said. "I've said for two years, I said it in campaigns, we needed to restrain spending. We have. And we also need revenue to pay these overdue bills. And we will.
Gov. Scott Walker tried to take full advantage of Illinois lawmakers passing dramatic tax increases Wednesday, saying Wisconsin would welcome any businesses from its neighboring state that care to relocate.
Absent from Walker's sales pitch was the fact that Wisconsin's top income tax rates remain higher than Illinois even under the increase.
Even so, the Republican Walker was reveling in drawing a comparison between Illinois, which has a Democratic governor, and his agenda to cut taxes.
"Years ago Wisconsin had a tourism advertising campaign targeted to Illinois with the motto, 'Escape to Wisconsin,'" Walker said in a statement. "Today we renew that call to Illinois businesses, 'Escape to Wisconsin.' You are welcome here."
Walker referenced Illinois' problem in a speech to business leaders on Tuesday, issued a statement hours after the tax increase vote on Wednesday and then called a news conference to talk about it as well.
Wisconsin lawmakers were picking up on it as well. Rep. Robin Vos, R-Caledonia, said he welcomed any chance to "kind of stick it to them" in Illinois. He said lawmakers there raising taxes played right into Walker's hands.
And while income tax rates are higher in Wisconsin, corporate income taxes in Illinois would be higher.
Wisconsin has a graduated income tax rate that goes from 4.6 percent to 7.5 percent. Illinois has a flat rate that would increase from 3 percent to 5 percent under the move passed by the Legislature to help plug a $15 billion budget hole. Lawmakers there also approved raising the state's corporate income tax rate, effectively moving it from 7 percent to 9.5 percent. Wisconsin's rate is 7.9 percent.
Walker hasn't yet proposed lowering the state's income or corporate tax rates. But he has called for eliminating taxes for companies that move to Wisconsin from Illinois or anyplace else. He also wants to cut taxes on small businesses already in the state. He argues that those moves, along with lawsuit and regulatory reforms, will make Wisconsin a more attractive place to do business.
Vos, co-chairman of the Legislature's budget committee, said he wants to change Walker's small business tax cut proposal into a $1,000 income tax credit to companies for every job created in the state. The Legislature could vote on the tax cut proposals as soon as next week.
The key is that Wisconsin is moving toward lowering taxes while Illinois is raising them, said James Buchen, a vice president at Wisconsin Manufacturers and Commerce, the state's largest business group.
"It just makes Wisconsin look more attractive relative to our neighbor to the south," Buchen said.
Walker has adopted the mantra that "Wisconsin is open for business" and has repeated it at nearly every turn ever since his election in November. He's pledged to add 250,000 jobs in Wisconsin by 2015.
Wisconsin faces a two-year $3 billion budget shortfall. Walker has said his budget, which will be released next month, will balance even with the business tax cuts he's already proposed.
While Walker's talking about taking jobs away from Illinois, Wisconsin's neighbor has already tried to woo Talgo Inc., a train maker that said it will move its manufacturing jobs out of Milwaukee next year because the state rejected federal funds for high-speed rail.
Talgo spokeswoman Nora Friend said Illinois's tax structure would be one of many factors in determining whether the company would relocate its manufacturing there.
"Illinois is still a very strong state because of its strong supply chain and strong will to expand its rail plan," she said Wednesday. "Our analysis includes a lot of factors. (The tax situation) would not weigh in as a positive but it's difficult to say whether it's the deciding factor. It would be one more factor that gets weighed in."
She said Illinois, Washington and Florida are among the top three candidates for Talgo's new site.
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