The Decline and Fall of Chicago and Illinois

The Decline and Fall of Chicago and Illinois

Chicago, and Illinois, are in big economic trouble.

  • 7th straight year of population decline. Losing 235,000 people in 10 years, 3x the amount of any other state. Last year saw a decline of 79,500 people – second only to much larger New York – and the rate of people leaving is accelerating.
  • Illinois has, on average, property taxes 2x the national average. If you owned the “Home Alone” house in suburban Chicago, since the movie was made in 1990 you would have paid $890,000 in property taxes.
  • Chicago is the worst residential real estate market of any large city in America. While values have been rising elsewhere since the Great Recession, in the last decade, property values in Chicago have declined 20%.
  • Sales tax is 9%, and on some products 10%+, one of the highest rates in the USA. On-line purchases are taxed at 10.25%, for example. Illinois is one of only 7 states to charge sales tax on gasoline. And Illinois has the highest cell phone tax in the country.
  • Illinois roadway toll fees are widespread, and among the highest in the USA, with the majority of those funds going NOT to road improvement but rather into the general budget to cover state expenses.
  • Illinois is 46th in private sector job growth – and would be 50th except the #1 source of job growth is government jobs. And 40% of the government workforce makes $100k+/year. The total number of jobs in Illinois December, 2019 was 6.2M – unchanged since 2015 – and up only slightly from 5.9M in 2010 – yielding a pathetically low growth rate for jobs of 1/2 of 1% (.5%) per year
  • 1/3 of the state budget is pension payments, and pension debt is 26% of state GDP – highest in the country. Lots of retirees, very few new jobs to pay their pensions.

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Gibbon wrote “The Decline and Fall of the Roman Empire” as a treatise to uncover how such a powerful empire could lose its greatness. There is no doubt, Chicago and Illinois were once great. The area was known for great jobs, great infrastructure, great transportation system, great homeownership – and for many decades considered one of the best places to live in America. Back when agriculture and manufacturing dominated the economy. But quite obviously, as the world changed, and the sources of economic value (including jobs) changed, the late, great state of Illinois kept pushing on with “business as usual” instead of changing policies and investments to re-orient for the Information Era.

Things were not destined to become this bleak.  Chicago could be Austin today – but obviously it isn’t.  Where Austin, and Texas, looked at trends and made investments beyond the old “core” of oil and gas, Chicago and Illinois completely failed to look at trends that indicated a clear need to change. Problems, and the path to solve them, have been obvious for years.  It was easy to predict this would happen.  But a chronic focus on the short-term, rather than the long-term, combined with a complete unwillingness to change how investments were made caused state and city leaders to consistently ignore warning signs and make one bad decision after another.

Indicators of Decline

I’m an expert on trend-based planning, so let’s take a look at the telltales this was coming and how those telltale indicators were ignored:
  • In February, 2006 (yes 15 years ago) I wrote that Illinois was the #1 net job loss market in the country. This factoid highlighted an emerging problem in the underlying economy.  The state was still considerably dependent on old-line agriculture/food giants, those businesses were crumbling and unlikely to recover as the economy shifted.  Notably Kraft was in its 5th year of what was to be a turnaround (that never happened) and Sara Lee was under incompetent leadership that kept selling businesses to shore up declining revenues and earnings.  The state, and city, had failed to develop an infrastructure for investment in start-up companies.  There was a total lack of investment money for entrepreneurs from paternalistic large companies such as Motorola and Ameritech. And a lack of money for innovation from banks, venture capital and private equity firms.  Existing businesses were aging, cutting jobs and none were focused on investing in new companies to keep the local economy tied to the emerging Information Economy [ link  ]
  • In February, 2009 Forbes selected Chicago as the 3rd most miserable city in the USA, citing high taxes, no job growth, infrastructure decay, congestion and bad weather.  An uproar ensued – but no change. I then noted my 2006 column, and recommended a very serious Disruption in how Chicago was managing its resources. Clearly the “more of the same” strategy trying to defend its past was not working.  Unless there was a disruption, Chicago would get worse – not remain the same, and certainly not get better.  The signs were clear that from ’06 to ’09 nobody was thinking about the big changes needed [ link  ]
  • In June, 2010 it was reported that Illinois lost 260,000 jobs between 2000 and 2010 – and that was an indicator of why Chicago and the state were having so many economic problems.  I recommended the city and state make significant changes in resource allocation to keep more start-ups local.  The University of Illinois was the #4 engineering school in the US, but the vast majority of graduates left to one or the other coasts. Local businesses were not developing new businesses, thus not hiring these top students.  Start-ups at the universities, and by recent grads, could not obtain funding, so they fled to where the money was.  Economic reliance on stalled companies like Kraft, Sara Lee, Motorola, Lucent, Sears and United had created a Growth Stall that was sure to lead to additional job losses – when the best talent was right there in the state! [link ]
  • I followed up a week later that same June with a column on how Mayor Daley was very popular with voters and local businesses, but he was setting up the city (and state) for failure.  There was a focus on keeping the “old guard” happy, and doing so by completely ignoring opportunities for future growth.  Offering tax breaks and subsidies to recruit corporate headquarters (like Boeing) created very few jobs, and was a poor use of resources that should be diverted to funding start-up tech and bio-tech companies.  And financial machinations, like selling the city’s parking rights, gave a short-term lift to the budget, hiding significant weaknesses, while creating massive long-term problems. Chicago and Illinois politicians were focused on short-term actions to get votes, and ignoring the very real jobs problem that was tanking the economy.  [ link ]
  • By April, 2014 I was able to clearly demonstrate that my predicted economic stagnation spiral had taken hold in Illinois.  Defend & Extend investments to shore up declining companies – like Sears – robbed local governments of funds for job creating programs.  And a decade + of no job creation was forcing taxes up – at a remarkable rate – which kept businesses from moving to Illinois; kept them from opening software labs, coding facilities, research centers, pharma and bio-pharma production plants, etc.  With no growth, but rising costs, the death spiral had begun and needed immediate attention [ link  ]
  • In September, 2016 the outward migration from Chicago and Illinois had become a powerful trend.  Looking at demographics, the market was aging.  Rising costs and no growth had pinched budgets to the limit, while pension costs had become an unsustainable burden on the state’s citizens.  Just like Japan was in an aging crisis, Illinois was in an aging crisis.  And this was destined to create even more problems for the economic death spiral that began before 2006. [ link  ]
  • So by January, 2017 the demographic tailspin was clearly creating a vacuum pulling people out of Chicago and Illinois.  Fully 4 years ago it was obvious that the predicted trends had taken hold, and nothing short of an incredible disruption would save Chicago from becoming the next Detroit. Using the simplest trend planning tools made it clear that unless there was radical change in investments the Chicago empire was at its end. [ link  ]

Lessons for business?

Far too many businesses act like Chicago. “Business as usual” dominates.  Resources are automatically routed to defending old business lines, rather than investing in new products and solutions.  Focusing plans on historical customers, products and markets create blindness to market shifts, and a reluctance to move forward to new technologies and markets.  Very little energy is put into trend analysis, and plans are not built based on trends and likely future outcomes (planning from the past dominates over planning for the future.)  People who point out likely future bad outcomes unless serious change is undertaken are ignored, or shouted down, or removed entirely. Short-term financial machinations (selling assets, or a business, or offering deep discounts to keep customers) create an illusion of security while long-term trends are undermining the business’ foundation.
We are experts at trend analysis, trend planning and effective resource allocation.  It was clear 15 years ago that major resource reallocation was necessary for Chicago to continue growing its economy. Don’t let a fixation on doing more of the same get in the way of your future growth, like Chicago.  Let us help you identify critical trends and invest smarter to build on trends and grow.

Key lessons?

First, the world is growing and leading businesses will grow. If you’re not growing, you’re dying. Just like GE and Exxon. Second, never plan from past success, but instead plan for the future. You don’t grow value by being operationally excellent, because the world is forever changing and it will make your past business less valuable even if you do run it well. Third, make sure your plans are all built on trends. Let trends be the wind in your sales, or the current under your boat, or whatever analogy you like – just be sure you’re using TRENDS to drive you business planning, product development and solutions generation. Customers buy trends and help for them to achieve the future.

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Did you see the trends, and were you expecting the changes that would happen to your demand? It IS possible to use trends to make good forecasts, and prepare for big market shifts. If you don’t have time to do it, perhaps you should contact us, Spark Partners.  We track hundreds of trends, and are experts at developing scenarios applied to your business to help you make better decisions.

TRENDS MATTER. If you align with trends your business can do GREAT! Are you aligned with trends? What are the threats and opportunities in your strategy and markets? Do you need an outsider to assess what you don’t know you don’t know? You’ll be surprised how valuable an inexpensive assessment can be for your future business.  Click for Assessment info. Or, to keep up on trends, subscribe to our weekly podcasts and posts on trends and how they will affect the world of business at

Give us a call or send an email.  [email protected] 847-726-8465.

The No. 1 Trend For Planning — Demographics — And Why People Are Fleeing Illinois

Trend analysis is the most critical part of planning.

Some trends are hard to spot, because people think they are just a fad. Many folks think electric cars fit that category.

Other trends are hard to accept because they imply a big shift in how we live or work – or how we run our business. Scores of IT people who have written me over the years saying mobile devices on common networks (telecom to AWS) will never replace PCs connected to server farms. The implications of this trend are severely negative related to demand for their skills, so they ignore it.

But every plan should be built on trends, because these forecasts are critical for decision-making. It’s the future that matters, not the past. Too often plans are built on history, when trends clearly indicate that things are going to change, and old assumptions are outdated.

Demographic trends are easy to forecast, and important.

While some trends are hard to forecast, some trends are really easy to spot and forecast. And the easiest trend to understand is demographics. If you don’t use any other trends in your planning, you should have demographic trends at the core of your assumptions.

 Take for example the movement of people across the United States. Ever since the wagon train people have been moving west. And, like my friend Buckley Brinkman (executive director and CEO of the Wisconsin Center for Manufacturing and Productivity) likes to say, “ever since the invention of air conditioning people have been moving south.” Yet, I’m startled how few organizations plan for this shift and adjust their strategies and tactics to be more successful.

From July 1, 2015 to July 1, 2016 the seven fastest growing states were western.  And of 50 states, only eight lost population.

Growth is sublime, decline is disastrous.

 Bruce Henderson, founder of the Boston Consulting Group, used to say that if you want to hunt or farm you’re far better off in the Amazon than you are in the Arctic. Basically, where there are resources, and lots of growth, it’s a lot easier to succeed.

For business, this means that if you want to grow your business – whether you’re installing HVAC systems or building a state-of-the-art battery manufacturing plant – you’ll find it relatively easier in faster growing states.  It doesn’t mean there is no competition, but it does mean that growth makes it easier for competitors to succeed.

Contrastingly, there were eight states that lost population in this same 12 months.

This means that competition is intensifying in these states. As people move out there are fewer customers to buy what each business sells, so these companies have to fight harder, and price lower, to grow – or even maintain.  As the population declines taxes have to go up because there are fewer taxpayers to cover government costs. These states become less desirable places for business.

The businesses in Illinois, for example, are in the middle of a bare-knuckle brawl over the state budget that has gone on for two years. The Governor and the legislature cannot agree on how to manage costs, or revenues.  Bond ratings have been slashed as costs to borrow have gone up.  Several services have been shut down, and student costs at universities have gone up while programs have been gutted or discontinued.

Governor Rauner (R – IL) has repeatedly said he wants Illinois to be more like Indiana, its neighbor to the east.  Perversely people apparently are listening, because Illinois is shrinking, while Indiana grew a healthy 0.31%. For residents remaining in Illinois this worsens a host of maladies:

• the state’s jobs situation struggles as the number of paying jobs declines, making it harder to recruit new talent, or even keep its own university graduates;
• Illinois’ pension problems worsen,  as there are fewer people paying into the pension funds while those drawing out funds keep increasing;
• Illinois is unable to fund schools properly, especially Chicago, due to less income – forcing up property taxes;
• taxes keep rising due to fewer people and businesses (when adding property taxes, sales taxes and income taxes Illinois is now the highest tax state in the country);
• new highways are being built with federal funds, but other infrastructure is in trouble, as city, county and state roads are pothole ridden. Trains and subways become outdated and fall into disrepair. And one-time budget Hail Mary’s, like Chicago selling its parking structures and meters in order to balance the budget for one year, strip citizens of future revenues while they watch parking (and other) service costs skyrocket;
• and Chicago has suffered the lowest real estate recovery rate of the top 30 major U.S. cities –not even returning to prices in 2008.

Growth solves a multitude of sins.

Just like a rising tide raises all boats, growth creates more growth. More people increases demand for everything, which increases business sales, which increases jobs and wages, which increases the value of real estate and household wealth, which increases tax revenue, which allows offering more services to make a state even more appealing.

On the other hand, shrinking can become like the whirlpool over a drain. As the problems increase more people decide to leave, making the problems worsen. As more people go, there are fewer people left behind to make things better. Jobs go away, wages fall, demand drops, real estate prices drop, infrastructure projects stop, services stop and yet taxes have to be raised on the fewer remaining residents.

Few trends are more important for planning than understanding demographics. Demographics affect demand for everything, and planning for changes offers businesses the opportunity to be in the right place, at the right time, to be more successful. And, demographic trends are some of the easiest to predict:

• population size
• average age, and sizes of age groups
• average income, and sizes of income groups
• ethnicity
• religion

Plans should be based on trends, not history. Understanding trends, and their trajectory, can help you be in the right market, at the right time, with the right product in order to succeed. There are lots of trends, but one that is fairly obvious, and incredibly important, is simply understanding demographics. Is this built into your planning system?

Wake Up Call! How Stagnation Spiral is Hurting Illinois

Wake Up Call! How Stagnation Spiral is Hurting Illinois

Economic growth is a great thing.  When the economy booms people make more, so they pay more income taxes.  They spend more, which generates more sales tax.  They upgrade homes and buy bigger homes, which have higher property taxes.  But even though they pay more dollars in taxes, people are happy because they have more cash, and often the percent of their income spent overall on taxes is lower.

A virtuous circle where everyone benefits.  Growth helps the citizens, and the community prospers.

For the industrial era, this virtuous circle was great for Illinois.  Farmlands continued to prosper with bountiful crops, while new manufacturing jobs created higher incomes for those leaving the farms.  The roadways and airports grew, while income taxes remained almost paltry by national standards.  And Illinois could boast some of the country’s best public schools even while property taxes were below national averages.  This growth environment kept locals in the state, and attracted people from the plains, other parts of the midwest, south and northeast as well as immigrants from foreign lands.  Industrial growth propelled a great environment.

Last week many people were surprised by a recent Gallup survey showing that Illinois leads the USA in people wanting to leave their home state.  A whopping 50% of the population would like to leave.  And Illinois was 2nd from the top with percentage of people who have high intent to actually leave (at 19%.)  So if those two groups overlap Illinois could lose 10% of its population in  short order!

If ever there was one, this has to be a wake-up call!

Decrease dollar graph.

The seeds of this problem were sown many years ago.  When manufacturing started going offshore, Illinois was hard hit.  A Center for Government Studies report shows that between 2000 and 2010 the number of people employed in Illinois actually declined by 115,000 (1.5%).  Farming, wholesale and retail trade jobs fell by 135,000.  But far worse was the decline in manufacturing jobs, which dropped by a whopping 311,000.  Those were jobs which had been Illinois’ growth foundation for 60 years.  And they were the employers who provided the network effect of business-to-business growth that kept the state’s virtuous circle spinning.

Despite the obviousness of this shift in employment – from manufacturing to services – the state reacted timidly to replace that employment base with another growth vehicle.  In an era of growing financial services, Illinois failed to develop a strong banking sector, and in fact watched First Chicago/Bank One become JPMorganChase and leave – along with almost all its other large brethren.  Despite leading engineering universities (University of Illinois Chicago, University of Illinois Urbana/Champaign, Northwestern, Illinois Institute of Technology, Northern Illinois, etc.) Illinois failed to develop a vibrant angel investing or venture capital community, and digital entrepreneurs were pushed toward the coasts for funding – and increasingly the talent followed them out of state.

It did not take long for the virtuous circle to become a stagnation spiral.  As jobs left the state there was lower demand for housing, so people couldn’t sell their houses – especially after 2007.  The housing bust that racked America hit the Chicago area, and all of Illinois, harder than many metros.  And home prices have failed to recover at anything close to the national average.  Chicago still leads major metro areas in percentage of homes with underwater mortgages. To maintain money for schools and roads communities were forced to raise property taxes.  Today many people, especially in the 6 Chicago “collar counties,” pay property taxes that are higher than similar homes in Los Angeles and San Francisco!  Property taxes that have become among the highest in the country.

With no growth in spending, communities raised sales taxes to generate more income.  Today most Illinois citizens pay between 9-10% sales tax, again amongst the highest in the country.  Which encourages even greater on-line shopping, and deterioration in the local retail trade.

Road maintenance, and general funding at the state level, pushed the state to raise highway tolls.  What were $.25 toll machines on major arteries in the 1990s now cost $.75 (tripled) and the rate is double that ($1.50) if you don’t install an electronic toll device in your auto (sorry out-of-state drivers.)

Lacking growth, state income tax receipts could not keep up with state demands – especially for pensions that depended on both a vibrant stock market as well as higher state income.  So Illinois doubled the income tax rate in an effort to fund pensions and avoid bankruptcy.

Yet, despite seeing taxes in all areas increase, residents are subject to declining services.  Potholes remain an ever-present danger for drivers.  Municipal traffic services (buses and rail cars) have increased prices by multiples, yet there are fewer routes and longer waits for customers.

Which leads to an even worse element of stagnation – aging population.  As the jobs for people 16-44 declined, younger people left the state and that demographic actually declined by 3.2% between 2000 and 2010.  Those who remained were older, so the Baby Boomers grew by 21%!  However, this aged demographic is not in its prime “spending” years, and instead is much more likely to invest for retirement.  Thus further dampening the local economy.

And, an aging population means that the number of children declined – dramatically.  The “baby bust” resulted in a 6.2% decline in children under age 10 in Illinois last decade.  Fewer children means less demand for school teachers, and all the things related to child rearing, further shrinking the economic growth prospects.  While this is good news for property tax payers generally, it’s never a good sign to see closed schools simply because there’s no need for them.

Now the spiral becomes a self-fulfilling prophecy.  Retiring boomers on a fixed income realize that they cannot afford to live in a state with such high, and rising, property taxes.  Especially when other states have fixed taxes that are 1/4 to 1/3 what they pay in Illinois.  These retirees (or soon to be retirees) discover lower property tax states often have sales taxes that are half what they pay in Illinois.  The economics of staying become increasingly difficult to bear – while the benefits of leaving look ever more promising.

Entrepreneurs and business leaders see little reason to move more jobs into Illinois.  When looking at facility locations they realize they can receive the same tax breaks almost anywhere, but employees would prefer the lower tax environment of other states – especially sun belt states like Texas which has no income tax.  As Illinois offers tax breaks to dinosaurs like Sears, desperately trying to keep jobs despite failing corporate prospects, it becomes increasingly difficult to lure anyone other than small-employing headquarters locations into the state.  And personal taxes keep going up to compensate for these ill-conceived legacy company support programs.

No wonder so many people think about leaving Illinois.  And we haven’t even mentioned the weather (do you know how to spell P-O-L-A-R V-O-R-T-E-X?)

Growth is a wonderful thing.  Everyone prospers when economic growth provides the virtual circle of more cash.  But when the market turns toward the stagnation spiral – well it sucks for just about everyone.

Just ask the folks in Detroit – who are now auctioning off empty homes for $1,000 on the internet just to stop ongoing blight that is wrecking the city like an economic tsunami.

There is no simple answer for a declining economy like Illinois.  But this was a situation that took over 2 decades to create.  Failure to recognize the decline in manufacturing, and shift to digital economy jobs, left political and industry leaders arrogantly thinking everything would be fine.  An inability to invest in creating a replacement powerhouse industry means the state has few resources to invest in anything at all now.  Unable to leverage local university innovation with a comprehensive and effective program for funding projects has created a veritable slipper-slide from Illinois to California or New York for new graduates.

The answer will take a some time to develop, and implement.  But one thing is clear, if Illinois’ leaders don’t come up with something soon there will be even fewer people around, and even greater problems developing.   It would be easy to dismiss this Gallup poll, or let community pride keep one from taking its implications seriously.  But that would be an even worse mistake.  This is a serious wake-up call.

Hey politicians – growth is what matters – Chicago, Illinois

I was born in 1957.  That year, a 3 bedroom track home in Wichita, KS sold for the same price as that very same track home in Palo Alto, CA – about $10,000.  Of course, things have changed hugely since then.  Agriculture value had declined markedly, and automation has allowed for dramatic productivity improvements, robbing the heartland states of hundreds of thousands of agricultural jobs.  Without people on the farms, the need for agricultural cities supporting the farms declined.  No growth, and values decline.  Today that home in Wichita is worth something like $50,000. 

The land where the track home once sat in Palo Alto is worth $500,000.  Because the explosion of technology jobs in Silicon Valley made demand for housing much greater, and as the value of technology soared those employed in the industry saw their incomes rise, allowing for higher home values.

It all comes down to growth.  Geographic areas are like businesses in that growth leads to all kinds of good things – including higher home values.  People go where the jobs are.  Especially good paying jobs.  And that comes from investing in innovation, and the companies that develop new solutions aligned with market needs.

According to Forbes magazine in "Houston: Model City" Illinois has lost 260,000 jobs in the last decade.  No wonder home values in Chicago never soared like San Jose.  But it's also no mystery why the 15-20% decline in Chicago real estate seems never to be improving.  When a city stops growing – well – look at Detroit.

Today Crain's Chicago Business reported "Chicago Economy Sees Signs of Life, But Rocky Recovery is Forecast."  Why?  Little has been done to improve job growth.  Once an agricultural center (the famous stockyards of The Jungle fame) Chicago became a powerhouse manufacturing center.  But over the last 15 years the city and state have done almost nothing to drive more jobs related to information or the coming biological growth wave.

Few realize that the University of Illinois is ranked as the 4th best engineering school in the world.  Yet, most graduates end up "going coastal" in order to find high paying jobs.  Worse, innovators who want seed money or venture capital find none from the state, as it continues struggling to support the costs of jobs and pensions related to the now-gone manufacturing economy!  Spending money trying to Defend & Extend the old manufacturing base.  And there is almost no angel or venture private financing, which has grown considerably on both coasts, because that is targeted largely in non-manufacturing industries.  And the large companies in Chicago – from Kraft to Sara Lee to Motorola to Lucent – to even Boeing – invest nearly nothing in spin-off companies and innovators in their own back yard.  Many start-ups report they have to move either west or east in order to obtain financing for their ideas and rapid growth.

For cities and states, growth is the key.  It is OK that once all the cowboys ended their cattle drives in Wichita.  And that the world's largest grain elevator is just southeast of town.  When agriculture was the center of the universe that was a good thing.  But because the leaders did not transition toward new job growth as the economy shifted, Wichita is now a backwater.  It is so hard to recruit talent to Wichita that Pepsi moved the headquarters of Pizza Hut to Dallas, and most of the decisions for Beech aircraft are made at Raytheon Headquarters in suburban Boston.  Face it, do you want to live in Wichita?

How quickly will people say the same thing about Chicago?  Already, nobody wants to live in Detroit.  If Chicago city leaders, and Illinois state leaders, can't get out of old Lock-ins to manufacturing mind sets we all may be surprised how quickly Chicago follows its sister cities into unattractive outcomes.  For politicians, and corporate leaders, a focus on growth is extremely important if they want to keep their city vibrant.

For residents of Chicago, there is ample reason to be worried about the future of their infrastructure and home values.

America’s Emerging Demographic Disaster – Are You Planning For It?

America’s Emerging Demographic Disaster – Are You Planning For It?

Demographics is Destiny

Planning is all about the future. And the future is easiest to predict when we look at demographics. Population trends are easy to spot, and long-lived. So the recent U.S. census, which built on previous trends, gives us great insights for planning our investments. Let’s focus here on the two biggest demographic trends.

First, the U.S. population growth rate is terrible. Less than 1%/year. Its the 2nd worst decade since stats started in 1790. And this included the rebounding post Great Recession economy! Simply put, fewer babies and a lot fewer immigrants. So now, there are more people over 80 years old in America than under 2 years old. Partially the result of efforts designed to boost employment and pay, a decade of anti-immigration policies has left us with fewer people to get things done. It didn’t boost employment nor pay, but it has meant there are fewer people around to support the aged and infirm – and to pay taxes.

In 2018, I wrote about the Japanese demographic “trend bomb.”  Low birthrates and anti-immigration meant there were only 2 working people to support each retiree. And the situation was worsening. It’s time America starts considering what it will do if we don’t let immigrants return to spark growth. Growth can hide a multitude of sins,    Source: Avondale Asset Management
because it creates demand for more goods and services – thus creating economic growth. People in China and
India aren’t starving any longer, because they’ve grown their economies out of poverty.

As wrote in 2017, it was America’s population growth – driven by immigration – that made 1800s and 1900s America the jewel of the world. Despite horrors at Ellis Island, those boatloads of immigrants created the agricultural and industrial America with its flourishing economy. Like I observed in 2016, unless we re–invigorate growth through immigration, the woes Trumpers complain about will get much, much worse. Soon Pakistan and Indonesia will have more people than the USA! China and India, with their growing populations, growing economies and growing diaspora are making an ever–bigger imprint on the global economy. Meanwhile, America is on its way to stagnant performance like most European countries.

U.S. Population is Mobile, Despite the Pandemic

Second, the trend south and west continues unabated. In 1970, the South and West accounted for less than half the population. Now they account for 62%. The Northeast is losing people rapidly, with 48 of 62 New York counties losing people. And Illinois has seen the problem in spades.  Chicago and Illinois are already in a world of hurt due to declining population causing a declining economy causing real estate prices to fall and taxes to rise. (Though the pent-up pandemic housing demand is temporarily increasing housing prices, masking the long term trend.) When population trends down, it becomes a whirlpool of problems – just look at what’s happened in Detroit! You must have the people to build a strong economy.

Looking at both these trends, do you see the unabashed irony? We see no problem with cities and states competing for migrants from other cities and states. Local and state governments lure in companies and people with tax breaks, subsidies and other allowances. We think immigration within our country is good – and recognize losing people from our local area is bad. But at a national level, we still have people who object to immigration. They want the borders closed, and no new entries. We have politicians who want to freeze the economy in place. Yet we know from our past that the only solution to getting our economy to grow REQUIRES immigration. It is the #1 reason the economy was so sluggish coming out of the Great Recession – we cut immigration to unprecedented levels under Obama and continued the decline under Trump. We are unlikely to birth our way to growth, given trends in lifestyles and gender equality. But, we can bring in immigrants who can help the economy grow. We need to get over this hypocrisy and move toward greater immigration as a pro-America policy!

What does this mean for your business?

First – are you sure you want to do business only in the USA? The growth markets are elsewhere. Have you considered selling in China, India, Indonesia, Micronesia, Thailand, South America and Africa? These are growing markets where Chinese businesses (in particular) are making big investments. By going where the population is growing they are able to grow their revenues, and their influence. America isn’t the dominant international player it once was, and there’s never been a better time to look outside America for your next growth market.

Second – Take your business where you see the growth in America. Lots of businesses are going to Texas (and Nevada, Utah, Idaho and Arizona) because lots of people are going there! If you open a restaurant in a town losing people, to succeed you have to entice people to drive to your town and restaurant. You better be really good, and you’ll probably have to make price allowances to have repeat business. But if you have a restaurant in a locality where people are immigrating in large numbers you can do well even if your food is mediocre. Growth hides a multitude of sins!! Your food need not be fantastic, and you can price higher, and you can even have shorter hours because you’re where the people are! It’s simply a lot easier to succeed when you are in a growing marketplace. Are you planning to be someplace because that’s where you started, have family, or went to college? Or are you planning to be someplace where the people, and money, are?

Have you taken into account changes in demographics when making your plans? It is undoubtedly the #1 trend you should use for planning (Fleeing Illinois) . It is highly predictable, and has a lot to do with success. Simply going where the people are will help you succeed. There’s nothing more important to your scenario planning than obtaining a copy of the latest census and studying it really, really hard. It’ll jump start you on the road to greater sales and more success!

Don’t Miss Adam’s Recent Podcasts!

Did you see the trends, and were you expecting the changes that would happen to your demand? It IS possible to use trends to make good forecasts, and prepare for big market shifts. If you don’t have time to do it, perhaps you should contact us, Spark Partners.  We track hundreds of trends, and are experts at developing scenarios applied to your business to help you make better decisions.


TRENDS MATTER. If you align with trends your business can do GREAT! Are you aligned with trends? What are the threats and opportunities in your strategy and markets? Do you need an outsider to assess what you don’t know you don’t know? You’ll be surprised how valuable an inexpensive assessment can be for your future business.  Click for Assessment info. Or, to keep up on trends, subscribe to our weekly podcasts and posts on trends and how they will affect the world of business at

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