From the pork products that come from Kansas to the soaps made in Ohio, the specter of retaliatory tariffs looms large among the Midwest’s economic sectors that rely on trade with Canada and Mexico. Many of the affected industry groups continued in early 2019 to try to get their voices heard among U.S. trade leaders.
One of their latest outreach efforts: A letter signed by a diverse group of more than 40 organizations — including the National Corn Growers Association, the U.S. Chamber of Commerce, the National Pork Producers Council and the Association of Equipment Manufacturers — urging a return to “zero-tariff North American trade.”
Two of the Midwest’s newly elected governors — one Democrat, one Republican — shared a similar message to legislatures in their first-ever State of the State addresses: It’s time to invest more in our transportation and water infrastructures.
DeWine referred to his proposed 18-cent-per-gallon hike — which would raise an estimated $1.2 billion a year — as a “minimalist, conservative approach ... the absolute bare minimum we need to protect our families and our economy.”
In Kansas City’s metropolitan area, there is a long history of businesses crossing the Kansas-Missouri border — lured by one of the two states’ tax breaks and financial incentives. “It’s a zero-sum game when incentives are given to move a company just a few miles from where it was,” says Rep. Kristey Williams, a member of the Kansas House Commerce, Labor and Economic Development Committee. “Essentially, taxpayers lose.”
Could this traditional type of interstate competition be replaced by an interstate collaboration, or cease-fire?
Smaller- and large-scale ideas were being proposed in the nation’s state legislatures in early 2019, including a bill known as the “border war bill” in Missouri. Passed by the state Senate in late February, SB 182 would prohibit state incentives from being offered to companies located in four Kansas border counties. Kansas would have to adopt a comparable ban for SB 182 to take effect.
According to Missouri Sen. Mike Cierpot, the bill’s sponsor, the two states have “spent over $335 million shuffling businesses back and forth over state lines … by moving a matter of miles, or in some cases blocks.”
Illinois has joined the growing number of Midwestern states to raise the minimum wage for workers. Six years from now, when SB 1 gets fully phased in, the wage floor for Illinois workers age 18 and older will be $15 an hour. That will be the highest minimum wage in the Midwest; four other U.S. states have adopted $15-an-hour laws.
According to the U.S. Department of Labor, as of the start of this year, six states in the region — Illinois ($8.25 per hour), Michigan ($9.25), Minnesota ($9.86), Nebraska ($9), Ohio ($8.55) and South Dakota ($9.10) — had minimum wages higher than the federal government’s ($7.25). Under the laws in Minnesota, Ohio and South Dakota, wages are adjusted automatically every year to account for changes in the cost of living. In late 2018, with the passage of SB 1171, Michigan legislators eliminated their state’s inflationary adjustment while also increasing the minimum wage. The hourly rate rose to $9.45 in March and will increase to $12.05 by 2030.