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Economic Pain of WIU Layoffs Extends Beyond Campus

May 16, 2016

Jerry Tyson has been cutting hair since 1955. And his single-chair barbershop – aptly named The Barbershop – has been providing  haircuts and shaves near downtown Macomb since the early 1980s.

Tyson estimated 30%-40% of his customers are workers or students at Western Illinois University.  But he suspects his customer base might shrink as workers are let go or furloughed.

“I’ve had any number of customers say they’ve gotten a pink slip (from WIU),” said Tyson. “Some of these people will probably be leaving town. There are other barber shops that charge a lot less money than I do and, sure, it will take business away.”

Tyson’s suspicions about the impact of WIU on his business – and the economy -- are confirmed in a new study from the Rural Economic Technical Assistance Center at the Illinois Institute for Rural Affairs, which is headquartered at WIU.  The report, Western Illinois University’s impacts on the economy of the State of Illinois, was just released. 

“For a localized impact, WIU has this enormous, sort of a single entity impact in Macomb. Less so, of course, in the Quad Cities because it’s a smaller entity in a bigger community, but right here in our particular region it’s an enormous impact,” said Chris Merrett, Director of the IIRA. 

"When we see a decline in enrollment, for example, or a decline in payroll, it's not really that much different than, for example, if Pella Corporation laid off people (at its Macomb factory)."

The 16-county region that’s the focus of the study. The report said this is the most likely region for expenditures from WIU’s operations, employees, and students, and for university-related construction spending.
Credit Courtesy of the IIRA

Merrett said the study found that for every dollar invested in Western's campuses in Macomb and the Quad Cities, another .68 full or part time job is created.

"So there's a really tangible, measurable impact on what WIU does for the local and regional economy," Merrett said, adding other public universities in the state have a similar impact on their regional economies.

"We have this injection of state money into local economies. It's money well invested. It not only educates the next generation of workers, enhancing their incomes, but it's also circulating in our local economy as well, spurring amenities that we otherwise would not have in a place like Macomb. So Macomb is a much richer, diverse, and enjoyable place because WIU is here."

The study found WIU has the following impacts on the 16 county region that most directly benefits from the campuses in Macomb and the Quad Cities:

  • $513.7 million in annualized economic output;
  • 4,138.7 full and part time employment positions;
  • $239.8 million in labor income;
  • $76.9 million in local, state, and federal revenues.

Robin Hanna, Faculty Assistant at the IIRA and lead author of the study, said the economic benefits created by Western are also felt outside the 16 county region.

"Western is not simply a regional entity with regional impacts but it affects the whole state," said Hanna, who has completed five such studies in the past 12 years.

The statewide impacts, according to the study:

  • $785.1 million in annualized economic output;
  • 5,381.4 full and part time employment positions;
  • $379.0 million in labor income;
  • $106.8 million in local, state, and federal revenues.

It comes as no surprise to Susan Schuytema, owner of Market Alley Wines, that WIU's economic influence extends beyond campus and beyond Macomb.

Susan Schuytema, owner of Market Alley Wines in Monmouth, believes her bottom line will be hurt as Western lays off workers due to the state’s budget problems. “It’s sad but it’s the state, the literal state that we are in. It’s messed up and I thinking taking bold cuts -- what else are they (WIU administrators) going to do?”
Credit Rich Egger

“We have a wine club and we’ve already lost four people from our wine club that were laid-off from the university or pending layoffs. So it definitely has an effect on us,” said Schuytema of WIU's recent budget cuts.

Market Alley Wines is in downtown Monmouth, about 30 miles north of Macomb. Schuytema, who graduated from Western in 1988, said she's lost customers in the past when they've moved out of the area but they've always been replaced by new people moving in.  She said it remains to be seen whether that continues as WIU lets workers go without replacing them. And she's worried about the trickle down effect of what's happening at Western.

"A business owner in Macomb who's a supporter of mine might not get as much business. And if they don't get as much business, they're not as likely to come and share their money and go to other businesses," Schuytema said.  

She fears the state budget impasse and the harm done to public universities will make it more difficult for businesses to succeed in Illinois -- and the uncertainty caused by the nearly year-long budget impasse isn't helping.

Back at The Barbershop in Macomb, Jerry Tyson, who is a Republican member of the McDonough County Board, said it’s time for both parties to come together in Springfield

“I think both sides can take credit for this terrible mess we’re in,” he said. Tyson called this a terrible time for WIU but he's confident the state's leaders will come up with a solution. 

"I have all the confidence in the world in our leaders and I think we'll get this straightened out," Tyson said.

"But I don't think it's going to happen overnight and there's going to be a lot of pain before this is over."