Chicago is often billed as the nation’s top destination and departure point for Chinese imports and exports. The city’s capacity for trade with China is supposed to get a big boost in the coming years because of a planned new $200 million cargo handling center at Chicago O’Hare International Airport, which was announced by Mayor Rahm Emanuel last week.
The center drew praise from both labor and business leaders, as it is projected to create “more than 11,000” jobs — actually 1,200 temporary construction jobs and 1,200 permanent jobs, while indirectly sparking the creation of 10,000 jobs regionally. While the jobs are sorely needed and the Chicago Federation of Labor endorsed the plan in a joint statement with the Chicagoland Chamber of Commerce, skeptics question how great the jobs will actually be and, in principle, whether facilitating more imports of Chinese goods is a positive thing for local U.S. workers.
The plan involves $62 million of city airport funds and a $130 million investment by the private firm Aeroterm LLC. The construction jobs will likely be filled by union members, but it is unclear from media coverage and the mayor’s announcement whether the permanent jobs at the center will be union or exactly what types of jobs are expected to be created indirectly.
According to Crain’s Chicago Business, Aeroterm will act as the property manager and lease the cargo-handling facility out to customers. The story says there are no certain clients identified yet, but Aeroterm feels confident enough about prospects to put its money on the line. To anyone familiar with the logistics industry (essentially another form of cargo handling) often explored on this blog, the arrangement should raise some concerns.
Warehouses where goods are received and restaged for delivery to big box stores and other facilities are typically owned by one company, operated by another and staffed and run by several more layers of subcontractors. The workforce is disproportionately made up of temporary contractors with no benefits or job security, and complaints of health impacts, sexual harrassment and discrimination are rampant. On the surface — albeit without a specific understanding of how the center will operate — it seems the O’Hare cargo handling center might raise similar problems.
Labor’s support for the cargo center is interesting given that the service employee (SEIU) and UNITE-HERE unions have been trying to organize passenger service workers and concessions workers, respectively, at Chicago airports, and they say Emanuel’s policies are directly jeopardizing airport jobs and degrading working conditions — as David Moberg wrote for In These Times in March.
The center will tap graduates of the Chicago City Colleges enrolled in the aviation training program, one of the new job-focused programs the Emanuel administration is instituting at the City Colleges. Crain’s said the City College connection means it is likely that cargo center workers would be paid at least in part with TIF (tax increment financing) funds for six months before the private employer takes over their payroll.
Based on the preliminary details so far available, it seems like this could, in the best case, be a way of leveraging public funds for significant private job creation and augmenting Chicago’s central location as a transit and trade hub…or, in the worst case, be another example of taxpayer funds being used to subsidize a private venture that creates largely temporary and nonunion jobs.
Meanwhile the Rockford Register Star reports that the Chicago cargo center may compete with cargo expansion plans by the airport in Rockford — a working-class town 80 miles west of Chicago. The paper reports:
In Rockford, airport officials continue to pursue cargo airlines. The airport says air cargo operators can save thousands of dollars per flight by landing here and trucking cargo to operations near O’Hare. The airport is also working to lure a company that provides maintenance, repair, and overhaul services for cargo and passenger jets.
I also wonder whether Chicago’s new cargo center will affect the small airport and job prospects in hard-scrabble Gary, Ind., where civic leaders have long talked of expanding the airport and increasing its cargo handling to spur economic development. The Gary airport currently has almost no passenger traffic, instead relying largely on cargo.