The Illinois Department of Employment Security (IDES) recently released the latest data on the state's unemployment rate and job growth, and although 2,200 new jobs were created, the unemployment rate increased to 5.6 percent.
“Illinois continues to recover at a slower rate than the rest of the nation, as witnessed by the meager payroll gains in October,” IDES Director Jeff Mays said. “The recovery has been uneven among the various sectors as Illinois still lags in manufacturing, construction and financial activities, as well as trade, transportation and utilities.”
Illinois' recovery continues to lag behind the rest of the nation. The national unemployment rate was 4.9 percent in October, while Illinois saw a rate of 5.6 percent, an improvement over October 2015, when it stood at 5.9 percent. However, month-to-month, it ticked up 0.1 percent from September. The number of workers seeking employment, whether or not they are receiving unemployment benefits, determines the unemployment rate.
While job growth increased slightly, it sill lags behind neighboring states. In addition, manufacturing jobs are still moving out of state. The state saw a gain of more than 1,600 jobs in manufacturing, 2,000 jobs in government, and 4,800 jobs in professional and business services last month, but it also saw a loss of 3,300 construction jobs.
The gains in manufacturing, however, are offset by the bigger picture, as the state has lost 10,000 manufacturing jobs in the past year. The largest gain over the past year was in the professional and business services industry, with more than 31,400 new jobs. Leisure and hospitality was second, with more than 16,500 jobs added.
“High costs and competition from surrounding states continue to drain manufacturing jobs from Illinois," Illinois Department of Commerce & Economic Opportunity acting Director Sean McCarthy said. "We saw several manufacturers move across the border to Wisconsin in October. Sixteen-hundred new manufacturing jobs is a start, but it is a drop in the bucket compared to the 10,000 manufacturing jobs Illinois has lost over the last 12 months – an average loss of nearly 200 jobs per week. We can build on this month’s growth by making Illinois more competitive and affordable for manufacturers.”
The exodus of jobs and workers from Illinois has been a continuing issue for more than a decade. The primary reasons cited by residents leaving the state were high taxes and better employment opportunities in more business-friendly states. Between July 2014 and July 2015, the state saw a net loss of 105,000 residents. Over the past 10 years, from 2005 to 2015, the state lost 700,000 people.
The loss of blue-collar jobs, such as manufacturing and construction, have pushed residents to make hard choices – seek employment elsewhere or apply for government assistance. Illinois had nearly 2 million participants in the food-stamp program in December 2015.
Since the Great Recession of 2007-09, Illinois' recovery has lagged behind the rest of the nation. Personal-income recovery is the second worst in the nation, with only Nevada faring worse than Illinois.
While high income and property taxes have affected the workforce, the added burden of onerous business regulations has discouraged job growth. The continuing cycle of high taxes and business regulations has driven businesses out of the state. The loss of workers and businesses reduces the tax base, which means lower tax revenues and less money to run the government and fund schools, social services and other essential services.
Illinois must become more competitive with its neighbors to encourage jobs and workers to stay and build a broader tax base that will increase revenues without raising taxes. By making structural changes to the budget, reducing the number of regulations on business and implementing pension and workers' compensation reforms, the state may be able to turn around its weakened economy.