Illinois workforce shrinks by largest margin in state history

July 20 2014

In June, Illinois suffered the largest monthly workforce loss in recorded state history.

June’s workforce loss was worse than the worst month of the Great Recession. Overall, 21,700 Illinoisans gave up and left the workforce in June; in September 2008, 17,500 Illinoisans quit the workforce. (Bureau of Labor Statistics data go back to 1976.)

This hefty workforce loss has driven state’s unemployment rate down to 7.1 percent from 7.5 percent, creating a superficial appearance of improvement. And Gov. Pat Quinn says Illinois needs to “keep the momentum.”

Keeping up this sort of “momentum” would be disastrous.

An astonishing 46,000 Illinoisans have quit looking for a job and dropped out of the workforce over the last three months. That three-month loss of workers from the workforce is the second-worst decline in the history of Illinois.

The working-age population in Illinois grew by 12,000 people over that same three-month period, which leaves nearly 58,000 working-age Illinoisans unaccounted for and out of the workforce in just three months.

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The state’s jobless rate has plummeted from 8.4% to 7.1% in the same time frame. But it’s workers giving up and dropping out of the workforce, not the creation of new jobs, that has been the determining factor in this decline.

Illinois private-sector businesses reported 5,200 net new jobs in June. However, Illinois still has the worst jobs record in the U.S. in 2014, with the state down 18,100 private-sector jobs on the year. Illinois is the only state in the Midwest to have a net loss of jobs in 2014.

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June 2014 marks an all-time record for Illinoisans giving up and leaving the workforce. The need for bold reform could not be more obvious.

Illinois needs a lower tax burden, structural tax reform, a regulatory overhaul and a more hospitable environment to foster entrepreneurship. Anything less is simply encouraging continued failure.