$51,627 in unemployment benefits for average salaried parent in Illinois
Illinois employers are hurting from a lack of workers while the state unemployment rate remains high. When a parent can stay home and make $51,627 on unemployment, the prospects of getting more workers back to work this summer appear dim.
Illinois’ unemployment rate rose to 7.2% July 15, the 8th worst in the nation, at the same time employers are having trouble filling job vacancies.
The average Illinoisan earns $55,770 a year at work. If that person stayed home with their kids and collected unemployment, it would be $51,627.
For a parent earning around the state average, that’s $4,000 less for deciding not to work, and with no child care or transportation expenses.
Crunch the numbers another way and add federal stimulus, and the Chicagoland Chamber of Commerce calculated an unemployed worker receives $35 an hour.
“In Illinois alone, there are tens of thousands of unfilled jobs. Employers are offering substantially higher wages, employment bonuses and taking other steps to encourage people to return to work,” the chamber wrote in an open letter to Gov. J.B. Pritzker. “The problem is employers cannot compete with the approximate $35 per hour unemployed workers have received over the last four months as a result of enhanced UI benefits, tax credits, and stimulus payments.”
Illinois’ 7.2% unemployment rate exceeds the national average of 5.9%. Government policies are not helping reduce it.
Unemployed Illinoisans before the COVID-19 pandemic were required to upload a resume on IllinoisJobLink.com, a state-run job bank. The state rescinded the requirement for those unemployed by the pandemic. Currently, employers have posted over 120,000 jobs on the state jobs site; residents have only posted 37,834 resumes.
This month, Washington joined a growing list of states to require unemployment recipients to search for a job. Illinois will not be joining them.
“I don’t want to pull the rug out from under people that have certainly legitimate reasons for remaining on unemployment,” Pritzker said when asked about the reform.
He also promised to keep paying the extra $300 in federal pandemic unemployment relief through the federal expirationdate of Sept. 6. Over half of states are already putting an early stop to the additional $300 over concerns it is incentivizing people to stay unemployed.
Pritzker’s solution has been to ponder paying people bonuses for returning to work. The program has been used in Arizona, Montana, New Hampshire and Oklahoma and replaces extended benefits with a $1,000 bonus received upon return to work. Even with the bonuses, recipients will still have trouble making more by working than by staying home.
Maximum unemployment benefits – which are set based on the average wage of a person paying into unemployment – are currently $805 per week for single, childless Illinoisans. That is $505 from the state and $300 from federal Pandemic Emergency Unemployment Compensation funds. Because lower wage individuals are more likely to collect unemployment benefits, average unemployment payouts are lower than what the average worker would make on unemployment. Across all recipients, the average benefit paid out was $364.76 as of May 2021 plus the additional $300.
A recipient with a child can receive up to $993 in weekly benefits. The state gives a maximum of $693 to individuals with children, regardless of how many children, plus the $300 from the federal government. Parents as of July were also eligible to receive their child tax credit monthly, which has also been increased per child and per month.
So go to work, average $55,770 and pay for child care, transportation and taxes. Stay home, save the expenses, collect tax breaks and get up to $51,627.
It would be nice if Illinois didn’t leave people questioning their work ethic.
Correction: An earlier version of this article misstated the average weekly unemployment benefit. The numbers reflect the amount of unemployment benefits that can be received by a worker earning the state average income.