Every metropolitan area in Illinois shed jobs in 2020
The record year for job losses hit every corner of Illinois amid COVID-19 and state-mandated lockdowns.
Illinois suffered the worst year for jobs in state history during 2020, shedding 423,300 jobs (-6.9%) during the year. These job losses weren’t just confined to certain areas of the state: every metropolitan area shed jobs.
Job losses were also most heavily felt in the state’s most populous areas. From December 2019-December 2020: Danville -900 (-3.3%); Carbondale-Marion -2,500 (-4.3%); Champaign-Urbana -5,500 (-4.8%); Davenport-Moline-Rock Island -9,400 (-5.0%); Springfield -5,700 (-5.2%); Kankakee -2,600 (-5.6%); Bloomington -5,700 (-6.1%); Lake County-Kenosha County -29,100 (-6.9%); Rockford -10,300 (-7%); Decatur -3,600 (-7.2%); Chicago-Naperville-Arlington Heights -284,300 (-7.5%); Elgin -24,100 (-9.2%); Peoria -16,300 (-9.6%).
While some areas fared better throughout the year, each metro lost a significant portion of their jobs in 2020 amid COVID-19 and state-mandated mitigation measures. Naturally, significant job losses also meant high unemployment rates, which rose everywhere in Illinois during 2020.
Unemployment rates skyrocketed during the year in every metro, but rose the fastest in the Chicago area, which saw unemployment rates more than triple from 2.8% in December 2019, to 8.7% in December 2020. Previously, Chicago had the lowest unemployment rate of all metropolitan areas in the state, but now has the highest unemployment rate of all metros. This is likely in part to severe mitigation measures that particularly affected the Chicago leisure and hospitality industry, as indoor dining was prohibited for longer in Chicago than nearly any other area of the state. However, there were also voluntary reductions in economic activity to limit exposure and rapid spread of COVID-19 which likely also disproportionately impacted the most population-dense areas of the state.
The negative impact of COVID-19 and state-mandated mitigation measures on the labor market put many Illinoisans out of work. Many gave up looking for a job altogether. Across Illinois’ metropolitan areas, nearly 186,000 Illinoisans dropped out of the labor force.
The areas of the state where laborers exited the workforce the most were Peoria and Elgin, the two metros that saw the largest decline in jobs altogether. This general trend held true among nearly all metropolitan areas; the more affected by job losses, the more residents gave up looking for work. This indicates the unemployment problem is likely much more severe than the unemployment rate reveals, as these workers are not counted in that measurement. The one notable exception, however, is Chicago – one of the areas most affected by job losses – saw the smallest decline in labor force; part of the reason why Chicago’s unemployment rate is now by far the highest in the state.
Obviously, 2020 was a gruesome year for the labor market across Illinois, and although it looks like there may be some hope with a COVID-19 vaccine, the state still has a painful economic recovery ahead. Making matters worse for already-struggling businesses, Gov. J.B. Pritzker is continuing to pursue new taxes, even after voters soundly rejected his progressive income tax hike Nov. 3.
While the governor has, at least for the coming year, given up hopes of raising the state’s income tax, he is now promoting closing “loopholes” to raise more revenue. He recently failed to get the lame duck legislature to cancel a pandemic recovery tax credit for small businesses that would have taken from $500 million to $1 billion more from them as they struggle. Pritzker has vowed to pursue the money again in March with the new legislature.
As the state’s economy continues to struggle with the COVID-19 downturn – and to a much greater extent than the rest of the nation – it is imperative lawmakers work to avoid the harm to businesses and jobs that tax hikes would create. Economists argue against raising taxes during a recession.
Instead, Illinois can improve its finances and continue to provide core services mainly by implementing constitutional pension reform. Instead of just throwing more money at pension debt and deficits, constitutional pension reform would offer overburdened Illinois taxpayers a path to declining debt, lower taxes and more effective state government.
A more sustainable recovery is the goal, not more historic job losses.