Forget the unemployment rate, Illinois is in a depression
Illinois is tied for the worst income growth in the entire U.S.
Illinois has its lowest unemployment rate in more than a decade, at just 4.6 percent.
Time to pop the champagne bottles and celebrate the state’s economic success, right?
Not so fast.
Illinois’ path to a low unemployment rate has been paved by labor force dropout. Too many workers have given up on the Land of Lincoln, and their act of despair is actually driving down Illinois’ jobless rate.
You see, when an unemployed Illinoisan gives up on looking for work, he is no longer counted as unemployed.
As more Illinoisans give up, the unemployment rate goes down.
Illinois’ low unemployment rate is nothing to celebrate. If anyone is to be cheered, it is the dozens of states like Indiana, Wisconsin and Texas where formerly unemployed Illinoisans have been able to find a new start.
Illinois’ labor force has been shrinking and transferring to other states. Meanwhile, competitor states have seen significant labor force growth.
There are 230,000 fewer Illinoisans in the local labor force compared to before the Great Recession, which reveals that Illinoisans are giving up on their state’s economy.
Neighboring Wisconsin’s labor force is up by 70,000 and Indiana’s has grown by 130,000.
And how about high-powered Texas, where more and more Illinoisans have decamped to in recent years?
The Lone Star State has seen its workforce grow by 2 million in the same time period that saw Illinois’ workforce shrink by 230,000.
Illinois is mired in its own economic depression. The unemployment rate, which can describe a normal state economy, is no longer capturing the tragedy that is unfolding in the Land of Lincoln.
The unemployment rate can’t describe Illinois’ situation accurately because the people it is designed to track are giving up on finding work or leaving the state altogether.
In other words, don’t get caught focusing on the exterior paint job. You have to look under the hood to see how Illinois’ engine is running.
Plenty of indicators show that Illinois is wallowing in its own Great Depression, smack dab in the middle of an otherwise re-invigorated Midwest.
In fact, Illinois economic activity has grown at a slower rate than what occurred during the worst decade of America’s Great Depression, from 1930-1939.
Personal incomes are stagnant in the Land of Lincoln, growing less than 1 percent per year for the past decade. Illinois is tied for the worst income growth in the entire U.S.
One in six Illinois homeowners are deeply underwater on their mortgages. Single-family housing starts are down by 75 percent since before the Great Recession – a steeper decline than in any other state.
And despite years of worker dropout and black out-migration, Illinois still has the nation’s highest black unemployment rate.
The state’s economic engine isn’t functioning properly. It’s time for a tune-up so that Illinois can begin running on all cylinders.
But our elected mechanics in the General Assembly are far less than expert for this type of situation. They are much more likely to throw a wrench in the gears than to remove one. Their habit is to gum up the works with more taxes, debts and regulations.
Lawmakers should cease and desist, and roll back the damage they’ve already wrought.
The Illinois economy needs to be set free. Illinois businesses should be unleashed to hire, expand and profit without state government taxing and regulating away job opportunities. Businesses and homeowners should be relieved from the crippling property taxes that are bleeding value out of Illinois real estate.
Illinois needs more freedom, and less government control. That’s the only way out of the state’s economic depression.