Illinois adds 31,200 jobs in July, still missing 88,600 from pandemic
Illinois’ employment recovery continued in July, but the state is still missing nearly 1 in 9 jobs lost during the pandemic.
Illinois added 31,200 jobs from mid-June through mid-July, marking 14 consecutive months of job gains. However, the state’s unemployment rate of 4.4% remains far higher than the national unemployment rate of 3.5% and third highest of any state in the nation.
Nearly all major industries experienced job gains during the month. The largest gains came from the professional and business services sector, which grew payrolls by 10,000 during the month.
Manufacturing accumulated an additional 6,300 jobs; trade, transportation and utilities added 5,700 payroll positions; government employment grew by 4,300; leisure and hospitality payrolls grew by 3,400; financial activities gained an additional 2,200 jobs; other services added 1,800 positions; and the information sector added 300 jobs.
However, some industries also shed jobs or stagnated. Mining experienced no change in employment; construction and educational and health services payrolls both declined by 1,400 during July.
The construction sector experienced its first job losses in five months while education and health payrolls declined for the first time in six months. June marked the fifth consecutive month of either no job gains or job losses for Illinois’ mining industry.
Despite monthly growth in total payrolls during the past year, Illinois is still missing 88,600 jobs relative to pre-pandemic levels, with the missing jobs being spread across virtually every industry.
Leisure and hospitality payrolls are down 43,900 jobs, the most of any sector and accounting for nearly one-third of the state’s missing jobs. Meanwhile, the government and education and health sectors also make up a large chunk of Illinois’ missing jobs, down 36,400 and 32,600 jobs respectively.
With revisions in the latest jobs report, only two sectors have recovered the job losses suffered at the onset of the COVID-19 pandemic and state-mandated lockdown. Trade, transportation, and utilities and professional and business services have both recovered and are now above pre-COVID employment levels. Revised numbers show the information sector payroll below its pre-pandemic levels while the construction sector’s July job losses put it back in the red.
While the continued employment recovery in Illinois is welcomed, a great deal of economic uncertainty remains. The Federal Reserve has raised interest rates four times already this year, with more rate hikes anticipated in the coming months. Despite rising interest rates, inflation remains among the highest levels seen in the past 40 years – up 8.5% from a year ago, the bureau reported on Aug. 10. As payroll growth accelerates, inflation expectations also remain high and increase the likelihood of steeper, more frequent rate hikes by the Federal Reserve. Larger rate hikes reduce the chances that inflation can be brought down without the economy slipping into a recession.
Illinois’ economy still hasn’t fully recovered from the economic downturn of 2020. The state is still missing 88,600 jobs and the unemployment rate is the highest in the Midwest. Making matters worse, Illinoisans suffered more during the Great Recession than most other Americans and are poised to be particularly vulnerable in the event of an economic downturn today.
On top of recent policies that have exacerbated the threat of recession, Illinois governments have less flexibility in their budgets and spending on vital services, which will be especially needed during a recession, has largely been crowded out by pension obligations. The state is also facing a $1.8 billion unemployment trust fund deficit that raises questions about how much assistance could be provided to Illinoisans who lose their jobs and about whether it would result in higher taxes for businesses.
The results could be catastrophic for Illinois, whose businesses and residents are already fleeing the state. Three major corporations – Boeing, Caterpillar and Citadel – have all announced since May they would be relocating company headquarters out of Illinois. A record exodus driving population decline threatens to prevent the state’s economy from ever returning to pre-pandemic employment levels.
The first step to ensure Illinoisans don’t endure a particularly painful future economic downturn will be for voters to take a hard look at Amendment 1 on the Nov. 8 ballot. Amendment 1 would change the Illinois Constitution to grant unions in Illinois more extreme powers than they have in any other state, including the ability to bargain over virtually limitless subjects, the ability to override state law through their contracts and guarantees taxpayers and lawmakers would have an extremely difficult time reversing course.
Should Amendment 1 pass, Illinois’ $313 billion pension debt would continue to balloon as state and local taxes, which are already among the highest in the nation, rise in an attempt to keep up. The property tax alone is estimated at more than $2,100 over four years if the amendment passes. Spending on vital programs would continue to fall. Illinois’ housing and labor markets are already suffering as high taxes and reduced services make finding a job and living in the state tenuous. These problems would be exacerbated should the U.S. enter a prolonged recession.
Illinois needs reform that will control the state’s cost drivers and deliver vital support to taxpayers when they need it the most. Amendment 1 ensures those challenges worsen during periods of economic duress.