Illinois’ less-populated areas lead May jobs decline

Illinois’ less-populated areas lead May jobs decline

Illinois shed 7,900 jobs in May but most of those losses were outside of urban areas.

New data shows Illinois’ May job declines mainly hit outside of urban areas, accounting for 7,100 lost jobs out of a total drop of 7,900.

Illinois lost 7,900 jobs from mid-April to mid-May, marking the first month of job losses for the state in 2021, data released June 17 showed. Most of the decline came from less-populated areas of the state, with the Elgin, Rockford and Bloomington being the only urban areas area to lose jobs, more recent data showed.

The areas of the state not considered to be within metropolitan areas shed 7,100 jobs (-1.2%); Elgin lost 1,200 (-0.5%) of jobs; Rockford payrolls declined by 1,000 (-0.7%); and Bloomington lost 600 (-0.7%) positions.

Despite the state losing jobs overall for the month, not all metropolitan areas saw payrolls decline. Peoria added 600 (+0.4%) jobs; Springfield grew payrolls by 500 (+0.5%) jobs; Champaign-Urbana added 300 (+0.3%) jobs; Davenport-Moline-Rock Island increased payrolls by 300 (+0.2%); Decatur grew payrolls by 200 (+0.4%) jobs; and Carbondale-Marion added 100 (+0.2%) jobs.

Chicago-Naperville-Arlington Heights, Danville, Kankakee and Lake County-Kenosha County payrolls remained unchanged during the month.

The dismal jobs report leaves Illinois’ unemployment rate unchanged at 7.1%, the eighth-highest in the nation, while the national unemployment rate declined to 5.8%. Of the metropolitan areas within Illinois, Rockford’s unemployment rate of 8.4% is by far the highest in the state and among the top 20 highest – of 389 metropolitan areas – in the nation.

Unfortunately, Illinois’ latest budget signals Illinois job seekers will continue to struggle relative to residents of other states. We know this because Illinois leaders continue to make the same policy mistakes.

Exactly a decade ago, they raised taxes at the onset of the recovery from the Great Recession. Tax hikes coupled with declining government services resulted in lower investment and sluggish productivity and employment growth, contributing to the state’s lackluster recovery relative to its peers.

This time around, Illinois imposed four taxes on businesses totaling $655 million. Adding insult to that injury, Illinois lawmakers couldn't balance the state budget for the 21st year in a row despite the tax increases.

By raising the cost of doing business in Illinois, the changes will be a drag on wages, and will lower investment and opportunity for the state's idled workers.

The tax hikes will not result in higher levels of public investment, which raise employment and the supply of government services. Nor will they provide help to needy Illinoisans because more than 25% of Illinois’ budget is dedicated to rising public employee retirement costs. That number is expected to continue to increase.

The estimated total cost of pensions had soared to nearly $28 billion on average each year in forgone income and direct payments to the pension systems by 2017. Tax hikes without any improvements in the quantity and quality of public services harm the state’s economic prospects and lower Illinoisans’ incomes.

Turning things around means a constitutional amendment that allows for a reduction in future pension liabilities and thus pension costs.

Instead, Illinois leaders put a constitutional amendment on the 2022 ballot to give public sector unions even greater power at the expense of everyone else. This amendment, Senate Joint Resolution Constitutional Amendment 11,  would permanently raise the unit cost of government services.

If SJRCA 11 becomes permanently enshrined in the Illinois Constitution, the state’s labor market performance will continue to lag.

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