Illinois lost 16,300 jobs on net in December 2015, down 3,000 jobs on the year
The state unemployment rate jumped to 5.9 percent from 5.7 percent, driven by an increase of 18,300 Illinoisans who are unemployed. Illinois also has 178,000 fewer people working compared to before the Great Recession.
Illinois lost 16,300 payroll jobs in December, putting Illinois in the red for jobs in 2015, according to December jobs data from the Illinois Department of Employment Security. The state unemployment rate jumped to 5.9 percent from 5.7 percent, driven by an increase of 18,300 Illinoisans who are unemployed.
Illinois’ December jobs report showed continued labor market weakness. The state shed 16,300 jobs on net, with significant job losses in trade, transportation and utilities (-12,100); professional and business services (-4,600); education and health services (-2,100); information (-2,100); and other services (-1,800). Construction was the only sector with significant gains (+6,700).
Illinois’ household survey data, which count the raw number of people employed and unemployed, showed that Illinois’ workforce grew by nearly 17,000 in December, but unemployment increased by 18,300, causing employment to shrink slightly. The significant uptick in the number of unemployed Illinoisans drove up the state’s unemployment rate to 5.9 percent from 5.7 percent.
Illinois still finds itself with the worst-in-the-nation recovery from the Great Recession. The Bureau of Labor Statistics conducts two surveys to measure labor markets in each state. According to the business establishment survey, Illinois reigns with the worst recovery in the nation, still down 90,500 jobs compared to before the Great Recession. The household survey shows Illinois is likely now the worst in the U.S. for employment recovery, with 178,000 fewer people working compared to before the Great Recession.
Leading up to the Great Recession, Michigan was undeniably the most flailing economy in the Midwest. The Wolverine State saw steady manufacturing and blue-collar job losses for years before the recession, with overall payroll jobs stagnating from 2003 to 2005 before plummeting. Michigan’s household employment peaked in August 2005. Though the U.S. entered the Great Recession in mid-2007, Michigan was already experiencing a recession in 2005.
The same effect could play out again – this time with Illinois playing the role of sick man of the Midwest. Illinois’ manufacturing and industrial sectors, particularly manufacturing and trade, transportation and utilities, saw significant job losses this year, dragging the state’s overall jobs count into negative numbers for 2015.
Labor markets across the nation have been in recovery for six years since the Great Recession ended. However, at some point the economy and labor markets will turn down again in the normal course of the business cycle. As the sick man of the industrial Midwest, Illinois’ weak performance could indicate an oncoming recession, with the Land of Lincoln leading the way.
The next recession will be especially harsh in a state that has seen years of malfeasance, failed governance and broken fiscal and economic policies. Illinois should begin getting its house in order, and quickly. Illinois’ jobs performance in 2015 reveals a state starved for tax relief and economic reform.
Policy reforms should target Illinois’ manufacturing and industrial sectors, where businesses and residents have experienced the most economic pain and job losses. Tax reform and regulatory policy changes are critical for manufacturing and industry. They include:
- Regulatory reform to fix Illinois’ broken workers’ compensation system, which drives manufacturing jobs out of the state
- Regulatory reform to fix the state’s anti-business lawsuit climate
- Tax and spending reform to freeze the nation’s second-highest property taxes and allow local governments to cut budget costs
- Tax and spending reform to avoid another tax hike that would give Illinois the fourth-highest overall tax burden in the country
- Further steps toward pension reform
In addition, more home-rule municipalities should follow the lead of the Village of Lincolnshire to enact local Right-to-Work ordinances. It will be a long road to recovery, and Illinois’ decades of mistakes need to be unworked one step at a time.