Illinois restaurants, bars take brunt of job losses amid harsh lockdown
Unemployment claims remain five times higher than normal, but the nation’s second-harshest restaurant restrictions have hit that job sector hardest.
An additional 46,005 Illinoisans filed for unemployment the week ending June 20, bringing total job losses to 1,335,433 since COVID-19 began shutting down the state’s economy, according to recently released data from the U.S. Department of Labor. The Illinois numbers have been growing slightly during the past three weeks as the rest of the nation returns to work.
The workers taking the hardest hit are in the accommodation and food services sector, which lost 44% of its jobs since February. There are 233,500 of those jobs missing, which comes as a new WalletHub study shows Illinois imposes the nation’s second-harshest lockdown on its restaurants and bars. Harsher lockdown measures have been associated with greater job losses during the COVID-19 pandemic.
Total non-farm jobs remain down by 737,700 (-12%) compared to February.
While the number of new jobless claims has flattened during the past month, new initial unemployment claims remain nearly five times higher than this time last year. Although the unemployment claims data appears to be improved from the past couple of months, Illinois’ economy, which lost nearly 800,000 jobs at the peak of the crisis, is yet to see any substantial jobs rebound.
Lockdowns hurt, as the evidence suggests most small businesses have less than two months of cash on hand while the median small enterprise has more than $10,000 in monthly bills and less than one month of cash on hand. Illinois’ small businesses employ the majority of Illinois workers. Allowing businesses to open again is an important step to save lives and livelihoods.
Although lifting a lockdown will not restore economic activity to levels observed before the pandemic, research shows the sequential lift of a lockdown is the best way to mitigate both the human cost of the virus and the economic damage. Instead, Illinois’ economy has been left with a vague, broad-based re-opening plan that requires a vaccine – which may take over a year to develop – before fully opening the economy again.
Further, Illinois voters need to consider the effects of the progressive income tax hike state leaders are seeking Nov. 3. Economists argue against increasing taxes during a recession. A progressive tax will increase taxes up to 47% on more than 100,000 small businesses just as they are trying to recover from the COVID-19 economic damage, and those small businesses are responsible for the vast majority of new jobs in Illinois.
A safe return to work for Illinois families is the first step to tackle growing racial gaps and to revive the Illinois economy. A tax increase would be a misstep.