Illinois tied for third-worst unemployment rate in the U.S.

Illinois tied for third-worst unemployment rate in the U.S.

Illinois' employment growth lags the nation and neighboring states in May.

Illinois and Washington’s unemployment rates tied for third-worst in the U.S. in May 2024, with 4.9% of the workforce unemployed, according to new data from the U.S. Bureau of Labor Statistics.

Illinois’ unemployment rate continued to exceed the national average of 4% in May. It was higher than all neighboring states.

Illinois saw modest job growth in May 2024, adding 43,900 jobs compared to May 2023. However, this growth rate ranked Illinois 44th among all states for non-farm job growth at 0.7%. Nationwide, states added 2.7 million jobs during that time, growing at 1.8% in the same period.

Illinois saw the highest growth rates in “other services” adding 9,800 jobs, a 3.9% increase. The state and local government sectors also saw significant gains with jobs growing at 3.7% each. Meanwhile, the professional and business sector saw the largest net decline during the 12-month period, reporting 24,800 fewer positions than a year earlier.

Illinois saw modest gains in 6 out of 11 industries, not including government, the state only outperformed its neighbors in 2 sectors.

Illinois reported the worst job growth rate among neighboring states from May 2023 to May 2024 at 0.7%. Missouri reported the strongest job growth at 2.8%.

Illinois’ job recovery rate since the pandemic also ranked worst among its neighboring states and 45th in the nation, with only 9,800 more jobs than were available in January 2020, only a 0.16% increase.

Illinois’ sluggish job recovery from the pandemic is complicated by population loss continuing to hit communities across the state. Data from the U.S. Census Bureau shows Illinois lost 32,826 residents in 2023, marking the state’s 10th consecutive year of population decline.

Historically, high taxes have been the No. 1 reason Illinoisans considered leaving the state. The Illinois Policy Institute’s Lincoln Poll in 2023 substantiated that reason.

Illinois’ state and local tax burden is the highest in the Midwest. Illinois also levies the second-highest state corporate income tax in the nation and the state’s tax code is among the least friendly for businesses in the Midwest.

Income tax hikes have already fostered an environment in Illinois that makes it harder for Illinoisans to find work and reduces wage growth prospects for those who are employed.

To address these challenges, state leaders need to stop hamstringing the economy with high taxation and poor public policy. Illinois must focus on strengthening its fiscal positionremoving regulatory burdens, and providing real tax relief both to workers who are already finding it difficult to remain and to job creators who are desperately trying to stay.

By taking these steps, Illinois can work toward creating a more competitive economic environment, potentially reversing the trend of slow job growth and positioning itself for stronger economic performance in the future.

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