Illinois unemployment still 3rd highest in U.S.

Illinois unemployment still 3rd highest in U.S.

Illinois continues to maintain a sluggish job market and high unemployment. The December unemployment rate was third highest in the nation, where it has remained for months.

Illinois remains one of the states with the highest unemployment rates, ranking No. 3 with a 5.2% rate during December.

That 5.2% unemployment rate translated into about 340,000 Illinoisans looking for work, according to the U.S. Bureau of Labor Statistics. Only California and Nevada had higher unemployment rates in December. The national unemployment rate was 4.1%.

While the state added 56,000 jobs during 2024, the growth rate trails behind the national average and most of the states surrounding Illinois. The Illinois growth rate was 0.92% while the national growth was 1.42%, or 2.2 million jobs.

Illinois saw the highest growth rates in state government jobs, adding 15,600 jobs, an increase of 11.25%. Other sectors with strong growth rates were private education and health services with 26,600 new jobs and “other sectors” with 9,900 new jobs. The professional and business sector saw the largest net decline during the 12-month period, reporting 16,200 fewer positions than a year earlier. The manufacturing sector lost 6,900 positions and the finance sector also saw a sharp decline of 4,100 jobs.

Illinois saw modest gains in 6 out of 11 industries, not including government.

Illinois’ job recovery rate since the pandemic has been notably slow, ranking 46th in the nation, with only 15,400 more jobs than were available in January 2020. This translated to a 0.25% increase. This ranks dead last among neighboring states with the second lowest being Iowa at a 1.09% growth. Missouri has performed the best in it’s post-pandemic recovery with a 5.62% increase.

The primary culprit in Illinois’ slow economic growth and high unemployment is an unfriendly business environment thanks to high taxes resulting from a constantly mismanaged state budget and government pension system.

Illinois’ job market is slow thanks to a large exodus of skilled workers, but high tax rates are the top reason those workers are leaving. Illinois’ state and local tax burden is among the highest in the Midwest, it 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.

Recent 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. Rising income and property taxes have made housing less affordable in Illinois and reduced returns on housing investment relative to other states.

Illinois has many advantages including its central location and diverse economy. Its problems are self-inflicted. To grow, the state 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.

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