Indignation, action needed on Illinois’ jobs crisis

Austin Berg

Director of Content Strategy

Austin Berg
August 31, 2017

Indignation, action needed on Illinois’ jobs crisis

Until Illinois lawmakers get serious about economic growth, don’t expect the state’s jobs trend to get off the depressing path it’s been treading for years.

Illinois lawmakers spent much of the last month speaking out about the need for a major change in how the state funds schools. Their message hit headlines statewide on a daily basis.

They said Illinois was a national laggard. They said the system was hurting low-income families. And they claimed to have fixed all this in a sweeping education funding bill sent to the governor’s desk. After all, they said now was the time for action.

But when Illinois students graduate, where will they work?

All the above concerns about Illinois’ education system apply to the state’s economy. It is deathly ill. And leaders in the General Assembly appear uninterested in supplying the necessary care to bring it back to health, and often seem intent on its further demise.

Preliminary jobs data from the Bureau of Labor Statistics, or BLS, show the Land of Lincoln is trailing far behind the jobs growth seen nationwide. And what meager growth can be found in Illinois is concentrated in the northeast corner of the state.

Illinois’ nonfarm jobs growth was an anemic 0.65 percent from July 2016 to July 2017. That’s less than half the national average. It’s also worse than every neighboring state by a wide margin.

In fact, Indiana, Kentucky, Michigan and Missouri all outpaced the nation as a whole over that time.

A deeper dive into the data shows a fissure in what little jobs growth Illinoisans do experience. While the state’s rate of jobs growth is less than half the national average, the rate outside the greater Chicago area is much worse.

Here’s how the northeast numbers shake out: The Chicago-Naperville-Arlington Heights and Elgin metro divisions combined with the Illinois section of the Lake-County-Kenosha-County metro division saw jobs growth of 0.72 percent, according to data from BLS and the state.

That’s weak. But it’s better than what the rest of Illinois is experiencing.

Outside of the greater Chicago area, Illinoisans saw jobs growth of under 0.5 percent over the year, or about 8,000 jobs. That’s peanuts.

And don’t forget weak jobs growth goes hand-in-hand with weak income growth. Indeed, the Land of Lincoln is home to the worst personal income growth in the United States over the Great Recession era.

So what strategies have lawmakers deployed to cultivate a healthier economy? One where employers plant roots in Illinois as opposed to our neighboring states? One where homegrown small businesses mature and flourish? One where families can count on sustained success?

There’s hardly any to speak of.

The biggest change Illinois workers and businesses will experience this year is a larger chunk of their wallet heading to Springfield due to the 32 percent income tax increase. And residents’ property taxes are still set to be higher in Illinois than in every state with no income tax at all, with little chance of going down.

Meanwhile, neighboring Wisconsin’s property taxes as a percentage of personal income are the lowest the state’s seen since the end of World War II. And, for a house of the same value, Illinois property taxes are nearly triple those in neighboring Indiana.

Adding insult to injury, Aug. 30 marked the one-year anniversary of a cry for help from Greg Baise, president and CEO of the Illinois Manufacturers’ Association, or IMA. He publicly pleaded for lawmakers to enact economic reforms to save the state’s manufacturing middle class.

Since then, Illinois has only added 600 manufacturing jobs. Neighboring states have added 9,900 (Wisconsin), 5,600 (Michigan), 6,000 (Indiana), 5,800 (Missouri) and 1,800 (Iowa) manufacturing jobs.

But bold reforms to address the cost drivers of Illinois property taxes and the costliest workers’ compensation system in the region – both of which are crushing manufacturers – have been stonewalled in the General Assembly.

House Speaker Mike Madigan enjoys rattling off a list of phony pro-growth reforms he’s pushed out of his chamber this year, citing bills on workers’ compensation and property taxes. But none of these are anywhere near strong enough to jumpstart the economy, lower the cost of doing business, or keep more money in workers’ pockets.

The speaker’s idea of workers’ compensation reform, for example, was creating a state-run workers’ compensation insurance company. As most residents will tell you, Illinois has no clue how to run a business. Just look at the state’s books. The IMA came out strongly against the proposal, saying the bill “will not reduce costs or reform the system to make Illinois competitive.”

Thankfully Gov. Bruce Rauner vetoed it.

Meanwhile, Illinois’ middle class is stretched ever thinner as Madigan and others in the General Assembly spin their wheels.

Until Illinois lawmakers get serious about economic growth, don’t expect the state’s jobs trend to get off the depressing path it’s been treading for years.

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