Nearly 40K Illinois jobs still missing 3 years after pandemic
Illinois is still missing 39,500 jobs that existed before the COVID-19 pandemic hit three years ago. Also, 2022 jobs growth was weaker than first thought.
Illinois added 9,600 fewer jobs in 2022 than was initially reported, meaning the jobs lost since the pandemic hit three years ago now stands at 39,500, according to new data released March 9 by the Illinois Department of Employment Security.
Total nonfarm payrolls rose by 151,400 from December 2021-December 2022, down from the 161,000 originally predicted.
The downward revisions were primarily concentrated in the leisure and hospitality sector (-7,400) and manufacturing (-7,300), while government (+8,000) and educational and health (+5,500) payrolls experienced large, upward revisions.
Other industries receiving downward revisions were financial activities (-2,900); construction (-2,600); trade, transportation and utilities (-2,300); professional and business services (-1,900); and information (-1,500). Other services (+2,400) and mining (+400) payrolls were adjusted upwards.
The downward revisions also mean Illinois is missing even more jobs compared to pre-pandemic levels than previously thought. As of January 2023, the state was missing 39,500 jobs compared to when jobs peaked in January of 2020. The largest share of the missing jobs are concentrated in the leisure and hospitality sector, which is still missing 38,000 jobs.
The U.S. economy fully recuperated pandemic-era job losses in June 2022 and has since added more than 2.7 million jobs. Illinois’ ability to fully recover remains a question, with the state hitting a record population loss of 104,437 in 2022.
Downward revisions to Illinois’ labor market are not a good sign, particularly as fears over a looming recession continue. In the event of an economic downturn, Illinois is one of the least prepared states. According to data from The Pew Charitable Trusts, Illinois’ current reserves would allow the state to operate for about 12 days, the fewest of any state.
Additionally, a recent stress test conducted by Moody’s Investors Service found most states are well prepared to financially withstand a recession. Illinois is not one of those states. The report found Illinois to be among the least prepared to handle even a moderate recession.
Without serious structural reforms to state spending, public pensions and the state’s tax system, Illinois will likely remain more vulnerable to the adverse effects of economic downturns than other states. The consequence of that vulnerability will mean forcing residents and businesses to pay the price for Springfield’s financial mismanagement through higher taxes, job losses and business closures.