Nearly half of Illinois’ metropolitan areas lost jobs in August
The latest job numbers show Illinois continues struggling to recover pandemic job losses, a bad sign for its lagging economy as recession fears rise.
Illinois added just 4,100 jobs from mid-July through mid-August, marking the weakest month of job growth in more than a year and a significant slowdown in the state’s employment recovery.
August saw seven of the 15 metropolitan areas that contain parts of Illinois lose ground in recovering jobs lost during the pandemic, according to data released Sept. 23 by the U.S. Bureau of Labor Statistics. While the largest decline came from the St. Louis metro area, which lost 1,800 jobs, the largest percentage decline was in the Cape Girardeau metro area, declining by 2.06%, or 900 jobs. Those areas are predominantly located outside of Illinois.
Other metro areas to suffer job losses were Springfield, which lost 500 jobs; Davenport-Moline-Rock Island, losing 400 jobs; Rockford, losing 300 jobs; and Decatur and Kankakee, with each losing 100 jobs.
The Chicago-Naperville-Arlington Heights area led job growth by adding 10,600 jobs for the month. Other areas to add jobs included Bloomington, which gained 1,000 jobs; Peoria, which added 800; the Lake County-Kenosha County area and Champaign-Urbana area, which each added 400 jobs; Elgin added 300; Danville added 200; and Carbondale-Marion added 100 jobs for the month.
Despite continued growth in payrolls as a whole, Illinois is still missing more than 80,000 jobs relative to pre-pandemic levels, with the missing jobs being spread across nearly every metro area. As of August, only Bloomington has recovered from early 2020 job losses.
Only 90% of 2020 job losses have been recouped statewide since the recovery began, less than any neighboring state except Wisconsin. Some areas of the state have fared better than others. With August’s gains, the Chicago-Naperville-Arlington Heights joins the Carbondale-Marion, Springfield, Lake County-Kenosha County and Davenport-Moline-Rock Island areas in regaining at least 90% of the jobs lost in early 2020.
St. Louis, Elgin, Rockford, Peoria, Decatur, Champaign-Urbana, Danville, and Kankakee are all trailing the Illinois recovery. The recovery has been particularly sluggish in Kankakee, which is still missing 64% of the jobs it had in 2020.
The Cape Girardeau area had been keeping pace with Illinois’ recovery, but with this month’s losses has slipped back to missing one-third of its jobs. It had been down only 14% in June 2022.
Many experts are concerned the nation is on the brink of – or may already be in – a recession. If that is the case, Illinoisans could be in for a particularly tough downturn, as job openings are falling most rapidly here and the state is already battling the highest unemployment rate in the Midwest.
The Federal Reserve raised interest rates in September, the fourth time this year, in an effort to combat rampant inflation. Despite rising interest rates, inflation has continued to remain higher than expected – up 8.3% from a year ago. The national economy shrank by 0.9% during the second quarter of 2022, according to preliminary data released July 28 by the U.S. Bureau of Economic Analysis. That is traditionally a key indicator of a recession. The combination of these factors is bad for future economic prospects. The U.S. labor market might not be able to sustain its recovery because of these challenges.
Illinois could still be more susceptible to a potential economic downturn as businesses and residents flee. Three major corporations – Boeing, Caterpillar and Citadel – all announced in the past two months they would be relocating their company headquarters out of Illinois. And a record exodus driving population decline threatens to prevent the state’s economy from ever returning to pre-pandemic employment levels.
The first step to ensure Illinoisans don’t endure a particularly painful future economic downturn will be for voters to take a hard look at Amendment 1 on the Nov. 8 ballot. Amendment 1 would change the Illinois Constitution to grant government unions in Illinois more extreme powers than they have in any other state, including the ability to bargain over virtually limitless subjects, the ability to override state law through their contracts and a guarantee taxpayers and lawmakers would have an extremely difficult time reversing course.
Should Amendment 1 pass, Illinois’ $313 billion pension debt would continue to balloon as state and local taxes, which are already among the highest in the nation, rise in an attempt to keep up. The proposal would guarantee a $2,100 property tax increase for the typical Illinois homeowner, according to Illinois Policy Institute projections. Spending on vital programs would continue to fall. Illinois’ housing and labor markets are already suffering as high taxes and reduced services make finding a job and living in the state tenuous. These problems would be exacerbated should the U.S. enter a prolonged recession.
Illinois needs reform that will control the state’s cost drivers and deliver vital support to taxpayers when they need it the most. Amendment 1 ensures those challenges worsen during periods of economic duress.