PRESS RELEASE from the ILLINOIS POLICY INSTITUTE CONTACT: Melanie Krakauer (312) 607-4977

39% of Illinois businesses still closed as state reopens with Phase 5
Illinois Policy Institute experts share where the Illinois economy stands now 

CHICAGO (June 12, 2021) – As Illinois fully reopened for business with Phase 5 yesterday, the state’s economy had significantly fewer businesses than prior to the pandemic.

As compared to highs in January 2020, Illinois had 39% fewer businesses this May, according to data from the Opportunity Insights Economic Tracker, a project of Harvard University.

The biggest losses are in the food and accommodations sectors, where the number of small businesses that remained open fell by nearly 53%, the Illinois Policy Institute finds. The leisure and hospitality sector saw a 52% decline in the number of surviving small businesses. For the retail sector, the number of small businesses fell by nearly 39%.

Unfortunately for those Illinoisans still out of work, the General Assembly passed a fiscal year 2022 budget that includes four of Gov. J.B. Pritzker’s nine new tax hikes, including ones that would reduce investment and hurt job creation efforts by removing key tax incentives and deductions.

Where Illinois’ economy stands:

• Illinois has recovered half of the over 800,000 jobs it lost during the pandemic. One year after the state began recovering from the harsh economic downturn, the state is still down 424,800 jobs.
• Illinois is battling one of the highest unemployment rates in the nation at 7.1%. This is one percentage point higher than the national average of 6.1%.
• Since the recovery began, Illinois’ job growth ranks worst in the Midwest.
• As of June 4, over 15,000 calls are still in a callback queue, awaiting a response for help with unemployment benefits from the Illinois Department of Employment Security, according to a recent query from the Illinois Policy Institute.

Dr. Orphe Divounguy, chief economist at the nonpartisan Illinois Policy Institute, offered the following statement:

“Though Illinois’ economy has spent a year trying to bounce back from the COVID-19 economic shock, we’ve seen Illinois’ job market recover at a slower pace than the rest of the nation. As Illinois businesses take an important step forward by being allowed to reopen, cash-strapped business taxpayers face higher taxes. Those taxes will make it harder to raise wages or invest and bring back workers.

“The new taxes in the budget – the treatment of net operating losses and rolling back bonus depreciation – will raise the pretax return businesses require to pursue investment opportunities, reducing the number of projects they’ll find worthwhile. By raising the cost of investment, we’re shrinking the number of available opportunities for over 400,000 job seekers.”

To read more about the economic impacts of the COVID-19 pandemic on Illinois jobs, visit: illin.is/IDES.

For bookings or interviews, contact media@illinoispolicy.org or (312) 607-4977.