All-time record 201,000 Illinoisans quit their jobs in August
Illinois’ sluggish labor market is driven by a record number of workers quitting their jobs at the same time there are fewer job opportunities than in nearly any other state. Even though an all-time record number of workers quit, Illinois was only No. 7 in the “Great Resignation.”
Illinois’ sluggish labor market is driven by a record number of workers quitting their jobs at the same time there are fewer job opportunities than in nearly any other state. Even though an all-time record number of workers quit, Illinois was only No. 7 in the “Great Resignation.”
The “Great Resignation” hit Illinois hard in August, setting an all-time record as 201,000 Illinoisans left their jobs – 3.5% of the state’s employees.
But Illinois was only No. 7 in the nation for resignations. A record 4.3 million Americans quit their jobs in August, driven by large spikes in individuals within the accommodation and food services, wholesale and retail trade, and state and local government and education sectors resigning.
While it is clear Illinois’ sluggish labor market is being driven by a substantial surge in employees quitting their jobs, what is less clear are the reasons why. Illinois is one of eight states that actually has more unemployed individuals than job openings.
The massive spike in quit rates is a bit more understandable in most other states and at the national level, where there are more job openings than job seekers. When there are more job openings than available workers, employers must offer more competitive salaries and benefits in order to attract new employees from a limited pool of workers, often encouraging even those who are gainfully employed to leave their jobs in search of new opportunities.
When there are more job seekers than job openings, employers do not feel as pressured to up compensation because workers are often willing to accept lower wages and benefits for the security of a job.
For Illinois, where available job openings are relatively scarce, it is unusual to see such a substantial spike in individuals leaving their jobs. The phenomenon at the national level has been deemed “the Great Resignation,” and is likely because many Americans are seeking more competitive job offers during a rare time in which employees have increased bargaining power compared to their employers.
It remains to be seen whether this will be the case in Illinois.
Illinois continued to grow payrolls and reduce unemployment counts from mid-August to mid-September, according to data recently released by the U.S. Bureau of Labor Statistics.
Illinois added 9,300 jobs during the month. The state’s unemployment rate fell from 7% to 6.8%.
The job sectors with monthly gains in employment were: Leisure and hospitality (+5,500), trade, transportation and utilities (+3,700), construction (+2,500), government (+900), information (+400), educational and health services (+400), and mining (+100). The industry sectors that lost were: Manufacturing (-2,800), financial activities (-1,100), professional and business services (-200), and other services (-100).
The continued growth in payrolls yielded a slight improvement in the state’s unemployment rate, which fell from 7% to 6.8%. However, Illinois’ recovery continues to lag the rest of the country as the national unemployment rate is now a full two percentage points lower than in Illinois. Illinois faces the sixth-highest unemployment rate in the nation and the highest in the Midwest.
It is unlikely Illinois will make substantial progress in closing the recovery gap with the rest of the nation, as new Job Openings and Labor Turnover Survey data reveals more Illinoisans are now losing or quitting their jobs than are finding them. For every Illinoisan hired during the month of August, 1.15 Illinoisans were separated from their jobs – one of the highest rates in the nation. While this phenomenon hasn’t yet resulted in job losses in the monthly jobs report (the job openings survey data and monthly jobs report are different surveys and cover slightly different time periods) this trend bodes ill for the state’s economy going forward.
Separations outpacing hiring activity in Illinois isn’t being driven by a lack of job opportunities. Illinois’ hiring rate of 4.1% is only slightly lower than the national average of 4.3%, and sits squarely in the middle of Midwestern state averages.
Despite hiring activity on-par with most other states, Illinois’ increase in the number of individuals quitting their jobs now threatens to set back the state’s recovery. With more unemployed Illinoisans than jobs available, it is unclear whether workers will find improved job opportunities or simply fall even farther behind peers in other states.