Pritzker could have saved nearly 32,000 jobs during COVID-19 downturn
Illinois is the largest state without a short-time compensation plan, increasing the chances nearly 32,000 job losses will be permanent.
An additional 22,387 Illinoisans filed for unemployment the week ending Aug. 8, bringing total job losses to 1,576,058 since COVID-19 and associated lockdown measures began shutting down the state’s economy, according to new data from the U.S. Department of Labor. However, Gov. J.B. Pritzker could have mitigated these losses by implementing a short-time compensation program, also known as work sharing or a shared-work program, that avoids full lay-offs by allowing employees to work reduced hours as well as receive partial unemployment benefits.
While most large states have similar programs, Illinois remains an outlier when it comes to these benefits. Illinois has had the ability to implement a short-time compensation program since 2014, but Pritzker has refused to act during the current crisis. Had Illinois implemented this program, the state could have saved an estimated 31,795 jobs – more than the number of jobs lost in the past week and more than all the jobs in Danville, Illinois.
In states that have the programs, 3.4% of those receiving unemployment benefits are doing so through the programs. This means they still have jobs and the odds their jobs will be there at the end of the pandemic are far greater. If Illinois had a program that delivered similar results, the state could have retained an additional 31,795 jobs.
The lack of a work sharing program has not been the only issue with the state’s unemployment system. Unemployed Illinoisans are still struggling to reach the Illinois Department of Employment Security to request benefits. Meanwhile, sole proprietors, freelancers and independent contractors, or “gig workers,” had to wait more than 50 days after the state’s stay-at-home order to become eligible for benefits. Making matters even worse, the unemployment system has also been plagued by fraud that has left some unable to access their benefits.
Absent government stimulus, many businesses will have to close permanently. Fewer jobs mean many families will struggle to keep up on their rent, mortgage and credit card payments. It also means the risk of default has increased.
The COVID-19 impacts on small businesses would be compounded by Pritzker’s “fair tax.” If he gets voters to approve his tax hike Nov. 3, it will increase taxes up to 47% on more than 100,000 small businesses just as they are trying to recover from the COVID-19 economic damage. Those small businesses are responsible for the vast majority of new jobs in Illinois, and will be vital to the state’s recovery.
Economists and former Pres. Barack Obama agree: You don’t hike taxes during a recession.