Stunning data show Illinois economy stalled out before COVID-19 pandemic
The last thing Illinois needs is more bad news for the sake of it. But ignoring this reality threatens to make this crisis worse.
Millions of Americans are out of work.
In any other downturn, they could print out a stack of resumes, pound the pavement and press flesh. Not today. Entire sectors of the economy are comatose and “non-essential” workers stay at home. Illinois’ unemployment website is crashing under duress.
Experts agree the pandemic will get worse before it gets better in the U.S. Illinois must do everything in its power to prepare for the worst. But new data showing the state’s economic performance in 2019 raise an important question: How can the state make sure the slumbering giant gets back to work when he awakes?
Data from the Bureau of Labor Statistics released this month show Illinois was home to one of the worst economies in the nation last year.
While almost every other state was expanding payrolls, Illinois actually lost 5,200 jobs in the private sector for the first time in a decade. Last year was the only time on record that Illinois lost private sector jobs while the nation’s economy was expanding.
This performance ranked 47th of 50 states. When counting the public sector, the addition of 5,100 payroll jobs overall ranked 43rd.
Driving the Illinois downturn was the nation’s worst loss of manufacturing jobs – a gut punch for the state’s middle class. Illinois was down 13,100 manufacturing jobs in 2019.
Of course, the last thing Illinois needs is more bad news for the sake of it.
But ignoring this reality threatens to make this crisis worse, because the wrong moves today will kneecap the state’s recovery when it’s needed most.
For starters, the state should not be celebrating failure. In press conferences last year and into 2020, state leaders touted a strong and healthy economy as they passed a massive capital bill and gas tax hike, imposed a statewide minimum wage hike, and put a $3.7 billion progressive income tax hike on the 2020 ballot.
The data show the opposite.
One example: Month after month, state leaders including Gov. J.B. Pritzker have touted Illinois’ low unemployment rate.
The data show this is madness.
The state’s unemployment rate wasn’t declining because of people finding work. It was declining because people gave up on searching or left the state entirely. Illinois’ labor force (the number of employed people plus the number of unemployed people searching for a job) shrunk by nearly 43,500 over the year – the worst drop in the nation. This trend continued into the first two months of 2020.
These stark figures show why Illinois policymakers must hold two response phases in their heads at the same time: the emergency and the recovery.
Emergency actions should include, among other responses, busting down barriers to health care access, immediate tax relief funded by state borrowing, and forgiving fines and fees for those who can’t afford them.
A rapid recovery requires handling the state’s crushing debt problem – which is crowding out critical aid dollars – and wiping a small-business tax hike off the November ballot. State lawmakers made the mistake of passing a massive income tax hike in 2011 amid an economic recovery, costing Illinois thousands of jobs and billions of dollars in economic activity. The state must avoid repeating this failure, and remove or delay the controversial $3.7 billion progressive income tax hike question.
Every Illinoisan can make a major difference to help the state today: washing your hands regularly, staying home as much as possible, donating to local aid efforts and supporting small businesses.
But it’s up to leaders to secure a brighter future.