Will Obama’s Speech Save Jobs in Illinois?
by Emily Dietrich President Obama convened a joint session of Congress Thursday night to unveil his latest jobs proposal. Almost immediately, lawmakers and political pundits levied harsh criticism. Leftists expressed fear that the President’s proposal isn’t “bold” enough. The purported $450 billion price tag doesn’t come near the $1 trillion in spending some have agitated...
by Emily Dietrich
President Obama convened a joint session of Congress Thursday night to unveil his latest jobs proposal. Almost immediately, lawmakers and political pundits levied harsh criticism.
Leftists expressed fear that the President’s proposal isn’t “bold” enough. The purported $450 billion price tag doesn’t come near the $1 trillion in spending some have agitated for.
Those on the right bemoan the just-another-political-speech approach that can’t be scored by the Congressional Budget Office (CBO). Although the White House promised that the $450 billion in new spending would be offset by $450 billion in cuts and new taxes, the details won’t be revealed until a later date.
It’s painfully obvious that last night’s speech means President Obama plans to keep America on the tax-now, cut-later path.
Illinoisans know something about that.
In response to exploding budget deficits, lawmakers spiked personal and corporate income taxes in January. Months later, they passed a budget that increased spending.
Yet, the political bickering and tax-and-spend policies do nothing to alleviate Illinois’s jobs crisis. In fact, the jobs crisis in Illinois is only getting worse.
Since January, the trajectory of employment in Illinois has gone one direction – down. To get Illinois back on track, we must do two things. First, we must understand the current employment situation. Then, we can devise a strategy to put Illinois back to work.
What Does the Illinois Jobs Market Look Like?
To understand the jobs market, we have to dig through government-provided employment numbers. The Bureau of Labor Statistics, or BLS, provides this data. To put together a holistic view of the U.S. jobs market, BLS compiles two monthly surveys.
The first survey is called Current Employment Statistics, or CES. CES surveys 140,000 employers nationwide to calculate the number of jobs created in the economy. Using this business survey, CES releases non-farm payroll data. Changes in non-farm payrolls tell us that businesses either have more or fewer jobs from the previous month.
According to the most recent CES report, Illinois lost 24,900 jobs in July. This loss followed on the heels of 7,200 lost jobs in June. Illinoisans want nothing more than to see this number improve in August. Unfortunately, with the U.S. creating no net new jobs in August, job growth in Illinois seems unlikely.
January 2010 – July 2011
But the job numbers alone don’t tell the whole story. It’s one thing to hear from business proprietors, but what are the workers themselves saying?
To find out, BLS conducts what is commonly called the “household survey.” The household survey, also known as the Current Population Survey, or CPS, surveys 60,000 households nationally. This survey captures and releases four key numbers – the size of the labor force, the number of people employed and unemployed, and the unemployment rate for the entire country. Through this survey, we hear straight from the people.
To break national data down to the state numbers, BLS uses elements from both CES and CPS in what is called the Local Area Unemployment Statistics, or LAUS. This set of statistics takes a picture of state employment and allows us to work through numbers on the labor force, employment, and unemployment.
When we look at these LAUS numbers, we see that the number of people employed in Illinois has been dropping since the start of 2011. Since January of this year, there are almost 90,000 fewer Illinoisans employed than at the outset.
January 2010 – July 2011
Source: U.S. Department of Labor, Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
When we dig deeper in LAUS data, we find that the number of Illinoisans employed wasn’t the only number that decreased after January. The size of Illinois’s labor force also shrunk. In fact, it dropped to levels not seen since late 2009.
A shrinking labor force is not good for Illinois’s economy. The smaller the labor force number, the fewer Illinoisans employed or actively looking for work. This decline can translate into shrinking revenues which makes a bad fiscal situation worse.
January 2010 – July 2011
Source: U.S. Department of Labor, Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
The last number we looked at was unemployment rate. Illinois’s high unemployment rate spells more bad news for the state.
In July, Illinois’s unemployment rate jumped to 9.5 percent, up from 9.1 percent. Now, Illinois’s rate stands higher than the national average of 9.1 percent.
January 2011 – July 2011
Source: U.S. Department of Labor, Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
Putting Illinois Back to Work
Even though various factors affect the stock market, its plunging numbers today indicate that Obama’s speech did little to inspire confidence in the U.S. economy.
For Illinois, all four economic indicators – jobs, employment, unemployment, and labor force – reveal a dismal jobs market. Illinois’s current policy choices are not leading to desirable incomes.
With fall fast approaching, the time has come to change the tax-now, cut-later approach.
The General Assembly will return to Springfield in October. Job creating strategies should be at the top of their agenda.
First, lawmakers should repeal the job killing tax hike and clear up layers of red tape. This will enable entrepreneurs to do what they do best – spur job creation and spark growth.
Second, legislators must get the state’s fiscal house in order. This includes reigning in spending and removing obstacles that block private sector growth.