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ILLINOIS
LOSES 16,700 JOBS IN FACE OF NEW TAX HIKE PROPOSALS
Illinois Policy Institute
New Illinois jobs data reveal a state with
thousands of job losses, unemployment rising to 5.7 percent, a
collapsing manufacturing sector, and several downstate communities
sliding back into recession — all of which make the Illinois Senate’s
new tax hike proposal especially harmful.
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 Illinois lost 16,700 payroll jobs in December 2016, according to a Jan. 20
report from the Illinois Department of Employment Security, or IDES.
In addition, the state’s November jobs count was revised down from a gain of
1,700 jobs to a loss of 4,500 jobs. Illinois’ unemployment rate went up to 5.7
percent in December, even though Illinoisans continued to drop out of the
workforce.
The budget plan coming out of the Illinois Senate couldn’t come at a worse time,
as it depends on tax hikes that would only hinder job creation.
The state’s jobs crisis is spiraling out of control. The IDES report shows
Illinois shed thousands of jobs across almost all sectors, with the largest
losses coming in education and health services (-5,400); professional and
business services (-3,600); and construction (-3,200). Manufacturing also
continued a downward spiral in its labor force, dropping another 1,100 jobs on
the month.
Illinois’ unemployment rate rose to 5.7 percent from 5.6 percent. The reason for
this spike in unemployment is an increase of 6,100 Illinoisans who were counted
as unemployed in December. The labor force continued its long-term slide,
shrinking by another 2,500 in December.
The December payroll jobs report was bad news across the board, with losses in
both white-collar and blue-collar sectors. Manufacturing had the largest loss of
jobs of any sector in 2016, shedding 11,000 jobs in the past year.
After two consecutive years of hemorrhaging manufacturing jobs, Illinois is
headed toward its all-time low in factory work. At the bottom of the Great
Recession in January 2010, Illinois had only 553,800 manufacturing jobs. Now
Illinois has 565,400 production jobs, reflecting weak global demand for some
local products, as well as the state’s policy-induced exodus of manufacturing
investment from Illinois.
Illinois has a long-running divergence between white-collar and blue-collar job
opportunities, with job gains concentrated in the greater Chicago area and job
losses occurring in downstate communities. The manufacturing job losses are a
sign of this divergence, and reflect the differences in economic opportunity
between the two major parts of Illinois.
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 The “2017 State of Illinois Economic Forecast” prepared for the
Commission on Government Forecasting and Accountability shows how
stark the difference has become. According to the report, four
downstate metro areas are already in recession, and four more have
economic recoveries at risk of coming undone. Across the Midwest,
there are eight metro areas in recession, and Illinois is home to
half of them.
Downstate communities are tipping back into recession even though
they never completely recovered from the Great Recession. The
Chicago area has gained 110,000 jobs compared with before the
recession, while the downstate region has lost 43,000 jobs over the
same time.
This is one of the worst times imaginable to raise taxes on
downstate Illinoisans.
Downstate industrial communities suffer under a tax and regulatory
environment that is especially costly for industrial occupations.
And the same taxes and regulations that cause problems for downstate
communities in need of job creation also harm minority communities
in the Chicago area, which is burdened with the nation’s highest
black unemployment rate. In fact, the Chicago area in general, with
looming property tax hikes and skyrocketing debt, could itself edge
toward recession with all the tax hikes hitting families and
businesses.
Tax hikes lower the wages and standard of living of all taxpayers.
Springfield political leaders should address spending drivers
instead of asking for still more taxpayer money. Key spending
drivers in need of reform include reducing the extraordinary
collective bargaining power of government-worker unions, and
changing the Illinois Constitution to allow for reform of the
state’s deeply indebted pension system.
Illinois political leaders need to make the state an attractive
place for job-creating businesses to invest. The IDES jobs report
brings terrible economic news and should serve as a reminder to the
General Assembly that Illinois’ structural imbalances need to be
fixed – and tax hikes aren’t the answer.
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