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 Illinois’ unemployment rate hit 3.9% in September – the first
time in decades that the jobless rate went under 4%, according to data from the
U.S. Bureau of Labor Statistics.
Illinois’ jobless rate has remained higher than the national average but
followed the national trend. The national jobless rate was 3.5% in September,
continuing to hit multi-decade lows after falling consistently during the past
decade.
Illinois added 4,800 payroll jobs in September, according to data from the BLS.
The September gain was offset by a 4,400-job downward revision for the month of
August. The original August report showed a loss of 1,400 jobs, but the revision
bumped the month’s losses to 5,800 jobs.
Payroll jobs survey
Illinois’ job gains and losses across 11 industrial sectors add up to give the
total change of 4,800 jobs on the month, driven primarily by a pickup of 3,700
jobs in the Trade, Transportation and Utilities sector. Professional and
Business Services gained 800 jobs. The largest sector of loss was 1,000 jobs in
Manufacturing followed by 900 jobs in Education and Health
Household employment survey
Illinois’ unemployment rate fell from 4% to 3.9% in September as a result of
more Illinoisans finding work. The number of people working in Illinois grew by
7,978 while the number of people describing themselves as unemployed fell by
6,540. Overall, this means the labor force expanded mildly on the month by 1,438
people, while the composition of the labor force improved to have more people
working and fewer people counting themselves as unemployed.
Trends
Illinois’ labor force has shown consistent growth for a year, expanding by
42,800 people since September 2018. However, the undeniable multi-year trend is
that Illinois’ labor force has been shrinking. The Great Recession kicked off a
decline in Illinois’ labor force more than a decade ago. Even after Illinois’
recovery began, the labor force never really bounced back and has instead
continued in a mild downtrend. This trend concerns Illinois
policymakers, and undoubtedly reflects the disturbing trend of working-age
Illinoisans leaving the state for a new job and not being replaced by enough
workers moving into the state. Illinois has failed to achieve broad-based
economic growth to keep the labor force growing, and this trend is likely to
continue as Illinois’ relative economic weakness continues to sap the vigor of
the state’s labor force. Illinois is unique among Midwest states for its
consistently shrinking labor force.
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Another trend unfolding in Illinois is uneven
growth between different job sectors, as white-collar sectors
achieve better job growth while blue collar sectors have seen
relative job stagnation.
For example, in September the state economy shed 1,000 Manufacturing
sector jobs while adding 800 jobs in the Professional and Business
Services sector. In this case, this one-month snapshot is reflective
of the longer-term trend. During the course of the Great Recession,
Illinois lost roughly 120,000 Manufacturing jobs and 90,000
Professional and Business Services jobs. Since the recession hit
bottom nearly a decade ago, Illinois has added only 38,000
Manufacturing jobs while adding 186,000 Professional and Business
Services jobs.
Another contrast is to look at Manufacturing jobs versus jobs in
Leisure and Hospitality. Manufacturing has been surpassed by Leisure
and Hospitality during the past decade for providing more jobs for
the economy. This sector shift is driven to a national trend that
has also been exacerbated by weakness in Illinois’ manufacturing
jobs recovery. This trend is playing out across the
country as a greater proportion of people work in desk jobs while a
smaller proportion work in factory jobs. However, Illinois’ trend is
undoubtedly worse than normal for the region, as the state’s tax and
regulatory policies can acutely hamper hiring in the industrial
economy.
The trend is not Illinois’ friend on the jobs and growth front.
There are pockets of strength in Illinois, in particular Chicago’s
attractive and booming downtown. However, these pockets of strength
need to be leveraged into an economy that allows for broader-based
growth.
America’s global cities and urban cores have benefited from a strong
period of secular growth in the age of globalization. That secular
growth, particularly benefiting Chicago, has helped cover up some of
Illinois’ stagnation in other areas. Illinois’ public finances, tax
climate, and regulatory policies are a strong deterrent to the
investment the state needs to achieve broad-based growth.
Rather than allowing this deterioration to continue, Illinois policy
leaders should reverse another trend: that of passing into law more
taxes and regulations that will stunt local hiring. The state’s tax
and economic policies should be oriented towards more economic
growth rather than less, so Illinoisans can see more job
opportunities and earn success closer to home.
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