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 Illinois added 93,200 jobs from mid-June to mid-July,
continuing participation in the national jobs rebound from the COVID-19
downturn. The additional jobs now bring the state’s unemployment rate to 11.3%.
A much-welcomed improvement, but still well above the national unemployment rate
of 10.2%.
While growing payrolls mark signs of a continued recovery for the state amid the
sharpest downturn in recorded history, roughly 237,869 Illinoisans remain
missing from the state’s labor force due to COVID-19 and associated
state-mandated lockdowns (see appendix). Those 237,869 have given up looking for
work entirely. Had these Illinoisans been counted in the labor force, Illinois’
unemployment rate would have been 15.1%, 34% higher than the state’s official
estimate.
Prime working-age Illinoisans, particularly women, are
those who have dropped out of the labor force the most. Ensuring these
Illinoisans return to the labor force and find jobs will be essential for the
state to have a full economic recovery.
Yet, during an unprecedented downturn that has left record numbers of
Illinoisans out of work, state leaders are trying to persuade voters to pass a
$3.7 billion tax hike that will especially hit the small businesses that create
most Illinois jobs. The July numbers are another step in the right direction,
but Illinois is still facing a long road to recovery and must focus on policies
that will encourage would-be workers to return to the labor market.
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Already, having the nation’s highest state and
local tax burden remains a drag on the Illinois economy, so what
would happen to the COVID-19 recovery if Illinoisans face another
tax increase?
Illinois voters on Nov. 3 have a rare opportunity
to decide whether giving lawmakers more power to raise state income
taxes will help or hurt the COVID-19 recovery. Economists argue
against increasing taxes during a recession, but Gov. J.B. Pritzker
so far has put $56.5 million of his own money into a campaign to
convince voters his $3.7 billion income tax hike is truly a “fair
tax.”
Pritzker’s “fair tax” would 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. Lawmakers already set rates for the
initial tax hike that would be up to five times greater on small
businesses than on large ones, if voters approve. Those small
businesses are responsible for the vast majority of new jobs in
Illinois.
The COVID-19 shutdowns disproportionately hurt women workers and
worsened racial gaps in the Illinois economy. By hurting Illinois’
small business job creators, Pritzker’s progressive income tax will
further damage the jobs market and make the recovery increasingly
harder.
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