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ILLINOIS
SEES NATION’S LARGEST SPIKE IN NEW INITIAL UNEMPLOYMENT CLAIMS
Illinois Policy Institute/
Bryce Hill
Initial
unemployment claims in Illinois increased by more than 9,800 last week,
the worst spike in the country. |
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 More
than 46,000 Illinoisans filed new unemployment claims last week, an increase of
9,805 compared to the week ending Oct. 3, according to recently released data
from the U.S. Department of Labor, or DOL.
That spike in claims was the largest raw increase in the nation. And Illinois’
27% increase in claims was three times larger than the national average.
New unemployment claims have been on the rise for the past four
consecutive weeks in Illinois, indicating the state’s economic recovery could be
stalling out. Newly released jobs numbers are also a major cause for concern.
Data released today by the Illinois Department of Employment Security, or IDES,
show Illinois’ recovery continues to lag the national average. The state shed
12,000 jobs from mid-August to mid-September as the rest of the nation continued
growing payrolls. Aside from the COVID-19 downturn, that stands as the worst
monthly job loss in Illinois since July 2010.
Meanwhile, the state’s unemployment rate of 10.2% remains
nearly 30% higher than the national average of 7.9%.
“As thousands of Illinoisans have returned to work in recent months, today’s
report is a positive sign that Illinois is on the path to recovery amid
extraordinarily challenging economic times,” an IDES official touted in a press
statement.
But surging unemployment claims and falling job counts are clear signs Illinois’
economic recovery is in jeopardy.
Illinois is facing a long road to recovery and must focus on policies that will
foster a healthy labor market where businesses can feel confident in their
futures and hire Illinoisans who are in desperate need of work.
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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. Lawmakers already set
rates for the initial tax hike that would create combined state and
local income tax rates in excess of 50% for small businesses, and
the state income tax increase alone would be up to five times
greater on small businesses than on large ones. More than 100,000
small businesses will face tax hikes of up to 47%, just as they are
trying to recover from COVID-19 restrictions, if voters approve the
“fair tax” on the Nov. 3 ballot.
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.” His proposal would give
lawmakers more power to raise state income taxes, including on
retirement income, and make city income taxes more likely.
The impacts of the tax hike would likely fall on job seekers in
low-income households and minority households – those who already
have been disproportionately hurt by the COVID-19 pandemic.
Illinois must avoid tax hikes now more than ever to ensure Illinois
fully participates in the national economic recovery. A massive
income tax hike that punishes job seekers will only serve to
exacerbate inequality and make the state less competitive.
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