As Illinois lags in wage, job growth, small business leader says federal
unemployment supplement needs to end
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[July 13, 2021]
By Elyse Kelly
(The Center Square) – Small business growth
lags in the Land of Lincoln according to a recent report by Paychex,
which puts Illinois last in hourly and weekly wage growth among small
businesses.
Paychex’s Small Business Watch showed over the last 12 months Illinois’
hourly wage grew 1.7% and weekly wage grew 0.85%. That’s compared to
neighbor and national leader Missouri, which grew its hourly wage 4.09%.
Illinois Chamber of Commerce President and CEO Todd Maisch said a
preliminary impression of the data suggests Illinois’ reaction to the
pandemic may be to blame.
“Illinois could have opened up its economy sooner and consequently been
closer to the national average in terms of growth,” he told the Illinois
Radio Network
Maisch cautions however against drawing too many conclusions from the
last six months of data.
“This is the kind of thing where we’re going to need to look back a year
from now, even 18 months from now and get a better feel for what states
did and what was the impact on their economies,” he said.
Job growth in Illinois is also low compared to other states.
Over the last 12 months, Illinois’s job growth was measured at 1.91% as
compared to other states like North Carolina who saw growth at 7.06%.
Illinois’ slow job growth is a result of the current worker shortage,
according to Maisch. That shortage is the biggest problem facing
Illinois’ small businesses right now, he said.
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Maisch points to the supplemental federal
unemployment benefit as a primary cause behind the shortage.
“That added benefit – which again is not $300 a
month, it’s $1200 a month – is definitely a dampening impact on
people willing to return to the workforce,” he said.
Gov. J.B. Pritzker recently reiterated that Illinois will keep the
benefit through September. Maisch said that is a mistake.
“They should take a closer look at ending the unemployment
benefit—the added, extra unemployment benefit,” he said.
Maisch said that Missouri ended that federal benefit June 12.
“Anecdotally, I will tell you that we hear from employers over there
that it has made a big difference in terms of being able to find
people willing to work,” he said.
Pritzker recently proposed creating a cash incentive to entice
Illinoisans back to work. Maisch said that is unlikely to work.
“Paying people to return to the productive workforce is something
that is not only going to create perverse incentives, but second,
it’s really going to undermine small business confidence in their
government,” he said. “Basic question: ‘I’ve got a job at a good
wage. Why should I be paying higher taxes to pay someone to take my
job?’ It’s just the wrong approach and we hope that the governor
doesn’t go that route.” |