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ONE YEAR
LATER, ILLINOIS’ JOBS RECOVERY FROM COVID-19 AMONG SLOWEST IN U.S.
Illinois Policy Institute/
Bryce Hill
Job losses peaked in April 2020 amid
COVID-19 and state-mandated shutdowns. In the year-long recovery since,
Illinois’ has been among the nation’s slowest. |
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 Illinois’ jobs growth came to a grinding halt in April amid a
national slowdown in the labor market recovery. The state added just 300 jobs
from mid-March through mid-April, and actually shed 4,000 private sector jobs
during the month.
Weak labor market performance relative to other states is something Illinois has
had to contend with for much of the past year.
Job losses peaked in April 2020 amid COVID-19 and state-mandated shutdowns. In
the year since, Illinois has added among the fewest jobs in the nation. Illinois
ranks 44th in the nation in jobs growth since the recovery began at the end of
April 2020.
Illinois has added 408,400 jobs (+7.7%) since April 2020, one
of the slowest paces in the nation. The only states adding fewer jobs were
Nebraska (+7.5%), Louisiana (+7.5%), Iowa (+7.4%), Oklahoma (+5.9%), Wyoming
(+4.7%) and New Mexico (+4.2%).
Employment levels in Illinois remain 424,800 below their pre-pandemic peak in
January 2020, meaning Illinois has regained fewer than half the jobs it lost
during the pandemic. As a result, Illinois is battling one of the highest
unemployment rates in the nation.
Unfortunately for those Illinoisans still out of work, Gov. J.B. Pritzker is
pursuing nine new taxes worth nearly $1 billion, including ones that would hurt
job creation efforts. The move was decried by the Illinois Chamber of Commerce
and Republicans because Pritzker is not closing unfair “loopholes” as he
claimed, but rather trying to take back a deal he made early in his term for key
tax incentives and deductions intended to create jobs.
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Pritzker is also rumored to be pursuing the
cancellation of a pandemic recovery tax credit for small businesses
that could take from $500 million to $1 billion more from them as
they struggle to recover. It is imperative lawmakers work to avoid
the harm to businesses and jobs that tax hikes would create.
Economists argue against raising taxes during a recession.
Illinois has already made this mistake once before, hiking taxes at
the onset of the recovery of the Great Recession. Tax hikes as the
state began trudging towards recovery resulted in a decline in
investment and sluggish productivity and employment growth,
contributing to the state’s lackluster recovery relative to its
peers.
Instead of repeating past mistakes, Illinois can improve its
finances and continue to provide core services mainly by
implementing constitutional pension reform. The Illinois Policy
Institute is offering that along with other fiscal fixes that can
give overburdened Illinois taxpayers a path to declining debt, lower
taxes and more effective state government.
Illinois needs its labor markets to improve so the state can create
more jobs and grow the tax base, not to pass more and higher taxes
that cost the state more jobs and residents.
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