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ILLINOIS
SEES AMONG WORST SPENDING DROPS EARLY IN COVID-19 PANDEMIC
Illinois Policy Institute/
Jon Josko
While the start of the COVID-19 pandemic
caused consumer spending to drop across the U.S., the decline was worse
in Illinois. Gov. J.B. Pritzker’s harsher restrictions appear to be the
culprit.
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 Personal consumption expenditures
fell by 2.6% from 2019 to 2020 across the nation as the COVID-19 pandemic began,
but they fell a full percentage point more in Illinois – the nation’s 11th
biggest drop.
That should be no surprise, because Illinoisans faced some of the most severe
pandemic public health restrictions, according to data from the Oxford COVID-19
Government Response Tracker.
The drop in consumer spending was concentrated in services. Overall, consumer
spending on services dropped 6.8% in Illinois, the biggest drop among all
neighboring states, and the eighth largest decline in the country.
Within the service economy, Illinois saw less consumer spending across the
board. The three industries hurt the most were: transportation, ranked seventh
in the U.S. for biggest decline in consumer spending; recreation, ranked 21st;
and food services and accommodations, ranked 10th.
During the pandemic, spending on housing and utilities rose across the country.
Illinois saw the sixth slowest growth, despite a relatively more affordable
housing market before the pandemic.
Consumer spending on goods rose across the country, at a rate of 3.9%. Illinois
was on par at 4% growth in spending on goods. Spending on durable goods rose
6.7%, with a 2.6% rise on non-durable goods in Illinois.
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The service sector was
disproportionately hurt by the pandemic and the severity of
government restrictions on economic activity.
Despite the lack of direct evidence that more severe COVID-19
business and school closures saved more lives, Illinois Gov. J.B.
Pritzker’s stated benchmark for reopening the state’s economy was a
vaccine or highly effective treatment, or the elimination of new
cases over a sustained period through herd immunity or other
factors. While
Pritzker’s decision may have been well-intended, the decline in
consumer spending because of the pandemic and mandated business
closures meant Black Illinoisans and parents – especially mothers
who disproportionately worked in service industries – suffered more
severe COVID-19-related job loss.
During the sudden economic contraction, workers in jobs that had
been deemed “non-essential” were idled at a higher rate than other
workers. Those who couldn’t work from home were often minorities and
women, those without a college degree and in low-paying occupations.
Policy and definitions mattered as Illinois began the pandemic in
2020. The problem is the Illinoisans who were most vulnerable
suffered the most from those government decisions about policy and
definitions. |
