|
 The national economy added 372,000 jobs in June,
far more than the 250,000 originally expected, which shows the jobs recovery
continues despite recession fears.
The good news is that should translate into continued recovery for Illinois. The
bad news is if a recession hits, Illinois is more susceptible than other states.
Total nonfarm payrolls remain 524,000 below their February 2020 levels
nationally, according to data released July 8 by the U.S. Bureau of Labor
Statistics. Total private sector employment has now surpassed pre-pandemic
levels. Although the private sector has recouped early 2020 job losses, there
are still significant differences in employment across industries compared to
the pre-pandemic economy.
There have been significant increases in employment in the trade, transportation
and utilities sector (+914,000 jobs) and professional and business services
sector (+880,000 jobs) compared to February 2020. However, the leisure and
hospitality industry is still missing more than 1.3 million jobs compared to
pre-pandemic levels. Government payrolls are down by 664,000 and educational and
health services and other services jobs are down by more than 250,000
respectively.
While some sectors are still a long way off from previous employment levels, the
labor market looks poised to continue its recovery. There are two job openings
for every unemployed worker in the country.
However, economic uncertainty remains. The Federal Reserve has already raised
interest rates on three occasions this year, with more rate hikes anticipated in
the coming months. Despite rising interest rates, inflation has continued to
remain higher than expected – up 9.1% from a year ago, the bureau reported July
13. Gross domestic product has been in decline and preliminary estimates from
the Federal Reserve Bank of Atlanta suggest GDP has now contracted for the
second consecutive quarter, which is traditionally a key indicator of a
recession. The combination of these factors does not bode well for future
economic prospects. It remains to be seen if the U.S. labor market will be able
to sustain its recovery despite these challenges.
What does it mean for Illinois?
[to top of second column] |
Strong jobs growth at the national level is good for Illinois, because its labor
market remains one of the least recovered in the nation. As of May, the state
was still missing more than 136,000 jobs compared to early 2020 levels.
Illinois’ unemployment rate of 4.6% was among the highest in the nation.
Another good sign for Illinois: the educational and health services sector led
national jobs growth in June. Illinois’ educational and health services sector
is still missing approximately 33,000 jobs. Robust national growth in these
fields could be a benefit for Illinois as continued national employment recovery
should translate to a continued recovery in the state.
However, Illinois could still be more susceptible to a potential economic
downturn as businesses and residents flee. Three major corporations – Boeing,
Caterpillar and Citadel – have all announced they would be relocating company
headquarters out of Illinois in the past two months. And a record exodus driving
population decline threatens to prevent the state’s economy from ever returning
to pre-pandemic employment levels.
The first step to ensure Illinoisans don’t endure a particularly painful future
economic downturn will be for voters to take a hard look at Amendment 1 on the
Nov. 8 ballot. Amendment 1 would change the Illinois Constitution to grant
unions in Illinois more extreme powers than they have in any other state,
including the ability to bargain over virtually limitless subjects, the ability
to override state law through their contracts and a guarantee taxpayers and
lawmakers would have an extremely difficult time reversing course.
Should Amendment 1 pass, Illinois’ $313 billion pension debt would continue to
balloon as state and local taxes, which are already among the highest in the
nation, rise in an attempt to keep up. Spending on vital programs would continue
to fall. Illinois’ housing and labor markets are already suffering as high taxes
and reduced services make finding a job and living in the state tenuous. These
problems would be exacerbated should the U.S. enter a prolonged recession.
Illinois needs reform that will control the state’s cost drivers and deliver
vital support to taxpayers when they need them the most. Amendment 1 ensures
those challenges worsen during periods of economic duress.
|
