Madison - St. Clair Record

Monday, September 16, 2019

Illinois Policy Institute: Job numbers reflect both progress and trouble

By Hoang Tran | Mar 31, 2016


CHICAGO – The Illinois job numbers arrived last week and it is a mixed bag. While the state has added more than 18,000 jobs, unemployment has also risen to 6.4 percent, up from the 6.3 percent it was in January.

Michael Lucci, vice president of Policy at the Illinois Policy Institute, explains that the two numbers reflect the current job creation climate of Illinois.

“The two numbers come from two different surveys that are part of the same jobs report,” Lucci said.

He said the one survey measures jobs - how many are added or lost - which this survey indicates 18,000 were gained. The other measures overall employment and unemployment.

“What’s basically happening is that in February, Illinois had a good month for job creation: 18,000," he said. "However, on the whole, Illinois’ job creation rate has been very weak. So, we have a growing workforce and the people entering the workforce are not able to find jobs on the whole, on average, over the long period of time." 

He said the unemployment rate, which has been going up for the last six months, is going up because job creation is not keeping up with workforce growth.

According to Lucci, if job creation is not as good as or better than workforce growth, then the state will likely continue to see unemployment go up, regardless of how positive the jobs created numbers may look.

Illinois has 1,300 more jobs than it had before the recession of 2008, but it is also seeing the seventh month in a row where the unemployment number has increased.

While adding over 18,000 is encouraging, the types of jobs added is vague and may be a mixed bag, he said.

“In terms of whether they are full time jobs with good pay, you can’t see that specifically month by month,” Lucci told the Record. “We do know that over time, there has been an increase of jobs that are less than full time with less than complete benefits. That’s one part. Second part is that Illinois' overall job creation rate has been slow. So whether it is a full time job or not a full time job, Illinois just has fewer of both than most other states are creating.

"We are seeing that we do have weakness in terms of getting full time jobs, we do have underemployment, [and] there are a substantial number of people who have a part time job but they would like full time work. That’s the one problem. The other problem is just overall job creation has been weak in Illinois for a number of years now.”

Lucci believes that the reason for Illinois’ poor job growth is simple: taxes and policies.

“Illinois’ overall tax burden is either the highest or the second highest in the Midwest,” he said. “Our overall regulatory burden is generally considered the worst in the Midwest across a variety of regulatory issues such as workers' compensation, unemployment insurance, licensing requirements, and things like this. Illinois usually comes out the worst. Our lawsuit climate is very unfavorable in Illinois. So, we have the least business friendly regulatory environment overall and we have the highest or second highest overall tax burden in the Midwest. You put those two things together and you’re not going to have good job creation.”

The tax and policy burdens tie directly with what Lucci observes as another problem within the state: the substantial loss of industry jobs.

“[A] major observation we had, and this goes over a number of years, is that Illinois has substantial industrial job losses and weak industrial job growth,” he said. “Specifically, I’m talking about manufacturing, transportation, and construction. When you look over a longer period of time, especially our manufacturing job creation, it is very weak compared to all of our neighboring state.

"We were the only state to lose manufacturing jobs last year in 2015. We’ve consistently been weakest in manufacturing and other industrial type work places. They are the places that are hardest hit by policy problems such as our worker’s compensation policy, our lawsuit situation, our property tax burden, and overall tax burden…Manufactures here pay two to three times more on worker’s compensation than they do in neighboring states. Manufactures here own a lot of property and our property taxes are very high compared to other states. So we see our weakest job growth is in those industries that are most affected by our policy problems.”

Lucci said Illinois needs to fix its tax and policy situation because it is not only affecting job growth but affecting families.

"I think that makes it clear [that] we need to fix our property tax situation [and] we need to fix our workers' compensation policies because we are very directly seeing that workers are losing jobs in those industries and that means that families are losing the ability to take care of their children if they are families that work in those industries,” he said.

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