(Editor's note: This article was published first at Illinois Policy Institute)
Illinois’ economy struggled with job growth during Gov. J.B. Pritzker’s first term, ranking 35th in the U.S., according to new data from the U.S. Bureau of Labor Statistics.
Regionally, Illinois’ -0.03% total nonfarm job performance was only slightly better than total losses in Wisconsin at -0.07% and Michigan at -0.81%. Iowa grew by 0.24% and Missouri, Indiana and Kentucky each grew by over 2% during the past four years.
| Illinois Policy Institute
Illinois was the worst in the region for jobs in the construction and financial activities sectors. Illinois’ -4.63% decline in the leisure and hospitality sector and -2.83% decline in manufacturing only bested Michigan, which declined by -6.02% in leisure and -3.63% in manufacturing.
All of Illinois’ 11 major sectors were in the bottom half of the nation from January 2019 to January 2023. Seven of those sectors posted job losses during that time. Only four gained.
The state's manufacturing sector ranked 43rd nationally, while financial activities ranked 42nd. The state’s hard-hit leisure and hospitality sector ranked 40th, as did its professional and business services sector. Illinois’ construction sector was 39th, while other services came in 34th. The trade, transportation, and utilities sector ranked 32nd and information sector was 31st.
The best performing industries for Illinois during Pritzker’s first term barely cracked the top 30 nationally. The education and health sector came in 26th nationally, while the government sector was 28th and mining sector 29th.
It is worrisome to see the state struggling to recover its pandemic job losses. The state is still missing 39,500 jobs since the start of the pandemic, with updated jobs data showing 2022 growth was weaker than previously thought. The U.S. economy fully recuperated pandemic-era job losses in June 2022 and has since added more than 2.7 million jobs. Illinois’ ability to fully recover is questionable, with the state hitting a record population loss of 104,437 in 2022.
One reason for the state’s sluggish recovery is the severity of the pandemic measures taken by Pritzker. His emergency orders and lockdowns were among the first in the Midwest. Since the pandemic began, Pritzker has issued 40 emergency declarations, keeping Illinois among only six states still treating the pandemic as an emergency.
The state’s pandemic response and poor policy choices have hurt Illinois’ economy as businesses and individuals struggle to recover. The situation is being made worse by the potential for a recession. With the recent collapse of Silicon Valley Bank and Signature Bank of New York, financial markets are rattled and economic uncertainty is rapidly increasing.
Should another downturn such as the 2008 financial crisis occur, Illinois will likely be among the states hardest hit. It is among the least prepared for a moderate recession, according to a recent stress test by Moody’s Investors Service.
Despite highly touted increases in the state’s rainy day fund, the current reserves would only be enough to operate the state for about two weeks. Experts recommend states have two months of reserve funding to weather fiscal turmoil.
Without serious structural reforms to state spending, public pensions and the state’s tax system, Illinois will likely remain more vulnerable to economic downturns than other states. That vulnerability will force residents and businesses to pay for Springfield’s financial mismanagement through higher taxes, job losses and business closures.