The newest federal report says Illinois lost 2,200 jobs in June, and data from the Bureau of Labor Statistics shows the state’s economy is stagnant, according to an analysis by the Illinois Policy Institute.
The report didn’t offer any positive news, Michael Lucci, vice president of policy at Illinois Policy Institute, said. Rather, a trend that lasted about 18 months has faltered significantly.
The labor force in the state grew for more than a year, meaning more people were working or looking for jobs. The unemployment rate was higher but many people found jobs, as well, according to Lucci. But the June report shows 36,000 people left the labor force, including 17,500 who had been unemployed.
“That’s one of the positives we had been seeing,” Lucci said. “It looks like that very well might be turning back.”
To Lucci, this signals that more working-age adults are leaving the state, and more residents have lost faith that they can find a job locally.
Education and health services lost 7,300 jobs in June, contributing to the net loss of 2,200 jobs. Professional and business services and financial services gained 3,000 and 1,700 jobs, respectively. The manufacturing sector gained 100 jobs.
With the loss to the labor force, the unemployment rate in Illinois fell from 6.4 percent to 6.2 percent. Illinois is tied with Louisiana and New Mexico for the third highest unemployment rate. Alaska has the highest rate at 6.7 percent and Nevada is at 6.4 percent. Illinois’ rate surpasses its nearest neighbors: Kentucky and Ohio have unemployment rates of 5 percent, while Indiana, Michigan, Missouri, Wisconsin and Iowa have rates between 4 and 4.8 percent. Minnesota has a rate of 3.8 percent.
Each of those states, except Missouri, also gained jobs in June. Missouri’s job count didn’t change.
Within the state, regions with ties to manufacturing have suffered the most, Lucci said. But it’s also visible in and around Chicago. Areas depending more on service industries are doing better than those rooted in industrial work.
“Over the medium-run and the long-run, they’ve been having a much more difficult time,” he said. “That’s understandable because the sector they have a lot of jobs related to has really been struggling in Illinois, in particular.”
Compared to its nearest neighbors, Illinois was the only state to lose manufacturing jobs last year. Lucci said the loss of these blue-collar jobs is connected to the state’s business climate and industrial policies, which compare poorly point for point with nearby states. Anecdotally, manufacturers who have left the state cite unfavorable workers' compensation policies, property taxes and right-to-work laws.
“They’ll go down the list and say it’s easier to do business in other states,” Lucci said. “They’ll just spell it out.”
He expects the bad news to continue until the state “changes course.” Results of elections in November will probably show businesses where the state is headed, Lucci said.
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