Illinois sees worst workforce depletion in state history

Brady Cremeens
Illinois News Network
7/21/14

CHICAGO-Last month the state of Illinois recorded its largest monthly workforce loss in recorded state history.

Nearly 22,000 Illinoisans left the workforce in June, a greater number than even the 17,500 who quit looking for work during 2008’s “Great Recession,” according to a report from the U.S. Bureau of Labor Statistics.

Illinois has seen a decrease in the unemployment rate in recent months and Gov. Quinn is celebrating the news, but the real employment situation in the state is under dispute.

The state’s unemployment rate dropped from 7.5 percent — a rate tied for fourth-worst in the nation — to 7.1 percent, placing it 43rd in the nation.

Gov. Quinn has praised the numbers, and at a press conference earlier in July encouraged Illinois residents to “keep up the momentum.” However, some economists are saying the presumed improvement isn’t a result of real job growth.

In fact, they say it’s just the opposite.

Gary Burtless is a senior fellow of economic studies at the Brookings Institution and a former economist with the U.S. Department of Labor. He said people leave the workforce for many reasons, but usually mass exoduses are caused by a shortage of available jobs and more appealing employment climates elsewhere.

“What you have in Illinois is a combination of long-term economic stagnation and various fiscal crises at the state and local government levels,” Burtless said. “The state doesn’t have its financial house in order and on top of that implements unfriendly business policies that drive companies away, thus keep people out of good jobs.”

Burtless said when scenarios like these are allowed to play out over extended periods of time, people eventually give up looking for work altogether.

“It’s sad, really, because these things are avoidable,” Burtless said. “But ignoring major problems won’t get the job done.”

Private-sector business growth in the Prairie State recorded 5,200 new jobs in June, a number Gov. Quinn praised in a recent press release.

“There are more people working in Illinois today than at any time since February 2009,” the governor said, and “Illinois ranks (third) in the country for corporate expansions and locations.”

But Illinois still boasts the worst jobs record in the U.S. so far in 2014, with net loss of 18,100 jobs since January, and remains the only Midwestern state to have a net job loss this year.

The cause of the lower unemployment rate is a record amount of people leaving the workforce altogether, Vincent Vernuccio, director of labor policy at the Mackinaw Center.

“People are leaving for better business and employment opportunities,” Vernuccio said. “Illinois finds itself behind other states because other states recognize the importance of smart tax codes and lessening the regulatory burden for companies.”

“When employers have to deal with high workers’ comp rates, a heavy tax burden, start-up red tape and then pay high tax rates once they get off the ground, it’s no wonder they look to friendlier states for relief,” Vernuccio said.

A total of 46,000 Illinoisans have quit looking for a job and dropped out of the workforce since the end of March — the second biggest three-month decline in state history.