Illinois’ Black unemployment rate No. 2 in U.S.

Black workers in Illinois face a tougher job market than peers nationally. Hispanic men, Asians face lower unemployment rates relative to peers in other states.

Illinois’ labor market has lagged the rest of the nation for decades, but Black workers have had it tougher. Then came the pandemic and Illinois’ labor woes worsened.

The Black workers already struggling found themselves struggling even more. Employment gaps between white and Black Illinoisans widened, as did gaps between male and female workers.

It wasn’t until July 2023 that the state fully recovered the job losses experienced in early 2020 – 14 months later than the rest of the nation.

But even though employment is finally above January 2020 levels, the state’s unemployment rate has risen to 4.8% in the early months of 2024. Illinois ranks third-highest in the nation, according to the latest monthly numbers from the U.S. Bureau of Labor Statistics. That leaves many Illinoisans sidelined from work. People of virtually every background are worse off in Illinois than their peers in other states.

Illinois endured the fifth-highest average unemployment rate of any state during 2023 – averaging 4.4% – far higher than the national average of 3.6% and only besting Nevada, Alaska, California and New Jersey.

Unemployment doesn’t affect all Americans in the same way, though. That’s the case in Illinois, where many national trends hold but are often exacerbated by the state’s poor economic environment.

Men are more likely to become unemployed than women, both in the U.S. and in Illinois. However, men and women in Illinois suffer higher unemployment rates than their counterparts nationally. While outcomes in Illinois are worse than in other states, men in Illinois are disproportionately affected by the state’s poor labor market compared to women. The male unemployment rate in Illinois is 21% higher than the national male rate. The female unemployment rate in Illinois is 17% higher than nationally.

A similar pattern exists for unemployment rates of age groups. Unemployment drops precipitously with age both nationally and in Illinois. Illinoisans – particularly those in their prime working-age years – tend to suffer drastically higher unemployment rates than those in other states.

Those who are of prime working-age – 25-54 years old – see large gaps in their employment prospects compared to their counterparts nationally. While young Illinoisans aged 16-19, and older Illinoisans age 65-plus tend to have greater success than other Americans of similar age, those who are in their prime working years face far higher unemployment rates simply because they live in Illinois.

Young workers, ages 16-19, are significantly more likely to be employed in Illinois than their peers in other states, with their unemployment rate in Illinois averaging 8.9% compared to 11.2% nationally. The teen advantage quickly dissipates: each cohort between ages 20-64 in Illinois suffers far higher unemployment rates than its peers nationally.

Even though unemployment generally decreases with age both nationally and in Illinois, Illinoisans in their prime endure far higher unemployment rates than those in other states. Among workers ages 35-44, Illinoisans face unemployment rates 43% higher than their peers nationally, at 4% vs. 2.8%. The next largest gaps come among those aged 45-54 years, where Illinoisans find themselves unemployed 36% more often – 3.4% compared to 2.5% – as well as those aged 55-64 years old where unemployment rates are 3.3% in Illinois but only 2.5% nationally, leaving Illinoisans unemployed 32% more often.

While large, pronounced employment gaps between Illinois and the rest of the nation are seen when viewing workers by age, the largest gaps are between racial and ethnic groups.

White and Hispanic Illinoisans see numbers similar to their peers in other states. White Illinoisans experience unemployment 12% more frequently than those in other states – 3.7% compared to 3.3% nationally. Hispanic Illinoisans are 4% less likely to experience unemployment than those in other states – 4.4% versus 4.6%.

Asian Illinoisans are far less likely than Asians in other areas of the country to be out of a job, with unemployment rates of only 1.7% in Illinois compared to 3% nationally.

The largest differences are between Black Illinoisans and peers nationally. Black Illinoisans faced average unemployment rates of 9.6% in 2023, compared to 5.5% for Blacks nationwide, meaning Black Illinoisans were 75% more likely to be unemployed.

Not only were Black Illinoisans much more likely than their peers in other states to experience unemployment, the white-Black employment gap was also substantially larger in Illinois than in the rest of the nation. The Black unemployment rate in Illinois was 2.6 times higher than the white unemployment rate, while nationally, the average Black unemployment rate was 1.7 times higher than the white unemployment rate. This is not because white Illinoisans are doing substantially better – their unemployment rates are still higher than the national average – but rather because Black Illinoisans are doing so much worse than their peers in other states.

When ranked among all states with available data, Illinois’ Black unemployment rate is the second-highest in the nation, only better than Kentucky. These lackluster outcomes are consistent among both Black men and women in Illinois, who faced identical unemployment rates of 9.6% in 2023. Illinois’ Black female unemployment rate was second-highest in the nation while the Black male unemployment rate was No. 3.

The situation in Illinois is likely even worse than unemployment rates indicate. That’s because Black Illinoisans are the only racial or ethnic group in the state whose labor force participation rate was actually lower than the U.S. average in 2023. In other words, the true unemployment rate for Black Illinoisans is likely even higher, as many individuals have become discouraged by their prospects and simply quit trying to find a job.

While other Illinoisans fared better in absolute and relative terms than Black Illinoisans, employment outcomes still ranked among the worse in the nation for many groups.

In addition to the fifth-highest average unemployment rate overall in 2023, Illinois men and women each experienced the sixth-highest unemployment rate when comparing across states. The white unemployment rate was seventh highest in the nation, ninth highest for white males and 10th highest for white females. Illinois’ Hispanic unemployment rate was middle of the pack at 23rd (out of 43), 23rd (out of 37) for Hispanic men and 12th (out of 31) for Hispanic women. Illinois’ Asian unemployment rate fared the best compared to other states, 18th highest (out of 23) in the nation. Estimate availability for each demographic group varies because of limited sample sizes in some states.

Terrible labor market outcomes are likely playing a substantial role in the exodus of residents from Illinois. The largest group leaving the state are those who are of prime working-age (25-54 years old) and their families. Taxes and public policy are not potential answers when the Census Bureau conducts its Current Population Survey, so the top reason given for leaving Illinois is work opportunity. Illinois’ hostile tax and policy environment isn’t helping that.

Historically, high taxes have been the No. 1 reason Illinoisans considered leaving the state. Polling from NPR Illinois and the University of Illinois found 61% of Illinoisans thought about moving out of state in 2019, and the No. 1 reason was taxes. The Paul Simon Public Policy Institute found 47% of Illinoisans wanted to leave the state in 2016. It also found “taxes are the single biggest reason people want to leave,” with 27% citing that motive. More recently, the Illinois Policy Institute’s Lincoln Poll in 2023 substantiated these sentiments.

These are not unfounded fears. Illinois’ state and local tax burden is the highest in the Midwest. Illinois also levies the second-highest state corporate income tax in the nation and the state’s tax code is among the least friendly for businesses in the Midwest.

The housing and labor markets are closely linked and are both affected by tax policy. Recent income tax hikes have already fostered an environment in Illinois that makes it harder for Illinoisans to find work and reduces wage growth prospects for those who are employed. Rising income and property taxes have made housing less affordable in Illinois and reduced returns on housing investment relative to other states.

If Illinois is to begin rectifying the mistakes that have left virtually all Illinoisans with tougher lives than their peers in other states, state leaders need to stop hamstringing the economy with high taxation and poor public policy. Illinois must focus on strengthening its fiscal position, removing regulatory burdens and providing real tax relief both to workers who are already finding it difficult to remain and to job creators who are desperately trying to stay.