After two years of COVID-19, Illinois jobs growth seriously lags nation

Employment in nearly all of Illinois’ major industries are still lagging other states two years after the initial COVID-19 shutdowns rocked the economy.

It’s been two years since Gov. J.B. Pritzker imposed COVID-19 mitigation mandates across Illinois, dictating what actions were and weren’t permissible. The cost, even after two years, is more than 200,000 jobs still missing from the state’s economy, 317,600 Illinoisans currently out of work, and the 5% unemployment rate is 41st highest in the nation. 

All told, Illinois has made one of the worst employment recoveries in the nation. 

Ten states have all already surpassed their pre-pandemic employment levels, according to data released March 14 by the U.S. Bureau of Labor Statistics. Illinois is still missing 200,100 jobs compared to January 2020, when the state’s job numbers peaked. Illinois’ jobs market remains one of the least recovered of any Midwestern state.

Illinois has only recovered 76% of the jobs the state lost during the onset of the pandemic and state-mandated shutdowns – 14th worst in the nation, and the fourth least of any state in the Midwest. Meanwhile, South Dakota, Indiana and Missouri are the most recovered Midwestern states, each having recovered more than 90% of their states’ job losses.

The pain of job losses in early 2020 and Illinois’ slow employment recovery can be felt across nearly every industry in the state. While total payrolls were down 1.8% nationally in January 2022 relative to the country’s pre-pandemic peak, Illinois jobs were down 3.3% from their peak. The results are even worse when broken down by industry. 

Employment counts across virtually all major industries in Illinois lag the national average. The only industry in which Illinois has performed better than the national average is “other services,” with payrolls down 5.1% versus 5.7% nationally. The gap is especially painful in the leisure and hospitality sector, where 42% of Illinois’ missing jobs come from. In that industry, Illinois’ payrolls are down 13.4% – 84,000 jobs – while U.S. payrolls are only down 10.1%.

As more and more states make a full employment recovery, Illinois’ outcomes remain markedly worse than most other states in virtually every industry. Only Illinois’ professional and business services sector has outperformed most other states since job losses began in 2020. 

Illinois’ downturn and sluggish recovery relative to other states has been particularly pronounced in the leisure and hospitality sector, which only outperformed six states during the past two years. Meanwhile, the government sector has also shed a particularly large number of jobs in Illinois relative to other states. Of the government job losses in Illinois, 99% have come from state and local governments, not federal jobs.  

State and local governments across Illinois are faced with large fixed costs in the form of pension obligations that make it difficult for governments to pursue expansionary policy amid downturns. Rather than providing tax relief or increasing services for Illinoisans during trying times, Illinoisans are subject to service cuts despite rising taxes. 

 A proposal on the Nov. 8 ballot would exacerbate this issue and likely make downturns even more painful in Illinois if voters approve it. Amendment 1 would change the Illinois Constitution to grant unions in Illinois more extreme powers than they have in any other state, including the ability to bargain over virtually limitless subjects, the ability to override state law through their contracts, and a guarantee that taxpayers and lawmakers would have an extremely difficult time reversing course.

Should Amendment 1 pass, Illinois’ $317 billion pension debt will continue to balloon as state and local taxes, which are already the among the highest in the nation, rise in an attempt to keep up. Spending on vital programs will continue to fall.

Illinois needs reform that will rein in the state’s cost drivers and deliver services to residents when they need them most. Amendment 1 will make that much more difficult.