Chicago unemployment is highest in nation
Nearly 100,000 Chicago-area residents are out of work, and at 6.2% the Chicago metro area has the highest unemployment rate of the nation’s 50 largest metro areas. Illinois as a whole isn’t doing much better, with a 6.1% unemployment rate.
Chicago has fewer workers and more unemployed residents than before Mayor Brandon Johnson took office in May 2023. The labor market has gotten so bad in Chicago that the metro area faces the highest unemployment rate of the 50 largest cities in the nation.
Johnson ran on the idea, and has continuously proclaimed, that his administration is “making Chicago the most pro-worker city in the country.” There’s just one problem with that – today, nearly 100,000 Chicagoans are out of work. As of June, the Chicago metro area was facing a 6.2% unemployment rate, the highest of any major metropolitan area in the nation. The U.S. as a whole has a current unemployment rate of 4.5% and Illinois’ overall unemployment rate sits at 6.1%. The data are real-time, non-seasonally adjusted measures.
Not only does the Chicago metro area’s unemployment rate rank higher than anywhere else, other Midwestern cities are seeing the opposite with unemployment rates well below the national average. Milwaukee and Minneapolis both have an unemployment rate of 3.7%, Kansas City has an unemployment rate of 3.8% and Indianapolis has an unemployment rate of 4.0%.
When you zoom in even farther to look solely within city limits, Chicago’s labor market story gets even worse. The unemployment rate has climbed to 7.1% for those who live in the city – up 1.8 percentage points compared to the 5.3% unemployment rate seen in June 2023. Even worse, there are nearly 11,400 fewer employed Chicagoans than compared to this time last year. As a result, more than 99,000 Chicagoans are out of work – up nearly 26,000 compared to this time last year. While the available data is not seasonally adjusted (unemployment tends to increase during the summer months, largely because students are looking for summer work or have recently graduated), there are even fewer Chicagoans employed than when Johnson took office on May 15, 2023.
These poor labor market outcomes are likely a major reason why Chicago’s population has reached its lowest point since 1920. The city’s population has fallen to 2.66 million people, far below the peak of 3.62 million in 1950, and is smaller today than in 1920.
Domestic outmigration – residents fleeing for other areas – has been the sole driver of Cook County population decline in recent years, and likely the driving factor in Chicago’s population decline. The city’s population has declined for nine consecutive years and is currently on pace to be overtaken by Houston as the nation’s third-largest city in the next decade.
Last year, polling conducted for the Illinois Policy Institute showed 34% of Chicagoans would leave the city if given the opportunity, with 39% of those who said they would move citing taxes and affordability as a reason.
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.
Despite repeated evidence of population decline being driven by a hostile tax environment that does little to foster job and housing opportunities for residents, Mayor Brandon Johnson is boosting his calls to raise taxes on Chicagoans.
Voters rejected Johnson’s signature real estate transfer tax hike at the polls in March, but the mayor has said he hasn’t given up on raising $800 million in new taxes. Johnson on May 8 was in Springfield seeking $1 billion in additional funding from the state for Chicago Public Schools, $900 million in bond funding for a new Bears stadium, increased funds to remove lead water lines and additional tax revenue to be shared with the city.
If Johnson truly wants to turn Chicago into the most pro-worker city in the country, his focus should be on rehabilitating his relationship with the city’s business community and finding sustainable solutions to reverse Chicago’s high unemployment and population decline rather than hiking taxes on a struggling city.