Illinois’ 15 metro areas all see unemployment higher than U.S. rate

Despite some growth, high unemployment remains an issue in Illinois. All 15 metropolitan areas showed higher rates of unemployment than the national average.

Despite job growth in May for some metropolitan areas, unemployment remains a concern across Illinois.

The statewide unemployment rate has consistently ranked third highest in the nation. All 15 metro areas reported unemployment rates higher than the national average of 3.7%, according to the U.S. Bureau of Labor Statistics. Decatur faced the highest unemployment rate at 5.8%, followed closely by Danville, Kankakee and Rockford – all at 5.6%.

On the lower end, Bloomington, Champaign-Urbana and Springfield each reported 4.2% unemployment rates. The St. Louis metro area, which primarily belongs to Missouri, and Cape Girardeau, also mostly in Missouri, both had 3.9% unemployment rates, the lowest among Illinois metro areas but still above the national average.

Overall, 11 Illinois metro areas added jobs during the 12 months ending in May 2024. Champaign-Urbana led the metros with a 2.39% growth, adding 2,900 jobs. The St. Louis metro, shared with Missouri, followed with a 1.88% increase.

The biggest losers were the Springfield area, losing 1.46% of its jobs, and Decatur, losing 1.25%.

The Chicago-Naperville-Arlington Heights metro division added 14,400 jobs, a 0.38% increase over the year. While positive, this growth rate lagged the national average of 1.77%.

St. Louis accounted for the largest share of job growth. It was half of all job growth in metro areas that gained workers. The Chicago area was second at 27.12%.

In the Chicago-Naperville-Arlington Heights Metro Division, several industries saw significant growth during the 12-month period. Manufacturing added 7,800 jobs, a 2.83% increase. Private education and health services grew by 18,700 jobs, up 2.97%. Some sectors faced declines, with professional and business services losing 26,200 jobs, a 3.7% decrease.

Illinois employment growth exceeded pre-pandemic levels but trailed behind the national economy. The state added 0.16% more jobs. Seven areas continued to report fewer jobs now than they had before the pandemic.

Eight of 15 Illinois metropolitan areas added jobs from April to May 2024, an overall increase of 12,700 jobs statewide.

The Kankakee metro area saw the largest percentage increase in non-farm employment, growing 0.7% and adding 300 jobs. Leading the losses by percentage was the Decatur area, which fell by 0.42% by losing 200 jobs. The Davenport-Moline-Rock Island area also saw a notable drop of 500 jobs.

State employment growth in May slightly exceeded the national economy. Illinois reported 0.21% more job growth, compared to 0.17% growth nationwide.

The Chicago metro area gained 6,400 jobs, a 0.17% growth. That rate ranked fourth among Illinois metro areas.

While the Illinois job market shows some resilience, it faces ongoing issues. Persistently high unemployment and a large exodus of skilled workers remain problems.

Historically, high taxes have been the No. 1 reason Illinoisans considered leaving the state. The Illinois Policy Institute’s Lincoln Poll in 2023 substantiated that reason.

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.

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.

To promote job growth, 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.