Illinois’ declining labor force participation rate explains stubborn poverty rate
Data shows Illinoisans who would have been working a generation ago are not today.
There is a worrying economic trend for Illinois’ workforce. Tens of thousands of Illinoisans who would have been working decades ago have left the labor force.
This is especially problematic for low-income Illinoisans since employment status and socioeconomic status are closely linked.
The labor force participation rate is defined by the Bureau of Labor Statistics as the percentage of the civilian noninstitutional population age 16 years and older working or actively looking for work. It has sharply declined in Illinois and the country in recent decades.
As demonstrated in the Illinois Policy Institute’s report on poverty, a declining labor force participation rate bodes poorly for Illinois’ stubborn poverty rate.
The Illinois labor force participation rate peaked at 70.0% in February 2000, while the national labor force participation rate peaked at 67.3% in early 2000. In April 2024, Illinois’ labor force participation rate stood at 64.7%, while the national labor force participation rate fell to 62.5% in May 2024. Notably, the percentage of men in the labor force in particular has steadily declined since the “War on Poverty” began in the 1960s.
The numbers are particularly devastating among men between ages 25 and 54. The rate among this prime working age demographic peaked at 97.8% in August 1958. As of April 2024, the rate was 89.1%. Important factors in this decline are increasing dependence on benefit programs and increasing rates of self-reported disability.
There are not fewer people working due to a lack of job openings. By the end of April 2024, there were 8.1 million job openings in the country. In February 2024, there were 386,000 job openings in Illinois.
In his book “Men Without Work,” American Enterprise Institute researcher Nicholas Eberstadt attributes the declining labor force participation rate among working age males to dependence on “means tested programs” and the large increase in men outside the labor force who receive Social Security Disability Insurance.
“27% of all prime-age men lived in homes receiving poverty-related benefits. The figure for 1985 was 11%.” Eberstadt wrote, referring to 2013 data. “57% of prime-age un-working men lived in homes reporting disability benefits, nearly twenty percentage points higher than it had been in 1985.”
The declining labor force participation rate in Illinois, particularly among working age men, has both social and economic consequences. On top of a stable income, work offers people dignity, fulfillment and meaning. With 11.9% of Illinoisans in poverty but more than one third of the state’s civilian noninstitutional population age 16 and older not working, this bodes poorly for low-income Illinoisans.
Illinois must focus on raising its labor force participation rate by creating a business-friendly environment, removing barriers to work such as excessive occupational licensing regulations and shifting toward a career first educational model.