Illinois falls farther behind national economic recovery in July

Despite the strongest jobs report in months, Illinois’ unemployment rate remains high as the U.S. rate continues to drop.

Illinois added 35,400 jobs in July, the strongest performance since February, but overall the state’s unemployment rate is holding steady as the rest of the nation’s economy is bouncing back.

New data from the U.S. Bureau of Labor Statistics shows while Illinois added 35,400 jobs from mid-June to mid-July, that did little to help the unemployment situation. Illinois’ unemployment rate remained virtually unchanged, coming in at 7.1% – where it has been stuck since March.

The industry adding the most jobs in July was leisure and hospitality. It added 14,200 positions, yet remains the farthest off pre-pandemic job levels.  Educational and health services added 7,100 jobs; professional and business services payrolls grew by 4,200; construction increased employment by 3,700; trade, transportation and utilities added 3,100 jobs; manufacturing expanded by 2,200 jobs; other services grew by 2,100 positions; information added 700 jobs; mining grew payrolls by 100; and federal government employment increased by 300 jobs.

Some industries did shed jobs during the month. The state of Illinois and local governments cut 600 jobs, while financial activities shed 1,700 positions.

The state’s unemployment rate of 7.1% is far higher than the national rate of 5.4%. While the national unemployment rate has continued to decline in recent months, Illinois’ unemployment rate has remained at 7.1% since March.

Illinois’ unemployment rate is the 8th highest in the nation, far higher than any other neighboring or Midwestern state.

Illinois’ weak labor market performance has not been felt equally, however. Black Illinoisans – who face an unemployment rate of 15.9% – are more than three times as likely to be out of work than white Illinoisans, whose unemployment rate is 5%. Hispanic Illinoisans, facing an unemployment rate of 6.4%, also fare drastically better than Black Illinoisans.

Not only are Black job seekers suffering disparate outcomes in their job searches, but their employment outcomes have also actually gotten worse compared to last year. While white and Hispanic Illinoisans have essentially seen their unemployment rates cut in half from July 2020 to July 2021, the unemployment rate for Black Illinoisans has increased. While there have been increases in the number of Illinoisans looking for work in the past year, the data provides further evidence to suggest Black Illinoisans are being left out of the labor market recovery.

The disparate effects of the COVID-19 economic downturn across industries and demographic groups have persisted during the state’s labor market recovery. Making matters worse for those Illinoisans still out of work, Illinois lawmakers passed a $42.3 billion budget that was unbalanced for the 21st year in a row and imposed $655 million in tax hikes that specifically strike at job creation. Those taxes will hinder Illinois’ economy as it attempts to recover.

Ignoring how public policy, and specifically taxation, impacts a fragile recovery will only lengthen and deepen Illinois’ struggles. But it appears Illinois’ minority workers will struggle the most, with state leaders’ missteps adding to their woes.