Illinois has too many unemployed chasing too few jobs, ranks 5th worst

Illinois’ job market struggles continued with almost 50,000 more unemployed workers than there were job openings in January – the fifth-worst ratio in the nation.

There were 324,121 unemployed Illinoisans competing for 277,000 job openings in January, a ratio of 1.2 applicants per job that is the fifth-highest in the nation, new federal data shows.

Illinois’ high unemployed-to-job-opening ratio means there is too little job opportunity, especially when compared to states such as North and South Dakota. Workers in less in-demand industries or those with specialized skill requirements, such as construction or manufacturing, are especially struggling.

Illinois’ December job openings rate of 4.3% lags the national rate of 4.6%. The job openings rate essentially measures the percentage of unfilled job openings relative to the total number of jobs in the economy. It reflects the demand for labor by showing how many openings employers are actively trying to fill. This indicates Illinois is not creating jobs as quickly as other states and there may be a mismatch between available jobs and the skills of the workforce.

A healthy job market would typically see far more hirings than separations. In January, Illinois had 178,000 hires and 212,000 separations, a concerning gap of 34,000 positions. Illinois also had a lower-than-average quit rate, suggesting Illinois workers may not be confident about finding better employment opportunities.

Illinois has also seen a naggingly high unemployment rate, exceeding the national unemployment rate of 4% by nearly a full percentage point at 4.9%. Illinois has the fifth-highest unemployment rate of any state in the country.

Policies that limit economic growth and opportunity contribute to Illinois’ struggling labor market. Such policies include excessive occupational licensing and high corporate, property and sales taxes. There are steps Illinois lawmakers can take to improve the state’s employment situation:

• Occupational licensing – Stop licensing low-wage jobs that are licensed less or not at all in other states.
• School choice – Reinstating and expanding school choice programs such as the Invest in Kids Act so more students develop skills that match the needs of employers.
• Taxes – Reducing Illinois’ second-highest in the nation property tax rate of 1.95% of a home’s value per year to a more reasonable 0.72%. Also, replacing the state’s corporate tax with state gross receipts tax. These measures will stem the flow of businesses and jobs fleeing Illinois for friendlier tax environments.
• Workforce development – Reallocating funds from administrative bloat in higher education to youth apprenticeship programs.