Illinois worst among Midwest, neighbor states for unemployed staying idle

Continued unemployment claims in Illinois remain virtually unchanged since mid-April. Other states are getting back to work.

An additional 37,626 Illinoisans filed for unemployment the week ending July 11, bringing total job losses to 1,458,097 since COVID-19 began shutting down the state’s economy, according to new data from the U.S. Department of Labor. Despite a small decline in new initial claims, Illinois has so far been unable to reduce the number of workers still needing unemployment checks, even as other states see large drops.

Since the last monthly jobs report, continued unemployment claims in Illinois are virtually unchanged. All other neighboring states and Midwest states have seen a substantial decline.

While Illinois claims remain stagnant, Ohio has seen a 47.1% decline in continued claims, the largest in the region. Illinois is in a distant last place: the second-worst state in the region, North Dakota, saw continued claims drop significantly more at -9.9% change from the week ending April 18 through the week ending July 4.

Lockdowns hurt, as is evident from 1.45 million Illinoisans filing jobless claims. Most small businesses have less than two months of cash on hand while the median small enterprise has more than $10,000 in monthly bills and less than one month of cash on hand. Illinois’ small businesses employ the majority of Illinois workers. Allowing businesses to open again is an important step to save lives and livelihoods.

As new data on COVID-19 emerges, Illinois will have to adapt to changing circumstances. Still, research shows the sequential lift of a lockdown is the best way to mitigate both the human cost of the virus and the economic damage.

Illinois voters need to consider the potential for the COVID-19 economic damage to be magnified by the progressive income tax hike state leaders are seeking Nov. 3. Economists argue against increasing taxes during a recession. A progressive tax will increase taxes up to 47% on more than 100,000 small businesses just as they are trying to recover from the COVID-19 economic damage. Those small businesses are responsible for the vast majority of new jobs in Illinois.

A safe return to work is the first step to bringing Illinoisans back to work, to tackling growing racial gaps and to reviving the Illinois economy. A tax increase would be a misstep.