Speaker Madigan falsely promotes Bureau of Labor Statistics report as ‘good news’

The economic report is yet another indictment of the status quo in Illinois.

Crain’s Chicago Business published a story on June 19 entitled, “Illinois among top states in creating businesses.” The article claimed Illinois “ranked No. 2 among states where businesses are being created the fastest.” House Speaker Mike Madigan is now circulating the story, and this week sent a memo to all members of the Illinois House of Representatives, saying, “the Bureau of Labor Statistics’ numbers are good news.”

The reality is the data from the Bureau of Labor Statistics, or BLS, when taken in totality, offered more bad news for Illinois.

Here are some important facts from the BLS report:

• Ranking No. 2 in businesses being created, when taken alone, is not an indicator of economic health. An increase in business count is only healthy when it is matched with jobs and income growth. For example, previous BLS data shows that from 2009-2012, Illinois ranked third in the U.S. for increase in businesses. However, over that same period, Illinois lost 20,000 jobs. The growth in new businesses occurred only because larger businesses died and were replaced by smaller businesses with fewer jobs. That is not good for Illinois’ economy or its middle class.

• The growth in Illinois business establishments was not matched by jobs and wage growth. The BLS report cited by Madigan actually contradicted the speaker’s premise by showing that Illinois ranked far below the national average for jobs growth and income growth.

• Illinois ranked 29^th nationally in job creation, behind most neighboring states. According to the report, Illinois was tied for 29^th nationally in job creation from December 2013 to December 2014. Illinois’ annual job-creation rate was 1.4 percent, versus a national average of 2.2 percent. Illinois ranked behind neighboring Michigan (2.1 percent), Kentucky (1.8 percent), Indiana (1.7 percent) and Missouri (1.5 percent), but ahead of Wisconsin (1.3 percent) and Iowa (1.1 percent).

• Illinois ranked 42^nd nationally for wage growth, well behind all neighboring states. Growth in weekly wages was especially bad in Illinois, going up only 2.8 percent, according to the report. This ranks Illinois as tied for 42^nd among the states, compared to a national average of 3.5 percent growth. Illinois ranked well behind all neighboring states for wage growth, with Iowa at 4.3 percent, Kentucky at 4.1 percent, Indiana at 4 percent, Missouri and Wisconsin at 3.4 percent, and Michigan at 3.3 percent.

• Three of the five worst U.S. counties for jobs growth are Illinois counties. The BLS report ranked the 340 largest U.S. counties for jobs growth, and Illinois counties took three of the bottom five spots. Lake County ranked 336^th (-0.6 percent), McLean ranked 337^th (-0.9 percent) and Peoria ranked 338^th (-0.9 percent).

Other relevant facts from BLS and the U.S. Census Bureau confirm the unfortunate findings of the BLS report promoted by Madigan. BLS data indicate there are 240,000 fewer Illinoisans working today compared to before the Great Recession, which ranks Illinois last in the country for recession recovery. In addition, 2014 was Illinois’ worst year in history for people leaving the state, with a net loss of 95,000 people to other states, making a total net loss of 675,000 people to other states over the last decade.

On national, regional and county-level comparisons, the BLS report was negative for Illinois, making it especially odd that Madigan and media outlets spun one section of the report as a positive story without the information provided in the rest of the report. An increase in the number of businesses cannot be considered a positive without supporting context. In this case, once again, the growth in the number of Illinois businesses came in the context of poor job creation and the worst wage growth in the region.

The people of Illinois should be told the truth about what is happening to their state. Half-researched reports spun for political purposes obscure the painful reality that middle-class Illinois families experience every day, but which political leaders consistently ignore. The body of economic and migration evidence, including the evidence in the report promoted by Madigan, confirm the failure of the policies of the status quo.

What is needed are structural reforms, including the political and economic reforms of Gov. Bruce Rauner’s Turnaround Agenda, along with a new consensus that balances the revenue needs of the state against the household budgets of Illinois families.