As we begin the second half of the year, it’s a prime time to assess Illinois’ economic climate.
Pandemic-related emergency orders have ended and most of society has returned to normal. But Illinois’ economic outlook is sobering: Our state is falling behind.
For suburban businesses and communities, there’s a lot to lose. A weak economy means fewer jobs and less economic opportunity. As Illinois leaders, we need to understand the issues so we can pick the right solutions.
Here’s what we’re facing:
Business growth
Illinois’ business applications, as measured by the U.S. Census Bureau, are lagging the rest of the nation. So far this year, business applications most likely to result in job creation have grown 68% faster nationwide than in Illinois. To put it in stark figures, we’re seeing a national growth rate of 11.5% compared to just 6.9% in our state.
Each missed business application represents a lost opportunity for job creation, economic growth and community development. Each lost opportunity makes it harder for Illinois to compete both nationally and globally.
Job numbers and unemployment
If we compare Illinois’ job recovery to other states, we can see Illinois is one of only 14 states yet to get back to pre-pandemic job levels. We’re missing 15,700 jobs on net since January 2020. Only five states have a slower pandemic job recovery, in terms of raw job numbers.
In total, the U.S. has added nearly 4 million jobs compared to before the pandemic.
Locally, the Chicago metro area is still lacking 16,400 jobs and its unemployment rate of 3.9% is higher than the national average of 3.7%. The number is down from 4.2% in April, yet this figure is not because of a sudden surge of Chicagoans finding jobs. Instead, it’s primarily a result of a decline in labor force participation. People from this area are giving up on finding a job, or at least giving up on finding a job here.
This decline in labor force participation is a warning. It suggests many workers are discouraged, unable to find jobs that match their skills or are leaving the state altogether.
Rising minimum wage
July 1 marks an annual minimum wage increase in Cook County, with the rate going up to $13.70 an hour for non-tipped workers and $8 an hour for workers who earn tips.
While the policy is intended to provide relief for those most in need, raising the minimum wage ultimately makes finding a job harder.
Unfortunately, most evidence suggests higher minimum wage levels lead to fewer jobs, particularly low-skilled jobs, as they are most likely to decline with a rise in the minimum wage. The burden means small businesses may cut jobs, reduce hours or delay growth plans. Research also suggests a higher minimum wage does not reduce participation in most forms of public assistance.
What it means
For suburban businesses, these statistics should be a call to action. We must promote state and local policies that support business growth and job creation, including lowering taxes, reducing regulations, and ensuring the education system is producing a skilled and capable workforce.
Suburban businesses are the lifeblood of our communities. They provide jobs, spur economic growth, and contribute to the vibrancy and quality of life in our towns and cities. To continue playing this vital role, they need a state economy that is growing, vibrant and committed to recovering.
Let’s not stand idle while our state falls behind. It’s time to understand the issues, get involved and demand lawmakers get to work on putting more people to work.
Source: Daily Herald
