Beware of the naysayers who claim Illinois’ economy is “upside down” and “struggling.”
As of mid-2023, there are no signs that the state is in recession.
Let’s look at the facts.
The US Department of Commerce reports that Illinois’ economy grew again in the first three months of this year and the state is now producing $1.07 trillion annually. Only four states offer greater added value.
The University of Illinois Flash Index — which measures corporate earnings, consumer spending and personal income — has posted 27 straight months of growth.
Over the past 12 months, our nonfarm payrolls growth has outpaced that of neighboring Wisconsin, Iowa and Missouri. In fact, Illinois added as many jobs last year as those three states combined. And nonfarm payrolls increased in all 14 metro areas in the state, from Chicago to Carbondale.
Employment in the private sector also recently reached a record high. The US Bureau of Labor Statistics reports that as of April, 5.32 million workers were employed in our private sector, exceeding pre-pandemic levels.
And while our unemployment rate was slightly above the national average, approximately 400,000 vacancies continue to be advertised each month. That’s 1.5 vacancies for every unemployed person.
This is due to a tight job market. The unemployment rate in the Chicago-Naperville-Arlington Heights area was last seen at 3.2%, marking “a record-low unemployment rate for the month of May.”
Economist Arthur Okun coined a concept called the “Misery Index” in the 1970s to measure economic hardship. The misery index is simply the unemployment rate plus the inflation rate.
In May, Chicago-area unemployment was 3.2% and inflation was 3.3%, resulting in a poverty index of 6.5%. For the same month, Tampa’s unemployment was lower at 2.7%, but inflation was significantly higher at 7.3% — a poverty index of 10.0%. Nationally, the index was 7.8%.
That’s not to say that the Chicago area is thriving compared to a place like Tampa, or that Illinois is doing better than the country as a whole.
But these facts provide context and perspective for those who are promoting the false narrative that Illinois is somehow in decline — as if a steady stream of “Now Hiring” signs and busy construction sites across our state weren’t proof enough.
Ultimately, it is clear that workers are better off and many companies enjoy competitive advantages by locating in Illinois.
The policy imperative is to make this happen for more people and businesses across the country — and to build on the positive momentum we’ve already created to continue to strengthen Illinois’ economy.
The good news is that the state is taking these steps.
For example, Illinois received $1 billion in federal funding for high-speed Internet infrastructure last month. This was only possible because our historic Rebuild Illinois capital program put us in a better position than our competitors to receive federal grants.
Research from the Illinois Economic Policy Institute and the University of Illinois has documented how a $1 billion investment connects more than 200,000 homes and businesses to broadband internet and increases production by $2.6 billion, with the biggest impact being are found in underserved, suburban and rural communities.
Likewise, thanks to our Climate and Equitable Jobs Act (CEJA) passed in 2021, Illinois is well positioned to benefit from federal renewable energy funding. Nationally, Illinois saw the fifth-largest increase in wind and solar power generation last year.
However, further steps can be taken. For example, creating a refundable child tax credit and finding ways to make child care more affordable would not only strengthen families, but also increase labor force participation and reduce employee turnover at Illinois companies.
While all business cycles have their ups and downs, Illinois’ expansion doesn’t stop there. With sound public policies, we can keep it going – and continue to prove the naysayers wrong.
• Frank Manzo IV, MPP is an economist at the non-partisan Illinois Economic Policy Institute.
Comments are closed.