Illinois' economy still faltering

Illinois' economy still faltering

What, if anything, is going to be done to boost Illinois' sluggish economy?

This country got some good news last week when the U.S. Labor Department produced its June report on job growth. Employers added 222,000 jobs, increasing opportunities for new entrants to the job market as well as those who had given up looking for work.

Indeed, it's because more of those people who previously were depressed about their job prospects are feeling better that the unemployment rate increased from 4.3 percent to 4.4 percent. Job market dropouts are not counted in the unemployment numbers. That's why a low unemployment rate can disguise the nation's jobs picture.

But the June report shows that things, at least for now, are looking up from a national perspective.

Unfortunately, Illinois continues to lag behind in job growth compared with its fellow states.

The Illinois Department of Labor won't produce its state jobs report until later this week. But its report for May showed that the state unemployment rate fell from 4.7 percent to 4.6 percent. But it didn't fall because more people entered the workforce but because more people, despairing of finding employment, dropped out.

Illinois employers added 2,400 jobs in May while the workforce shrank by 22,000 people who gave up searching for employment.

That's bad news for a variety of reasons. The most basic is that people need work to generate an income to pay their bills and support their families. Secondarily, government at all levels needs people working to generate tax revenue to pay for services on which people rely, everything from police and fire protection to roads and social services.

Unfortunately, Illinois continues to go the wrong way on jobs.

But that's not all the bad news on Illinois economic front.

While hundreds of thousands of Illinoisans are working, they're experiencing among the nation's worst personal income growth over the Great Recession era of 2008-09 with no signs of any improvement.

Michael Lucci, an economist with the Illinois Policy Institute, posits that "Illinois' income growth is so weak because jobs growth is lagging, paycheck growth is small and too many wage earners are leaving the state — and taking their earning power with them."

Others might offer different explanations. But there's no disputing that the income growth numbers are terrible.

Personal income growth in Illinois grew by 0.6 percent from January through March of 2017, placing Illinois 45th out of the 50 states. At the same time, inflation increased by roughly 0.5 percent, meaning that the income gain was nearly wiped out by rising costs.

Here's even more bad news. Illinois, along with Nevada, has the worst personal income growth from the "fourth quarter of 2007 through the fourth quarter of 2016." Nevada, however, enjoyed a 1.1 percent increase in that category in the first quarter of 2017 so Illinois will soon be in last place.

Last week, the General Assembly voted to raise the state's personal income tax from 3.75 to 5 percent, a 32 percent increase. So between inflation and high taxes, Illinois workers will be in the hole.

Clearly, this state has a jobs and economic growth problem. But it's one that, for incomprehensible reasons, our elected officials collectively refuse to recognize, let alone address.

Forget, for a moment, the partisan divide that has had Gov. Bruce Rauner and legislative Democrats and Republicans at each other's throats for the past two years.

The economic numbers make it clear that Illinois' economy is lagging and in desperate need of a boost that will generate jobs for people and revenue for government.

That is not a partisan issue. To the extent the people here care about their quality of life and the quality of the lives of all of their fellow citizens, it's an Illinois problem.

That ought to be a clarion call for our governor and legislators to focus on this problem and work together on solutions. So far, that clarion call has fallen on deaf ears.

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