Close-Up Look at Illinois' Unemployment Rate, Collective Bargaining, and Right to Work Laws; Illinois Employment Collapse

Michael Lucci at the Illinois Policy Institute has some interesting comments regarding unemployment in Illinois and why it matters.

Via email from Lucci ...

A smaller and smaller percentage of adults are working to support the entire state population. Why does this matter?

Because a booming economy provides the benefits of opportunity and upward mobility. But not only that. Growing the number of taxpayers is essential for funding core government services and pension bills. The only other tools legislators have are tax hikes, which have done more to chase away taxpayers than to fund the government.

The percentage of the working-age population that is employed fell by 5.6 percentage points, from 65 percent in January 2008 to 59.4 percent in December 2013. This percentage, called the employment ratio, has been described by economist Paul Ashworth as the “best measure of labor market conditions.”

The Great Recession hit the jobs market in January 2008. Since then, Illinois has seen a greater decline in its employment ratio than any other state in the Midwest.



Illinois has 380,000 fewer people employed now than before the recession. According to the Bureau of Labor Statistics, unemployment is still up by nearly 200,000 people, and at least 185,000 people have given up and left the labor force.

There is no solution to the state’s fiscal problems without a booming economy and a growing tax base. Job No. 1 for Springfield is to create a business-friendly environment. That begins with cuts to the fourth-highest corporate tax rate and ninth-highest tax burden nationally.

Reforming the ninth most expensive regulatory system and the fourth most expensive workers’ compensation system would lead to welcome opportunities for job seekers.

Indiana and Michigan have led the Midwest in pro-jobs labor reforms by allowing their workers to choose whether to join a union. Illinois is surrounded by states making positive reforms. It’s time for officials to get in the game.

Michael Lucci
Director of Jobs and Growth

Illinois vs. Wisconsin

My slight quibble with the article is Lucci left out Wisconsin for comparison.

Following governor Walker's courageous anti-union stance, Wisconsin’s state budget went from a $2 billion deficit to a nearly $1 billion surplus. And all this happened with hardly any public-sector employees losing their jobs. Wisconsin is poised to offer its people $500 million a year in tax relief. It looks like Walker picked the right strategy.

Illinois is in a bigger mess. The state’s pensions are underfunded by at least $100 billion. Powerful teacher unions can shut down schools to win pay hikes from nearly broke school districts. A temporary tax increase is liable to be made permanent – or worse, replaced with a progressive income tax that will chase more middle-class families and businesses out of our state.

Lucci may have left out the Wisconsin comparison, but his associate Paul Kersey didn't.

Please consider Kersey's take: Wisconsin’s labor reforms reach three-year mark: Should Illinois have followed Walker’s lead?

Union-Busting is a Godsend

Here is my take: Actual Wisconsin results prove Union-Busting is a "Godsend"; Elimination of Collective Bargaining is the Single Best Thing one Can do for School Kids

It's time to implement national right-to-work laws and put an end to public union collective bargaining nationally.

I salute governor Scott Walker for leading the way. Senator Rand Paul wants to do the same thing nationally. I also salute Senator Paul's efforts.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com