Quinn touts unemployment rate drop, but is the news really good?

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Posted: Aug 15, 2014 5:25 PM

BY BRADY CREMEENS | Special to Watchdog.org

CHICAGO – Gov. Quinn Thursday announced another Illinois unemployment rate drop, but some economists say that’s not the whole story.

Illinois’ unemployment rate decreased in July to 6.8 percent, down from 7.1 percent in June, according to data from the U.S. Bureau of Labor Statistics.

“Illinois’ comeback is going strong and we’ve got more work to do,” Governor Quinn said in a statement. “Illinois manufacturers are helping to drive our economy forward by creating good jobs and supporting local communities across the state.”

The BLS reports that 11,200 new private sector jobs were added in July, including nearly 4,000 manufacturing jobs.

While the unemployment rate is decreasing, there is evidence to suggest it may be because more and more Illinoisans are leaving the workforce altogether rather than a large net increase in job growth.

As INN reported in late July, June saw the single largest monthly workforce loss in recorded state history. Nearly 22,000 Illinoisans gave up looking for work in June, a number greater than even the 17,500 who left in 2008 at the height of the recession. The numbers for July will be released soon.

Gary Burtless, a senior fellow of economic studies at the Brookings Institution and a former economist with the U.S. Department of Labor, says the unemployment rate drop is a combination of factors, including labor force depletion.

“While a big drop in unemployment may look good on the outside, we know that’s not the whole picture,” Burtless said. “The unemployment statistics can only measure those who are working or actively looking for work. It can’t tell us anything about those who quit trying.”

Burtless said people usually quit trying to find work out of frustration with the job market, that they can’t get something satisfactory in a reasonable period of time.

“Illinois has mirrored the country as a whole in this regard,” he said. “The rate may technically be going down, but that doesn’t mean more people are working.”

The rate drop is certainly part of a mixed bag of economic news this week, as nine companies, including Comcast and Kraft Food Groups, Inc. have informed the Illinois Department of Commerce and Economic Opportunity that they intend to reduce their payrolls significantly, a hit that will cost the state nearly 750 jobs this year.

Illinois still boasts the worst jobs record in the U.S. through the first seven months of 2014, according to the BLS statistics. The loss of more than 18,000 jobs since January makes the Land of Lincoln the only Midwestern state to have a net job loss this year.

The Governor, however, is standing by his record.

“As part of his agenda to drive the state’s economy forward, Governor Quinn has taken unprecedented steps to support Illinois’ manufacturers, which supports jobs in service industries and sends Illinois products worldwide,” the governor’s office said in a press release. “Since taking office in 2009, Governor Quinn has enacted worker’s compensation reform and unemployment insurance reform to make Illinois a better place to do business. Other major fiscal reforms such as pension reform and Medicaid restructuring are restoring fiscal stability to Illinois.”

The 6.8 percent unemployment rate is the lowest since August 2008. The rate has dropped 2.4 percent from 9.2 percent since July 2013, the largest 12 month drop in Illinois since 1984.

“Today’s news that unemployment has dropped to its lowest level in nearly six years is further proof that we are heading in the right direction,” the governor said.

Brady Cremeens is a reporter with the Watchdog affiliate, Illinois News Network.