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The State of Working Illinois

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News Release

Contact: Joe King, NIU Office of Public Affairs
(815) 753-4299

December 15, 2006

State of Working Illinois report finds economy improving, but some concerns remain

DeKalb — The 2006 State of Working Illinois report compiled by researchers at the Northern Illinois University Regional Development Institute offers hope that the state economy is improving.

The report is a joint project of the Center for Tax and Budget Accountability and NIU's Office of Social Policy Research and Regional Development Institute.

Particularly encouraging were findings that unemployment declined during the past year. The number of unemployed in Illinois was down by more than 68,000 (1.1 percent), continuing a trend that began in 2003.

“Unemployment is the worst thing that can happen in an economy,” says NIU research associate Matt Eskew, who helped compile and analyze the data upon which the report is based. “When unemployment declines you see all kinds of improvements, like increases in per capita income and household income.”

Other encouraging findings in the report:

  • The number of employed persons in the state grew by 135,000, the largest job expansion on record since 1994.
  • The poverty rate in Illinois declined to its lowest level since 2001 (11.5 percent), a level that is below the national average and better than all other Midwestern states except Wisconsin.
  • While the majority of new jobs were in the service sector, more than half of those (56 percent) were classified as high wage service jobs in areas such as business and professional services and finance.
  • The median annual household income in Illinois increased by $775, outpacing national growth.

By 2005, most Illinois workers had some post-secondary education and nearly one-third held a college degree. Both of those figures are considerably better than national and regional averages.

As encouraging as some of the findings are, Eskew says there are still some causes for concern.
For instance, the state continues to lose high-paying manufacturing jobs – about 9,000 of them last year. While that was about half of the annual average from the previous five years (when 128,000 manufacturing jobs were lost), it is still a problem. Also troubling was the loss of 2,000 information services jobs, another high paying sector.

As a rule, those manufacturing and information services jobs pay better than the service sector jobs that are being created.

“Illinois continues to see ups and downs in its employment health. While the service sector growth is having a definite impact on job development, the decline of job quality, pay and benefits from the exodus of the state’s traditional industries has begun to take a toll on Illinois working families,” says Paul Kleppner, one of the main researchers from NIU’s Office for Social Policy Research.

Eskew agrees, saying that even some of the good news in the report comes with a caveat. He notes that while the study paints a brighter picture than the 2005 State of Working Illinois report (which looked at economic trends over 10 years, not just one year like the 2006 edition), the improvements have to be put into perspective.

“For instance, while it is certainly good news that the median household income increased by nearly $800, that is still 10 percent below where that figure was in 1999, so we still have a lot of ground to make up,” Eskew says. It will take at least another year’s worth of data to determine if the improvement was a one-year blip, or the start of a trend, he adds.

The full 2006 State of Working Illinois report can be found online at http://www.stateofworkingillinois.niu.edu/swil/index.html.

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