Study finds Illinois can expect more job losses
Billions of dollars in production and income to be lost
Illinois will lose the equivalent of 550,000 yearlong full-time jobs due to the pandemic, with 40% of them concentrated in trade, transportation, leisure and hospitality services and the professional sector, according to a new study from the University of Illinois.
The study by the university system’s Institute of Government and Public Affairs also warned that more than $28.5 billion in income will be lost to Illinois citizens and businesses, along with $76 billion in economic output representing the value of goods and services produced due to stay-athome and business closures.
The study’s authors said that in a slow reopening of the state’s economy, small changes in the critical economic component of household spending, such as nonfood shopping or going to restaurants, could significantly impact a recovery.
The authors of the study note that the recession caused by the pandemic appears unlike previous economic-driven recessions, as Illinois’ economy is moving in concert with the entire country rather than lagging behind the rest of the nation.
“What cannot be forecast at this time is whether Illinois’ recovery will lag that of the U.S. or whether the historical divergence between Illinois and U.S. job growth will persist, widen or narrow,” said the authors, professors Geoffrey J.D. Hewings, Kenneth Kriz and David Merriman.
Illinois, they said, has a complex interactive economy, and interruptions in one sector have ripple effects that affect directly or indirectly other sectors. As a result, the authors projected 400,000 direct yearlong job losses from the pandemic and another 150,000 from a multiplier effect of indirect job losses for each direct job lost.
The study forecast a decline of nearly $52.6 billion in production in the service sector, representing a loss of $19.7 billion in income and more than 389,000 full-time jobs. The transportation, communications and public utilities sector will see a $14 billion loss in production, $4.2 billion in income and a decline of more than 65,000 jobs.
The study said the ripple effect in the state’s economy is evident in less vulnerable sectors. Construction output will fall $2.6 billion and income loss will be $1.3 billion while 26,450 jobs in the sector will be lost. Governments in Illinois will have more than 30,000 fulltime job losses, the research found.
“Many of the unemployed will be able to garner relatively generous unemployment benefits due to recently enacted federal legislation” granting an additional $600 in weekly benefits through July, the authors said. “Despite this potentially mitigating factor, the hardship is undeniable and the macroeconomic repercussions are immense.”
The study said a significant influence on economic recovery will be the degree that employees feel comfortable returning to the workplace and how households view the risk of attending cultural and leisure activities.
“These were not risks faced by households in the recovery from previous recessions, so they add an important layer of uncertainty to the current economic situation,” the study said.