The Great Recession andIllinois Employment Trends

Presented byBrian Harger, M.S., EDFP

Center for Governmental StudiesNorthern Illinois University

DeKalb, Illinois

August, 2013

Background

• The recession that began in January 2008 was the steepest economic downturn since the Great Depression of the 1930s. It has been referred to as “The Great Recession” because of its severity and the length of its duration.

• Although the Great Recession officially ended in June 2009, employment in Illinois has yet to return to the levels achieved before it began.

• In many areas of the State unemployment remains at record levels despite gains in employment.

• This presentation explores Illinois employment trends during the Great Recession and since. It also looks at the relationship between recent employment trends and the State’s industrial structure.

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Unemployment TrendsMonthly Rate 1980 ‐ 2013

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Une

mpl

oym

ent R

ate

Illinois U.S.

Note: Data is not seasonally adjusted.Source: U.S. Bureau of Labor Statistics, 2013.

Recession

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Still Waiting for Recovery?

• Since peaking in the first quarter of 2010 the Illinois unemployment rate has declined steadily, but remains higher the national average.

• Some of this can be attributed to a contraction in the labor force. Since the end of the recent recession, the labor force has declined by 130,000.

• Non‐farm employment declined 337,000 during the recession. Since the recession ended in June 2009 it has remained relatively stable, but has yet to experience sustained growth.

• The number of unemployed has fallen by 128,000 since the recession ended, but is still nearly twice the average of the past decade.

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Still Waiting for Recovery?

• Employment has not yet returned to pre‐recession levels despite moderate growth in State and national GDP.

• The employment decline experienced during the recent recession was similar to the 1981‐82 recession and, so far, is following a slow path to recovery. 

• For example, 47 months after the end of the 1981‐82 recession, employment had increased 7.6%.

• In contrast, 47 months after the end of the recent recession employment is essentially unchanged.

7

17

9

9

19

17

58

34

62

0 20 40 60 80

January 1980 to July 1980

July 1981 to November 1982

July 1990 to March 1991

March 2001 to November 2001

December 2007 to June 2009

Months

The Duration of Past Recessions and Recovery Periods in Illinois

Return to Pre-Recession Level Duration of Recession*

* The duration of recessions are determined by the Business Cycle Dating Committee at the National Bureau of Economic Research.Sources: National Bureau of Economic Research; U.S. Bureau of Labor Statistics,

2013.

47 & counting…

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Employment Changes in IllinoisComparison of Industry Sectors

• More than three‐fourths of the jobs lost during the recession were in the manufacturing, professional and business services, and retail trade sectors. 

• While manufacturing and business and professional services have made a significant recovery, retail and other sectors remain weak. 

• The educational services, health care and social assistance and leisure and hospitality sectors were the only ones that added employment during the recession and are continuing to do so.

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-5.7%

0.0%

-13.7%

-15.2%

-6.6%

-10.4%

3.4%

-9.5%

-8.0%

-5.9%

-7.4%

-10.1%

0.5%

2.8%

3.2%

0.4%

-0.6%

2.7%

9.3%

-14.3%

2.0%

4.4%

-0.6%

-0.4%

7.1%

-6.1%

1.2%

-2.2%

13.1%

11.2%

6.8%

5.0%

-2.0%

-4.5%

-20% -10% 0% 10% 20%

Total Non-Farm Employment

Mining and Logging

Construction

Manufacturing

Wholesale Trade

Retail Trade

Utilities

Transportation and Warehousing

Information

Finance and Insurance

Real Estate and Rental and Leasing

Professional and Business Services

Educational Services

Health Care and Social Assistance

Leisure and Hospitality

Other Services

Government

Percent Change in Employment

June 2009 - June 2013 Dec. 2007 - June 2009

Source: U.S. Bureau of Labor Statistics, 2013.

Employment Changes in IllinoisComparison of Metropolitan and Non‐Metropolitan Areas

• The Chicago and Rockford metro areas lost the largest number of jobs during the recession, but have had strong growth since then.

• Although other downstate metro and non‐metro areas experienced fewer job losses, post‐recession growth has been weaker.

• Areas with a greater dependence on manufacturing and construction industries seem to have struggled the most during and after the recession.

-5.7%

-6.2%

-3.7%

-2.9%

-8.3%

-7.0%

-4.3%

-4.3%

-4.4%

-6.0%

-11.5%

-0.2%

-4.0%

2.7%

3.6%

2.2%

3.3%

2.6%

0.0%

2.8%

-4.7%

1.4%

3.4%

3.9%

0.6%

0.0%

-15% -10% -5% 0% 5%

State of Illinois

Chicago Metropolitan Division

Lake County-Kenosha County

Bloomington-Normal

Champaign-Urbana

Danville

Davenport-Moline-Rock Island

Decatur

Kankakee-Bradley

Peoria

Rockford

Springfield

Non-Metro Areas

Percent Change in Employment

June 2009 - June 2013 Dec. 2007 - June 2009

Source: U.S. Bureau of Labor Statistics, 2013.

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Opportunities for Job GrowthProfessional and Business Services

• Despite significant job losses during the recession, this sector has rebounded strongly, adding 103,000 jobs since June 2009.

• Professional and business services currently represents 15% of non‐farm employment in Illinois.

• Much of the employment growth in this sector is concentrated in the Chicago metro area and several downstate metro areas.

• The areas of the greatest projected job growth through 2020 include employment services (20,200 jobs), computer systems design (19,900 jobs), management, scientific and technical services (17,300 jobs) and services to buildings and dwellings (14,300 jobs). 

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Opportunities for Job GrowthHealthcare

• Healthcare was one of the few sectors that experienced employment growth through the recession, adding 15,600 jobs (a 2.5% increase). 

• The industry continued its strong performance, growing by 5.4% or 31,500 jobs since June, 2009 and it is projected to add 56,000 jobs between 2013 and 2020.

• The Illinois population is aging rapidly and with life expectancy of seniors increasing, the demand for healthcare services will continue to grow creating more jobs opportunities.

• The effect of the Affordable Care Act passed in 2010 remains to be seen, but its impact on employment will be dramatic.

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Opportunities for Job GrowthManufacturing

• The recent trend toward “re‐shoring” of some manufacturing activities holds significant job creation potential.

• The looming demand for workers to replace retiring “Baby Boomers” will be the primary source of job openings in manufacturing over the next decade. 

• Over 8,500 new production workers per year will be needed to replace retiring workers through 2020. The replacement demand will also be strong for managerial, professional and technical positions.

• However, a higher level of training and skills will be needed to work with more complex production technologies (e.g., robotics, 3D printing and nanomanufacturing). 

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Opportunities for Job GrowthTransportation and Warehousing

• Illinois is a central hub of the North American road, rail, inland waterway and air transportation networks, giving it a significant competitive advantage in transportation and distribution activities.

• Transportation and warehousing accounts for a relatively small share of total employment in the State, but has grown steadily in the past two decades.

• Despite slow economic growth and fluctuating fuel costs, employment has rebounded since the recession, growing by 7.1% or 16,200 jobs since June, 2009 and is projected to add 13,500 jobs between 2013 and 2020.

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Keys to Future Employment Growth

• Restore state and local government finances.• Re‐shoring higher value‐added manufacturing activities.• Demand for replacement workers as “Baby Boomers” retire 

will be the primary source of job openings.• Demand for healthcare and related services to the elderly 

(especially housing, travel and recreation) will continue to grow as the population ages.

• Continued growth in domestic energy production (especially natural gas).

• Transportation and logistics infrastructure.• Innovations in education and worker training.

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For More Information

Brian Harger, M.S., EDFPResearch Associate

Center for Governmental StudiesNorthern Illinois University

DeKalb, Illinois

E‐mail: bharger@niu.eduLinkedIn: http://www.linkedin.com/pub/brian‐harger/2/a47/705

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