The Great Recession and Illinois Employment Trends
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    The Great Recession and Illinois Employment Trends The Great Recession and Illinois Employment Trends Presentation Transcript

    • The Great Recession and Illinois Employment Trends Presented by Brian Harger, M.S., EDFP Center for Governmental Studies Northern 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. 2
    • Unemployment Trends Monthly Rate 1980 ‐ 2013 2.0 4.0 6.0 8.0 10.0 12.0 14.0 UnemploymentRate Illinois U.S. Note: Data is not seasonally adjusted. Source: U.S. Bureau of Labor Statistics, 2013. Recession 3
    • 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. 4
    • 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… 5
    • Employment Changes in Illinois Comparison 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. 6 -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 Illinois Comparison 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. 7
    • Opportunities for Job Growth Professional 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).  8
    • Opportunities for Job Growth Healthcare • 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. 9
    • Opportunities for Job Growth Manufacturing • 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).  10
    • Opportunities for Job Growth Transportation 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. 11
    • 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. 12
    • For More Information Brian Harger, M.S., EDFP Research Associate Center for Governmental Studies Northern Illinois University DeKalb, Illinois E‐mail: bharger@niu.edu LinkedIn: http://www.linkedin.com/pub/brian‐harger/2/a47/705 13