By: Mark Glennon*
To pay for job** growth in government, healthcare and social services, we need other employment to grow at least as fast. It’s that simple because private sector employers and employees pay most of the needed taxes and health insurance costs.
For that reason, this, too, is simple: Illinois’ path is unsustainable. All of our job growth is coming in government, healthcare and social services while other sectors are shrinking. That can’t last.
We recently wrote how that job growth masked job losses in other sectors over the most recent year. Our further research found that’s been true for five years. The numbers come from the Bureau of Labor Statistics (BLS), which breaks out job numbers by sectors, including “government” and “health services and social services.”
The results are dismal. Since January 2019, Illinois gained 61,200 government, health and social service jobs and lost 47,600 total jobs in all other sectors. In other words, those government, health and social service jobs far more than accounted for all the job growth in Illinois over the past five years, which was almost nothing — a net of just 13,600 jobs.
Illinois was one of only seven states like that for the past five years — where gains in government, health and social service jobs surpassed overall job gains — none of which are neighboring states. In fact, all our neighboring states grew private sector jobs far faster than government, health and social service jobs.
A recent Wall Street Journal column about Illinois and the few other states with this problem was headlined, “The Government Spending Jobs Boom.” Maybe that’s a bit of an overstatement since not all healthcare spending is government spending. Some of it is nearly all government, such as Medicaid and the billion dollars or so that Illinois has paid for migrant healthcare.
But even healthcare costs that seem to be entirely private are partly government-subsidized. That’s because employer-sponsored healthcare insurance is a deductible expense for employers. The government thereby partners with private employers to pay for health insurance, and that’s the biggest way healthcare is paid for. To cover that bill, we can’t be losing workers and employers.
Moreover, even if you ignore health and social services, new government jobs alone exceeded total net new jobs over the past five years by about ten percent, according to the BLS. And the most recent year was still worse, with new government jobs being sixty percent higher that total net new jobs.
Economist Herb Stein famously said, “Things that cannot go on forever don’t.” That’s where we are on job growth in Illinois today. Patching over job losses in the private sector with gains from government and healthcare cannot last. In fact, it’s a vicious circle because more jobs in government and healthcare mean higher taxes and insurance costs for all employers and workers, driving still more of them away.
*Mark Glennon is founder of Wirepoints.
** Be aware that this column focuses on what are usually called “job” numbers reported by the BLS, which are essentially a payroll count. Workers holding multiple jobs are on multiple payrolls and therefore are counted multiple times. The BLS also reports what are usually called “employment” numbers, which are the number of people working and do not count multiple job holders multiple times. For information on Illinois employment numbers, see our most recent column here, showing that about 80,000 fewer Illinoisans are employed than five years ago.
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
Illinois laws and taxes are hostile to private enterprise. That is readily apparent to anyone looking to or currently running a business in Illinois
Probably all the hires were illegal immigrants.
Inside The Most Ridiculous Jobs Report In Years | ZeroHedge
Nothing to see here. The situation mirrors our growth in population from illegals!
Here’s JB spinning rainbow & lollipops to fluffer audience form a couple days ago….hard to listen to whole thing, but he serves up some real whoppers about how amazing economy/ job creation is doing in Illinois under his leadership.
https://pantagraph.com/news/local/fireside-chat-with-gov-j-b-pritzker-at-social-innovation-summit/video_86bfb6d8-9171-5fce-a809-46408f22e1f3.html
He’s delusional, Illinois is crashing and burning
Illinois is already the most bloated state in the country in terms of government workers. That means Illinois should be reducing its government workforce. Instead, it’s doing the opposite. This is a great example of abuse of taxpayer funds.
When looking at full time equivalent state and local government employees per 10k population, Illinois ranks 15th. They have fewer per capita FTE state/local employees than Indiana, Tennessee, Wisconsin and Michigan. Source: 2022 US Census Data
Good catch. Thanks. However, IL has the most state/county/municipal government offices in the country. Hopefully, they can work at bringing that number down. They’ve had many years to do that, so I’m not sitting at the edge of my seat waiting for this change.
They have fewer per capita FTE state/local employees than Indiana, Tennessee, Wisconsin and Michigan. More, actually. You might be reading these rankings in reverse. Keep in mind these FTE govt worker rankings typically mirror GDP and population rankings. High population and high GDP states like Illinois will typically have less govt. workers per capita because they’re able to leverage economies of scale. Case in point: states like FL, CA, PA, GA all rank better than IL. On the flip side, the states with the most govt. workers per capita are WY, AK, NE, ND, KS. All large states with low,… Read more »
Good catch Nick. I clearly read that ranking in reverse as I saw Illinois ranked 15th and assumed there was no way Illinois could be ranked so high. My original point of even looking at the data was because of the claim made by mqyl that Illinois is “the most bloated state in terms of government workers”. This data shows that 35 states have more government employees per capita. Yes I understand economies of scale, but making mqyl’s claim just doesn’t make any sense based on the data. Also, economies of scale don’t entirely account for the rankings. Case in… Read more »
Surprised you can read
One other thing worth mentioning is compensation for govt workers in these states like IL with lower per capita govt workers tends to be much higher, so they’re not going to hire as many people. Less workers making more money.
I highly doubt state workers in Illinois would accept a large pay cut in exchange for hiring more workers. Their unions might like the added headcount though.
Lots of “Good Catches” in the comments. So does anyone want to tryout for the Bears? Hopefully we now have a good quarterback but someone needs to catch the football. LOL
PPF, I’m still not ready to give Illinois a good or even mediocre rating on this topic. When you consider Illinois’ high salaries and benefits, and the capital and overhead costs involved for all of those extra state/county/township/municipal buildings, Illinois moves up a number of notches on the “bloat” chart.
It demonstrates just how expensive the government worker class is in Illinois.
How does it demonstrate that Willowglen? I would think one would need to look at average FTE government employee in each state and compare that to the average wage of the non-government employee in each state. This could provide a ratio as to the cost of public vs private sector. I haven’t viewed any analysis like that but it would be interesting. Even that data would only provide costs and wouldn’t allow us to determine if our spending was more efficient which also helped hire fewer workers per capita compared to other states. Nothing in this data demonstrates how expensive… Read more »
Given the enormous pension debt in Illinois – something most other jurisdictions don’t have – I can’t imagine making the argument Illinois workers are not expensive. The pension debt is so overwhelming and any activity based accounting must allocate these liabilities to employees. You know this and your repeated narrative (accurate) that this is what has been bargained for. Being argumentative is not a good look. I understand you feel attacked on here and there are times when you call it right. The issue to discuss is whether this is all sustainable. Given you have a realistic grip on the… Read more »
Most of the pension costs is from the debt. It’s from not setting aside enough money along the way. I thought I saw somewhere that out of the 15 billion that needs to go to pensions in Illinois each year, about 3-4 billion is the actual costs for current employees. Meaning the other 11-12 billion is the cost of the debt, essentially borrowing from taxpayers of today for expenses of yesterday. Instead of cutting spending or raising taxes appropriately in the past, we are paying for borrowing costs. That’s not something you can use to factor in the costs of… Read more »
You are not making sense. The debts are real, legally protected like few others, and payable to employees. Merely because the state and politicians have mishandled the debt means we cannot acknowledge the costs of employees? There is no exception for facts that make people uncomfortable. You argument has been that the debts are all too real and enforceable and now your position is that we cannot acknowledge them? You can’t be serious.
You’re missing the point. Out of the 15 billion needed to actuarially spend on pensions, only 3-4 million per year is the actual costs. The remainder is from the debt. That can’t be attributed to current employees. The debt isn’t payable to employees. It’s payable to past employees for past services performed. Don’t like it? Then pay your debt as you go instead of letting it pile up. “You argument has been that the debts are all too real and enforceable and now your position is that we cannot acknowledge them? You can’t be serious.” That’s not what I’m saying.… Read more »
I am not missing the point – in any way – I am a former senior counsel for the big 4 and when liabilities are known they must be recorded and recognized. That dollar of cost must be paid no matter your rationalization. And some of the costs pertain to current employees. And your statement that I must take an accounting course is laughable. I have been around the best minds in accounting, and have been lucky to absorb an education at some of the best schools in the nation. Needless to say that is not something you are going… Read more »
All goods and services provided by someone else tends to be ”expensive”. We have to deal with it or deny ourselves the fruit of others’ labor. Some charges are avoidable or negotiable while others are not or are resistant at least.
Great article Mark that gets to the point
Of Illinois problem, overspending.
One day they , being Pritzker and company will read about Churchill’s quote,” trying to tax your way out of spending problem,
Is like trying to lift a bucket while you stand in it”. Good luck!
Private Sector jobs have probably gone down. Illinois has a very unfriendly business model. It is working well; businesses and people are fleeing in increasing numbers every year.
“Private Sector jobs have probably gone down.” Do you ever read the articles before commenting?
yes
On a vaguely related note, some people continue to complain we boomers in our youth were in the land of milk and honey with an abundance of high-paying professional jobs an interview away. However, many of us worked hard in school and summer jobs before we received that first offer of a professional job. In my case, I also worked continuously after undergrad engineering school (with a short “break” for grad engineering school) for many years before retiring. My wife and I also lived frugally and contributed many years to our retirement fund. Now, we have a financially secure retirement.… Read more »
Totally agree. My wife and I worked our butts off for what we have. Work ethic is dead in most of Gen Z. Their music sure stinks, too.
This article is spot on, and it’s likely to get worse. With this being the last year to use Dementia Joe’s free Covid bucks, we haven’t seen the effect of the structural budget deficits in many government entities yet. Unless something changes, like another Fed bailout, there will need to be staff reductions in government soon. Then there likely won’t be any growth, as private jobs continue to leave.
Ex Illini – great point. I just listened to an analyst regarding San Francisco. It has a 15 billion dollar plus budget for a city of 800,000, and the Mayor herself concedes deficits of several hundred million dollars. This analyst, however, sees a revenue take in 2025 and beyond of 9 billion. His take reflects the tide going out when the Covid funds go away. This is cataclysmic, and makes me scratch my head as to who is right. If shortfalls are this large, whether it be SF or Chicago or elsewhere, the blue model of governance is going to… Read more »
Great point. “Business friendly” is not in the Illinois Democrat vocabulary.
Another day, another WP headline about an Illinois problem. This used to bother me, but then I moved to Tennessee. I haven’t come across a Tennessee equivalent of WP yet. I wonder why.