Illinoisans Paid Almost as Much on Unemployment as at Work

Illinoisans Paid Almost as Much on Unemployment as at Work
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Illinois’ unemployment rate reached 7.2% in July, yet many businesses are struggling to find workers. We’ve all seen the “help wanted” signs at businesses and social media posts asking us to be kind to those who did show up to work. With the vaccine readily available to anyone ages 12 and older, why are people hesitant to go back to work? 

The answer, in part, lies in the benefits Illinoisans are receiving.

According to the Illinois Department of Employment Security, the average Illinoisan earns approximately $55,770 per year at work. Meanwhile, the Illinois Policy Institute found if that person stayed home with their kids and collected unemployment, they could earn $51,627.

So go to work, average $55,770 and pay for child care, transportation and taxes. Or stay home, skip the expenses and get up to $51,627. It appears Illinois’ unemployment benefits are incentivizing workers to stay home. 

Unemployment benefits hit records during the brunt of the COVID-19 pandemic. In addition to receiving $364.76, on average, from the state, individuals can collect an additional $300 from the federal Pandemic Emergency Unemployment Compensation funds. Gov. J.B. Pritzker has promised to keep paying the extra $300 through the federal expiration date of Sept. 6. 

“I don’t want to pull the rug out from under people that have certainly legitimate reasons for remaining on unemployment,” Pritzker said when asked about the reform.

Before the COVID-19 pandemic, unemployed Illinoisans were required to upload a resume on IllinoisJobLink.com, a state-run job bank, in order to receive unemployment benefits. The state rescinded that requirement during the pandemic. Currently, employers have posted over 120,000 jobs on the state jobs site; yet residents have only posted 37,834 resumes.

The pandemic also brought two rounds of stimulus payments to the majority of Americans. When the stimulus checks are coupled with extraordinary unemployment payouts, the Chicagoland Chamber of Commerce calculated an unemployed worker received $35 an hour.

“Employers are offering substantially higher wages, employment bonuses and taking other steps to encourage people to return to work,” the chamber wrote in an open letter to Pritzker. “The problem is employers cannot compete with the approximate $35 per hour unemployed workers have received over the last four months as a result of enhanced UI benefits, tax credits, and stimulus payments.”

These unemployment incentives are far above what any business can offer, even with the coveted $15 minimum wage and additional sign-on bonuses. Perhaps Illinois should join the long list of states that are incentivizing people to return to work rather than to keep collecting unemployment benefits. Over half of states are already putting an early stop to the additional $300 from the federal government over concerns it is prompting people to stay unemployed.

How can Illinois, which was already in the red before the pandemic, pay for these unprecedented benefits? It can’t. The state’s Unemployment Insurance Trust Fund is as much as $8 billion underwater.

The costly benefits are adding up in more ways than one. Illinois needs to get its citizens back to work. 

Bryce Hill is a senior research analyst at the Illinois Policy Institute, a nonpartisan research organization.



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