The stereotype is familiar — the factory worker who used to earn $19 an hour before his job was shipped to Mexico now earns minimum wage making Big Macs.
All too often, though, it's true. The new millennium has been tough on Illinois workers and their families, as the state's changing economy has seen the loss of thousands of high-paying jobs with good benefits, replaced by new jobs with lower pay and fewer benefits.
The bad news is that things are likely to get worse in coming years, according to a detailed study of the state's employment picture — findings that merit serious attention from policymakers.
The study, The State of Working Illinois 2005, warns that much of the projected job growth in the next few years will come in lower-paying occupations
offering few benefits. The predictable result? Increased demands for such public services as education and health care, even as state revenue growth tails off.
As reported in Illinois Issues last month, the study found that the median household income in Illinois dropped $6,000 over the past six years, leaving Illinois families with about the same buying power as they had in 1989.
The dismal picture stemmed largely from changes in the state's economy in which higher-paying manufacturing jobs with good fringe benefits have been replaced by lower-paying service sector jobs that frequently provide neither health insurance nor pension benefits.
The downward spiral will continue, the study predicts, unless policymakers can reverse the current trends. Relying on projections from the state Department of Employment Security, project researchers note that almost half of the roughly 600,000 new jobs expected to be created in the 10-year period ending in 2012 will be in just 30 occupational categories, out of more than 770 the department tracks.
While some of the expected new jobs have good salaries — the median wage for registered nurses, the fastest growing category at almost 19,000 new jobs, was $48,954 in 2004 — 54 percent had median wages of less than $36,408, the minimum needed by a family of four in rural Illinois to meet basic living expenses. In Chicago, the same family would have to earn $43,704 to cover costs of housing, food, health care and other necessities, according to the Economic Policy Institute, a nonpartisan think tank.
Moreover, four of the top 10 growing occupations — accounting for an estimated 62,000 new jobs — pay less than $19,350 a year, the federal poverty level for a family of four. The low-paying occupations include the second-largest growth category, retail salespersons, expected to add almost 16,000 new jobs at a median income of $18,624.
The projections suggest that "Illinois policymakers and advocates should be prepared to deal with a changing economy that will, for the most part, continue to create many new jobs that pay stagnant to declining wages, [and] provide fewer healthcare and pension benefits," the report noted.
The bad news is that things are likely to get worse in coming years, according to a detailed study of the state's employment picture - findings that merit serious attention from policymakers.
The study was a joint effort by Northern Illinois University's Office for Social Policy Research and its Regional Development Institute and by the Center for Tax and Budget Accountability, a Chicago-based think tank.
While the report makes no policy recommendations, its authors hope the detailed research will provide a starting point for political leaders and other policymakers to devise better economic development strategies.
"We wanted to get everybody interested in the size of the problem before offering solutions," says Ralph Martire, executive director of the center.
But Martire and Paul Kleppner, director of Northern's Office for Social Policy Research, clearly have some ideas about what needs to be done.
An obvious starting point is improving the educational opportunities available to the workforce. The study found a close link between education and well-paying jobs, with two-thirds of those without a high school education earning less than $50,000, while almost 60 percent of those with a college degree earned more than $75,000. The gap between the median wage of those without a high school diploma and those with a college degree was $12.74 an hour, the study found.
Kleppner believes the state needs to reduce high school dropout rates, especially among minority students, while Martire says people need to think of public education as something that goes beyond high school. "Twelfth grade doesn't cut it any more," he says.
Illinois also should focus on its strengths, such as its agricultural bounty and its central location, Martire adds. "We ought to be leading the country in green technology like biodiesel," he says. "We ought to be doing everything we can to maximize ourself as the transportation hub."
Current economic development efforts should be evaluated more closely, Kleppner says. The state should "stop subsidizing people to bring in low-wage jobs" in the guise of providing workers a steppingstone to better-paying positions, an unlikely result, he said, and government officials should investigate whether incentives offered prospective employers actually produce the promised jobs.
"State and local governments give them the money, but they never follow up to see if the jobs were created," he notes.
The researchers concede the report won't inspire action in the final weeks of the spring legislative session, as lawmakers focus on approving a budget for FY 2007 and heading out to the campaign trail. But the researchers are working on additional reports to be released in the coming months, in hopes of keeping job creation on the political agenda leading up to the November election.
After the election, state Reps. David Miller, a Democrat from Calumet City, and Donald Moffitt, a Republican from Gilson, plan to introduce legislation for a bipartisan economic development task force to study the issue more closely and develop policy recommendations, the researchers say.
The task is urgent. If the current trends continue unchecked, Martire says Illinois faces a future in which "we have less revenue base than currently to meet greater needs in terms of health care, social services and unemployment."
Charles N. Wheeler III is director of the Public Affairs Reporting program at the University of Illinois at Springfield.
Illinois Issues, April 2006
