Unsustainable: Illinois’ tiny, five-year jobs growth due only to new government, healthcare and social services – Wirepoints | Wirepoints

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.