Unemployment has improved since this spring, but the ongoing pandemic and efforts to contain it may cause lasting damage to the region’s job market, with many workers at risk of permanently leaving the workforce. Unemployment in northeastern Illinois was 12.1 percent the week of August 12th, compared to 11.0 percent statewide and 8.5 percent nationally, according to the most recent data from the U.S. Bureau of Labor Statistics.

The official unemployment rate, however, reflects only individuals who are actively looking for work. It does not include the approximately 49,000 unemployed people who have left the region’s labor force entirely since mid-February. If it did, the seven-county region’s unemployment rate would be closer to 13.1 percent. Taken together, total employment here has declined by 413,000 workers since mid-February.

The region’s official unemployment rate has improved somewhat since its worst levels in April 2020, when it reached 17.2 percent. But this positive trend can obscure the number of people who are out of work, because of how the unemployment rate is constructed and the unique effects of this downturn.

Although the Chicago region actually lost jobs in July and August, this decline was smaller than the number of people who chose to leave the labor force entirely rather than seek other work. The pandemic has required some workers to drop out of the workforce to provide child and family care, forced some to take furloughs or early retirement, and left many others unable to work because they are at high risk for severe illness. The result is an apparent decrease in the unemployment rate without substantial improvement in the labor market.

As businesses reopen and activity picks up, employers can bring back more of their employees, but the remaining layoffs are also more likely to be permanent. Even workers who are currently employed may be facing reduced hours, lower wages, childcare issues, and other barriers to full employment.

Broadly, the Chicago region is making some progress toward recovery. Yet our total job losses since February (10 percent) outstrip the worst days of the 2007-09 Great Recession, when employment in the region was only 8.6 percent below its pre-recession levels. These numbers — for jobs, unemployment, and the labor force — are likely to bounce around as each new phase of the recovery unfolds. Monthly jobs data will increasingly reflect changes in public restrictions and supports, such as the end of supplemental unemployment benefits, reopening and increased capacity for small businesses, or the use of payroll supports and subsidized business loans. Understanding these underlying dynamics will be important.

As the region works toward recovery, CMAP will continue to monitor our progress and evaluate the unique challenges faced by different demographic groups and key drivers of our economy, such as entrepreneurs. It will be critical for regional policymakers to monitor trends and craft robust responses to avoid a drawn-out recovery. Following the 2007-09 recession, it took metropolitan Chicago nine and a half years to recover to pre-recession unemployment levels.

ON TO 2050, our long-range, comprehensive plan, calls for northeastern Illinois to pursue regional economic development and foster further collaboration with workforce development partners. By working together as one region, we can support a swift recovery and build back more resilient, prosperous communities.