The COVID-19 pandemic has caused major upheavals in several major sectors of the economy: financial, manufacturing, retail, tourism.Â
Before the COVID-19 pandemic, though, the national economy had been performing well, with unemployment at the lowest it has been in the last 25 years, according to the Bureau of Labor Statistics. According to the Illinois Department of Employment Security, the state of Illinois also saw unemployment at its lowest in years, coming in at an average of 3.5 percent for January and February.
Now, after several weeks of huge swaths of the economy being shut down and unemployment rates skyrocketing, the economy has slowed considerably. Representative Darren Bailey, of Illinois Legislative District 109, talked with The Navigator about the issues caused by unemployment and the implications they hold over the economy. The first thing Bailey pointed out was the growing exodus of taxpayers and businesses alike out of Illinois.
â€śBusinesses are moving out of the state. Our work comp is two and a half times that of any other state; now, weâ€™ve raised the minimum wage. For many of entry-level jobs, people are coming from across state lines and securing jobs. The vast majority of that money doesnâ€™t get spent in Illinois. So, no. No matter what weâ€™re being told, the numbers suggest and show that the unemployment rate is simply due to a strong and robust national economy.â€ť
He doesnâ€™t take credit for himself or anyone in Illinois, though. Bailey credits President Trump for the stateâ€™s improved economic performance.
â€śWe call it â€?The Trump Economyâ€™ for a reason. You canâ€™t deny the good heâ€™s done for the national economy. The economy had grown, factories were producing and people were buying and there was a whole lot going on. Things were working.â€ť
The pandemic has changed all of that. However, Bailey suggests that Illinois could have been much better prepared to whether this economic crisis and help its citizens had it not been for one thing: Illinoisâ€™ finances.Â
â€śWhen you take a look at Illinoisâ€™ financesâ€” which Iâ€™ve been railing against since day one, Illinoisâ€™ finances are a disaster and theyâ€™re getting worse because of the decisions the Governor chooses to enact,â€ť Bailey said.
For a prime example, according to Bailey, look no further than the current budget for Illinois.
Â â€śLast year, we were experiencing a robust economy, during which we added $4 billion of spending to our budget. On top of that added $4 billion in spending, the state turned around and borrowed an additional $1.2 billion on bonds.â€ťÂ
Bailey said that all of that spending could have and should have been redirected to sections of the economy that needed it.
â€śWe were up there begging people to wake up and realize, â€?Hey, letâ€™s take advantage of this and stock this away. Letâ€™s pay down our debt.â€™ No, we didnâ€™t do that. The state created new spending instead of shoring up education, daycare providers, nursing homes or hospitals. We could have been shoring up the promises we made to those institutions, and we didnâ€™t do that.â€ť
Despite several State Representatives calling for the government to â€śstock upâ€ť on the momentum created by the robustness of the national economy, Bailey said Illinois passed a budget that ignored those pleas. The governor had his own idea as to how to stabilize the stateâ€™s economy: introduce a progressive tax. In the governorâ€™s address at the beginning of the budget, he says:
â€śâ€¦ Overall, this budget advances a responsible balance of disciplined spending, realistic new revenues and a more sustainable approach to the funding of the stateâ€™s pension systems â€¦ As a key element of my plan to stabilize Illinoisâ€™ finances in the coming years, my administration will seek a constitutional amendment to move the state toward a fair income tax system, which will replace the current flat income tax that overburdens the middle class and those striving to get there ...â€ť
For the rest of the story, check out this week's Navigator.