Public Works Policy, Taxes Cause Unemployment

Published August 22, 2008

The recent Associated Press article warning the general public about rising unemployment rates in Illinois neglects the historical facts that rates have been even higher during recent economic slowdowns in America.

The Illinois Department of Employment Security says the July unemployment rate was 7.3 percent. But in July 1975, the rate was 8.8 percent, and in July 1982, it was 9.5 percent. The June 2008 rate of 5.4 percent was not far removed from the 4.5 percent most economists regard as “full employment.”

With that historical perspective, the real alarms should go off when the “solutions” offered by our state government are increased make-work WPA-style tax-funded construction jobs combined with increases in state sales and income taxes to fund education. Those remedies will only exacerbate the job draining in Illinois and push our fragile state economy closer to a Michigan-like recession next year.

Ralph W. Conner ([email protected]) is local legislation manager at The Heartland Institute.