The Illinois economy is recovering but quite sluggishly. This was the conclusion reached based on a study conducted by University professor Robert Bruno and Chicago Labor Education Program research associate Frank Manzo IV. Bruno, who is also the director of the Labor Education Program, and Manzo used the data from the current populations survey which is gathered by the U.S. Census Bureau. The survey is conducted monthly for the Bureau of Labor Statistics to help determine variables such as the unemployment rate. The analyzed data for this study was from the March editions of the survey from 1995 until 2012.

“We wanted to take a pre-recession, post-recession snapshot of the state of working in Illinois,” Manzo said in a news release. “What we found is that there’s still a lot of slack in the labor market; in Keynesian terms, we have what’s known as ‘weak aggregate demand.’ The state is in recovery, albeit quite slowly, which means that workers are still worse-off than before the recession. But things aren’t quite as bad as they were during the darkest days of the Great Recession.”

Bruno and Manzo presented some intriguing solutions on how to bring the state economy up to speed, including the recommendation that the Illinois government should invest more into public infrastructure.

“Infrastructure is both hard capital like roads, sewer systems, electrical grids and highways,” Bruno said. “It is also building hospitals, building new schools. It is hiring new teachers. It is putting more money into supporting pre-K through university education. It is the combination of both hard and soft capital that makes investing in infrastructure viable.”

The duo’s ideas go beyond just a single pronged attack. In an effort for short-term and sustainable long-term boost, Bruno and Manzo want to use a combination of wage variables to help the economy. They advocate a raise in the minimum wage and an implementation of the Earned Income Tax Credit system.

“Illinois is one of six states that administers a flat tax rate,” Bruno said. “We argue that if you had a slightly progressive income tax, given the fact that Illinois is a wealthy, very high educated state, you will bring in billions of dollars without significantly hampering anybody’s quality of life. You can then turn that money around and invest it back into the infrastructure.”

The researchers believe the success of the state’s economy is predicated on the lawmakers in Springfield. The lawmakers will need to enact more “worker-friendly” policies to make the state more attractive. Professor Bruno said the higher wages and better standard of life will serve as incentives for more workers to come to Illinois. Regardless of the higher cost of production, employers will also be spurred on to move their businesses to and create businesses in Illinois because of the level of education their workers will receive here. The incentive for the employers lies in higher revenue they can earn in the state.

“There is so much potential in the Illinois labor market that is going to waste,” Manzo said. “We hope that this study can add to a policy debate that needs to happen in the statehouse.”

Lanre can be reached at [email protected].