The economy has improved tremendously following the peak of the pandemic, but there’s no denying the significant fluctuation that has occurred over the last few years. Last month, the Census Bureau released the latest data for the American Community Survey (ACS), and the results were staggering. While the survey report aims to show a more detailed picture of racial and ethnic demographics in our country, the information collected also shows the disproportionate effect on communities throughout Chicagoland.
Explore three topics highlighting data in the Chicago Metropolitan Statistical Area (MSA) from the ACS’ 2016-2020 five-year estimates that we found to impact the Chicagoland workforce the most, and how our work aims to help each.
Economic Impact on Chicago’s South and West Sides
The wealth gap in Chicago continues to grow as neighborhoods in Chicago face economic inequality. According to the survey, the national unemployment rate from 2016-2020 was 5.4%, which is less than Chicago’s average of 6.2%. What’s even more disheartening is the relationship between the unemployment rates and percentage of families whose income in the past 12 months is below the poverty level, which was 9.1% nationally and 8.2% in Chicago. Of all the Chicagoland areas, the Englewood and West Englewood areas had the highest rates, with an average unemployment rate of 24% and poverty rate of 34.1%. The next most affected area is North Lawndale, with an unemployment rate of 21.9% and poverty rate of 34.3%.
Which leads us to the question of why are these areas impacted so disproportionately compared to others in Chicago? As emerging globalization and technological changes continues to elevate big central urban areas, like Chicago’s Loop, those resources are being deplenished from areas like the Chicago’s South and West Sides. Back in the mid-1950s, these areas were booming with industrial jobs in factories, steel plants, and logistics companies, creating easy access to good-paying jobs. Now, most of those factories have moved out of these neighborhoods, and there are fewer employment opportunities on Chicago’s South and West Sides.
While education and helping prepare students for career success has become a huge focus for the younger generations, finding ways to support current job seekers is key to stimulating the South and West Side’s economic mobility. Local nonprofits and workforce organizations are taking every opportunity to tackle this issue, and we are proud to be amongst them.
With over 70% of our placements being local talent from Chicago's South and West Side neighborhoods, we’re pleased to work toward assisting some of the most affected areas of Chicago in hopes of helping to close this unemployment gap. To take this even further, we opened our Skills Neighborhood Link (SNL) location in Englewood in July 2021. We’ve held job fairs, meetings with community partners, and appointments for local residents to meet with our team to get help get hired. Our team will be available at a SNL location in the West Lawndale area also as we continue to look for ways to reduce barriers to employment.
Commuting in Chicago
With the lack of job opportunities in Chicago’s South and West areas, job seekers from these areas need to commute to find work. While commuting is not only time consuming, draining and can impact your health, affecting stress level, anxiety, and even sleep, research shows that the cost can add up. According to the Federal Highway Administration, households in auto-dependent locations can typically spend 25% of their income on transportation costs (i.e. gas, car repairs, insurance, etc.). With 68.3% of workers the Chicagoland area driving to work, many workers living outside of the city hub are paying the price with an average of almost 39 minutes mean travel time to work from the South and West sides.
Unfortunately, public transportation is not always the easiest or most cost-effective alternative to driving. In the Chicago region, many jobs are located outside the city, but the transit system offers few options for residents to reach suburban job sites. According to the survey, 11.3% of the Chicagoland area residents depend on public transportation for work (compared to the 4.6% national average), which poses a challenge for employers looking to attract talent from further distances, and for workers needing to commute to work.
Businesses can trim down the commute time of their employees by providing quality jobs for workers in Chicago’s South and West Sides by locating their jobs directly in these communities – Skills is here to be a partner in those efforts. In June 2021, we helped Discover open its first customer care center in Chatham on the South Side. With 81% of the staff residing inside five miles of the facility, Discover is making good on its promise to hire locally, impact the quality of life of its team, and invest in the community. Also, last summer we grew our partnership to support the launches of Amazon’s new fulfillment centers in Markham and Matteson to support their local hiring in South Suburban Cook County. Companies interested in investing in local underinvested communities by bringing jobs to job seekers have a partner in Skills and our Neighborhood Impact Consulting services.
The youth of Chicago are among the top groups to experience significant workforce participation fluctuations. The survey results found that the unemployment rate was 19% for those 16-19 years old and 12% for those 20-24 years old and then drops to 6.8% and continues to lower for those 25 and older. Even pre-pandemic, the youth unemployment rate remained high as so many youth pursued unpaid internships and extracurricular activities, as a needed step to achieve higher-paying jobs post-college. More recently, COVID-19 hit youth in the workforce the hardest, with the unemployment rate of over 30% for those 16-19 and over 25% for those 20-24 years old within the first few months of the pandemic. The majority of job losses were due to the large population of youth workers in the food service, restaurants and hospitality sectors, which were the first industries to let workers go in March 2020.
Today, although the youth unemployment rate is improving as these jobs open again, we’re starting to see the long-term effects of the pandemic on this demographic. A recent trend shows they are delaying secondary education because of the cost, forcing them into lower-wage jobs. Fortunately today, companies are noticing the economic hardships they’re facing and are reconsider their hiring requirements. More than 100 companies across the nation have pledged to change their hiring habits by opening the door to higher-wage jobs with career paths to people without a four-year college degree. Workforce experts see removing the college degree filter as key to increasing diversity and increasing equality.
At Skills, our Career Access programs helps set youth up for career success by connecting early-career talent to quality jobs through coaching, mentoring, professional development, and educational opportunities. This program provides the necessary resources they need to succeed as they embark on a long-term career path, whether they’re pursuing a degree or credential.
As Skills celebrates its 10th anniversary this year, we’re proud to continue our mission of connecting jobs to people. Through our jobs-first workforce approach, we work with employers to identify their hiring needs and job seekers to pursue their career paths, reducing barriers and increasing equity throughout Chicagoland. Learn more about Skills and how we can work together to get Chicago back to work by contacting us today.
Click each area below to view the unemployment and poverty rates in Chicago, with the darker areas indicating higher rates than the lighter ones. Data is taken from the American Consumer Survey (ACS)'s Chicago Metropolitan Statistical Area (MSA) for the 2016-2020 five-year estimates.