La Grange, IL: Illinois’ plans to expand broadband infrastructure by 2025 will connect nearly 565,000 residents to high-speed internet, create nearly 25,000 jobs, grow the economy by billions of dollars, and generate sufficient tax revenues to pay for itself within a decade, according to a new study from the nonpartisan Illinois Economic Policy Institute (ILEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign.
Read Study: “The Economic, Fiscal, and Social Effects of Public Investments in Broadband Internet Access in Illinois”
According to Census data, just 83% of Illinois’ population and 84% of its workforce had access to reliable broadband prior to 2020, with disparities as high as 12% between white residents and people of color and additional divides between affluent communities and lower-income and rural communities. Recent research has revealed that as many as one-in-five Chicago students lack reliable broadband access—primarily in black-majority neighborhoods. In Downstate Illinois, where adding new cable can be less economical, there was an out-migration of people between 2010 and 2020 while the City of Chicago and surrounding suburbs added population.
As part of the historic $45 billion Rebuild Illinois infrastructure program enacted by lawmakers in 2019, the state committed $400 million to expanding broadband access across Illinois. State, federal, and non-state matching funds—including an additional $100 million guaranteed by the bipartisan Infrastructure Investment and Jobs Act signed into law by President Biden last year—will invest a minimum of about $1 billion in broadband infrastructure in Illinois by 2025. ILEPI and PMCR researchers used data from Connect Illinois, the U.S. Census Bureau, and industry-standard IMPLAN economic modeling to project impacts of these planned investments on statewide connectivity, jobs, wages, economic growth, and tax revenues.
“Even before a deadly pandemic exposed staggering racial and geographic disparities in access to remote work, online learning, and telehealth services, lawmakers in both political parties recognized expansion of high-speed broadband as an economic imperative for our state,” said ILEPI Executive Director and study coauthor Frank Manzo IV. “The data shows that they were right. These investments will lead to higher labor force participation, more access to high-wage jobs, and improved access to health and educational services.”
After controlling for age, race, education, occupation and other factors, researchers found that access to high-speed internet increases the probability of employment for an Illinois resident by 1.2% and increases the wages of workers in previously underserved communities by an average of 5.4% (or $2,235 annually). Based on the average per-service location cost of the state’s recent broadband infrastructure expansions ($4,154), they estimated that the state will be closing approximately a quarter of its current digital divide—connecting an additional 238,000 homes, businesses, and farms as well as 244,000 workers and a total of 565,000 individuals through 2025.
To estimate the overall economic impacts of Illinois’ planned broadband infrastructure expansion, researchers modeled both the initial construction phase (2020-2025) as well as the long-term effects (2026 and beyond) that would take into account the higher wages and labor force participation of newly-connected Illinoisans.
“Construction of this expanded broadband infrastructure will mean business opportunities for local contractors and suppliers, and create skilled construction jobs that pay prevailing wages and invest in apprenticeship programs,” said study coauthor and ILEPI Policy Analyst Andrew Wilson. “As this spending ripples throughout the economy and stimulates consumer demand, it will create thousands of new jobs, add billions to the state’s economic output, and generate more than $125 million in new tax revenues for state and local governments.”
As hundreds of thousands of new homes, businesses, and farms are connected, researchers projected additional impacts tied to increased labor force participation and higher wages. This is expected to create another 11,000 jobs, while boosting annual economic output by nearly $2 billion and adding another $77 million per year to state and local tax collections—more than offsetting the total cost of Illinois’ planned investments within a decade.
Based on U.S. Census Bureau figures, researchers estimate that 13% of residents will still be left without reliable high-speed internet access after 2026. Closing this gap would require additional public and private investments in broadband infrastructure amounting to $2.8 billion.
“Expanding Illinois broadband infrastructure is not only essential to our competitiveness in today’s economy, but the data also shows that it will likely pay for itself by creating new opportunities for businesses, higher wages for workers, better access to preventive telemedicine, remote learning and modern farming technologies for underserved communities, and a broader tax base for Illinois,” said study coauthor, PMCR Director, and Professor Dr. Robert Bruno. “Sound public policy should demand a strong return on investment, and the evidence shows that a long-term commitment to connectivity for Illinois will deliver.”
The Illinois Economic Policy Institute (ILEPI) is a nonpartisan nonprofit research organization which uses advanced statistics and the latest forecasting models to promote thoughtful economic growth for businesses and working families in Illinois and across the Midwest.
The Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign investigates the working conditions of workers in today’s economy to elevate public discourse aimed at reducing poverty, create more stable forms of employment, and promote middle-class jobs.