The sun has returned, and the rain has left us for now. Today this update is going to begin diving into a look at the issues at hand when we talk about a reopen. Also, today will be report card day for unemployment numbers and the economy.
The Treasury and the Small Business Administration said Wednesday that they temporarily shut out big banks from the electronic loan portal used to submit applications for the government’s small business relief program. The move applied to any lender with more than $1 billion in assets for an eight-hour time period starting 4 p.m. on Wednesday. The plan was to ensure access to the PPP loan program for the smallest lenders. It sounds like the SBA and Treasury will evaluate whether to create a similar reserved time again in the future
House Committee Appointment for Congressman Foster
House Speaker Nancy Pelosi named Congressman Bill Foster, to a new bipartisan House Select Committee on the Coronavirus Crisis. This new committee will be tasked with making sure the billions of dollars Congress has released are not mishandled.
*Join us tomorrow at 1 pm as we talk with Congressman Foster on our video conference. You can sign up here: http://jolietchamber.chambermaster.com/events/details/2020-webinar-may-1-federal-updates-concerning-the-covid-19-pandemic-5894
CARES Act 2 update
According to Speaker Pelosi, Democrats will push for including almost $1 trillion in the next coronavirus relief package to help states and local governments hit hard by the pandemic.
The next emergency package will also look to include funds to aid workers, families, and businesses to a greater extent. This relief for taxing bodies though will easily be the largest line item in what is looking to be similar in size to the CARES Act package of $2.2 trillion.
Unemployment claims reached 3.8 million last week, the sixth consecutive week with millions of new claims as the coronavirus pandemic continues to wreak havoc on the economy. The new figure brings the six-week total of new claims to more than 30 million. This figure of 30 million is estimated to be 20% of the entire American workforce
The record number of unemployed is draining the accounts of a number of states which has put them in position to borrow massive amounts from the Federal government. This is not an unusual practice during recessions as 35 states borrowed over $150 billion in 2008 during the Great Recession. We have heard about the vow to not bail out fiscally troubled states like Illinois, but the federal unemployment loans in order to restock these funds can’t be blocked as long as their programs conform with federal law. States need to submit letters to request advances once their accounts run out. The loans from the federal government can be repaid over a three-year period. After that period if the loan is not paid off, then the government can begin to raise taxes on employers. The CARES Act waived interest payments on these loans through the end of the year. However, during the Great Recession, these interest payments were interest free for two years so hopefully that will be extended for this recession or longer.
In the first quarter of 2020 the U.S. economy shrank at its fastest pace since the last recession in 2008. This downturn ended the longest expansion of the economy in history. The broadest measure of goods and services produced in the country, gross domestic product, contracted at a seasonally and inflation adjusted annual rate of 4.8% in the first quarter.
Continuing to Flatten the Curve vs. Responsible Reopening
Conversation begins to dig deeper into the issues surrounding how our economy reopens. Congress seems to have taken on a new debate centered around liability protection of business. Senator McConnell remarked that he is not willing to approve any more government aid if a package does not include legal protections of employers. The fear here is that consumers and employees are going to line up and accuse businesses of not properly setting up social distancing, improper sanitization methods, and a lack of shared PPE. Some legal experts argue that the business community’s concerns are overblown, noting that those who bring suits alleging exposure to the virus would have difficulty proving it was the business’s failure to exercise reasonable caution that caused the infection.
You, our members, need to feel safe that if and when you do reopen that you’re not automatically going to be at fault. Especially, if you have followed protocol and there is not a way to prove that the virus was contracted at your place of business. This could become tricky however, as placing protections at the federal level would most likely override state laws.
Retail and Restaurants are certainly right in the middle of this dilemma. There needs to be a fair compromise in this situation so that employees can feel safe to return to work and employers can run their business without one more fear as long as they are taking all necessary precautions. Here is a link to reopening guidelines from the National Restaurant Association.
It will certainly be interesting to see how employees decide what to do once we move into a reopening. If they feel unsure about returning due to safety or other concerns, then unemployment benefits will no longer be extended as they have turned down a job offer.
Another issue that will need to be addressed is childcare. Frontline and essential workers need assistance now and those returning to the workforce are going to need it as well as several usual programs that they have come to rely on will be inaccessible.
Stay at Home Update
Illinois Senate Minority Leader Bill Brady says his caucus believes the governor is on firm ground to carry out the emergency stay-at-home orders. He says the two Republicans filing suits are doing so on their own. However, Brady feels that it is time for lawmakers to return to Springfield. He feels that they all need to have a hand in state management rather than the Governor having to make all of the decisions. Remember, tomorrow is day one of the order update.
Remembering Minimum Wage
Let us not forget that on July 1 the minimum wage will increase again. This increase will take us to $10 per hour and then again on January 1, 2021 to $11 an hour. The July 1 increase comes six months after the last increase on January 1, 2020. At this time, we need to be focusing on keeping businesses open and employees paid. An increase in the minimum wage is proven to eliminate jobs and this current increase will certainly be no different. We have shared this feeling with our elected officials and urge you to do the same.
The Illinois Department of Commerce and Economic Opportunity (DCEO) in partnership with the strategy consulting firm, Milpa Services, are conducting a statewide survey to measure the COVID-19 impact on Latinx business owners in Illinois. If you are a Latinx business owner in Illinois, please consider completing the 8-10 minute survey in English or Spanish.
Deadline to complete the survey is May 15, 2020.
Finally, we will leave you with this next thought to think about over the next few days. What will be the decision to have ballots in November mainly filled out and turned in via mail? This is sure to be a partisan fight until the end. Questions will arise over timing, paid return postage, witnesses, and of course fraud.
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry