It is Thursday, so that means our weekly announcement of unemployment numbers. We also have some exciting news to share about PPP changes. We’ll recap briefly as well what was talked about today on our virtual conference session with Senator Bertino-Tarrant and Representative Manley.
Newest Unemployment Report
Initial unemployment claims fell to a total of 1.9 million individuals in the final week of May. This is a drastic change from the weekly peak of 6.9 in April. The new data also showed an additional 623,000 claims of Pandemic Unemployment Assistance, a program passed in the CARES Act that expanded benefits to gig workers, the self-employed and other groups typically not eligible for unemployment insurance.
The overall continuing claims number comes in around 21.5 million which shows the best picture of how many individuals are out of work currently rather that the total overall claims since mid-March of 42 million.
We’re hearing that considering these numbers and with the national unemployment rate projected to hit or exceed 20 percent, the highest number since the Great Depression, a growing number of Republican senators say the federal government should continue to assist with weekly unemployment benefits in some form, but just not as high as the current $600 amount. Most still believe that the high amount is a disincentive for returning to work
A new idea has popped up with the suggestion that the federal government should provide a back-to-work bonus of $450 per week for laid-off workers who return to their jobs.
This is certainly a shift from the previous discussions and we’ll watch to see if the amount changes and/or moves to a back-to-work bonus. It seems though that the additional assistance will remain for those unemployed.
Attached is a document of slides from this mornings IDES Unemployment Insurance Law presentation through the Workforce Center of Will County
PPP Changes are Approved by the Senate
The U.S. Senate by unanimous consent cleared a recent House passed (H.R. 7010) bill to extend the Paycheck Protection Program. The highlights of the program are below:
- Extends the PPP loan forgiveness period to include costs incurred over 24 weeks after a loan is issued or through Dec. 31, whichever comes first. Businesses that received a loan before the measure is enacted could keep the current eight-week period.
- Extends to Dec. 31 from June 30 a period in which loans can be forgiven if businesses restore staffing or salary levels that were previously reduced. The provision would apply to worker and wage reductions made from Feb. 15 through 30 days after enactment of the CARES Act, which was signed into law on March 27.
- Maintains forgiveness amounts for companies that document their inability to rehire workers employed as of Feb. 15, and their inability to find similarly qualified workers by the end of the year. Under the modified measure, companies would be covered separately if they show that they couldn’t resume business levels from before Feb. 15 because they were following federal requirements for sanitization or social distancing.
- Extends the deadline to apply for a PPP loan to Dec. 31 from June 30.
- Requires at least 60% of forgiven loan amounts to come from payroll expenses. But the legislation as written would require companies to spend 60% on payroll or none of the loan would be forgiven.
- Repeals a provision from the CARES Act that barred companies with forgiven PPP loans from deferring their payroll tax payments.
- Establishes a minimum loan maturity period of five years following an application for loan forgiveness, instead of the current two-year deadline set by the SBA. That provision would apply to PPP loans issued after the measure is enacted, though borrowers and lenders could agree to extend current loans.
Since the House passed the bill May 28, it will now go to President Trump for his signature.
Illinois Revenue Update
In April, the net decline in state tax collections was around $2 billion. Now with May wrapped up, the reports are in and the numbers are mild in comparison. May saw a decrease of $341 million as we still deal with the pandemic, but it does come as a bit of good news. Again, just about all revenue sources in addition to tax collection are a steep decline as compared to the same time frame in 2019.
A poll that was conducted by the U.S. Chamber of Commerce says 80% of U.S. small businesses have fully or partially reopened. Those surveyed were somewhat optimistic as compared to other forecasts when it comes to returning to normal. Of those surveyed, 55% say that it will be six months to a year before the economic climate returns to “normal.” Overall, more than half of small businesses that lost employees due to the pandemic said they hope to rehire them in the next six months. Meanwhile, eight in 10 business owners surveyed said they are planning to make changes to promote safety in their workplaces. Roughly 40 percent of respondents said they will require employees to wear protective equipment and customers to stand six feet away from one another. Nearly half plan to increase their cleaning or disinfection efforts.
Virtual Conference Recap
As mentioned earlier, today was our Illinois Special Session recap with House Assistant Majority Leader Natalie Manley and State Senator Jennifer Bertino-Tarrant. It was an extremely information session that covered a number of topics including how life in Springfield was over the few days of special session, the change to working groups via video conference, and how the focus was mainly COVID-19 related. We went over education funding, the workers’ comp agreement, new ballot mailing process, business closure orders, and rent & mortgage assistance. It remains to be seen how the veto session will take place in November/December. We would like to see continued discussions on ethics reform, property tax relief, and new revenue streams that don’t rely on an income tax increase (or other taxes for that matter). We thank them again for their time with us and for the information that they shared with us.
Finally, I would like to wrap up today’s message by sharing our sympathies again to the Walsh family on the passing of Will County Executive Larry Walsh, Sr. in case you had missed the earlier Chamber email. I mentioned today on our virtual conference that Larry was everything that all of the stories, reports, and emails have mentioned over the past 24 hours – he cared for all he came across, willing to work with anyone, and ready to get to work to get things accomplished for the good of everyone.
A good amount of information that is shared through these messages is from the relationships that the Chamber has formed over the years. One of the main reasons that our Chamber has been in position to develop strong relationships comes from Larry Walsh and not only his influence on the local, state, and federal levels, but from his willingness to help an individual new to government affairs. Thanks to Larry for all of those doors that you opened, for walking through them with us even if we always didn’t agree 100% on the issues, and for just being a great friend to the Chamber. You will truly be missed, but your impact will live on.
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry