The end of the week is here and so is the extreme heat. Make sure you all stay cool over the weekend as the heat index is predicted to be as high as 106 degrees. That will be the end of predictions for this update as the rest of the information below is based on facts and figures.
Illinois Numbers on Unemployment
The Illinois Department of Employment Security (IDES) announced today that the unemployment rate fell -0.7 percentage point to 14.6 percent, while nonfarm payrolls added +142,800 jobs in June, a record monthly increase, based on preliminary data provided by the U.S. Bureau of Labor Statistics (BLS) and released by IDES. The June payroll jobs estimate and unemployment rate reflects activity for the week including the 12th.
The state’s unemployment rate was +3.5 percentage points higher than the national unemployment rate reported for June, which was 11.1 percent, down -2.2 percentage points from the previous month. The Illinois unemployment rate was up +10.6 percentage points from a year ago when it was 4.0 percent.
In June, the three industry sectors with the largest over-the-month gains in employment were: Leisure and Hospitality (+58,700), Trade, Transportation and Utilities (+40,800) and Education and Health Services (+24,600). The industry sectors with the largest payroll declines were: Government (-19,000), Financial Activities (-1,700) and Mining (-800).
Mass Unemployment Could Force Social Security Administration to Make Cuts Sooner
Social Security benefits are a major source of income for millions of retirees, with around one in five married couples depending on their benefits for at least 90% of their income in retirement, according to the Social Security Administration (SSA).
Generally, the SSA uses money from payroll taxes to pay out current retirees’ benefits. However, payroll taxes are no longer enough to continue paying out benefits in full, so the SSA has been forced to tap its two trust funds to cover the deficit. Those funds are quickly running out of money, though, and according to the SSA’s most recent projections, they’ll be depleted by 2034. If Congress doesn’t make any changes before then, payroll taxes will only be enough to cover around 76% of future benefits.
COVID-19 could make the problem worse, however. Because Americans are facing unemployment in record numbers, there are a lot of people not paying payroll taxes right now. That means the SSA is collecting a lot less than expected in taxes and will likely need to take even more from its trust funds to continue paying out current benefits. While nobody knows exactly what this will mean for the future of Social Security, a report from the Bipartisan Policy Center estimates that because of COVID-19, the trust funds could be depleted as soon as 2028.
As part of the next coronavirus stimulus package, President Trump is proposing payroll tax cuts. While that may be good news for current workers, it could spell disaster for Social Security.
Payroll tax cuts would reduce the amount the SSA has to pay out in benefits right now, meaning it would need to take even more from its trust funds. In addition, it would mean that once the trust funds are depleted, the SSA will have less money to pay out in future benefits. Right now, payroll taxes are expected to cover only around 76% of future benefits. If taxes are cut, benefits may need to be reduced even more. There is no guarantee that any of these things will happen, but if Congress doesn’t come up with a solution, benefit cuts are a real possibility.
With That Said …
President Donald Trump has signaled to Hill Republicans that he will not sign a new coronavirus stimulus package without the inclusion of a payroll tax cut. This new red line from the White House serves to illustrate the challenges that lie ahead in negotiating another Covid-19 relief package. GOP and Democratic congressional leaders are trillions of dollars apart in funding goals for the package, as well as how those funds will be spent.
Liability Protection Proposal Prepared
Senate Republicans are preparing to offer a five-year shield from coronavirus lawsuits as part of a forthcoming relief proposal. The proposal would be retroactive from December 2019 through 2024, or the end of an emergency declaration issued by the Department of Health and Human Services if that is later, according to a draft summary.
The proposal, which is currently being reviewed by the White House, would give federal courts jurisdiction over lawsuits related to personal injuries or medical liability tied to coronavirus infections, preventing lawsuits in state courts, where business groups have warned about uneven laws. It would specifically include protection for schools, charities, local government, and businesses that properly follow public health guidelines. In addition, it protects front-line health workers. Entities and front-line health workers are liable only for “gross negligence” or “intentional misconduct.”
Mask Policy Ask
Earlier this month, the U.S Chamber of Commerce sent a joint letter with business leaders to the President, Vice President, and Governors Hogan and Cuomo urging that the White House Coronavirus Task Force and the National Governors Association work together to:
- Establish guidance on the appropriate metrics (e.g. positive tests, hospitalizations) for imposing location-based mandatory mask requirements in all public spaces;
2. Develop model mandatory mask policies that are simple and do not impose the enforcement burden on organizations without such expertise, such as businesses and non-profits; and
3. Make clear that businesses and non-profits will not be held liable for refusing entry or services to an individual who is not complying with face covering requirements.
In the joint letter, the U.S. Chamber of Commerce and business leaders—while reiterating their support for these decisions to continue being made at the state and local level—request that for the sake of public health and the economy, requirements should be informed by clear and consistent guidance based on data.
Finally, we have information to share about our next Virtual Conference on Monday, July 20. The session will take place at 10:00 AM with the newly announced Small Business Development Center (SBDC) here at Joliet Junior College.
Small Business Development Center & Phase 4 Economic Resurgence Tools
Please join the Joliet Chamber for an introduction and overview of the new Small Business Development Center and Phase 4 resurgence tools and tips.
- Introduce the SBDC’s Starting Your Business training for local entrepreneurs
- Develop a directory of local Chamber members to help startup companies in key areas
- Share new tools to help existing small businesses with their growth at no cost
- Present thought-provoking ideas to aid local companies in sales in the months ahead
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry