Chamber Members:
This update sincerely always attempts to share as much positive news as possible. Sometimes however, reality is that things these days on the COVID and economic front cannot always be promising. Here are a few comments from sources on the two days of negotiations in Washington DC:
“THE TWO PARTIES ARE SO FAR APART that it is extremely difficult to envision getting any kind of compromise by the end of July.”
ANOTHER SOURCE involved in the talks put it this way: “0% chance there will be a bill passed by the end of July, 40% chance there is a bill by mid-August.”
A THIRD SOURCE suggested that “Republicans are irreparably split, and they’ll never be able to find unity in their fractured conference.”
FINALLY, “After two days of back-and-forth negotiation, it seems evident that the effort to craft and pass a Covid relief bill not only will slip into August, but could also easily subsume the first two weeks of next month. The two sides are miles apart on issues large and small, and neither side has an obvious incentive to cave nor relent. Internally, both Republicans and Democrats have divisions — the GOP more than Dems — and those remain unresolved.”
Direct Payment Stimulus
Reports are emerging that Republicans are pushing the threshold to be lowered this time around from $75,000 down to $40,000 per individual.
Comparing Economic Stimulus Packages
The European Union has adopted a groundbreaking stimulus to fight coronavirus recession. The $857 billion package includes unprecedented steps to help less wealthy countries, including selling collective debt and giving much of the money as grants, not loans. The agreement sent a strong signal of solidarity even as it exposed deep new fault lines in a bloc reshaped by Britain’s exit.
The deal was notable for its firsts: European countries will raise large sums by selling bonds collectively, rather than individually; and much of that money will be handed out to member nations hit hardest by the pandemic as grants that do not have to be repaid, and not as loans that would swell their national debts. In addition to raising cash and extending grants, the package will increase lending and deploy other, more traditional stimulus methods to arrest and reverse the economic free-fall that threatens the stability of the world’s richest bloc of nations.
The deal reached on Tuesday is significant in that more creditworthy E.U. nations will be underwriting loans to fund the recoveries of countries that would otherwise face onerous borrowing costs. The Netherlands and other wealthier nations with healthier public finances are concerned that the commonly funded aid would simply go into a bottomless pit of spending that doesn’t truly help these economies recover without changes to make it easier to reduce bureaucracy, create jobs and stimulate growth.
A key argument in favor of offering grants rather than loans has been that Italy and other countries likely to take the aid are already over-indebted and piling on yet more loans would just worsen their positions.
Childcare COVID Crisis
The collapse of the childcare industry is threatening to stoke racial and gender inequities and put pressure on Congress to address the crisis in its new round of coronavirus aid.
The sector, which saw 60% of its programs close at the height of the pandemic before rebounding slightly, is still down some 237,000 workers from last year. This is a number that is likely to grow as states shut down again, economists say. Some projections show the industry could permanently lose half its programs. Two in 5 childcare providers this month said they will shut for good without an infusion of federal funding.
Back to Work
In mid-April, something strange started happening in the U.S. economy: Smaller companies, those with fewer than 500 workers, started rehiring workers more quickly than larger companies.
During a typical crisis, large companies have important advantages, like more cash on hand and better digital operations. So why were smaller companies apparently faring better during the lockdowns this spring?
The answer, it appears, is government policy. The economic-rescue plan that the federal government created in March included loans from the Paycheck Protection Program that were meant to reduce job losses, mostly at companies with fewer than 500 workers. If the companies maintained their employment levels, the government would ultimately forgive the loans.
In all, the PPP saved between 1.5 million and 3.5 million jobs, according to a new study by researchers at M.I.T., the Federal Reserve and the ADP Research Institute. The study adds to the mounting evidence about one kind of economic stimulus that seems to have worked especially well during the pandemic: direct subsidies to businesses, to keep people employed.
State reports widespread fraud in unemployment claims
Illinois’ already pressured unemployment insurance system now has been hit by a new problem: what state officials say is widespread fraud in aid claims filed amid the COVID-19 pandemic.
Rebecca Cisco, spokeswoman for the Illinois Department of Employment Security, which processes unemployment claims, declined to put a dollar value or range on the fraud, citing confidentiality and “ongoing investigations.”
According to a statement from Illinois officials, IDES “uncovered and is investigating a widespread fraud scheme that is being conducted nationwide,” most of it involving improper claims for special unemployment aid of $600 a week under COVID relief legislation.
Marketing Strategies and Tactics Webinar
A Marketing Strategies and Tactics During COVID-19 webinar will take place on Tuesday, July 28. This webinar is being hosted by the Women’s Business Development Center – Aurora. The session will begin at 12 p.m. Register here: https://www.eventbrite.com/e/marketing-strategies-tactics-during-covid-19-registration-112505079722?utm_medium=email&utm_source=govdelivery
COVID-19 Testing and Vaccines: What’s happening now, and what’s next to come?
Friday, July 24, NOON – This is presented by the U.S. Chamber of Commerce as part of their Path Forward series. Pharmaceutical companies are working at record speeds to develop a COVID-19 vaccine. Before it arrives, we know swift, accurate, and widespread testing is key to a successful reopening strategy.
When can we expect a vaccine? Who will have the first access? What are the latest testing strategies, and will they keep up with demand? On Friday, guests including Dr. Lloyd B. Minor, Dean of the Stanford University School of Medicine, will join us to discuss the latest updates on testing and vaccines, and address your pressing questions during a live Q&A. You can register to participate here: https://www.eventbrite.com/e/path-forward-covid-19-testing-and-vaccines-tickets-114318162702?aff=ebdssbonlinesearch&utm_medium=Email&utm_source=SFMC&utm_campaign=&utm_content=
Finally, more companies are offering a four-day workweek. The pandemic is prompting more companies to experiment with this trend. Will interest outlast the pandemic? Not only might reduced hours allow employers to share around the pain of the economic contraction, reducing the need for layoffs, but a less full office also makes social distancing easier if and when employees physically return to work. Plus, everyone has a lot on their plate now. Giving your people a little space to rest and regroup can result in greater productivity when they are on the clock, the thinking goes.
Shortened workweeks remain impractical for more hands-on industries like construction and personal care where hours in generally correlates with productivity out. But as the coronavirus crisis continues to put more pressure on companies’ finances and employees’ schedules, we may yet see a further rise in shortened workweeks for jobs where less time at work often leads to better ideas and more output.
Stay well,
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Mike Paone
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry
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