Two more days after today to wrap up this year of what ever name(s) you want to associate with it. There are five days until the new Congress meets, one week until voting ends in Georgia’s Senate runoffs, and three weeks until Inauguration Day, Jan. 20, 2021.
It also appears as the flakes fall that we’ll have the first real measurable snow fall of the year. Check out today’s update below for info on continued covid relief discussions, a positive outlook for 2021, and thoughts on the role of the physical office.
*Daily Coronavirus update brought to you by Silver Cross Hospital
Next Round of Covid Discussions
The House voted overwhelmingly Monday to increase COVID-19 relief checks to $2,000, meeting President Donald Trump’s demand for bigger payments and sending the bill to the GOP-controlled Senate, where the outcome is highly uncertain.
Democrats led passage, 275-134, their majority favoring additional assistance, but dozens of Republicans suddenly joined in approval.
Senate Majority Leader Mitch McConnell (R-Ky.) blocked today an attempt by Democrats to set up a stand-alone vote on increasing the amount of recently passed stimulus checks from $600 to $2,000.
Senate Democratic Leader Charles Schumer (D-N.Y.) and Sen. Bernie Sanders (I-Vt.) both tried to get consent for the Senate to bring up legislation that passed the House in a 273-134 vote on Monday. The GOP leader did not directly address why he objected, but under the Senate’s rules any one senator can block efforts to set up votes or pass bills.
McConnell signaled separately that he could package the increase in direct stimulus checks, with a repeal of a tech shield that has emerged as a top target for Trump and election-related investigations. Trump, in his statement on signing the $2.3 trillion package, said the Senate would “start the process for a vote” that tackles the three issues.
Democrats want a stand-alone vote on a bill to increase the stimulus checks from $600 to $2,000.
“The fastest way to get money into Americans’ pockets is to send some of their tax dollars right back from where they came. Two-thousand-dollar stimulus checks could mean the difference between American families having groceries for a few extra weeks or going hungry,” Schumer said, before unsuccessfully trying to pass the House bill.
Sanders tried to set up a vote on the House bill for Wednesday. When McConnell objected, Sanders blocked the GOP leader from scheduling a quick vote on overriding Trump’s veto of the National Defense Authorization Act (NDAA).
All of this comes as U.S. stocks climbed to records on Monday. The Dow Jones Industrial Average added 204.10 points, or 0.7%, to 30403.97. The S&P 500 advanced 32.30 points, or 0.9%, to 3735.36 and the Nasdaq Composite gained 94.69 points, or 0.7%, to 12899.42. All three indexes set new closing highs.
Visit our covid resource page for documents that have been added that review the relief package as well as the PPP changes in particular: https://jolietchamber.com/2020/03/covid-19/
Answers to Key Questions About the Next Stimulus Payment
Who is eligible to get a payment?
- Individuals with adjusted gross income up to $75,000 and married couples with adjusted gross income up to $150,000 qualify for the full payment amounts of $600 per adult and per child under the age of 17.
- The amounts decrease for households above those income thresholds. Individuals without children who have income above $87,000 and married couples with no children and income above $174,000 do not qualify for any payment.
- There is no limit on the number of children in a family who can receive payments. For example, a household with two parents and five children under 17 would qualify for a total payment of $4,200.
- For the most part, eligible recipients need to have a Social Security number.
- A change to eligibility in the relief bill said that U.S. citizens who file joint tax returns with spouses who don’t have a Social Security number will now be able to receive a payment. However, only the spouse with a Social Security number will receive a stimulus check. In families with children, at least one spouse must have a Social Security number, and Social Security numbers must be provided for each child in order for them to receive their payments.
- The expanded eligibility for mixed-status families in the new bill is retroactive to the direct payments from earlier this year. If a mixed-status family didn’t get a first-round payment, they can claim it when they file their 2020 tax return.
Who is ineligible to receive a payment?
- People ages 17 and older who are claimed as a dependent on someone else’s tax return do not qualify for payments. This category includes college students whose parents claim them as dependents and elderly people who are claimed as dependents on a relative’s tax return.
- The bill also specifies that people who died prior to Jan. 1, 2020, are not eligible for payments.
How quickly will I get my payment?
- Treasury Secretary Steven Mnuchin that he expects people will start receiving their payments next week.
- The IRS will send payments to people via direct deposit in cases where it has their bank information. The IRS has bank information for more Americans compared with earlier in the pandemic since it had created a web tool so that people could provide their direct deposit information to receive the first round of payments that were mandated in the CARES Act from late March.
- In cases where the IRS does not have direct deposit information, the agency will send payments by mail to the address on the taxpayer’s 2019 tax return.
- The IRS will send payments to people automatically based on information from their 2019 return. It will automatically send payments to people who were not required to file a tax return but receive Social Security benefits, railroad retirement benefits, Supplemental Security Income, or certain veterans’ benefits.
- The IRS is required to make advance payments by Jan. 15. Eligible recipients whose payments aren’t issued automatically by then can claim their payments when they file their 2020 tax return next year. The tax-filing season is likely to start in late January.
Will I have to pay taxes on my payment?
- No. The stimulus payments are not taxable income; they are considered advance payments of tax credits.
My income was substantially different in 2020 than it was in 2019. How will that affect my payment?
- People will receive automatic payments from the IRS late this year and early next year based on their 2019 income. However, taxpayers who are entitled to bigger payments based on their 2020 incomes because they made less money this year can get the additional amount when they file their 2020 tax returns.
- Taxpayers whose 2020 income was much higher than their 2019 income do not have to pay back any money they received that they wouldn’t have gotten if their advance payment was based off their 2020 income.
If I had a child this year, is the newborn eligible for the $600 payment?
- Taxpayers who had children in 2020 will not automatically receive payments for any new children but can claim those credits when they file their 2020 tax return.
Will my payment amount be smaller if I have any past due debts?
- The advance payments will not be reduced because of past-due federal or state debts. Unlike the first round, they can’t be reduced if someone owes past-due child support.
- Additionally, the bill includes a provision to prevent the payments from being garnished by banks and private debt collectors. Such a provision was not included in the legislation that created the first round of payments.
I never received my first payment. Can I still get it?
- In cases where eligible Americans did not receive their first payment or received too small of a payment, they can claim a tax credit when they file their 2020 tax return.
Wave of Attempted Fraud Hits State Unemployment Claims Programs
A wave of attempted fraud is hitting state unemployment benefits programs after they struggled to process record-high claims from layoffs during the economic turbulence triggered by the coronavirus pandemic.
States across the country—including California, Louisiana, Illinois, Maryland, and others—have collectively received millions of unemployment insurance requests that officials believe to be tied to fraud, with losses likely in the billions of dollars.
More than $500 billion in regular and pandemic-related unemployment aid has been distributed so far, according to Treasury Department data. And more is coming, including a new round of enhanced benefits worth $300 a week included in a pandemic stimulus package passed by Congress.
“The sheer generosity of the federal programs made them targets for criminal enterprises at a time that states lacked the resources, the computers,” said Labor Secretary Eugene Scalia earlier this month in a speech to the American Enterprise Institute. He said he feared “U.S. taxpayers lost billions to unemployment-insurance fraud during the pandemic.”
The nation’s unemployment insurance systems are run through a patchwork of state-run programs where fraud has “dramatically increased during the pandemic,” a U.S. Labor Department spokeswoman said. The department, which administers federal components of aid programs in addition to compiling data on state benefits, said thieves have targeted temporary pandemic-related programs extending unemployment aid to millions of workers. To better understand the scope of fraud, it is working with states to track denials where identities couldn’t be verified, the agency spokeswoman said.
Criminals often use stolen Social Security numbers, birth dates and other personal information to apply for benefits. Fraud has led states to temporarily freeze unemployment payments, at times affecting hundreds of thousands of claims, including legitimate ones for laid-off workers.
It also has thrown off national claims counts that are closely watched by investors and policy makers in the U.S. Labor Department’s weekly unemployment insurance report, according to a government watchdog report. Many states said they can’t disclose the number of fraudulent claims as they continue to investigate cases. Among states that do, estimates can amount to hundreds of thousands of fraudulent claims, or several times typical weekly claims counts.
Illinois has detected and blocked 341,000 fraudulent claims during the pandemic, while Michigan has fielded more than 190,000 reports since March. In Arkansas, Little Rock police said they have been inundated with unemployment fraud reports. Victims in Maryland include Gov. Larry Hogan and several of his top deputies.
Unemployment fraud has skewed data in the Labor Department’s market-moving jobless claims release, the Government Accountability Office said in a recent report. The report said the weekly data both over- and under-estimated the actual claims counts at various times. That is because states might report the fraudulent claims one week and then correct them the next.
Fraud is creating financial stress for workers who filed legitimate claims, as some experience temporary account freezes and payment delays. It also could create tax headaches next year if fraudulent claims were paid out in their name, tax experts say.
Minimum Wage Increases to $11 an hour New Year’s Day
As a follow-up to yesterday’s brief reminder of the wage increase, here is today’s press release from the Governor’s office: Illinois’ minimum wage is set to increase to $11 an hour on Friday, January 1, 2021. The Illinois Department of Labor is encouraging employees to watch their paychecks to ensure that time worked in 2021 is paid at the new rate.
Governor JB Pritzker signed legislation into law in 2019 providing a path to a $15 minimum wage by 2025. Minimum wage earners received two increases in 2020 to $9.25 an hour on January 1 followed by an increase to $10 an hour on July 1. The minimum wage will continue to increase an additional $1 an hour each January 1 until it reaches $15 an hour in 2025.
The new law maintains provisions for employers to count gratuities to offset wages for workers such as food servers who regularly earn tips. Tipped employees may be paid 60 percent of the hourly minimum wage. These workers must still earn the minimum wage after receiving tips or the employer must make up the difference.
Workers who are under 18 years old and work fewer than 650 hours in a year will earn a minimum wage of $8.50 per hour beginning January 1. The youth minimum wage rate will gradually rise to $13 an hour by 2025.
All Illinois employers are required to post the “Your Rights Under Illinois Employment Laws” in a conspicuous location on the premises of the employer where notices to employees are customarily posted. The color poster, which also covers other Illinois labor laws, can be found here in English and Spanish: https://www2.illinois.gov/idol/Employers/Pages/posters.aspx
Three Reasons 2021 Could Be (a Lot) Better Than You Think
Job growth is stalling, consumer spending is wilting, and a fast-spreading virus strain has raised crippling new lockdowns. Yet after this most unusual of years, there are three good reasons to think next year will be better—perhaps much better than you think. It all comes down to the unique character of both the recession and the policy response.
A question of supply, not demand
Most recessions begin when rising interest rates or stressed financial markets undercut demand for goods and services, driving up unemployment, which further crimps demand. This one began with a natural disaster, like a hurricane or earthquake, which interrupts the supply of goods and services.
When a disaster of that sort ends, a V-shaped recovery ensues. But this disaster, the most widespread and longest lasting in a century, isn’t over. There was a partial V-shaped recovery in the third quarter as lockdowns were lifted. But since the pandemic was never brought under control, restrictions and social distancing never ended and indeed have recently tightened.
Those restrictions are repressing consumer spending. IHS Markit estimates personal consumption is running 7% below its fundamental level as dictated by wages and salaries, government payments, wealth, interest rates, taxes, and demographics. In the 2007-09 recession, it ran close to or above its fundamental level.
If vaccines are effective, most of the population should be vaccinated by midyear, allowing social-distancing restrictions to end. It isn’t outlandish to think consumer spending could snap back to its fundamental level by year-end (though that isn’t IHS’s forecast). That could boost growth in 2021 to 5%, the best since 1984.
A policy response like no other
President Trump’s signature to the relief bill will ultimately bring total stimulus since February to $3.5 trillion, according to the Center for a Responsible Federal Budget. That is more as a share of gross domestic product than the response to the 2007-09 recession and it is being spent in less than two years instead of five.
President Trump called the $600 per person stimulus check “ridiculously low” and some liberals feel similarly about the $300-a-week bonus unemployment benefit. In fact, together with March’s higher payouts, they represent an unprecedented funnel of federal cash that in aggregate—though not for every individual—more than replaced all the wage income lost during the pandemic.
Meanwhile, Federal Reserve Chairman Jerome Powell said last week, “the concerns that we had at the very beginning of really serious, deep shortfalls and massive budget cuts on the part of state and local governments have not yet occurred.”
To be sure, states expect 11% less revenue in the current fiscal year, which ends next June, than originally budgeted, according to a report released Wednesday by the National Association of State Budget Officers. But the hit has been less than feared, in part because the pandemic has disproportionately hurt lower-paid workers who pay less income tax and services that carry less sales tax than goods, said Kathryn Vesey White, director of budget-process studies for NASBO.
State and local governments didn’t get the general assistance they hoped for from this week’s fiscal deal, but $122 billion is earmarked for schools, higher education, vaccine distribution, transit systems, and testing and tracing.
Federal largess is even more powerful because the Federal Reserve is amplifying it. When recovery kicks in, investors often price in higher interest rates. But the Fed short-circuited that process by promising that interest rates, which are near zero, will stay there until and unless inflation reaches 2% and unemployment drops to pre-pandemic levels. This unprecedented commitment is of limited help while a rampant pandemic is holding down activity. But once restrictions are lifted, it could turbocharge asset prices and consumer and capital spending.
Recessions often do long-term damage by wiping out entire businesses along with hard-to-re-create relationships among customers, suppliers, and employees, and by keeping some people jobless so long they leave the workforce altogether.
It is early days, but there are signs that scarring may be minimized this time. Bankruptcies usually rise when unemployment soars, but this time they are down, according to Epiq Aacer, which tracks filings. Chapter 11 filings by business are up, but well below levels reached in the previous recession. Chris Kruse of Epiq Aacer expects filings to rise, especially once eviction moratoriums protecting delinquent tenants and homeowners expire. But those moratoriums and forgivable federal loans will in the end spare a lot of people and businesses bankruptcy court.
Even after seven months of solid growth, total employment stood 9.8 million lower in November than in February, a jobs deficit larger than in February 2010, the low point of the last cycle. But 38% of that number are people who permanently lost their jobs, compared with 77% then. Goldman Sachs estimates 60% of the missing jobs are in virus-sensitive industries, most of which will return with a vaccine.
True, jobs or businesses destroyed during the pandemic’s darkest days are gone forever—and there are more dark days to come. But a rapid recovery next year offers hope that many unemployed will avoid the trap of long-term joblessness and new businesses will soon rise from the ashes of the old.
Is the Office Really Going Away?
The giant work-from-home experiment that no one wanted has been under way long enough to ask: What happens to the office now? Do we really need it?
History reminds us that the early days of the Industrial Revolution began with people doing commercial work from home. Since then, we have been remarkably, some might say stubbornly, committed to the idea that work should be centered at the office, even when it could have been done remotely. We invested huge amounts of money in office real estate equipped to help us be efficient. We also asked employees to spend lots of time and money traveling to those offices.
A lot of people seem to think it’s time to completely overhaul that model. Is everyone convinced though that is really what is going to happen?
It is hard to know for certain, but by some counts as much as 40% of the American labor force is working remotely—more people by far than are still at work in offices, given the massive numbers currently unemployed. No one seems to think it is a good idea for college students to keep doing distance learning once the pandemic has receded or to keep having religious services virtually. But a lot of people believe that continuing remote work and at least paring back physical offices is sensible. It seems like only yesterday that the tech companies were the models in doing everything they could to keep employees from leaving their campuses. Now some, like Twitter, are suggesting they never have to come back. Why is that?
The idea of getting rid of offices, or at least scaling them way back, is of course to save money. This could be like Uber for office jobs: Get employees to provide and pay for their own office, which they have anyway (i.e., their kitchen table), and save a lot of company money on offices and real estate. Also, if people relocate away from expensive areas like Silicon Valley and New York to work remotely, we can pay them less, the thinking goes. Besides, employees seem to like it, and the work is getting done.
The problem with that view begins with the fact that the current situation is so strange that it is unlikely to tell us much about how things would go after the pandemic.
Not now isn’t never
It is true that surveys consistently find that employees working from home report better work-life balance, which shouldn’t be surprising given that conflicts about needing to be in both places at the same time go away when work and home are the same place. They also consistently report wanting to have more opportunities to work from home after the pandemic, also not surprising because they wanted that before. But that is not the same as never going into an office again.
Remote work is far preferred to the alternative of no work or commuting into crowded office spaces during a pandemic, but that does not mean work and home life are better than before the pandemic. Especially for younger people and those without kids, no office means sharply reduced social life. Fifty-eight percent of adults report that they have dated someone at work, for example, and you can’t do that on Zoom.
There are also misunderstandings about how a “new normal” model of remote work would function. The idea that employers can pay people less if they move to less expensive communities to work remotely is a myth. To begin, in a country where the average 50-year-old has already worked for 12 different employers, the idea that we should move our family permanently from Silicon Valley to Iowa on the promise that our current job with a big tech company will continue indefinitely is foolish. People live in expensive locations like New York because that is where they can get their next job. The high pay is because lots of employers want those skills, not to compensate for cost of living.
Program Notices & Reminders
U.S. Chamber Guide to New Pandemic Relief Package
How Do These Changes Impact My Existing PPP Loan?
I Exhausted My Initial PPP Loan, How Does This Help Me?
What If I Never Received a PPP Loan?
Which Changes to Other Programs That May Help My Small Business Have Been Changed?
- Expanded Employee Retention Tax Credit
- EIDL Grants
- Grants for Shuttered Venue Operators
- SBA Loan Debt Forgiveness
Here is the link to the Monday 12/21 update that contained full information on the relief package:
SBDC at JJC Update
21 Topics in 21 Minutes for 2021 Growth
Date: Scheduled one-on-one session
In less than 30 minutes, the Illinois Small Business Development Center at Joliet Junior College will help you prioritize key 2021 business plans whether it is for your people, your product, your marketing, your sales, your money, or the impact of this crisis. In this short, one-on-one exercise, we will help you determine up to three of the biggest opportunities for growth in the year ahead. We will offer no-cost tools to develop your strategy for success in those areas. Email us at SBDC@JJC.edu and we will send you a link for registration.
Selling for Non-Salespeople
Date: 1/7/21 Time: 2pm
Is your B2B product or service really awesome – BUT – you aren’t confident in your ability to sell it? Most of us feel like introverts at times, but you can join us for a simple session to act like an extrovert. Hear tips on how to do the prospecting, presenting, and closing to help you get new customers to say YES! Join Mike Wilczynski for the no-cost webinar by registering at: https://ilsbdc.ecenterdirect.com/events/33822
Starting Your Business in Illinois
Date: 1/14/21 Time: 9am
Thinking about starting a business in Illinois? This informative workshop helps entrepreneurs understand many of the steps and requirements. In this no-cost overview of Starting Your Business in Illinois, we will touch on many aspects of your business plan, including legal, accounting, banking, marketing, and sales.
Advanced Business Data Research (with Shorewood Library)
January 21st at 6pm
Already familiar with Reference Solutions (formerly Reference USA)? Learn how to utilize this data even more! In this session, learn higher level search techniques, how to use the additional functionality (like the mapping, summary, and chart options), and how to combine searches within modules to get a more in-depth level of data.
Register at: https://ilsbdc.ecenterdirect.com/events/33678
Government Certification Process (with Rita Haake at COD)
January 28th at 9am
Certifications: Interpreting the alphabet to pursue profits! Which small business certification is the best one for you?
• Federal: 8(a), EDWOSB, HUBZone, SDB, SDVOSB, WOSB, VOSB
• State: DBE, FBE, FMBE, MBE, PBE, VBE
• Local: DBE, MBE, WBE, VBE
You will learn the details of the application process, documentation requirements, certification options, and how to market and leverage certifications for the growth of your business.
Register at: https://ilsbdc.ecenterdirect.com/events/33909
Will County Residents Behind on Mortgage or Rent Can Access Funds
Funds are available to those at least one month behind on rent. utility assistance is also available for those who qualify. Renters having difficulty working with their landlords and facing eviction are encouraged to contact Prairie State Legal, another HUD CARES funded program, at (815) 727-5123.
Owners behind on their mortgages are encouraged to work with their mortgage companies on forbearance options. If those options are not available or exhausted, assistance is available for families behind on mortgage payments as well.
The local agencies helping are:
- Will County Center for Community Concerns, (815) 722-0722
- Spanish Community Center, (815) 727-3683
- Catholic Charities, (815) 774-4663
- Community Service Council, (815) 886-5000
Finally, we wish you a Happy and Prosperous New Year!
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry