Today we have our usual Thursday jobs report and it is again an encouraging one. A handful of other items to review as well such as a tax credit to businesses to encourage vaccination, workforce issues, Republican earmarks, rent control proposal, and news on redistricting.
*Daily Coronavirus update brought to you by Silver Cross Hospital
U.S. Unemployment Claims Hit New Covid-19 Pandemic Low
Worker filings for jobless benefits declined to 547,000 last week, a new pandemic low that adds to evidence of a strengthening labor market and overall economic recovery.
Initial unemployment claims, a proxy for layoffs, fell 39,000 last week from an upwardly revised 586,000 the prior week, the Labor Department said on Thursday. That put new claims on a seasonally adjusted basis below 600,000 for two consecutive weeks in mid-April, their lowest levels since early 2020. The four-week moving average, which smooths out volatility in the weekly figures, was 651,000, also a pandemic low.
Jobless claims remain higher than their pre-pandemic levels—the weekly average in 2019 was about 218,000—but last week’s drop extended a downward trend since the start of this year and raised expectations for further declines in coming weeks.
Initial jobless claims since last fall hadn’t declined below a range of roughly 700,000 to 900,000, despite other data that pointed to a pickup in the labor market. The unemployment rate in March, for example, fell to 6.0%, a pandemic low.
Claims levels “didn’t match up with the improvements we’ve seen in the labor market,” said Gus Faucher, chief economist at PNC Financial Services Group. “We have been waiting to see an improvement,” he added.
Continuing jobless claims—a proxy for the number of people receiving benefits through regular state programs—fell to 3.67 million in the week ended April 10, a decline of 34,000 from the prior week. The four-week moving average in continuing claims also fell.
“I do think that we are seeing real improvement in the labor market, and claims will continue to gradually move lower probably through the rest of this year,” said Gus Faucher, chief economist at PNC Financial Services Group.
White House Offers Vaccination Tax Credit
President Joe Biden on Wednesday announced new employer tax credits and other steps to encourage people reluctant to be inoculated to get the COVID-19 vaccine as his administration tries to overcome diminishing demand for the shots. The moves came as Biden celebrated reaching his latest goal of administering 200 million coronavirus doses in his first 100 days in office.
With more than 50% of adults at least partially vaccinated and roughly 28 million vaccine doses being delivered each week, demand has eclipsed supply as the constraining factor to vaccinations in much of the country.
In a White House speech on Wednesday, Biden acknowledged entering a “new phase” in the federal vaccination effort that relies on increased outreach to Americans to get their shots, both to protect them and their communities. “Vaccines can save your own life, but they can also save your grandmother’s life, your co-worker’s life, the grocery store clerk or the delivery person helping you and your neighbors get through the crisis,” Biden said. “That’s why you should get vaccinated.”
As the vaccination program progresses, the administration believes it will only get more difficult to sustain the current pace of about 3 million shots per day. Roughly 130 million Americans have yet to receive one dose.
The paid leave tax credit, which was funded by the Covid-19 relief package President Biden signed into law last month, will offset costs up to $511 per day for up to 80 hours, or 10 workdays. It will be offered between April 1 and Sept. 30. Companies with fewer than 500 employees would qualify for the tax credit.
The White House is urging larger employers, which have more resources, to provide the same benefits to their workers, and educate them about the shots and encourage them to get vaccinated. “We’re calling on every employer, large and small, in every state, give employees the time off they need with pay to get vaccinated,” Biden said.
Businesses Scramble for Help as Job Openings Go Unfilled
It looks like something to celebrate: small businesses posting “Help Wanted” signs as the economy edges toward normalcy. Instead, businesses are having trouble filling the jobs, which in turn hurts their ability to keep up with demand for their products or services.
Owners say that some would-be workers are worried about catching COVID-19 or prefer to live off unemployment benefits that are significantly higher amid the pandemic. Childcare is another issue — parents aren’t able to work when they need to tend to or home-school their children. For some people, a combination of factors goes into their decision not to seek work.
Businesses of all sizes are struggling with hiring even with millions of Americans unemployed and as increasing numbers of people get vaccinated and look forward to a more normal life. A Census survey taken in late March shows that 6.3 million didn’t seek work because they had to care for a child, and 4.1 million said they feared contracting or spreading the virus. But smaller companies that often can’t offer pay and benefits as generous as larger companies have a tougher time.
“A shortage of talent is nothing new for small businesses, but the circumstances surrounding this shortage are entirely different,” says Jill Chapman, a consultant with Insperity, a human resources provider. The National Federation of Independent Business found in a March survey of its own members that 42% had job openings they couldn’t fill. Owners cited higher unemployment benefits as one factor. And a study released last month by the National Bureau of Economic Research found that a 10% increase in unemployment benefits during the pandemic led to a 3.6% drop in job applications.
Companies whose work is done inside homes — including plumbers, contractors, and pest control businesses — find many prospective hires are afraid of contracting the virus on a job. Meanwhile, demand for their services is up because there’s more wear and tear on houses and apartments as people spend more time at home.
Economist Joe Brusuelas says childcare is another issue that may extend owners’ struggles to find workers. “Until the schools are reopened and avenues of childcare normalized, small firms in general, as well as food, beverage, leisure and hospitality, in particular, are going to face staffing challenges until later this fall at the earliest,” says Brusuelas, chief economist with the consulting firm RSM.
Some GOP Senators Plan Earmarks, Ignoring Party Ban
Senate Republicans left in place their decadelong ban on earmarks, ditching plans to put it to a vote Wednesday, but some GOP senators say they will ignore the prohibition and start requesting money for projects in their states.
The outcome of the scrapped vote had been uncertain. Ahead of Republicans’ closed-door meeting on conference rules Wednesday afternoon, at least 19 of the 50 Republican senators had signed onto a letter circulated by Sen. Mike Lee (R., Utah) pledging support for keeping the party’s ban in place. “We will not participate in an inherently wasteful spending practice that is prone to serious abuse,” the letter read.
Sen. Richard Shelby (R., Ala.), the top-ranking Republican on the appropriations committee, said after Wednesday’s meeting that GOP senators “absolutely” could ask for earmarks now, despite the ban technically remaining in place as part of the conference rules.
“If you don’t want to earmark, don’t ask for one. Even if you ask for one you might not get one because the old earmark days, they’re gone,” Mr. Shelby said. Under the appropriations committee’s rules, he said, earmarks will “have to be meritorious, they’re going to have to be substantive in nature and meaningful for us to really even consider them.”
Earmarks allow lawmakers to direct federal agencies to spend specific amounts on projects in their home states or districts, but incidents of fraud and misuse over the years have made them politically toxic. A series of high-profile corruption scandals forced both parties in the House and Senate to back away from earmarking, and Congress imposed a moratorium in 2011. Then-President Barack Obama pledged to veto any bills containing earmarks.
Now Democrats, who control the White House and both chambers of Congress, have announced they will bring earmarks back, albeit with new requirements for transparency and safeguards intended to prevent corruption, such as lawmakers directing money to projects in which they or their families have a financial stake.
House Republicans voted by secret ballot last month to lift their own ban on earmarks, generating backlash from some in their own party, who warned it would result in wasteful spending.
In the Senate, talks between Sen. Patrick Leahy (D., Vt.), chairman of the appropriations committee, and Mr. Shelby have centered around a proposal that would cap the total funding for earmarks at 1% of all discretionary spending, according to a Senate aide familiar with discussions.
The House and Senate would split that amount evenly, and then the Senate would divide its 50% allocation equally between Republicans and Democrats, the aide said. Senate rules already require disclosure of earmarks included in legislation, but the appropriations committee would go beyond that to include disclosure of all earmark requests regardless of whether they make it into bills, according to the aide.
Bill Change Would Allow Voters to Lift Rent Control Bans Locally
A new amendment to House Bill 116, which advanced out of committee earlier this spring, would allow municipalities to vote on rent control measures through referendum.
HB116 as originally introduced would have lifted the state’s blanket ban on local rent control measures, which has been in place since 1997. The new amendment instead would give that power to voters and municipal governments to consider rent control measures on a community-by-community basis.
The bill’s sponsor, Rep. Will Guzzardi, D-Chicago, said he chose to introduce the amendment as a compromise after hearing from constituents and colleagues in the house. “We’ve gotten great support for (this bill) in the chamber, but we also heard some concerns from some colleagues about lifting this ban statewide,” Guzzardi said Wednesday. “There were some members who spoke to me and said well you know, the people in our community really think that this ban is important, and voters in my district don’t want to be exempted from the ban,” he added.
Guzzardi said in a Wednesday Housing Committee hearing that the new amendment would lay out a process to allow local voters to introduce a ballot measure for rent control, from the petition process to placing a referendum on the ballot. Under the act, if voters of a municipality pass a rent control referendum, the municipality would be considered exempt from the state’s blanket ban on rent control policies, allowing the local government to set caps on rent prices.
“If a community can get the signatures to get a petition on the ballot and pass a referendum, and its locally elected officials can pass an ordinance to govern rent increases in their community, boy, it doesn’t seem like we should be standing in that community’s way,” Guzzardi said Wednesday.
Opponents of the legislation, including Greg St. Aubin of the Illinois Realtors Association, called the bill “a very destructive policy” that would discourage investment in new housing developments and create an atmosphere of uncertainty for developers and landlords around the state. “Our view is that whether you lift the ban in its entirety, or you go with this model, we believe that it is sending a tacit message from the state to local governments that (rent control) is a legitimate, viable, and perhaps even worthwhile policy, and we disagree with that,” St. Aubin said.
Republican opponents on the committee raised concerns that the bill still goes too far in opening the door to regulating rental costs for landlords who need to set prices in order to adequately maintain their rental properties, and that the legislation could allow for a wide range of rules on rent across the state.
Rep. Andrew Chesney, R-Freeport, said the bill would be an overreach on regulating landlords. “Theoretically, a vote, a referendum and a city council could completely obliterate whatever business they have. So, I mean, doesn’t that seem like a complete government takeover of a private business?” Chesney said. “There’s no protection to the actual owners that gives them any certainty of what the city councils would even be able to do,” he added.
Guzzardi responded that the bill is intended to give more flexibility and power to local municipalities to decide for themselves if rent control were an approach they would like to consider, and that the bill would play no part in determining a statewide policy on rent control. “We are offering the marvelous and much beloved protection of democracy,” Guzzardi said. “Right now, communities have no voice in this manner.”
The bill as amended passed the Housing Committee by a 14-8 vote Wednesday
GOP Puts New Twist on Redistricting Plan
Illinois Republicans have added a new twist to their call for an independent redistricting commission in hopes of overcoming Democrats’ claims that their plan would likely be found unconstitutional.
The new twist, discussed Wednesday during a Statehouse news conference, would be to allow two different commissions – the one they are proposing in legislation, and the one mandated after a certain point under the Illinois Constitution – to work side-by-side to come up with new legislative and congressional district maps. “The constitution has a commission that exists. It can’t be changed, it is what it is,” said Rep. Ryan Spain, R-Peoria. “So how do we feed the correct information into that constitutional redistricting commission? … We recommend the use of Senate Bill 1325 as the best way to gather input because there are still legislators that are included on the constitutional commission.”
Republicans introduced SB 1325 in February. Its language is substantially similar to that of a proposed constitutional amendment that Democratic Sen. Julie Morrison, D-Lake Forest, introduced in 2019 with a bipartisan group of 37 cosponsors – more than the three-fifths majority needed for passage.
It calls for establishing a 16-member redistricting commission appointed by the chief justice of the Illinois Supreme Court and the next most senior justice from the other party. The commission would be made up of seven Democrats, seven Republicans and two independents and would “reflect the ethnic, gender, and racial demographics of Illinois.”
Since its introduction, though, Democrats have argued that such a plan cannot be adopted through legislation, but only through a constitutional amendment. That’s because the Illinois Constitution, as it currently reads, already spells out a procedure for redistricting. It says lawmakers have until June 30 to approve maps, and if they fail to meet that deadline, the responsibility goes to an eight-member commission, divided evenly between Democrats and Republicans, with some members who are legislators and some who are not.
Because the Republican plan is different from what’s provided in the constitution, Democrats argue, it would almost certainly be overturned by the Illinois Supreme Court. “Republicans know that this bill is nothing but a smokescreen,” Sen. Rachelle Crowe, D-Glen Carbon, said during a recent redistricting hearing. “A bill cannot trump the constitution. There’s no ifs ands or buts about that. A bill cannot trump the constitution.”
Asked to respond to that during Wednesday’s news conference, Spain and other House Republicans, for the first time, argued that two commissions could work simultaneously, with the one created under legislation providing information and guidance to the one mandated under the constitution. “I think that we’re at a critical point in which changing the constitution is just not going to happen at this point, because the Democrats will not allow that question to be placed on the ballot,” said House Minority Leader Jim Durkin, of Western Springs. “And so we are looking for any way to be able to find an alternative.”
At issue in this year’s redistricting process is not just who draws the maps, but what population data will be used in the process. Due to the pandemic, as well as a number of natural disasters last year, the U.S. Census Bureau will be late producing the detailed, neighborhood-level data needed for legislative redistricting. The Census Bureau has said it will have that data in an old, “legacy” format by the end of August, but it won’t be available in a more user-friendly format until late September.
Since the Illinois Constitution requires lawmakers to complete the task by June 30, Democrats have suggested using alternative data sources, including the American Community Survey, which Republicans argue is not intended to be used for redistricting purposes. “Look, ACS data is a very small sample of the entire state, number one,” said Rep. Tim Butler, R-Springfield. “It is a snapshot over several years, and it does not accurately reflect the communities in our state. It is good data to use for a variety of things, but even the Census Bureau themselves says that ACS data should not be used for redistricting.”
Democrats, meanwhile, have said they are considering all possible sources of population data, not just the ACS. But they have also said it is their intent to complete the redistricting process before the June 30 deadline.
Durkin, however said Republicans will consider filing a legal challenge to any maps that are based on anything other than official census data. “We are discussing that possibility,” he said. “And if that is the way that the Democrats are going to draw the districts, that is an option that we’re considering, absolutely.”
Program Notices & Reminders – Expanded Information
Small Business Development Center (SBDC) at Joliet Junior College
Here are our upcoming no-cost webinars:
Government Certification Process (with Rita Haake at COD) on April 27th at 1pm
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.
Webinar: The Certification Process (ecenterdirect.com)
Small Business Administration Restaurant Revitalization Fund
SBA Administrator Isabella Casillas Guzman announced key details on application requirements, eligibility, and a program guide for the Restaurant Revitalization Fund (RFF). The restaurant industry has been among the hardest-hit sectors during the economic downturn caused by the COVID-19 pandemic. To help bring jobs back and revive the industry, the American Rescue Plan, signed into law by President Joe Biden, established the $28.6 billion Restaurant Revitalization Fund at the U.S. Small Business Administration (SBA). The SBA will administer the funds to the hardest-hit small restaurants.
Ahead of the application launch and over the next two weeks, the SBA will establish a seven-day pilot period for the RRF application portal and conduct extensive outreach and training. The pilot period will be used to address technical issues ahead of the public launch. Participants in this pilot will be randomly selected from existing PPP borrowers in priority groups for RRF and will not receive funds until the application portal is open to the public.
Following the pilot, the application portal will be opened to the public. The official application launch date will be announced at a later date. For the first 21 days that the program is open, the SBA will prioritize reviewing applications from small businesses owned by women, veterans, and socially and economically disadvantaged individuals. Following the 21-day period, all eligible applicants are encouraged to submit applications.
As the SBA builds and prepares to roll out the program, this dedicated SBA website is the best source for up-to-date information for eligible restaurants interested in the RRF.
Small Business Administration Shuttered Venue Operators Grant Program
Over the next few days, the SBA tech team and vendors will remain focused on testing the Shuttered Venue Operators Grant application portal; it will not reopen in the next few days, rather they are aiming to reopen the portal by the end of the week.
As we’ve shared, after their vendors fixed the root cause of the initial tech issues, more in-depth risk analysis and stress tests identified other issues that impact application performance. The vendors are quickly addressing and mitigating them and working tirelessly with the SBA team so the application portal can reopen ASAP and they can deliver this critical aid.
We have and will continue to share updates regularly. For the most current updates, continue to check SBA’s Twitter feed. And, again, applicants will have advance notice so they can be best prepared. For more information about the Shuttered Venue Operators Grant program, visit sba.gov/svogrant.
Small Business Administration Program: Economic Injury Disaster Loan Program (EIDL)
Effective immediately, applicants can send a request for reevaluation of a Targeted EIDL Advance application that was declined to the following email address:
Applicants should follow these instructions when requesting a reevaluation:
- Send an email to TargetedAdvanceReevaluation@sba.gov
- Use the subject line “Reevaluation Request for [insert your 10-digit application number]”
- In the body of the email, include identifying information for the application such as application number, business name, business address, business owner name(s) and phone number
- Important: Include an explanation and any documentation that addresses the reason for the decline, if available. SBA will contact applicants if additional documentation is required to complete the review.
Finally, make sure you get your RSVP in to join us at our first Business After Hours / Open House for our new Chamber office. Hope to see a good number of you next Thursday, April 29th.
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry