Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”

Chamber members:

Today’s Roundup has info on the latest concerning the economy and jobs. Two issues that will continue to be under the spotlight. Additionally, the Biden Administration has announced a new rule concerning labeling of employees vs. independent contractors. Also, with voting well under way, a little more info on the constitutional amendment that is on the ballot.

Finally, I wanted to take some space here to express condolences to the family of Don “Duke” Williams who suddenly passed away last week. Many of you knew him from running Syl’s Restaurant and/or the Renaissance Center. He was also involved in other establishments over the years and no matter where involved, he was a dedicated supporter of the chamber. I wrote about the late Larry Walsh Sr. in this space back in June of 2020 when he passed for many reasons, but one of the reasons was because of his impact on chamber advocacy.

In addition to always working with us on hosting and accommodating our needs, whether it be special menus or room setup, Duke was always there to help. He always made it a point to check afterwards and make sure things went smoothly. Sometimes it was a call the next day because he couldn’t be there at the end which always meant a lot. With that said, many of you may not know of his passion for advocating on behalf of the restaurant industry. Duke was a key founding member of our Food & Beverage Association which was mainly a result of government restrictions on the industry during the covid pandemic. I routinely spoke with him on sometimes a daily basis as he was concerned about what was happening and coming down the line.

He was a driving force in pushing for answers from IDPH and keeping our views in front of our elected officials at the time. Duke continued that as an instrumental founder of the F&B Association and pushed for the group formation along with a handful of others. His presence within the industry will be greatly missed, but his impact and vision will not be forgotten!

If you have a little time, join us next Wednesday 10/19 for the October F&B event at MyGrain beginning at 4:30 PM to toast one of our founding members.

*Government Affairs Roundup brought to you by CITGO & Silver Cross Hospital*

Jobs Up but Labor Force Shrinks
The economy added 263,000 jobs in September. That’s good news. It was less than in August when employers added 315,000, but still solid. Expectations were for 250,000, so those were met and barely exceeded.

However, on the other side, the labor force shrunk by 57,000. If we had the same labor participation rate now as before the pandemic, there would be 2.9 million more workers in the labor force. Employers continue to hire workers, but not enough of them have returned to the labor force. We are in a unique economic period where growth is slowing because of inflation, but hiring remains strong and could even be stronger if more workers took jobs.

Wages rose 0.3% from August and 5.0% annually from September 2021. Education and health services added 90,000 jobs; leisure and hospitality 83,000; professional business services 46,000; manufacturing 22,000; and construction 19,000. Government lost 25,000 jobs and transportation and warehousing 8,000.

The bottom line is to buttress the slowing economy, we need to get more workers to fill the historically high number of job openings.

Wholesale inflation rebounds in September after two monthly drops
Wholesale inflation accelerated in September after two straight months of falling prices for producers’ goods and services, according to data released Wednesday by the Labor Department.

The producer price index, which tracks the prices producers charge for their goods and services, rose 0.4 percent in September. Economists expected a smaller 0.2-percent increase in producer prices last month. Producer prices are up 8.5 percent on the year, down from an 8.7 percent inflation rate in August and in line with economists’ expectations.

Prices for goods and services without food, energy or trade — three volatile areas of the economy — rose 5.6 percent over the past 12 months, the same rate as in August, and 0.4 percent last month alone. Producer price inflation rebounded last month as gas prices stabilized near current levels. Two months of plunging gas prices in July and August helped turn producer price inflation negative after the steep rise in energy prices over April and May pushed it toward record levels.

The Labor Department pinned much of the September increase in producer inflation on rising prices for services and food. Producers charged 15.7 percent more last month for both fresh and shelf-stable vegetables, according to the department, while prices for diesel fuel, natural gas, eggs and pork also rose.

A sharp increase in costs for travel services also pushed wholesale inflation higher in September, even as prices for non-energy and food related goods were flat last month. The new wholesale inflation data comes a day before the Labor Department is set to release data on consumer price growth in September — a far more influential read into the pace of inflation. Economists expect the consumer price index to have increased by 0.2 percent in September, according to consensus estimates.

Biden Rule Would Add More Gig Workers to Company Payrolls
The Biden administration is proposing a new rule that could put more gig workers on company payrolls, scrapping a Trump administration rule from 2021 that made it easier for firms to classify workers as independent contractors.

The proposal, released Tuesday, would affect millions of workers across a range of industries, including healthcare, restaurants, construction and ride-share transportation, the Labor Department said. Most prominently, it could lead to a push to classify drivers for ride-share or food delivery companies such as Uber Technologies Inc. and Lyft Inc. or DoorDash Inc. as employees rather than gig workers. The companies have opposed similar efforts in the past.

The rule would put in place a more stringent test to determine when companies can count workers as contractors rather than employees. Under labor law, employees are eligible for protections such as the minimum wage, medical leave or overtime pay that don’t apply to independent contractors.

“We have seen in many cases that employers misclassify their employees as independent contractors, particularly among our nation’s most vulnerable workers,” Labor Secretary Marty Walsh said in a statement. “Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages.”

Any attempt to reclassify gig workers would likely lead to legal challenges from companies arguing they are not covered under the test. The rule also escalates a multiyear debate between Democrats and Republicans over the status of gig workers.

“There’s going to be a contentious fight over this in the courts and if there is a change in political power at the federal level there’s going to be a continuation of this ongoing instability,” said Peter Norlander, a professor at Loyola University Chicago who studies gig work.

The Labor Department will take public comment on the rule for 45 days. The administration likely won’t finalize the rule until next year. The rule would put in place a “multifactor reality test” to determine whether workers are truly in business for themselves and control aspects of their employment such as whether they perform managerial duties, how they are supervised or whether they are able to set prices.

It would replace a Trump-era rule—completed just days before the Biden administration took office—and return to an approach favored by the Obama administration. The Trump administration rule made it more difficult for a gig worker to be counted as an employee under federal law. The Biden administration blocked the 2021 rule within months of taking office, but a federal judge later reinstated it. Gig-economy companies were among the most vocal proponents of the Trump-era rule.

The companies have also been active at the state level. In 2019, California passed a law classifying some gig workers as employees. The companies won passage of a ballot measure the following year that exempted many ridesharing and delivery services from the state law, following the most expensive campaign for any ballot measure in state history.

Labor Department officials said the rule is part of their broader attempt to crack down on employers who classify workers as contractors when they should be considered employees eligible for minimum wage provisions and other benefits.

“Combating misclassification is a priority for the department because we have seen it deny a wide range of workers the lawful wages, disrupt businesses that are following the rules and hurt the broader economy,” said Seema Nanda, the department’s top lawyer.

What to know about the Workers’ Rights Amendment
Despite a legal attempt to thwart it ever making the November ballot, Illinoisans will vote on a proposed constitutional amendment this election for the first time since 2020. Amendment 1, or what is commonly known as the Workers’ Rights Amendment, will be the first issue to appear on ballots throughout the state which aims to guarantee an employee’s right to unionize and bargain collectively.

The measure is a result of the Illinois General Assembly passing Senate Joint Resolution Constitutional Amendment 11 in May 2021, receiving bipartisan support in the House and Senate. Here are two basic questions regarding Amendment 1 – its language and what’s required vote wise to pass – and their answers.

What is the exact language of the Workers’ Rights Amendment?
Passage of the amendment would bring the following additions through Section 25 to Article 1 of the Illinois Bill of Rights — part of the state constitution since 1818.

“Employees shall have the fundamental right to organize and to bargain collectively through representatives of their own choosing for the purpose of negotiating wages, hours, and working conditions, and to protect their economic welfare and safety at work. No law shall be passed that interferes with, negates, or diminishes the right of employees to organize and bargain collectively over their wages, hours, and other terms and conditions of employment and work place safety, including any law or ordinance that prohibits the execution or application of agreements between employers and labor organizations that represent employees requiring membership in an organization as a condition of employment.”

“The provisions of this Section are controlling over those of Section 6 of Article VII.” For the Illinois General Assembly, the amendment would essentially prevent them from passing “right-to-work” bills that would hinder or deny employees’ ability to organize and to negotiate terms for hours, wages, and workplace safety with their employers.

What is required for the amendment to pass?
Per Article XIV, Section 2 of the state constitution, a three-fifths majority of those voting on the question or a simple majority of those voting in the election are needed for the amendment to pass.

Stay well,

Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
815.727.5371 main
815.727.5373 direct