Dear Governor Pritzker:
We write in response to the Illinois Retail Merchants Association’s (IRMA’s) July 13 letter. This letter ignores the realities of struggling families in Illinois, grounds its assertions in misleading or inaccurate information, and glosses over the significant effects that the pandemic continues to have on Illinoisans. We want to set the record straight.
Federal Pandemic Unemployment Assistance is Supporting Families Who Continue to Struggle in the Pandemic
The letter you received last week accuses you of applying “artificial brakes” to the Illinois economy and alleges that employers must compete with a purported $35/hour that unemployed workers have received over the last four months due to “enhanced UI benefits, tax credits, and stimulus payments.” This projection of employee wages is provided with no supporting evidence or documentation, likely because it is wholly baseless. Indeed, were this to be true, unemployed workers in Illinois would be making over the equivalent of $70,000 per year. As organizations who work with low wage workers across the state, we assure you that this is not the case. Indeed, it willfully obscures the reality of the economic challenges facing too many Illinois families.
It is also dishonest to cite benefits like stimulus payments and the Child Tax Credit (CTC) as disincentives to work. All but the wealthiest Illinois families have been eligible for both tax credits such as the Child Tax Credit (CTC) and stimulus payments regardless of employment status. Consequently, those benefits cannot be the reason that some Illinoisans are not returning to the workforce at this time. Fortunately, we have actual data to show us who may not be working or who may be working less, and the real reasons for these decisions.
Too many jobs in Illinois do not pay a living wage. The United Way’s ALICE report data shows that before the pandemic 35 percent of families did not earn enough to afford the cost of living, and more than half of all jobs paid below a survival wage of $20 per hour. When you consider recent data from the National Low Income Housing Coalition showing that a family living in Illinois must earn more than $22 per hour to simply afford a two-bedroom apartment – a number that is higher in the Chicago metropolitan area – we know that Illinois needs more good paying jobs. While employers may be offering short term bonuses or incentives to bring people back to work immediately, we see no evidence that they are offering ongoing job opportunities that will continue to pay sufficient wages and provide workers with adequate benefits and worker protections against COVID and other on the job safety hazards. If they were, we would expect workers to be responding to those incentives and filling those positions. Instead, however, workers are using their bargaining power to demand truly good jobs that allow them to support themselves and their families and work under safe conditions.
In addition, on May 14 the University of Illinois and the Illinois Economic Policy Institute released a paper showing that nearly 40 percent of working mothers in our state lost jobs or lost work hours due to the pandemic. When their children’s schools or childcare facilities closed, the numbers were worse – 60 percent of women worked fewer hours. And pre-pandemic racial disparities have persisted – more than 50 percent of mothers of color were forced to decline work due to school or childcare closures, versus 39 percent (still far too many) of white mothers.
None of this demonstrates a lack of desire to work; it is plainly because too many parents have had no choice but to stay home and care for young children. Enabling them to work requires meaningful pro family policies, such as expanding childcare, offering paid sick leave, and providing paid family and medical leave. Our organizations would happily join IRMA et al in advancing these policies, though unfortunately we have seen them thwart these vital worker protections for many years.
For Many Illinois Communities, the Pandemic is Not Over.
We also note that the COVID pandemic is not over. As you recently noted, the highly infectious Delta variant of COVID-19 is becoming more prevalent in Illinois and will likely be the dominant strain in the state by fall, if it is not already. Unfortunately, we continue to see severe racial disparities in vaccine rates – 68 percent in the north suburbs versus 45 percent in the South suburbs; more than half of white suburban residents have been vaccinated, while the rate is 40 percent for Black residents and 45 percent for Latin/a/x residents. We commend the state’s efforts to shift away from mass vaccination sites and focus on providing vaccines in community-based settings, to increase uptake among communities who are most in need of vaccines. But until vaccination rates are higher, many people, especially people with underlying health conditions, will remain concerned about working with unvaccinated people. We urge a continued humane focus on vaccine distribution versus a punitive policy of eliminating safety net unemployment insurance benefits.
FPUC Benefits Expire on September 6
The letter of June 13 recommends elimination of “PUA” benefits, suggesting that PUA is the program providing an extra $300 per week to unemployed Illinois workers. This is not correct. PUA is providing a regular weekly benefit to many workers who did not otherwise qualify for regular UI, including gig workers and independent contractors who otherwise would have had no safety net during the pandemic. PUA’s costs are covered by the federal government, and it should not be eliminated before the federal government chooses to do so (currently the end of September). Federal Pandemic Unemployment Compensation (FPUC) provides both “regular” UI and PUA beneficiaries with an additional $300 benefit during each week of unemployment. We ask you to maintain your earlier decision not to eliminate this benefit; as this letter has established, FPUC is not the reason that some people remain unable to work.
In addition, the additional $300 per week expires in the first week of September. Any decision to end the supplement would require a 30-day notice, which would mean that the earliest benefits could stop would be late August, with mere weeks to go before they will expire. We assume that the organizations who wrote to you are aware of this fact, which helps reveal their letter for what it is – a pure political statement rather than a set of prudent policy recommendations.
ARPA Funds Should Be Used to Support Illinois Families First
Finally, the letter of June 13 urges you to restore the UI trust fund to solvency. We certainly support this concept, but disagree with the proposal to do so by taking the remaining $5 billion from ARPA fiscal relief funds to fill the Trust Fund. UI is a counter-cyclical program. When the state’s economy is strong, and unemployment is low, fewer people claim UI benefits and the Trust Fund grows. When unemployment is high, as during the pandemic, more people claim benefits and the Trust Fund shrinks. As we are now at such a moment we must look to how the Trust Fund can best be replenished. In considering proposals to do so, we should remember that the primary responsibility for the Trust Fund’s solvency lies with employers, who do so by paying taxes – including increased taxes when the Trust Fund is at a low point. By ignoring the obligation to provide money for the Trust Fund through ordinary and regular means, employer groups are seeking to transfer a significant tax burden away from themselves and to workers who are the primary intended beneficiaries of the state fiscal relief funds. While restoring solvency to state UI Trust Funds may be an eligible use for ARPA fiscal relief funds, there are several reasons why it cannot responsibly be the best way to spend all of Illinois funds that remain.
First, it is premature. Last week you met with President Biden to discuss how to best ensure the solvency of the Trust Fund. Under his leadership and in cooperation with your administration, the US Department of Labor may offer states options ranging from waiving repayment of borrowed federal funds to significantly lengthening the period in which funds must be repaid, to provide employers with more time to pay any needed taxes. Illinois should not take unusual steps to fill any holes in the Trust Fund until the federal response becomes clear.
And second, there are additional important uses for much of the $5 billion in ARPA state funds – uses that would benefit the lowest income people in our state. The signatories to this letter urged that these funds be used to expand the Earned Income Tax Credit (EITC), further support undocumented immigrants with direct cash payments, offer premium pay to frontline workers who risked their lives daily to keep working during the pandemic, and offer cash payments to workers who could not even qualify for UI , as well as returning citizens and people receiving public benefits. To promote equity, these policies must be prioritized over reducing taxes on big business.