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Question of the day

Friday, Jul 23, 2021

* Background is here if you need it. From the Shriver Center on Poverty Law on behalf of several groups…

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.

* The Question: Has this letter changed your opinion at all from last week when we debated this same topic? Explain.

- Posted by Rich Miller        

13 Comments
  1. - Cool Papa Bell - Friday, Jul 23, 21 @ 10:50 am:

    No. All of the “extras” need to end. I’m all in favor of a $15 wage and so on. But life has always been harder for those who make less. We really can’t fix that and it takes ownership of those at the lowest wages to overcome those issues (even knowing its hard to pull yourself up by your bootstraps when you don’t have any)

    Something to address - the cost of housing, the hardship in finding daycare, public transport to get people to where better jobs are.

    And I’ll always back a plan to continue SNAP and other benefits to those who work in a low wage situation.


  2. - G'Kar - Friday, Jul 23, 21 @ 10:50 am:

    No, because I already disagreed with IRMA’s letter.


  3. - bkhartbnjo - Friday, Jul 23, 21 @ 10:53 am:

    No, it affirmed and reinforced my opinion of the IRMA letter and viewpoint.


  4. - Commonsense in Illinois - Friday, Jul 23, 21 @ 10:54 am:

    Why do I get the feeling this letter was solicited?

    If the state is truly trying to reopen the economy, it gets nowhere fast by providing individuals with incentives NOT to reopen the economy.

    Mr. Karr’s letter was spot on. This response simply wants government to obtain for workers what their unions are unable to get through negotiations.


  5. - Captain Obvious - Friday, Jul 23, 21 @ 11:08 am:

    Free money is a disincentive to work, no matter the reason it is given. $20 per hour is not a “survival” wage. In most of the state that’s pretty good money. This letter does not move the needle a bit for me. Time to require job searches and end the enhancements.


  6. - Glengarry - Friday, Jul 23, 21 @ 11:12 am:

    Nope. Lost me at “Latin/a/x.”


  7. - Oswego Willy - Friday, Jul 23, 21 @ 11:14 am:

    No change.

    Those unaffected still are “angry” at poor people, and seemingly angry about enhancements that are seemingly dwindling from $35 now to $20 an hour in overall measure.

    We’ll see if there will be political fallout now with both letters.


  8. - Erthely - Friday, Jul 23, 21 @ 11:20 am:

    Should have probably also included the info from recent studies that have shown that the states that ended enhanced benefits early didn’t see any meaningful change in employment numbers.


  9. - Umm - Friday, Jul 23, 21 @ 11:28 am:

    “reducing taxes on big business.” Please define. popular buzz word but what exactly is a “big business”?


  10. - @misterjayem - Friday, Jul 23, 21 @ 11:56 am:

    “Why do I get the feeling this letter was solicited?”

    Undiagnosed paranoia?

    “Free money is a disincentive to work, no matter the reason it is given.”

    In The Four Freedoms, his series of four 1943 oil paintings, Norman Rockwell identified four essential human rights that should be universally protected.

    Two of those essential freedoms — Freedom from Want, and Freedom from Fear — will always be a disincentive to work, no matter the reason they are protected.

    – MrJM


  11. - Actual Red - Friday, Jul 23, 21 @ 12:05 pm:

    No change, but then I already disagreed with IRMA. If our economic system depends on the threat of imminent starvation to get people to do wage work, then its a bad system. Perhaps business owners should think about tightening their own belts for once. There are always going to be costs, why do they always have to be pushed onto the people at the bottom?


  12. - Joe Bidenopolous - Friday, Jul 23, 21 @ 12:36 pm:

    No. I was already aligned with the Shriver Center’s positions


  13. - walker - Friday, Jul 23, 21 @ 1:01 pm:

    No. IRMA’s letter might express the commonly held opinions of their members right now, but there is little actual economic or financial information that supports their position. This will resolve itself in the short term as other factors inhibiting quick rehiring become more evident.

    I see it as a cheap shot, unlike the more responsible positions we usually see from IRMA.


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