For a Successful Presidency, Biden Must Create a Behemoth of American Jobs
The soon-to-be-president has a tall order before him — replacing the $10M jobs lost for the new economy and creating opportunities for the next generation of American workers.
The United States economy is in a deep hole. President Trump has racked up deficit spending to the tune of $7 trillion. The economy has stalled during a raging pandemic. For 2020, deficit spending topped 17% of the economy.
There are more Americans out of work than when President-elect Joe Biden was vice-president during the Great Recession. It was even shocking during the Great Recession to see over 600,000 people lose their jobs almost every month.
Economists say that the task before us is daunting. Millions of people have been unable to find work since March 2020. Biden has promised to extend job aid until September 2021, when the fiscal year for the U.S. government comes to an end.
The President-elect wants to spend $1.9 trillion on new stimulus for the American economy. Republicans are already balking at this prospect. And this is just a down payment; Biden wants to spend trillions on infrastructure, green jobs, and transportation for the current decade.
Although the U.S. has lost the most jobs since the Great Depression of the 1920s, Harvard economists believe that the American economy could be back to full employment by the end of 2021.
Biden will oversee more job creation than any other president in history. Bill Clinton grew the economy by 22 million jobs, and Ronald Reagan’s job creation came during his second term in office.
The easy job gains have come and gone. “Biden is going to inherit a chilled, but not frozen, economy…There is hope for tomorrow, but there is a concern for today,” said the chief economist Gregory Daco at Oxford Economics.
Vaccines: Key to Job Creation
The economy is weak, but it is much further ahead than when Biden first came into his vice-presidency in 2009. Economists believe that the economy will recover faster as Biden displays a clear and concise plan as to how he will efficiently distribute the Covid vaccines, with the clear safety protocols of wearing masks, washing hands, and social distancing.
Biden promises 100 million doses of the vaccine in his first 100 days in office. Economists are placing their bets on the vaccine, which should be widely available towards the second half of 2021.
Growth on Wall Street
Stocks on Wall Street are soaring, believing that the Biden administration is ready for the challenge. Demand is pent up. Wealthier Americans, who have been able to work from home, have $1 trillion in the bank, ready to spend on outside dining and to travel.
Growth for 2021 will easily top four percent, the most in two decades. Other optimistic economists believe that the full powerhouse rebound will not occur until 2022. It is unknown how long it will take small businesses to recover back to pre-pandemic levels.
Biden promised not to make the same economic mistakes that occurred in the Obama Administration. The presidential team only did one massive $800 million stimulus package to prop up the economy; there were no follow up packages. Consequently, it took a decade to recover full employment — everyone who wanted a job had one.
Robots Taking Jobs
Businesses are experimenting with automation and having corporate meetings on Zoom. Even with expansive employment creation, some jobs may never come back.
Manufacturing and production are at their highest level in seven years, with 557,000 fewer workers. Robots are flipping hamburgers and making fries; a few robots are even cleaning homes and offices. Workers will need to retrain for new jobs.
America has lost 4 million service industry jobs. Most of these low-income workers had jobs in the retail, food service, and entertainment complexes. Low-income workers typically live paycheck to paycheck, and they could risk losing their homes and cars the longer they remain unemployed.
The need to no longer meet in a corporate downtown office is affecting the commercial real estate market. Managers can meet with their employees through a laptop computer in the convenience of their private homes.
Propping up Small Businesses
The American economy has just succumbed to a new milestone. More people are working for large corporations than in the past. The small hometown business model is suffering, with many places closing shop.
Larger firms have more access to loans and capital, and they can weather an economic downturn for several months.
The disenfranchised are starting millions of Internet businesses, but this trend is not expected to continue.
Biden now faces the challenge of decreasing economic inequality by closing the gap between the rich and the poor and making sure small businesses thrive.