President Biden is giving a bit of simple advice to businesses unable to find workers: Offer people more money. Biden is betting it leads to middle-class security. But Republicans say his policies have let loose high inflation that will hurt the economy. https://t.co/hyFTW0A7Cb
— AP Politics (@AP_Politics) May 22, 2021
… This recommendation, included in a White House memo about the state of the economy, gets at a fundamental tension in an economy that is returning to full health after the coronavirus pandemic. Businesses are coping with spiking prices for goods such as steel, plywood, plastics and asphalt. Yet workers, after enduring a year of job losses, business closures and social distancing, are no longer interested in accepting low wages.
Administration officials say the White House is not trying to target a specific wage level for workers. But officials say higher wages are a goal of President Joe Biden and a byproduct of his $1.9 trillion relief package and at least $3.5 trillion in additional spending being proposed for infrastructure and education.
Boosting wages gets at the central promise of the Biden presidency to improve the lives of everyday Americans and restore the country’s competitive edge in the world. Republicans say that Biden’s policies have already let loose a torrent of inflation that will hurt the economy. The outcome of these competing forces could decide the trajectory of the U.S. economy as well as the factors weighing on voters in next year’s elections.
White House economic adviser Jared Bernstein said the goal is “to pull forward a robust, inclusive recovery that provides good employment opportunities to people who have been the heroes of this pandemic, folks who are in the bottom half, who went to work, often in unsafe conditions, or had to stay home to take care of their families and deal with school closures and childcare constraints.”…
What makes the current situation unique is that wage pressures generally build when the unemployment rate is low. But the rate is 6.1% and the country is 8.2 million jobs below its pre-pandemic levels, historically the kind of numbers that might lead workers to settle for lower earnings.
The difference this time is that the government spent a combined $6 trillion over the past year, including relief packages passed under President Donald Trump, to minimize the economic damage from the pandemic. Biden’s own relief package was geared toward helping to boost wages, with enhanced unemployment benefits, new monthly payments to parents, aid to restaurants and money for state and local governments to increase pay for essential workers…
Part of the dispute between Biden and Republicans is a more fundamental one on how economies grow. The administration has embraced a philosophy of investing in workers and providing them with benefits to make it easier for them to juggle life responsibilities and jobs.
By contrast, Republicans believe the key is to minimize taxes and other barriers for employers so that lower operating costs lead them to invest and hire. …
Since we took office, we’ve gone from an economy in crisis to one that is projected to grow faster than it has in nearly 40 years.
That’s progress. Let’s keep it going.
— President Biden (@POTUS) May 22, 2021
Opinion: How does the Biden White House get results? By remaining disciplined.https://t.co/jv46wFOwzW
— The Washington Post (@washingtonpost) May 23, 2021