According to news reports, President Biden wants to reduce the unemployment rate back to where it was (3.5%) before the pandemic hit, see here and here. This is a highly worthwhile goal that will do more than anything else to raise wages for low-income workers. But is he really serious? Consider:
- Killing the Keystone Pipeline and a likely federal leasing moratorium, see here and here, will cost thousands of jobs and greatly affect revenues in western states such as New Mexico, Wyoming, and North Dakota. These measures will furthermore do nothing to reduce carbon emissions.
- Red states, with their open economies, have lost far fewer jobs than blue states, with their massive lockdowns. Avoiding a job-killing stimulus, with excessive unemployment benefits, will do much to get workers back on the job, especially in the blue states with the highest numbers of unemployed workers.
- A $15 minimum wage, will lift 900,000 Americans out of poverty but also cost 1.4 million workers their jobs over the next four years.
Recall that the low 3.5% unemployment rate achieved for several months under President Trump, before the pandemic hit, was brought about by a combination of tax reform (lowering the corporate tax rate from 35% to 21%) and significant federal deregulation. President Biden proposes to take a completely different approach (massive fiscal stimulus) to attempt to restore the same low unemployment rate, but this risks a new round of inflation. Which approach will work best? We might well know the answer before the midterm elections in 2022!
Conclusion. Some commentators claim that Democratic Presidents are better for the economy than Republican Presidents. We may have at least a partial and preliminary answer to this question real soon!