How will President Biden's American Rescue Plan and his proposed American Jobs and American Family Plans affect the Inland Empire?
For answers, we turned to three local economists: Redlands' premier economist John Husing; Yasemin Dildar, assistant professor of economics, Cal State San Bernardino; and Nathaniel Cline, nationally recognized professor of economics, University of Redlands.
----- JOHN HUSING, Economics and Politics Inc.:
President Biden has passed the $1.9 trillion American Rescue Plan that is sending checks to families and offering small business support to drive up demand and counter the country’s high unemployment rate (United States: 6 percent; Inland Empire: 7.7 percent).
Now he proposes the $2 trillion American Jobs Plan to repair all kinds of infrastructure and the $1.8 trillion American Family Plan to create two years of free pre-school and community college education, plus family leave and child care. He would pay for this $5.7 trillion in spending by raising corporate taxes to 28 percent from the Trump administration’s 21 percent. Firms doing business overseas would pay a minimum of 21 percent, up from 10.5 percent.
Certainly, these measures would see the recession ending in late 2021 or early 2022. There would be a huge community college and private school need to train workers to undertake the infrastructure efforts. Poverty levels should decline as newly skilled workers get jobs. Women would be more apt to find employment given the child care provisions. Low income children’s lives would benefit from formal early pre-school educations. Our decaying infrastructure would be fixed.
So much spending, even over a medium term period, could cause inflation to take off. That is why paying for this with added taxes is essential. Here, the Fed must be prepared to take strong action if necessary. Companies should be able to handle the 28 percent rate. That was the proposed rate when the cut was made from 35 percent before Trump took it down to 21 percent.
The debt should not be an issue. The U.S. faced a similar situation after World War II and was able to handle it due to the 1950s expansion set off by the GI bill, which similarly increased the skill sets of millions of former soldiers. There is precedent for training workers as part of infrastructure; Kennedy passed the National Defense Education Act to train the workers needed to get us to the moon.
Biden’s actions are bold but with inflation potential if they are not handled well.
----- YASEMIN DILDAR, Cal State San Bernardino economics professor, focus on women’s economics:
The Biden administration’s plans will be a boon to women in the region.
Women workers suffered the most during the pandemic, and their experiences made it clear that they continue to be seen as primary care providers in the household. This is even more true in the Inland Empire, which has higher dependency rates than the national average -- a higher ratio of those needing care to those actively working in the labor market. President Biden’s American Families and American Jobs Plans will address this issue.
Expanded child care will give women the support to stay in the workforce, and since women are the primary workers in the care industry, it should also give them more job opportunities.
The increased child tax credit will provide the resources necessary for mothers to seek out high quality, affordable child care, further supporting their labor force participation.
----- NATHANIEL CLINE, professor of economics, University of Redlands:
It is difficult to be specific about the Biden American Jobs and Family Plans at this point because they are still under negotiation. Having said that, this pair of proposals represents a sea change in federal policy that has far-reaching implications for the Inland Empire.
Our three main sectors of employment (health care and social assistance, transportation and warehousing, and construction) are at the center of the Biden proposals. We have a number of transportation, water infrastructure and electrical grid projects ready to go that would benefit from federal funding and would support job growth in the region. Subsidies to electrify truck fleets coming into the region from the ports of Long Beach and Los Angeles would add jobs and improve our air quality.
The bills also include a large amount of money for care work and pay increases for care workers. In other words, the likely consequence of these bills for the I.E. are jobs, pay raises and higher quality of life. While they are large compared to recent federal policy, they are likely still too small to completely satisfy our jobs and environmental needs.