On Monday, Joe Biden, the President-elect, unveiled the members of his coronavirus task force and warned of a “dark winter” ahead. Even as encouraging news emerged about a potential vaccine, case numbers have continued to climb in alarming fashion. The flip side of the virus’s rapid spread is heightened concern about the economy. Last Friday’s job figures showed the unemployment rate falling to 6.9 per cent in October, a welcome reminder that, since a historic slump earlier this year, hiring has rebounded more rapidly than many experts expected. However, more than eleven million Americans are still out of work. And, with further restrictions on economic activity likely, the outlook is potentially grim—especially given that Congress failed to pass a new stimulus package before the election. With a vaccine unlikely to be widely available until well into 2021, there is an urgent need to bolster the economy between now and then, and to insure a strong recovery beyond that horizon.
The pandemic presents a huge challenge to Biden. Yet it also provides an opportunity for him to frame his policy agenda, which often got lost—or distorted—in an election that was essentially a referendum on Trump. Speaking in Warm Springs, Georgia, a week before the election, Biden invoked F.D.R., who kept a vacation retreat there: “We’ll act to pass my economic plan that will finally reward work, not wealth, in this country,” he said. “We’ll act to pass my health-care plan to provide affordable, accessible health care for every American, and drug prices that are dramatically lowered. We’ll act to pass the Biden climate plan, meeting the challenges of a climate crisis while creating millions of good-paying, high-paying labor jobs. We’ll act to address systemic racism in our country, and we’ll act to give working people a fair shot again in this country.”
Obviously, Biden gave that speech before it became clear that he might well have to deal with a Republican majority in the U.S. Senate. The outcome of the two runoff elections in Georgia, scheduled for early January, will determine what the President-elect can realistically hope to achieve through legislation—a fact he knows from his experience in the Obama Administration. (If not for the Republican Scott Brown’s victory in a January, 2010, special election in Massachusetts, which was prompted by the death of Ted Kennedy, Obamacare might well have a public option already.) Even if the G.O.P. ends up with a narrow majority in the Senate, the goal of the Biden Administration must be the same as the one he invoked in Georgia: the creation of a new social contract that prioritizes work over wealth and sets the country on a new course, just as F.D.R.’s New Deal did in the nineteen-thirties.
In a time of intense polarization and divided government, that’s a tall order, to be sure. If 2020 has demonstrated anything, though, it has been the need to rebalance the economy to the benefit of working-class Americans. First came the pandemic, which the working class has been disproportionately affected by—just as, in the preceding generation, it was at the short end of globalization, technological change, and a sustained effort to reduce the power of labor unions. Then came the election, in which an alarmingly large number of American workers voted, once again, for a race-baiting, plutocratic right-wing populist.
Biden isn’t someone with strong ideological views or a fixed approach to economics. He sees himself as a problem solver, which, in this instance, may be an advantage. His job is to fashion a concrete economic agenda and use the coalition-building skills that he demonstrated during the campaign to get at least some of it enacted. He should begin with the pandemic and build outward from there, pushing policies designed to increase the bargaining power of workers, and to restore the link between productivity growth and wage growth. In the decades after the Second World War, this link produced a more equitable U.S. economy, but, under the impact of globalization, technological innovation, and conservative policies, it has been sundered.
The immediate task is to help the millions of Americans who have been out of work for many months, some of whom are facing the possibility of losing their jobless benefits entirely. The CARES Act, which Congress passed in March, provided funding for states to extend benefits from twenty-six weeks to thirty-nine weeks, but this provision is due to expire at the end of December. Many states have also pledged to extend benefits on their own, but they need more federal support to make good on this promise. A spending package that deals with this and other aspects of the pandemic, such as insuring the ready availability and distribution of vaccines, is the first priority. But it is only the first.
When the 117th Congress gathers in January, Biden must push for a comprehensive stimulus package, which would include funding for such measures as a national child-care program, expanded tax credits for workers on low wages, and incentives for green investment. Haggling with Senate Republicans over money is only part of the task ahead, however. In looking to create an environment that is more favorable to workers and families on modest incomes, there are plenty of proposals that don’t hinge on obtaining budget approval.
Such policies include raising the national minimum wage from its paltry level of $7.25 an hour. Ideally, the target should be fifteen dollars, but any raise would require Senate approval. Even without legislation, though, a Biden Administration could create a fifteen-dollar minimum wage for people who do contract work for the federal government—there are about four million of them. Studies show that higher minimum wages don’t impact just the lowest paid: they ripple upward without any discernible increase in layoffs.
The top priority of labor unions is enacting the PRO Act, which would make labor organizing easier, and which the Democrat-controlled House of Representatives passed earlier this year. But, even if Senate Republicans block this legislation, a Biden Administration can insure some progress by appointing a Labor Secretary who prioritizes labor rights and by revitalizing the National Labor Relations Board, which is supposed to enforce existing labor laws and rules. In many parts of the economy, particularly those that employ a lot of immigrants and minority workers, such as agriculture and caregiving, employers routinely flout these regulations.
There are other areas where the new Administration will have the capacity to move ahead without Republican approval. On its own accord, it can protect the interests of workers in future trade agreements; provide some student-loan relief for heavily indebted people on modest incomes; appoint financial regulators who are serious about rooting out wrongdoing and abusive behavior; and use antitrust policy to tackle the monopoly power that enables many large corporations to gouge their customers. (For-profit hospital chains and broadband providers are two examples.) The new Administration will also have the power to appoint policymakers to the Federal Reserve who are committed to keeping unemployment at a very low level. Recent experience confirms the ancient wisdom that a tight labor market is a crucial component of raising wages.
Republicans are already claiming that Biden hasn’t won a mandate, but his election platform included virtually all these proposals. And, despite the mixed results of the election, there is no reason to doubt that most of them would be highly popular. “Many elections across the country demonstrated that progressive, pro-worker policies are not just good economics, but also can be electoral winners,” Thea M. Lee, the president of the Economic Policy Institute, a progressive think tank, pointed out last week. “By overwhelming margins, Florida residents voted to raise the state’s minimum wage to $15 an hour, and Colorado residents voted for a 12-week paid family and medical leave program.”
Proposals like these make economic sense, and they are also vital to the health of our democracy. To prevent even more Americans of modest means from falling under the sway of Trumpism, it is imperative to deliver them some tangible benefits. Accounts of why so many Latinos in the Rio Grande Valley voted for a President who vilified Hispanic immigrants point to, among other things, the stimulus checks that bore his name. Presidential politics isn’t entirely transactional, but voters do respond to leaders and parties that they believe have their back. From Day One, Biden and his appointees must make perfectly clear which side they are on.
