Biden Brushes Aside Wage Worries in Defense of Economic Plans
(Bloomberg) -- President Joe Biden offered a broad defense of his economic agenda on Thursday, arguing that his policies have already begun to benefit ordinary Americans and rejecting business-community concerns about labor shortages and rising wages.
In a speech at Cuyahoga Community College in Cleveland, Biden pointed to the receding pandemic and accelerating hiring and consumer demand as indications the U.S. is “coming back.”
“Covid cases are down, deaths are down, unemployment filings are down, hunger is down,” he said. “Vaccinations are up, jobs, real growth is up, people getting health coverage is up, small business confidence is up.”
Biden’s political opponents have charged that rising prices and difficulty some businesses have experienced in hiring are a result of the president’s $1.9 trillion pandemic relief measure, which boosted unemployment benefits and is distributing billions in cash directly to households. But the president argued that U.S. productivity has grown far faster than wages, offering no apology to businesses that have to raise pay to attract workers.
“We must restore the connection between the success of our economy and the people who produce that success, hardworking Americans,” Biden said. “Rising wages aren’t a bug; they’re a feature.”
New figures released Thursday showed that applications for state unemployment insurance fell for a fourth consecutive week, data that supports Biden’s argument.
Yet the improving jobs numbers, along with rising prices for products ranging from lumber to used cars, have fueled the GOP’s case that the government doesn’t need to spend an additional $4 trillion on Biden’s proposals to overhaul infrastructure and support families.
Biden said his administration would soon announce new initiatives to address what he called “supply pressures” in the economy, beginning with construction materials and “transportation bottlenecks.” He also said the administration would combat “anti-competitive practices that hurt small business and families.”
The investments he’s proposed, he said, would keep the U.S. ahead of competitors already spending on their own infrastructure, listing Japan, Canada, Italy, France and the EU as countries that have undertaken infrastructure and research-and-development improvements of their own.
“The pandemic exposed just how badly we need to invest in the foundation of this country and the working people of this country,” he said.
While many Republicans are interested in funding road- and bridge-building, they oppose raising taxes to pay for Biden’s other plans, such as expanding community college access or universal pre-K. Republicans argue such hikes could jeopardize any nascent economic recovery.
A group of Republican senators led by West Virginia’s Shelley Moore Capito publicly revealed a $928 billion counteroffer on infrastructure on Thursday, but the plan includes only about $257 billion in federal spending beyond what Congress was already expected to enact and is more than $1 trillion short of Biden’s latest proposal.
In the speech, Biden glossed over April’s disappointing jobs report, saying instead that the U.S. had added an average of 500,000 jobs each of the first three months of his presidency.
Biden again called for raising the minimum wage to $15 an hour, a move that would require Congress to act. And he reiterated his plan to impose higher rates on the wealthy and corporations -- a key point of his plan to finance what the White House bills as transformative and historic investments for the country.
“The American people understand that the economy we had before the pandemic left far too many people behind, and that more and more families were finding that their grip on a middle class life – and the security it affords – was precarious,” Mike Donilon, a senior adviser to Biden, wrote in a memo. “They know we can’t afford to simply turn the clock back to where we were.”
Donilon cited a range of non-partisan polling that showed some of Biden’s infrastructure and tax plans are popular with the majority of Americans.
The community college where Biden spoke was supposed to be the site of a campaign rally in March 2020, before it was canceled when the pandemic hit and social-distancing practices were adopted in the U.S.
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