Tags: expanding | skilled labor | key | biden | resurrecting | economy

Expanding Pool of Skilled Labor Key to Biden Resurrecting Economy

Expanding Pool of Skilled Labor Key to Biden Resurrecting Economy
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By Wednesday, 18 November 2020 08:20 AM Current | Bio | Archive

President-elect Joe Biden ran on a platform to address climate change, remedy inequality, resurrect the economy and implement a more focused COVID-19 strategy.

Preliminary tests indicate Pfizer-BioNTech’s vaccine could be as much as 90% effective, and others are on the way from Moderna, Johnson & Johnson and Oxford-AstraZeneca.

However, producing and distributing adequate doses pose enormous challenges and will take many months. Pfizer’s vaccine must be stored at minus-94 Fahrenheit, many places lack adequate freezer capacity and about half of all Americans are reluctant to take a vaccine.

Mr. Biden needs to explain to the nation that Asian countries have enjoyed more success containing the virus by submitting to frequent tests, rigorous contact tracing and strict quarantining for those testing positive or who have been exposed. And implement similar strategies with state governors.

Once we have a vaccine, Mr. Biden and his Cabinet should spread across the nation to take their shots in public view. The message is simple: If I can risk it, so can you!

Mr. Biden warns this winter will be long and dark. Infection rates will come down only slowly, restaurants and stores will continue at limited capacity, and many who have lost jobs will have few decent opportunities for re-employment.

A stimulus bill to extend unemployment benefits and aid the states is lacking thanks to gridlock. Even if Mr. Biden can broker a deal between House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell, some 4 million to 5 million will be added to the rolls of permanently unemployed. Nearly 100,000 small businesses have closed permanently, and COVID-19 has accelerated disruptive changes in business practices and consumer habits.

State and local governments have lost $500 billion in revenue over two years and shed 1.3 million employees.

Major cities face a crisis of abandoned capital. Businesses permanently reducing their footprints in downtown areas, while employees work from home a few days a week has two effects — it creates a boom for suburban housing and home improvements to create larger work and recreational spaces, but it renders obsolete downtown office space, gyms and storefronts long before their useful life is finished.

Suburban growth is an illusion. Replacing perfectly good downtown office space with larger suburban homes does not add to the nation’s productive capital stock even if the GDP statistics say it does.

For several years, business travel may not recover to pre-COVID-19 levels. Business-district coffee shops, restaurants and retailers will have fewer customers stopping for morning brews, lunch and office attire, but the boom in home improvements, Internet shopping and Internet-based services ranging from cloud software to entertainment streaming services will continue.

Many workers displaced last spring and summer earned modest incomes in public facing services and cannot be expected to take jobs in the construction trades, coding software or building websites without substantial retraining assistance — especially of the sort that public adult education is ill equipped to provide.

This fall and winter the pink slips are more highly concentrated among professional workers — lawyers, bankers, engineers, technicians and managers — with job skills specialized to industries that are contracting. They are potentially more mobile than low-wage workers, but mortgages and student debt can make them reluctant to endure many months of retraining and to move families.

The official unemployment rate at 6.9% greatly understates the problem, because government statisticians face challenges counting the truly unemployed and many folks have quit looking. The Peterson Institute estimates it’s closer to 8.4%, it may be higher and sending the states some cash to tide them over and extending unemployment benefits, though essential, is hardly enough.

Without getting everyone back to work, the economy won’t be able to reasonably pay for green technologies and climate change abatement or create expanded opportunities for minorities and women without stealing those from others — a zero sum game that will inflame national divisions.

Expanding industries — web-based services, robotics, electric cars and the like — all need workers with skills that businesses can’t easily find. Alongside a COVID-19 strategy, Mr. Biden should craft a national re-employment strategy that subsidizes employers to hire and retrain workers, who were formerly employed in other industries, by offering payments equal to 25% of their former salaries for one to two years if employment subsequently continues for another one to two years.

Expanding the pool of skilled labor is the single most important thing Mr. Biden could do to rev up growth, create tax revenues to finance his climate change program and create more equally shared prosperity.

Peter Morici is an economist and business professor at the University of Maryland, and a national columnist. He tweets @pmorici1

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Peter-Morici
Expanding the pool of skilled labor is the single most important thing Joe Biden could do to rev up growth, create tax revenues to finance his climate change program and create more equally shared prosperity.
expanding, skilled labor, key, biden, resurrecting, economy
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2020-20-18
Wednesday, 18 November 2020 08:20 AM
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