How do Biden’s economic policies impact engineering fields: a look at the projected job market...
It’s U.S. election season, and almost time to sort out what the next four years in the U.S. might look like. Elections bring up different concerns and anxieties for everyone, but key among them is always this: what will the job market look like under whoever’s administration? Specifically, how would Biden’s economic policies reflect on the engineering profession? The past year has introduced quite a lot of instability into the market and, although engineers as a whole have not been hit by the brunt of it, a change in administration would almost certainly herald in some changes. So, based on past market trends, are Biden’s policies good for engineers?
The most recent reference period we can use as a model is the Obama Administration, in which Biden played a large role, of course. The period the administration covered — 2008 to 2016 — was certainly not the easiest on the American worker, but how did policy play into circumstance? Taking office in 2008, President Obama began faced with the worst recession since the Great Depression, with the future of the economy in doubt, and workers being laid off in every industry. Obama left office reporting robust, shared growth, and a U.S. economy that was stronger, more resilient, and better positioned.
Data shows that Obama is roughly in the middle of the pack among the five most recent presidents in regards to raw job growth. However, his administration also reduced both the unemployment rate and the underemployment rate back to pre-recession levels. Raw data shows most aspects of the job market — from employment rates to wage growth — bouncing back toward pre-recession numbers by the end of Obama’s eight years in office, although not yet fully recovered. The amount of bounce back also depended on the industry, though, and the composition of jobs saw change under Obama. Health care jobs fared exceptionally well, while manufacturing and some other heavy industries did not see as robust a recovery.
Overall, the Obama presidency took a job market in crisis and returned growth in the labor market better than most modern U.S. presidents. The key components to accomplishing this are laid out in the American Jobs Act. These include payroll tax cuts and extensions on business expensing for small businesses, job creation through modernization of schools and infrastructure, reforms to the unemployment insurance system, investments in employment opportunities for low-income populations, and a budget that fully paid for the Jobs Act as part of a long-term deficit reduction plan.
Biden would be starting from a similar position; the coronavirus pandemic has resulted in unique challenges, rapid job loss, and pressing economic downturn. The unemployment rate is now higher than that of the Great Depression. Americans have lost pay, hours, jobs, health care, or their entire businesses. His campaign has laid out a recovery plan titled “Build Back Better,” which claims to target and stimulate structural weaknesses in the American economy. Like Obama’s plans, Biden’s seem especially beneficial in health-care industries, promising to put people to work fighting the pandemic through a Public Health Jobs Core. His plans include working toward clean energy and mobilizing manufacturing and innovation to create American-made supply chains and revamp our infrastructure.
Many of his focuses seem similar to Obama-era plans, as do his specific plans of action, which bodes well for the economy as a whole. Moody’s Analytics, an economic research firm, has published a forecast weighing the effects of both candidate’s proposals.
Its predictions see a Biden Administration creating 7 million more jobs than the continuation of a Trump presidency as well as a higher long-term growth. Of course, this is a macroeconomics forecast. Real growth vs. job loss will vary from industry to industry, and we can only extrapolate policy and historical data to guess what the future looks like for engineering professions.
The Biden campaign’s plans do show one thing that was lacking from Obama-era economic stimulus plans: a focus on both manufacturing and energy infrastructure. While the Obama Administration did focus on job creation through infrastructure modernization, the main focus was on updating the technologies available to schools and other public institutions and broadening access to Wi-Fi. Biden’s plans call on engineering innovation to develop and implement clean energy solutions and for the creation of entirely U.S.-based supply chains for materials and components.
The basics of the Biden plan are to raise taxes on the wealthy and on corporations and use that money on infrastructure upgrades, a shift to clean energy, making housing and childcare more affordable, and improving education. The plan promises to yield not only new jobs but also an increase in the average American’s income by $4,800. The proposed increases in short-term deficit spending promise growth that will return, at least in part, that investment as well as to the immediate negative effects that could result from higher taxes and increased regulation.
In contrast, the Trump administration’s economic strategies involve reducing taxes and regulations to encourage U.S.-based manufacturing. Another difference: Biden has laid out a detailed blueprint, while the Trump campaign has only outlined possible economic proposals. While economists are able to give market predictions based on Biden’s proposals, it isn’t easy to do so for Trump’s plans without more detailed information.
Still, many experts — such as those behind the Moody’s Analytics report — seem to agree that a Biden presidency shows more economic promise, with some predicting unemployment below 4% by late 2022. And, while the Obama economic recovery didn’t see industrial and technical job recovery at as high of a rate as other industries, Biden’s focus on innovation and clean energy has a higher promise for engineering job growth. Of course, economic stability and growth aren’t the only platforms of concern in the election, but for many voters, it is an incredibly important one. Especially now, many Americans need an answer to the question, “Will I be able to provide for myself and my family?” Biden’s experience within an administration that did a lot for American job recovery, coupled with the promise shown by his detailed plans, gives a lot of hope.