Biden’s economic plan bets on blue collars, from infrastructure to child care

Economists have estimated that at least four-fifths of the jobs created by the infrastructure bill and the broader economic plan would not require college degrees, a dynamic that Biden unfailingly highlights when he discusses them.

“Best of all, the vast majority of these jobs … that we’re going to create don’t require a college degree,” Biden declared in Baltimore last week after the House finally passed the infrastructure plan. “This is the ultimate blue-collar blueprint to rebuild America.” The President used similar language when he signed the bill in a White House ceremony Monday afternoon.

“We cannot stop global change,” Clinton declared when he signed the NAFTA legislation. “We can only harness the energy to our benefit. … Every worker must receive the education and training he or she needs to reap the rewards of international competition rather than to bear its burdens.”

By contrast, Biden’s economic agenda focuses much more directly on improving conditions for workers in jobs that don’t require advanced education. While strongly supporting efforts to increase educational opportunity — through programs such as universal prekindergarten and expanded financial assistance for higher education — the President and his team believe that more education alone, absent other targeted policies, isn’t enough to create broadly shared prosperity.

“He has long recognized that blue-collar workers, non-college-educated workers, workers in traditionally lower-paid sectors, such as laborers in manufacturing or providers of care to kids and older persons, in many ways those workers have for too long been forgotten by even Democrat policy makers, who basically told them, ‘Get a college education and you’ll be fine,’ ” Jared Bernstein, a member of Biden’s Council of Economic Advisers, told me. “Which is not a viable option for a lot of people and seems pretty dismissive of their experience. I think he’s always bridled at an economics that leaves behind two-thirds of the workforce [without college degrees] and especially given that it’s the two-thirds of the workforce that’s been least pulled along by economic growth.”

New jobs for non-college workers

Over the long run, many economists believe, the infrastructure and broader Build Back Better plans could improve earnings and conditions for workers without advanced education — not only by tightening the labor markets in which they operate, but also through direct government wage mandates embedded in the bills that have received almost no attention so far in the national media. Politically the question for Biden is whether these benefits will kick in quickly enough to prevent a stampede toward the GOP in 2022 among working-class White voters, and maybe also more working-class Hispanics, drawn to conservative cultural messages and distressed over the ongoing spike in the cost of living. In the ABC/Washington Post poll released Sunday, Biden’s approval rating among Whites without college degrees plummeted to just 24% — far below not only the vote among them that he received in 2020 but also even Hillary Clinton’s meager showing with them in 2016.
The twin economic plans may offer Biden and other Democrats their best chance to improve those poll numbers. Several of the key measures in the Build Back Better plan — which Democrats are hoping to pass on a party-line vote in the next few weeks through the special budget reconciliation process — would bolster the financial position of millions of working-class families. Among other provisions, the bill includes expanded subsidies for child care and health insurance, free universal pre-K, an expanded tax credit for parents with children, an increased Earned Income Tax Credit for childless low-wage workers and authority for Medicare to negotiate lower prescription drug prices.
As important, analysts agree with Biden’s frequent assertion that the vast majority of jobs each plan would create do not require a college education, which only a little over one-third of workers in the labor force now hold. In a recent analysis, the Georgetown University Center on Education and the Workforce calculated that an infrastructure plan slightly larger than the final bill would create or save 15 million jobs over the next decade. Fully 85% of those jobs, the center projected, would not require college degrees; more than half would only require high school degrees or less. The biggest gainers would include electricians, plumbers, truck drivers, construction workers, mechanics, and shipping and materials handling personnel.
Biden has reached a critical moment in the battle for blue-collar voters

“We expect these to be the type of good jobs that point to the heyday of when manufacturing and construction were good jobs, they paid well and had benefits,” says Nicole Smith, the center’s chief economist. “We expect that … to last for at least eight to 10 years.”

Using different methodology, Adam Hersh, a visiting economist at the liberal Economic Policy Institute, recently calculated that over the first five years of implementation the infrastructure plan would create nearly 775,000 jobs annually, while the Build Back Better plan would add about another 2.3 million jobs a year. Hersh also projects that more than 80% of the infrastructure plan’s new jobs would not require college degrees, while non-college jobs would compose almost exactly four-fifths of those created by the broader plan.

In one key respect, the two plans are strikingly complementary. The Georgetown center calculates that men hold 90% of the current infrastructure-related jobs and men dominate the sectors that would see the most new jobs under the legislation. Meanwhile, Hersh calculates that early childhood education, child care and long-term care — all very low-wage fields now dominated by women, especially women of color — would generate about half of all the new jobs (more than 1.1 million) annually created by the broader bill.

“It seems that you have the infrastructure bill for men, and you have the reconciliation bill for women and [minorities],” says Smith.

Boosting wages and benefits

These bills are moving toward completion at a time when a decade of very slow population growth and the disruptions created by the Covid-19 pandemic have created the most competition in years for workers without advanced education. After decades in which wages were flat or declining for workers with high school degrees or only some college experience, as Smith notes, “For the first time in 30 years, we are observing increases in wages for those [workers] with less than a college degree.”

Supporters of the Biden plans expect they would increase the leverage of workers without college degrees to bargain for better wages and benefits by creating much more demand for such labor. “Having job creation at that pace and this level of jobs is going to tighten up those markets and help create pressure for wage increases that you don’t usually see lower down the job scale unless we reach full employment,” says Hersh.

But the plans don’t rely solely on tightened labor markets as their lever to increase wages for workers without advanced education. Though these ideas have drawn little attention, each bill includes multiple provisions designed to directly bolster wages and/or benefits for workers in sectors that the legislation would promote.

The infrastructure plan, for instance, requires the vast majority of projects to pay “prevailing wages” based on an average of the pay scale for local construction work. It also includes stringent provisions requiring that in all federal infrastructure projects — not just the new ones funded in this bill — most construction materials, from iron and steel to glass and plastics, are manufactured in the US. The Build Back Better plan offers substantially bigger tax credits for the manufacture of clean energy products that pay prevailing wages and electric vehicles constructed with union labor. It mandates higher pay for workers providing home health care or elder care services under programs funded through Medicaid. The Build Back Better plan also includes tougher penalties on employers using unfair labor practices to thwart union drives and more money for enforcement of federal wage laws, which could bolster earnings by promoting unionization and combating wage theft, respectively.
One of the most ambitious efforts to bolster wages is the attempt to drive higher pay for workers in early childhood education and child care. Today, those workers are among the economy’s most poorly compensated. The median wages for child care workers “do not meet a living wage in any state” for a single adult with one child, the Center for the Study of Child Care Employment at the University of California, Berkeley, concluded in a recent study.

Child care workers “are in the lowest 2% of earnings of all US employees-and preschool teachers are at the 18 percent [level],” Marcy Whitebook, the center’s director emeritus, told me. With parents already buckling under the cost, she says, child care and early education providers have little room to raise wages, even as low pay leads to enormous turnover and staffing shortages. “Most programs are at a breaking point because it’s just a hard business,” Whitebook says. “It doesn’t add up.”

The early childhood provisions in the Build Back Better plan — which include funding for universal preschool and a measure to cap child care expenses for most middle-class families at 7% of income — could channel enough new public money into the system to break that cycle. The bill sets reimbursement rates for state programs at a level that is linked to better wages, Whitebook says. It also says programs receiving the federal funding should pay early childhood teachers with four-year degrees (now about one-third of them) salaries equivalent to those of elementary school teachers with comparable credentials, who are typically paid much more. The changes might not be felt immediately, Whitebook says, but over time, “for workers it could be an improvement.”

‘Either/or’ vs. ‘both/and’

In all these ways, the infrastructure and reconciliation bills subtly diverge from the approach under Clinton and Obama. Each of those Democratic presidents stressed the importance of expanding access to higher education and training to move more workers up the skills ladder toward higher-paying and often high-tech occupations. As Robert Reich, Clinton’s labor secretary, told me earlier this year, the administration was “fixated on education as the magic bullet for curing widening inequality. It was the solution. And Clinton — I’m embarrassed to say, at my urging — would often say, ‘What you earn is what you learn.’ ”

Obama didn’t lean on that catechism as heavily, but he too often presented the loss of lower-skill jobs as a kind of irreversible natural phenomenon. “Companies that only care about low wages, they’ve already moved,” Obama declared in a 2015 speech at Nike while promoting his trans-Asian trade deal. “What this trade agreement would do is open the doors to the higher-skill, higher-wage jobs of the future — jobs that we excel at.”

Like Clinton and Obama, Biden is proposing multiple efforts to expand access to education — from the free universal pre-K program to expanded financial aid for college (even if a free community college program was dropped from the broader economic agenda as it was trimmed back). And the reconciliation bill devotes $20 billion to helping workers obtain training while still working. The difference is that Biden’s strategy assumes the economy will continue to need large numbers of workers in fields now considered low-skill — and that encouraging more of them to obtain more academic credentials in the future cannot substitute for improving their working conditions now.

“For both the President and the first lady it’s never an either/or, it’s always a both/and,” says Bernstein. “We have to make sure that education is accessible for all comers, but we can’t do that at the expense of a current workforce that is in need of high-quality jobs.”

In this January 16, 2014, file photo, former US Labor Secretary Robert Reich testifies before the Joint Economic Committee  in Washington.
That shift reflects a broader reconsideration among Democratic economists and policy-makers. The idea that rising eco`nomic inequality was rooted primarily in educational disparities has suffered since 2000, when wages for workers with four-year and advanced degrees have largely stagnated, just like those for workers with less education. Over those years, the dominant explanation in Democratic circles for stalled wages has shifted more toward disparities in power between workers and employers.

To explain stagnant wages, Reich, now a public policy professor at UC Berkeley, cites “the structure of how markets are organized, the decline of organized labor, the rise of monopolies and the extraordinary power in the hands of relatively few big companies.”

Biden’s effort to bolster blue-collar workers faces many obstacles, including the risk that inflation, if it persists longer than most economists forecast, could negate any wage gains the package triggers. Congress also appears unlikely to pass some of the policies that Biden prioritized, such as an increased federal minimum wage.

But in both their effects on the overall economy and specific interventions in key markets, the infrastructure bill and Build Back Better agenda represent the most concerted effort in recent times to strengthen the position of workers without advanced education. In the near term, it remains uncertain whether these initiatives can reverse the rising tide of working-class discontent Biden is facing in polls, but his team is looking at a much longer horizon.

“The idea here is not just to provide some sort of a near-term stimulus that keeps people busy for months or quarters,” says Bernstein. “It’s to fundamentally transform key sectors within our economy that disproportionately employ blue-collar and service workers … in a way that incentivizes not just more jobs, but higher-quality jobs.”


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