Although the US economy is still characterized by deep and profound economic injustices, Joe Biden's administration demonstrated what real progress toward shared prosperity looks like. It thus provides a yardstick by which to judge the new administration's promise to help US workers and their families.
WASHINGTON, DC – For decades, there has been a maddening gap between what the US economy could be delivering for working families and what it actually does deliver. The richest country in the world chronically fails to offer broad-based economic prosperity and security, because policymaking has been captured by the wealthy and privileged. In pursuit of their own financial interests, the well-off have piled one boulder after another in the way of a typical household’s ability to carve out an economically secure life.
This has been a long-going, incremental process, so there is no magic-bullet solution that could immediately clear the path. Each presidential administration must be graded on how many boulders it removed (or added). Viewed in this light, the economic-policy priorities of former President Joe Biden’s administration deserve much more credit than they have received. Biden chalked up significant achievements on behalf of American families, and even those that were stymied by Congress were well worth pursuing.
The Biden administration’s record matters, because it will offer a basis for assessing the new administration’s agenda. Donald Trump has signaled his intention to undo almost everything that Biden did, which means that assessing Biden’s accomplishments helps reveal where Trump truly stands.
Biden By the Numbers
The basic facts about the economy that Biden left Trump speak volumes. For starters, real (inflation-adjusted) average hourly wages and disposable personal income exceeded their pre-pandemic highs while Biden was in office. Growth since the middle of 2022 – once the global inflation shock had peaked – has been robust, and real wages for the bottom 30% of workers hit historic high points and grew extraordinarily rapidly after 2019.
Real wage growth for workers in the bottom decile, for example, rose by over 13% between 2019 and 2023 – the fastest four-year stretch of wage growth for this group since data started being collected in 1979.
Moreover, the share of prime-age adults (25-54 years old) with a job hit its highest level in almost a quarter-century, and the share of the population without health insurance is at an all-time low, owing partly to rapid growth in enrollment in the Affordable Care Act exchanges. And then there is Trump’s own favored metric: US stock markets hit all-time highs, with the Nasdaq index rising by a whopping 30% over the past year, and the S&P 500 up by 24%.
In short, Biden’s presidency coincided with historically fast progress in extending economic prosperity and security to a broader base of Americans. While plenty of boulders remain stubbornly planted between today’s US economy and a genuinely decent society, the previous administration demonstrated what real progress looks like.
The Biden administration’s economic approach had essentially four prongs. First, it sought to drive down the unemployment rate as fast as possible and keep it very low for extended periods (finally making “full employment” a reality). Second, it sought to guide investment toward the production of key public goods – the kind that private actors cannot or do not provide on their own. This meant boosting investment in greenhouse-gas reductions and in strengthening supply chains’ resilience against future shocks.
Third, the Biden administration sought to rebalance the power relationship between workers and employers by encouraging unionization, strengthening wage standards, and policing employer attempts to rig the labor market against workers. Lastly, the administration tried to reform the tax system so that the very rich would pay relatively more and moderate-income families would pay less.
Getting America Working – and Building – Again
The administration’s most stunning success was the rapid restoration, and subsequent maintenance, of full employment after the onset of the pandemic. Recall that the COVID-19 shock had sent the unemployment rate to nearly 15% in the spring of 2020. Even after the economy re-opened, unemployment was still almost 7% when American voters were casting their ballots in November 2020. It was the American Rescue Plan of early 2021 that helped drive the unemployment rate below 4% by the end of that year. It then stayed there for the longest period since the late 1960s (and remained just above 4% as of Inauguration Day).
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Some argue that this aggressive approach to restoring full employment caused the inflationary surge in 2021-22. But the evidence suggests otherwise. The post-COVID inflation spike was global, affecting literally every advanced economy, and the size of the spike across countries was unrelated to how aggressively they had reduced unemployment.
In comparative terms, the US inflation spike was of average size, and it was briefer than in other countries. As American voters were casting their ballots in November 2024, the US economy was the envy of the world in terms of growth, unemployment, and the inflation rate. The Biden administration’s success in restoring full employment was the key buffer for workers against the effects of inflation, not a cause of it.
After the initial rescue and recovery efforts, the Biden administration pursued its troika of “industrial policy” bills – the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act (IRA) – which drove significant investment in public goods like transportation, ports, roads, clean-energy capacity, and supply-chain resiliency. Such investments will make inflation from supply-chain breakdowns (the kind that Americans experienced during the pandemic) much less likely and will promote America’s future competitiveness.
As the global economy inevitably moves toward decarbonization, the big uncertainty is whether the United States will be a straggler in producing the technologies that will define the next industrial age. The Biden administration had a clear strategy to position the country as a leader in electric vehicles (EVs), battery storage, solar power, and other clean-energy sectors that could employ many Americans for years to come. If Trump pulls the plug on these investments, he could make us a laggard in some of the most important industries of the twenty-first century.
Labor and Market Power
The Biden administration admittedly had fewer legislative successes in rebalancing the relationship between workers and employers. But no one can accuse it of not trying. Most of Biden’s proposals on this front were blocked by a sharply divided Congress. For example, a provision offering a bigger tax credit for EVs made with union labor was stripped out of the final IRA. For that, workers can thank lawmakers who appeared to be doing the bidding of foreign automakers with non-unionized US production facilities.
Similarly, the Protecting the Right to Organize Act of 2021 would have provided much stronger legal protections for those seeking to form a union in the face of fierce (and often illegal) employer opposition. Indeed, it would have made the most significant pro-worker changes to the country’s labor laws since the 1935 Wagner Act. But though the bill made it through the House of Representatives following Biden’s endorsement of it, Republicans killed it in the Senate.
Then there was the Raise the Wage Act, which would have increased the federal minimum wage (still a meager $7.25 per hour) to $17 per hour over five years. It suffered a similar fate, dying in Congress without coming to a vote, despite having the White House’s support. As a small recompense, the administration was able to grant a higher minimum wage to federal contractors through executive action. It is indexed to inflation annually and is currently $17.75 per hour. How this executive order fares in the coming weeks will be one of the first tests of Trump and the Republicans’ professed commitment to serving the interests of the working class.
While the president’s bully pulpit cannot fully overcome legislative gridlock, Biden put it to greater use in supporting unions than any other president in modern history. Famously, he even walked a United Auto Workers picket line; those workers won a historically strong collective bargaining agreement soon thereafter.
The Biden administration also used executive powers to rebalance labor markets when possible. For example, the National Labor Relations Board issued a steady stream of decisions protecting workers’ rights to organize and bargain collectively, and preserving their status as employees in the face of attempts to misclassify them as independent contractors.
For its part, the Federal Trade Commission enacted a sweeping ban on the use of noncompete agreements as a condition of employment. As this practice has become increasingly common in recent decades, it has demonstrably harmed workers and competition in the labor market. The FTC ban could have been a big victory, and it is just one of many FTC actions aimed at protecting American families from corporations’ abuse of their excessive market power. But as the presidential transition occurs, its enforceability remains stymied by court rulings issued by federal judges appointed during the first Trump administration.
The Biden administration also had notable achievements in tax policy. To raise a fairer share of revenues from the very rich and corporations, the IRA included a tax on stock buybacks, a corporate alternative minimum tax, and additional resources for the Internal Revenue Service so that it can collect more taxes owed by the wealthy. Moreover, the American Rescue Plan included a transformative – but ultimately only temporary – increase in the Child Tax Credit (CTC), which nearly halved the child poverty rate while it was in effect.
Tragically, the assumption that the CTC expansion would be too popular to let lapse proved overly optimistic. When the time came, congressional Republicans blocked efforts to make it permanent. After long claiming to support more generous child tax credits, Vice President J.D. Vance himself, then a US senator, skipped a vote last summer that would have bolstered the CTC.
Meanwhile, other tax changes were put on hold in anticipation of a big budget debate over the expiration of the first Trump administration’s 2017 tax cuts at the end of 2025. This would have been an obvious occasion to push for more fundamental, durable changes to the tax code, but now the process will be led by Republicans. A further tilting of the tax system in favor of the very rich seems to be the most likely outcome.
Brace for Impact
The American public is right to be angry that a country with such vast abundance cannot provide greater economic security and prosperity for the typical household. But this anger is only useful if it is channeled into concrete demands for policies that would help families share in more of the economy’s gains. If popular anger translates, instead, into nihilism about “the system,” it will benefit those who have used that system to compound the economic injustice so many Americans – including many who voted for Trump – are experiencing.
Plenty of people within “the system” are working for smart, decent policies that would make life better for all. But others are only grandstanding: posturing about the plight of the working class while doing all they can to funnel more money to the wealthy and corporations. Allowing justifiable anger about economic injustice to blur these distinctions will cost the US dearly.
Of course, the public needs help making these judgments, and they are not getting much of that. Those policymakers who do care need to improve how they communicate about the economy. And the mainstream media also must do a better job of accurately conveying economic realities – both the good and the bad. They can start with a clear-eyed assessment of the past four years. The resulting picture will probably offer a stark contrast to what is coming over the next four.
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WASHINGTON, DC – For decades, there has been a maddening gap between what the US economy could be delivering for working families and what it actually does deliver. The richest country in the world chronically fails to offer broad-based economic prosperity and security, because policymaking has been captured by the wealthy and privileged. In pursuit of their own financial interests, the well-off have piled one boulder after another in the way of a typical household’s ability to carve out an economically secure life.
This has been a long-going, incremental process, so there is no magic-bullet solution that could immediately clear the path. Each presidential administration must be graded on how many boulders it removed (or added). Viewed in this light, the economic-policy priorities of former President Joe Biden’s administration deserve much more credit than they have received. Biden chalked up significant achievements on behalf of American families, and even those that were stymied by Congress were well worth pursuing.
The Biden administration’s record matters, because it will offer a basis for assessing the new administration’s agenda. Donald Trump has signaled his intention to undo almost everything that Biden did, which means that assessing Biden’s accomplishments helps reveal where Trump truly stands.
Biden By the Numbers
The basic facts about the economy that Biden left Trump speak volumes. For starters, real (inflation-adjusted) average hourly wages and disposable personal income exceeded their pre-pandemic highs while Biden was in office. Growth since the middle of 2022 – once the global inflation shock had peaked – has been robust, and real wages for the bottom 30% of workers hit historic high points and grew extraordinarily rapidly after 2019.
Real wage growth for workers in the bottom decile, for example, rose by over 13% between 2019 and 2023 – the fastest four-year stretch of wage growth for this group since data started being collected in 1979.
Moreover, the share of prime-age adults (25-54 years old) with a job hit its highest level in almost a quarter-century, and the share of the population without health insurance is at an all-time low, owing partly to rapid growth in enrollment in the Affordable Care Act exchanges. And then there is Trump’s own favored metric: US stock markets hit all-time highs, with the Nasdaq index rising by a whopping 30% over the past year, and the S&P 500 up by 24%.
In short, Biden’s presidency coincided with historically fast progress in extending economic prosperity and security to a broader base of Americans. While plenty of boulders remain stubbornly planted between today’s US economy and a genuinely decent society, the previous administration demonstrated what real progress looks like.
The Biden administration’s economic approach had essentially four prongs. First, it sought to drive down the unemployment rate as fast as possible and keep it very low for extended periods (finally making “full employment” a reality). Second, it sought to guide investment toward the production of key public goods – the kind that private actors cannot or do not provide on their own. This meant boosting investment in greenhouse-gas reductions and in strengthening supply chains’ resilience against future shocks.
Third, the Biden administration sought to rebalance the power relationship between workers and employers by encouraging unionization, strengthening wage standards, and policing employer attempts to rig the labor market against workers. Lastly, the administration tried to reform the tax system so that the very rich would pay relatively more and moderate-income families would pay less.
Getting America Working – and Building – Again
The administration’s most stunning success was the rapid restoration, and subsequent maintenance, of full employment after the onset of the pandemic. Recall that the COVID-19 shock had sent the unemployment rate to nearly 15% in the spring of 2020. Even after the economy re-opened, unemployment was still almost 7% when American voters were casting their ballots in November 2020. It was the American Rescue Plan of early 2021 that helped drive the unemployment rate below 4% by the end of that year. It then stayed there for the longest period since the late 1960s (and remained just above 4% as of Inauguration Day).
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At a time of escalating global turmoil, there is an urgent need for incisive, informed analysis of the issues and questions driving the news – just what PS has always provided.
Subscribe to Digital or Digital Plus now to secure your discount.
Subscribe Now
Some argue that this aggressive approach to restoring full employment caused the inflationary surge in 2021-22. But the evidence suggests otherwise. The post-COVID inflation spike was global, affecting literally every advanced economy, and the size of the spike across countries was unrelated to how aggressively they had reduced unemployment.
In comparative terms, the US inflation spike was of average size, and it was briefer than in other countries. As American voters were casting their ballots in November 2024, the US economy was the envy of the world in terms of growth, unemployment, and the inflation rate. The Biden administration’s success in restoring full employment was the key buffer for workers against the effects of inflation, not a cause of it.
After the initial rescue and recovery efforts, the Biden administration pursued its troika of “industrial policy” bills – the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act (IRA) – which drove significant investment in public goods like transportation, ports, roads, clean-energy capacity, and supply-chain resiliency. Such investments will make inflation from supply-chain breakdowns (the kind that Americans experienced during the pandemic) much less likely and will promote America’s future competitiveness.
As the global economy inevitably moves toward decarbonization, the big uncertainty is whether the United States will be a straggler in producing the technologies that will define the next industrial age. The Biden administration had a clear strategy to position the country as a leader in electric vehicles (EVs), battery storage, solar power, and other clean-energy sectors that could employ many Americans for years to come. If Trump pulls the plug on these investments, he could make us a laggard in some of the most important industries of the twenty-first century.
Labor and Market Power
The Biden administration admittedly had fewer legislative successes in rebalancing the relationship between workers and employers. But no one can accuse it of not trying. Most of Biden’s proposals on this front were blocked by a sharply divided Congress. For example, a provision offering a bigger tax credit for EVs made with union labor was stripped out of the final IRA. For that, workers can thank lawmakers who appeared to be doing the bidding of foreign automakers with non-unionized US production facilities.
Similarly, the Protecting the Right to Organize Act of 2021 would have provided much stronger legal protections for those seeking to form a union in the face of fierce (and often illegal) employer opposition. Indeed, it would have made the most significant pro-worker changes to the country’s labor laws since the 1935 Wagner Act. But though the bill made it through the House of Representatives following Biden’s endorsement of it, Republicans killed it in the Senate.
Then there was the Raise the Wage Act, which would have increased the federal minimum wage (still a meager $7.25 per hour) to $17 per hour over five years. It suffered a similar fate, dying in Congress without coming to a vote, despite having the White House’s support. As a small recompense, the administration was able to grant a higher minimum wage to federal contractors through executive action. It is indexed to inflation annually and is currently $17.75 per hour. How this executive order fares in the coming weeks will be one of the first tests of Trump and the Republicans’ professed commitment to serving the interests of the working class.
While the president’s bully pulpit cannot fully overcome legislative gridlock, Biden put it to greater use in supporting unions than any other president in modern history. Famously, he even walked a United Auto Workers picket line; those workers won a historically strong collective bargaining agreement soon thereafter.
The Biden administration also used executive powers to rebalance labor markets when possible. For example, the National Labor Relations Board issued a steady stream of decisions protecting workers’ rights to organize and bargain collectively, and preserving their status as employees in the face of attempts to misclassify them as independent contractors.
For its part, the Federal Trade Commission enacted a sweeping ban on the use of noncompete agreements as a condition of employment. As this practice has become increasingly common in recent decades, it has demonstrably harmed workers and competition in the labor market. The FTC ban could have been a big victory, and it is just one of many FTC actions aimed at protecting American families from corporations’ abuse of their excessive market power. But as the presidential transition occurs, its enforceability remains stymied by court rulings issued by federal judges appointed during the first Trump administration.
The Biden administration also had notable achievements in tax policy. To raise a fairer share of revenues from the very rich and corporations, the IRA included a tax on stock buybacks, a corporate alternative minimum tax, and additional resources for the Internal Revenue Service so that it can collect more taxes owed by the wealthy. Moreover, the American Rescue Plan included a transformative – but ultimately only temporary – increase in the Child Tax Credit (CTC), which nearly halved the child poverty rate while it was in effect.
Tragically, the assumption that the CTC expansion would be too popular to let lapse proved overly optimistic. When the time came, congressional Republicans blocked efforts to make it permanent. After long claiming to support more generous child tax credits, Vice President J.D. Vance himself, then a US senator, skipped a vote last summer that would have bolstered the CTC.
Meanwhile, other tax changes were put on hold in anticipation of a big budget debate over the expiration of the first Trump administration’s 2017 tax cuts at the end of 2025. This would have been an obvious occasion to push for more fundamental, durable changes to the tax code, but now the process will be led by Republicans. A further tilting of the tax system in favor of the very rich seems to be the most likely outcome.
Brace for Impact
The American public is right to be angry that a country with such vast abundance cannot provide greater economic security and prosperity for the typical household. But this anger is only useful if it is channeled into concrete demands for policies that would help families share in more of the economy’s gains. If popular anger translates, instead, into nihilism about “the system,” it will benefit those who have used that system to compound the economic injustice so many Americans – including many who voted for Trump – are experiencing.
Plenty of people within “the system” are working for smart, decent policies that would make life better for all. But others are only grandstanding: posturing about the plight of the working class while doing all they can to funnel more money to the wealthy and corporations. Allowing justifiable anger about economic injustice to blur these distinctions will cost the US dearly.
Of course, the public needs help making these judgments, and they are not getting much of that. Those policymakers who do care need to improve how they communicate about the economy. And the mainstream media also must do a better job of accurately conveying economic realities – both the good and the bad. They can start with a clear-eyed assessment of the past four years. The resulting picture will probably offer a stark contrast to what is coming over the next four.