A Post-COVID Society and Biden’s Economic Plan

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A Post-COVID Society and Biden's Economic Plan

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Aired on December 2, 2020, Bill English and Carmen LeBerge on Faith Radio discuss a post-COVID economy and society. We also discuss how a significant number of people have made job transitions during COVID. We also discuss Biden’s economic plans.

Here are the show notes:

Job retraining in the post-COVID economy:

Threats to workers:

1. Not easy to transition from jobs such as waiters, taxi drivers, cooks, waiters and so forth
2. Automation is consuming a larger portion of jobs that pay well, but are repetitive, such as factory work
3. There is a lot of pain in career transitions

Bureau of Labor Statistics:

1. 6.4M open jobs in September (latest numbers)
2. Increases in openings in food service, wholesale trade, transportation, warehousing and utilities
3. 4.7M were separations – of those, 3M were “quits” – not layoffs or job losses due to COVID
4. Civilian Labor Force Participation Rate
   1. October of 2000 – 66.8%
   2. October of 2010 – 64.4%
   3. February, 2020 – 63.4%
   4. October, 2020 – 61.7%
   5. Reasons:
      1. More people are retiring than are entering the work force
5. Unemployment Rate:
   1. Current: 6.9%
   2. During Obama’s 8 years: started at 8.3%, ended at 4.7%
   3. Trumps 4 years: 4.7% to 3.5% in Feb of 2020 – this is considered abnormally low

Yes, things are hard – but for those willing to take initiative, they can create a good future for themselves.

What workers can do:

1. Most who are directly threatened have no more education than a high school degree, to make over $50K/year,  you’re going to need a formal education, unless you go into the trades
2. Here is a list of jobs/careers which are in high demand right now: (indeed, Career Builder and CNBC)
   1. Plumbers – start at $0K – $50K, then go over $100K – lots of home renovations and repairs
   2. Carpenters – $50K – $65K/year – ~750K carpenters – Need 1M
   3. Electricians – 7000 join, but 10,000 leave each year. $55K – $75K/year
   4. Deliver Drivers – $33K/year
   5. Customer Service – $35K
   6. Truck Drivers – $60K – $80K
   7. Nurses – $70K – $80K/year
   8. Home Health Aids – no formal education is required – some states require 1-3 month course and licensure – $12/hr
   9. PCA – no formal education – $24K
   10. Nursing assistants – $30K/year
   11. Physical Therapy Aid – $34K
   12. Medical Technologists – BA – $56K
   13. Web Developers 75K – $100K
   14. Stock/Warehouse: $25K – $27K
3. Job training
   1. Federal and State Governments have significant assistance for those changing jobs or careers
   2. Verizon is training 500K for “digital jobs”, such as digital marketing analysts
   3. Amazon is spending $700M to train 100K for higher-skilled jobs
   4. Starbucks – become a benefits eligible employee working PT or FT and receive assistance in tuition coverage for your first bachelor’s degree at Arizona State University online.
   5. Walmart also offers tuition coverage at Arizona State University
   6. Other companies with programs – SAS, AT&T, Paychex, Marriott and others – most focus on leadership, sales and/or management programs.
4. Try working through a staffing agency who will likely get you work quickly while you map out your future
5. Join the military – National Guard or one of the main branches – many get their education either entirely paid or partially paid by the Fed govt.

Biden’s economic team suggests focus on workers and income inequality

They are going to use labor unions to increase compensation for workers while also increasing their donor base.

Income inequality  – the only way to solve this is through higher taxes on the upper wage earners and then redistribute the wealth through government action. The market pays what the market pays.

If you’re Citibank or Microsoft or General Electric and you need a new CEO, there’s probably only 10-20 people who can do that job.  So if they ask for $20M/year, you’re going to pay it.

Problems:

1. Reducing the gap – it will  never be enough
2. Paying their fair share – it will never be enough
3. Implement a wealth tax – it will never be enough

We’re already transferring a huge amount of money:

The bottom 20% today pay ~$300 in Federal income taxes and receive $20,000 in social insurance and means-test entitlement benefits

Middle income people ($54K – $81K) will average $10,100 in taxes paid and receive $16,600 in benefits

CBO – in 2016, more than half of American households received more in entitlement benefits than they paid in taxes.

What to do, IMHO:

1. Grow wealth by encouraging savings and investments – ultimately economies are grown through investment, not consumption
2. Remove the cost drivers to higher education imposed through the Federal Department of Education – such as education requirements for professors
3. Raise the corporate deductible limit of $5,250/individual to something like $10K or $15K
4. Let people fully deduct the cost of education