This week on Facing the Future, I talked to EcomonistMom.com blogger Diane Lim about the surprisingly weak April jobs report. Then we turned our attention to President Biden's proposals for the "care economy," including their potential to expand the work force and the political difficulty of raising enough revenue to pay for them.
When the U.S. Bureau of Labor Statistics released its Employment Situation Summary for April 2021 (i.e., the jobs report) last week, it landed with a thud because the estimated jobs gained in April, 266,000, was far below expectations of a million or so jobs gained. Normally, 266,000 jobs would have been a great number but these aren’t normal times. In March, 770,000 jobs were added and more were expected in April since it appeared the economy was coming back to life.
Lim said that, expectations aside, the jobs number was not that surprising. “Let’s face it,” she said, “This has been an unprecedented stoppage in the economy due to a public health pandemic and while early on we thought the health care crisis would only last a few weeks, as it wore on and schools remained closed, there was yet another reason why it wasn’t going to be easy to get back up to pre-pandemic speed.”
The good news was that the biggest gain came in the leisure and hospitality sector, which added 331,000 jobs. That sector has been particularly hard-hit and is still down by almost 3 million jobs or 17 percent since February 2020. Other industries, however, did not fare as well with manufacturing, retail and health care all down slightly and construction remaining about the same.
Turing to President Biden’s American Jobs Plan and American Families Plan, Lim said they are “very ambitious” and “pretty smart,” particularly from a long-term recovery perspective.
“If your goal is not simply to get us back to where we were pre-pandemic but to get us on a more sustainably growing path for the economy, then you see that the fundamental elements of [Biden’s proposals] are really about making some investments in the supply side of our economy -- trying to grow the productive capacity, trying to literally expand our notion of potential GDP rather than trying to stimulate the demand side of the economy to get us to our previous potential GDP,” Lim explained.
Lim noted a familiar dilemma that could lead to higher budget deficits. “The Biden agenda is extremely politically popular,” she said, “because mostly people are talking about the investments, the spending, and not so much the tax increases. And the tax increases are popular to the extent people have all heard that it’s not going to affect them.”