The Biden administration seems to believe that by rebranding its economic agenda as “Bidenomics” and using buzzwords such as “equitable growth” and “empowering workers,” it can convince the public that they are prospering financially. But considering only one-third approve of the way the president has handled the economy, Bidenomics is going to be a tough sell.
The value of workers’ paychecks declined for 25 straight months, almost the entirety of the Biden administration. This is in part because workers’ productivity, the amount of goods and services workers produce per labor hour, has also declined at an unprecedented rate since the administration’s first day. People are working more to produce less, and if this trend is left unchecked, people will be able to buy less and less with every paycheck, too.
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This is not a failure of workers — it is a failure of policy. Instead of feel-good phrases, America needs a real economic agenda that is focused on two things: raising workers’ salaries and lowering their cost of living. New research released recently by the America First Policy Institute outlines the causes of this decline in productivity and charts a pathway to reverse the trend. To implement a true worker-first approach, state and federal policymakers should start by adopting the following three tenets.
First, policymakers should increase labor flexibility and remove barriers. Few labor regulations are more burdensome than arbitrary occupational licensing requirements. Many states require newcomers to get relicensed and retrained in their chosen profession even if they are licensed in their home state. This requirement can cost thousands of dollars and hours of wasted time. Twenty states have already enacted some kind of universal licensing legislation , and the other 30 states should follow suit to ensure that they are not penalizing workers simply for moving.
Additionally, rules that restrict independent contracting limit economic flexibility and employment opportunities. Many workers choose contract work because it gives them more control over their schedules and allows them to choose their own projects. In addition to withdrawing the Biden administration’s proposed new rule limiting this model of work, an "America First" agenda would enable workers to pursue productivity-maximizing employment that works best for themselves and their families.
On top of this, housing development is often stifled by green energy requirements and anti-construction agendas. These barriers significantly increase the cost of housing, exasperate housing shortfalls, and contribute to homelessness. This hurts low-income households the most, who face more limits in their housing options and are forced to contribute an ever-greater share of their income to rent. Removing regulations on homebuilding would help workers live in places where their productivity would be greatest — not just wherever they can afford.
Second, policymakers should address the growing skills gap in our country. Our nation’s higher education system is in desperate need of reform and is wildly out of touch with the workforce needs of both the public and private sectors. States should work closely with business leaders to align programs at their community colleges, technical institutes, and traditional universities with real-life workforce needs. In addition, federal and state regulators should work together to streamline regulations around apprenticeships, which can enable students to learn a trade without going into substantial debt. And both the public and private sector should remove degree requirements from jobs when they are not truly needed.
To lay the foundation for closing the skills gap, our nation must reform K-12 curricula, too. Virtually every country besides the U.S. offers vocational education for high school-aged children. We are doing our children a disservice when we do not share all the options available to them when they graduate from high school.
Third, policymakers should enact pro-growth tax reform, which will induce economic growth and productivity. Workers need a tax code that promotes innovation and encourages growth and entrepreneurship. High-income tax rates do the opposite, forcing workers to give up more of their paychecks every year and disincentivizing business creation and expansion. Maintaining pro-growth tax policies, such as those included in the 2017 Tax Cuts and Jobs Act, can motivate businesses to invest in productivity-enhancing measures and fuel economic growth.
Boosting worker productivity is critical to increasing paychecks and putting money back into the pockets of men and women. It’s time Washington commits to an "America First" agenda and advances policies that increase flexibility for workers, remove barriers, and create more job opportunities. Anything less is a disservice to workers.
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Linda McMahon is the chairwoman of the America First Policy Institute as well as AFPI’s Center for the American Worker. She is also the former administrator of the U.S. Small Business Administration.
