SAN FRANCISCO (Reuters Breakingviews) - A nightmare awaits Joe Biden’s economic dream team. The pandemic has worsened structural problems: the poor have gotten poorer, marginalized people are losing jobs quicker, and the workforce is even further out of reach for the unemployed. The new U.S. president, who was sworn into office on Wednesday, has chosen experienced aides, but they will need imagination too.
Biden’s senior staff, including former Federal Reserve Chair Janet Yellen, the Treasury secretary nominee, and auto bailout veteran Brian Deese as top economic adviser, have a big job on their hands. The U.S. unemployment rate stood at 6.7% for December, roughly double its pre-Covid-19 level.
The Breakingviews Dream Team interactive tool scores a roster of candidates for government economic jobs. Biden’s team so far rates a relatively high 130 points out of a possible 210 for backgrounds in markets, world affairs and environmental, social, and governance issues. They will need all their skills. The underlying challenges are tougher than after the 2008 financial crisis.
They go deeper than headlines like rolling out the coronavirus vaccine. Take drug addiction, for example. A 2017 study by the late economist Alan Krueger showed almost half of American men in their prime working years not in the labor force were on pain medication. Fast forward a few years, and opioids were the driver for the United States recording the highest number of drug-related overdose deaths in the 12-month period ending in May, according to the Centers for Disease Control and Prevention.
Black Americans, already subject to higher poverty rates than average, had an unemployment rate of nearly 10% in December. Working women, who were making progress in contributing to increases in average household wealth, have also been hit hard. The National Women’s Law Center found that all of the 140,000 U.S. jobs lost in December were accounted for by women, on a net basis.
Biden’s team can start on some of these issues, for instance by restoring services to address opioid addiction, such as counseling. Like former President Donald Trump, Biden can enlist companies like IBM and Siemens to open up apprenticeships but also bolster the programs by funding retraining elsewhere.
Biden’s stimulus plan, announced last week, includes $130 billion to reopen schools and another $40 billion for childcare. His deep bench will need to deploy options outside of traditional financial assistance to help wake up the American economy.