Following Up on the Four Priorities of President Biden’s Workforce Strategy
Heather Boushey, Chief Economist, Investing in America Cabinet
Introduction
The President’s Investing in America agenda delivers historic public investments to American communities through legislation like the American Rescue Plan, Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act. These investments are crowding-in private investment into critical industries—to date, private companies have announced $825 billion in investments in growing industries like semiconductors, clean energy, and electric vehicles—and creating hundreds of thousands of jobs.
Creation of high-quality jobs for American workers is central to the President’s economic growth agenda. Already, since President Biden took office, the economy has added 15 million jobs while the unemployment rate fell to its lowest level in half of a century, remaining below 4 percent for a record 26 months. But as the President’s agenda brings clean energy and manufacturing back to America after decades of offshoring, the Biden-Harris Administration recognizes that this transition won’t be fully achieved if we don’t build the workforce we need. Expanded commitments to workforce development are necessary to successfully create durable, lasting industries through the Investing in America agenda.
As described in the Administration’s Roadmap to Support Good Jobs, the Biden-Harris Administration’s workforce strategy has four central priorities. First, it is designed to connect people to good jobs, including through evidence-backed training solutions like registered apprenticeships and other high-quality “earn and learn” pathways, and supportive services like child care that expand opportunity for American workers. Second, it is focused on ensuring that we have a skilled, diverse workforce for our transformational investments, with targeted workforce programs that align with growing sectors like clean energy and manufacturing that President Biden’s agenda has focused on. Third it ensures every community can meet its foundational labor needs, with policies designed to support short- and long-term labor supply in critical sectors like health care and transportation that often struggle to recruit and retain talented workers. Fourth, it prioritizes the creation of good-paying jobs with benefits, safety, stability, and worker voice to ensure that American families and businesses thrive.
This blog provides additional detail on the economic context for the President’s workforce strategy along with, for each of these priorities, recent actions taken, and recent progress in enacting them.
The economics of the President’s workforce strategy
President Biden took office in the midst of a global pandemic with staggering economic consequences. In January 2021, the unemployment rate was 6.4 percent and the labor force participation rate was 61.3 percent—two percentage points below the rate only a year earlier. However, the workforce problems did not begin with the 2020 pandemic. The United States had seen a multi-decade-long decline in the labor force participation rate for workers between the ages of 25 to 54, falling behind many of its peer countries. In manufacturing communities, the offshoring of domestic manufacturing in the 1990s and early 2000s led to the loss, by 2011, of one million U.S. manufacturing jobs and 2.4 million jobs overall.
President Biden came into office determined to address these challenges. His American Rescue Plan enabled the strongest recovery in decades. And moving forward, external estimates predict that over the next decade, the Administration’s Investing in America agenda will create more than a million jobs in industries like construction and manufacturing. In addition to making bold investments in 21st century infrastructure and industries, President Biden has an evidence-backed workforce strategy designed to ensure that all Americans have the opportunity to get a good, well-paid job in their community.
The Administration has made investments in evidence-backed training programs that ensure employers and counselors can play an active role in providing workers with the skills they actually need in industries with actual demand for labor. Research shows that demand-driven, sector-focused employment programs can not only increase employment in targeted sectors, but also have positive effects on earnings—especially for underserved workers entering these programs. These initiatives do not require students or workers to know on their own what skills the future job market requires. Instead, programs that produce the largest and most persistent earnings gains make strong connections to employers to determine in-demand jobs and skills. These programs also tend to provide larger investments per participant, upfront screening of participants on basic skills and motivation, and wraparound support services for participants.
Registered Apprenticeship programs have been shown to be particularly effective at increasing workers’ earning potential. A study of apprenticeships in 10 states finds that, over their lifetime, individuals who completed their training earned an average of $240,037 more than nonparticipants, with net social benefits of $49,000 over the course of the apprentice’s career. Apprenticeships also benefit employers; one study found that, on average, for every $1.00 invested, employers receive $1.44 in direct and indirect benefits in the years during and after training an apprentice.
The Biden-Harris Administration invests holistically in places across the United States, so that workers can get jobs in their communities. Job programs that are targeted towards regions that have been underinvested in can have particularly strong payoffs. One recent study found that the economic benefits of policies that add jobs in a given place (such as government-funded infrastructure projects) are at least 60 percent greater in “distressed” regions than in “booming” ones.
The President’s investments to empower and educate workers are already paying off. After Georgia received over $37 billion in private investments for clean energy technology, the city of Augusta has partnered with five major regional employers to develop their workforce and meet this increased demand through an Investing in America Workforce Hub. Terrence Tillman, a recent graduate of a newly expanded apprenticeship program, said “This is going to change my lifestyle. […] Knowing what the job entails and what its purpose is, I feel like I’m helping the country and the community.” Augusta is emblematic of how the Investing in America agenda can deliver good paying jobs and prepare the workforce for the future.
The President’s workforce strategy prioritizes job quality. An extensive economic literature lays out the benefits of improved job quality for workers, households, and businesses. By improving job quality, employers can more easily attract and retain workers—benefitting their bottom line. At the same time, improved job quality enables workers to bring home the pay and benefits that provide an opportunity to reach the middle class, which in turn supports economic growth.
Paying workers fair wages and providing benefits like paid leave can increase productivity, reduce turnover, and facilitate hiring and retention. Providing childcare lowers turnover while increasing the likelihood that parents can invest in training or additional education and work (especially full-time). Manufacturing firms that focus on job quality, like increasing pay and providing avenues for workers to have inputs into the firms’ practices, are better able to attract skilled workers, experience lower turnover, and generate higher productivity. Similarly, unions are already playing a central role in developing and training the workforce for the President’s investments in America.
Conclusion
President Biden has prioritized the creation of high-quality jobs for American workers in two ways—a strong and rapid labor market recovery and a comprehensive workforce strategy that prepares workers for the 21st century economy. As a result, while forecasters predicted that in 2023 the economy would fall into a recession, the US economy grew at a healthy 3.4 percent in the fourth quarter of 2023, added over 15 million jobs, saw the unemployment rate fall below 4 percent for a record 26 months, and hit a record low gap between the highest and lowest state unemployment rates. Further, employment growth remains solid in specific industries where growth has been catalyzed by the Investing in America agenda—since January 2021, the economy has added 848,000 jobs in construction, 768,000 jobs in manufacturing, and 27,500 jobs in clean energy employment.
The Biden-Harris Administration is committed to making the necessary investments to connect Americans to good jobs, prepare them for our transformation investments, ensure every community can meet its foundational labor needs, and boost job quality. Case in point: President Biden’s FY25 Budget proposes a new $8 billion Career Training Fund that would provide approximately 750,000 workers with training and wrap-around supports, as well as funds to expand public-private partnerships to offer high-quality training in growing industries. Investments like these lay the foundation for a thriving U.S. economy and strong, shared, and stable economic growth.
