A New Deal for the COVID Era
The good news is President Biden unveiled the American Jobs Plan this week. It’s an ambitious infrastructure plan that will allocate more than $2 trillion to rebuild the nation’s bridges, highways and roads; expand high-speed broadband across the country; build new schools and upgrade existing ones; and support a transition to clean energy. The bad news is how are we going to pay for it? The unpopular and unavoidable answer is most likely tax increases.
Realistically speaking, this proposal is unlikely to sail through as quickly as the American Rescue Plan did. There’s a lot of money on the table and we have to figure out how to fund it. With big business being asked to pick up a significant part of the tab, there’s bound to be pushback in negotiation. It wasn’t very long ago that Congress passed the last $1.9 trillion COVID relief bill, and many Republicans and moderate Democrats are worried about government spending and what it portends for both individual and business taxes. I share their concerns.
Still, with the country recovering from COVID-19, it is encouraging to see big, bold initiatives coming out of Washington, no matter what side of the aisle you sit on. The New Deal was critical to the country’s recovery from the Great Depression. Hopefully, the American Jobs Plan can do the same for us, in whatever form it ends up getting passed.
Let’s hope it works. If we can get more Americans into jobs that offer healthy wages and benefits, they will have more money to spend in other segments of the economy and that could help sectors like hospitality, travel, and entertainment, which all took a real beating the last 12 months.
One sector that stands to gain tremendously if the plan passes is construction, which was also battered by COVID-19. As the 2020 Marcum JOLTS analysis of construction employment trends recently reported, the industry suffered months of layoffs during the worst of the pandemic. It’s now seeing a rebound to the point that contractors are again having a hard time filling jobs. Average hourly wages reached the highest level on record in January – $32.11.
For many Marcum clients in this sector, it will be critically important to address the skills shortage in this sector. Introducing more Americans to careers in construction, including highly skilled construction jobs, will be essential to staying ahead of the demand for workers.
Biden’s plan will also target the manufacturing sector, where we have many clients. The plan is calling for $300 billion in investments in domestic manufacturing, research and development. There will be $50 billion alone for a new federal office that will keep tabs on domestic industrial capacity and the production of critical goods in the supply chain, and $46 billion in federal spending on clean energy manufacturing. That could spell opportunity for firms that are embracing innovation and pivoting to meet gaps that the pandemic revealed.
Of course, what happens remains to be seen, particularly with new strains of COVID becoming a concern. In the meantime, we’ll be keeping our eye on what’s happening in Washington and how that impacts our clients in terms of both taxes and business opportunities.
Today is Good Friday, and Easter takes place this coming Sunday. As regular readers know, we celebrate both Easter and Passover in the Weiner household. Last week, we celebrated Passover with our traditional Seder dinner, and this weekend we will have our traditional Easter brunch. To all of you who observe, we hope you are able to be with those you love – enjoy the holiday weekend!
Stay safe, stay healthy and remember, we’re all in this together!
