This article originally appeared on The Wall Street Journal on February 21, 2020.
The Biden administration says if Congress passes the proposed $1.9 trillion Covid relief bill, we won’t have to “wait for years for the economy to return to full employment,” as two members of the Council of Economic Advisers put it in a recent White House blog post.
It’s the right goal. In April 2017, the unemployment rate dipped below what the Congressional Budget Office projected as full employment. It stayed there until the pandemic. That created intense competition for employees and drove wage growth at or above 3% for 20 consecutive pre-pandemic months. By 2019 median family income hit a record high, the poverty rate declined to a record low, and income inequality decreased for the second year in a row.
The jobs picture is all but certain to improve in a year when people are getting vaccinated and states are opening their economies. The labor market will improve in the coming months if the government does nothing. But massive spending will hurt more than it helps.
Click here to read the full article.