How the Newly Introduced American Jobs Plan Could Impact Employers
Less than a month after the passage of the American Rescue Plan Act of 2021, The White House announced yet another policy plan that could transform the U.S. economy. Dubbed the American Jobs Plan, find out what HR teams and small organizations need to know about this new proposal.
Background: What is the American Jobs Plan?
The American Jobs Plan is a new policy proposal that was issued by the Biden administration on March 31, 2021. According to the fact sheet issued by The White House, the American Jobs Plan will invest in projects that improve critical infrastructure, the workforce, and other key components of the economy. If passed, The White House estimates the proposed plan will invest about 1% of GDP per year over the next eight years and cost approximately $2.3 trillion.
According to a report in Axios, economists are generally optimistic about “the potential for economic growth this year,” thanks in large part to the American Jobs Plan. In the same story, Axios reports that finance and analytics corporation S&P Global predicts that if passed, the infrastructure plan will accomplish the following:
- Create 2.3 million jobs by 2024;
- Inject $5.7 trillion into the economy; and
- Raise per-capita income by $2,400.
What Proposals Are Included in the American Jobs Plan?
While the legislation has yet to be written, the Biden administration plans to include a collection of proposals that could, directly and indirectly, impact small- and mid-sized employers across the country. With that said, law firm Locke Lord LLP estimates that "[r]oughly $800 billion of the $2 trillion plan directly or indirectly increases investment in renewable energy, electric grid improvement, and climate change mitigation ...."
Some of the most notable propositions include:
- Infrastructure Upgrades and Updates: The Biden admin wants to modernize 20,000 miles of highways and other roadways. It also aims to fix the 10 “most economically significant” bridges that need to be reconstructed and repair 10,000 smaller bridges, as well as replace buses and railcars, repair and renew stations and airports, and expand other forms of transportation into communities.
- High-Speed Broadband Access: The White House wants to bring affordable high-speed broadband to every American, which includes rural communities that currently lack access to reliable and fast internet.
- Renewed Electric Grid: The American Jobs Plan also promises to employ hundreds of thousands of people to lay transmission lines, cap orphan oil and gas wells, and renew the electric grid. The proposal plans to lower energy bills for middle-class Americans and improve air quality while shifting to 100% carbon-free electricity by 2035.
- Modernized Homes and Commercial Buildings: Another jobs-builder, the Biden admin wants to build, preserve, and retrofit approximately 2 million homes and commercial buildings to make them more energy-efficient, accessible, and affordable. This also includes plans to modernize school and childcare facilities.
- Increased Wages and Benefits for Home Care Workers: The American Jobs Plan wants to invest in care workers by creating “new and better jobs for caregiving workers.”
- Revitalized the U.S. Manufacturing Base: In addition, the American Jobs Plan aims to secure the American supply chain, invest in research and development, and train workers for “the jobs of the future.”
- Enhanced Support for Labor Unions and Collective Bargaining: Biden has already voiced plenty of support for unions by backing the Protecting the Right to Organize Act (PRO Act), which passed the U.S. House of Representatives in March 2021. The American Jobs Plan would likely either reinforce the PRO Act (if signed into law) or shore up protections for workers who want to join a union.
What Else Should Employers Know About the American Jobs Plan?
The White House also announced another major policy proposal that could impact employers. Known as the Made in America Tax Plan, the proposal promises to “make sure corporations pay their fair share in taxes and encourage job creation at home.” This includes setting the corporate tax rate at 28%—a 7% increase.
The American Jobs Plan fact sheet points out that 91 Fortune 500 companies didn’t pay federal taxes in 2018 and that the Made in American Tax Plan aims to reward corporations that invest in the United States. Both of these announcements arrive on the heels of the passage of the American Rescue Plan Act of 2021 (ARPA), which was signed into law on March 11, 2021.
The takeaway? The Biden admin is moving quickly to reshape the American economy, and employers need to keep up.
Ultimately, it’s far too early in the legislative process for HR teams and organizations to act on any of the proposed policies included in the American Jobs Plan. With that said, employers should stay on top of the latest updates as the proposal is refined. If passed, adjustments to infrastructure, jobs programs, labor support, and more could impact how organizations do business.
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