It would not be good policy for the current recovery to be bound by this low speed limit. A rapid recovery requires that U.S. employers provide low-wage workers with the better bargains that, by quitting en masse, they obviously are demanding. It requires a rapid removal of the main supply-side barriers to labor participation: a lack of childcare and the virus itself. And it requires a high-pressure economy, so that it is obvious to workers on the sidelines that there are good opportunities out there.
President Joe Biden’s administration and the Democratic congressional majority must recognize that both workers and entrepreneurs need a great deal more support right now than American business as usual can provide. Europe provides a promising example. The U.S. needs more of them.
J. Bradford DeLong is Professor of Economics at the University of California, Berkeley and a research associate at the National Bureau of Economic Research.