By John Regan
Joe Biden, set to become the 46th president of the U.S., will take office at a singular moment in the history of a nation struggling to confront the convergence of a pandemic, an economic crisis, and social upheaval.
It’s also a singular moment for Massachusetts employers. The change of administrations in Washington will have enormous consequences for employers on everything from federal stimulus to the tenor of labor relations.
Record numbers of voters cast ballots either in person, by absentee ballot, or through the mail in an election conducted amid a second surge of COVID-19 cases around the country. It was an election marked by stark polarization on the issues, a backlash against globalization, the growing influence of technology, and cultural and social struggles.
The new administration and Congress will set the nation’s economic agenda for the next two to four years. Biden’s ability to implement his economic plans will ultimately be determined by two runoff elections in Georgia that will determine which party controls the U.S. Senate.
The issues for employers will range from taxes to business regulation. The most immediate concern for Massachusetts companies and for the Commonwealth itself is the prospect that a Biden administration could break the logjam over a new economic-recovery package as a follow-up to the CARES Act passed in March. Such a package could reopen the door to the popular Paycheck Protection Program for employers and provide financial support to the state as it seeks to close a project budget shortfall of $3 billion to $6 billion.
Biden’s ability to implement his economic plans will ultimately be determined by two runoff elections in Georgia that will determine which party controls the U.S. Senate.
It is also anticipated that the new administration will initiate a more aggressive federal approach to moderating the COVID-19 pandemic than that taken by the Trump administration. Federal regulations such as a mask mandate and broad health protocols will affect Massachusetts companies that do business in multiple states.
President-elect Biden has proposed raising taxes on corporations and imposing a corporate minimum book tax. He would also increase taxes on individuals with income above $400,000, including raising individual income, capital gains, and payroll taxes.
Most observers expect regulation of business to become more aggressive in areas such as occupational safety, union activity, and environmental compliance. The development of wind energy, including proposed projects just south of Martha’s Vineyard, is likely to accelerate after several years of slowdowns.
U.S. financial markets are likely to be affected. The stock market generally produces below-average returns during the first two years of a presidency and strong returns during in the second two years as investors gain confidence in the predictability and certainty of an administration.
The nation’s approach to international trade, which was marked by aggressive imposition of tariffs by the Trump administration, may also change under a Biden administration. While the president-elect has refrained from releasing any detailed policy proposals on trade, he has emphasized the importance of training the U.S. workforce for a competitive global environment, a renewed commitment to reducing trade barriers, and a coordinated approach to negotiations with China that utilizes U.S. allies and international institutions.
AIM members should be assured that the association remains committed to representing your best interests whatever direction the political winds might shift. v
John Regan is president and CEO of Associated Industries of Massachusetts.