The Economic Legacy of the Biden Years, and the Path Forward

When President Biden took office three and a half years ago, old ways of thinking about the economy were already falling out of favor—among academics, organizers, and the American public. Market fundamentalism just wasn’t working. After the Great Recession and a subsequent decade of slow economic growth, and at the height of a devastating pandemic, trickle-down economics had zero credibility and fewer fans by the day. But even from our front-row seat in these developments, we at the Roosevelt Institute couldn’t have predicted how quickly the Biden administration would turn these intellectual and cultural shifts into historic legislation and policy change.

On the heels of President Biden’s withdrawal from the presidential race this past weekend, it’s a good time to reflect on how those wins have actualized a once-in-a-generation economic paradigm change—reclaiming the importance of governance, and marshaling the power and investments of government to shape markets in service of American workers and families. We know now what we didn’t know before: that markets aren’t an end in themselves, and that economic power tends to concentrate if left unchecked. This is why we need more muscular government power.

We have seen remarkable successes in the past three-plus years. And it’s imperative that we continue to chart a clear path forward.

A Record-Fast Recovery and a Worker-Centered Economy

Joe Biden’s presidency is one of the most worker-centered since the Roosevelt administration, as the American Rescue Plan (ARP) proved early on. 

In the first few months of the administration, policymakers heeded the lessons of the decade prior and chose a different course: a historically large recovery package that prioritized full employment and put money in people’s pockets. 

The results speak for themselves: In 2021 alone, nearly seven million jobs were created, four million of which were attributable to the passage of the ARP—making it one of the most effective pieces of economic recovery legislation in the last 50 years. 

In the years since, unemployment fell to its lowest level since 1969, and remained below 4 percent for a historic 30 months. The long-standing employment gap between Black and white workers has shrunk, and average real wages—that is, wages adjusted for inflation—are higher now than when the pandemic began and currently rising faster than inflation. Real US economic growth, meanwhile, nearly doubled, reaching 5.7 percent in 2024—one of the strongest years on record. 

The hot economy of recent years has provided an opportunity for more workers to reclaim power and collectively renegotiate the terms of their work. And it’s been bolstered both tangibly and symbolically by the most pro-labor administration we’ve seen in decades. A more assertive National Labor Relations Board has strengthened workers’ hand, and last year Biden became the first president to walk a picket line. Overall support for labor unions is at a level not seen since the 1960s.

A Government That Invests in Its People and Future

From combating the pandemic and climate crisis to bolstering domestic supply chains, the Biden administration has deployed long-neglected government tools to address some of today’s biggest challenges and opportunities. In the last three years, we have invested in green industries and physical infrastructure—through landmark legislation like the CHIPS and Science Act, Inflation Reduction Act, and Infrastructure Investment and Jobs Act—to bolster our shared security and take a major step in reaching our nation’s climate goals. 

Over the next decade, these massive investments will transform the communities hardest hit by trickle-down economics, and could mark a more enduring shift in the nation’s approach to climate and industrial policy. The IRA’s investments alone are expected to create more than 100,000 jobs, which the administration has pushed to ensure go to the people who need them most and maintain high standards of pay and safety. 

The historic public investments of these laws have also spurred a boom in private spending, with manufacturing construction spending tripling since 2021. 

What Comes Next

Beyond maximizing the potential of what’s been passed, we have the opportunity and obligation to think bigger in the coming years: to increase economic security for all Americans and make our economy and democracy both stronger and fairer.

Next year’s expiration of Tax Cuts and Jobs Act provisions offers the chance to rethink our tax code and ensure the wealthy and corporations pay their fair share. It would both make our economy more productive, and create more revenue to invest in what Americans want and need: from universal childcare and pre-K to free college and affordable housing. 

After decades of filibuster-blocked legislation for workers and families, and with a Supreme Court that has undermined women’s right to choose and government’s ability to govern, democratic reform must also be a top priority. President Biden’s recent proposals to create Court term limits and an ethics code are an essential start. 

Conclusion

The future is sensationally unpredictable, but one thing is certain: Powerful actors will continue to fight hard to keep the embers of trickle-down thinking alive. But the progressive policies enacted throughout the Biden administration have ensured that more people have better jobs and have shown what government is capable of. These achievements represent the work of countless progressive thinkers and advocates, pushing an administration that knew that market supremacy couldn’t deliver what it promised.

We have seen that with the right rules, our democracy can become more equal and more inclusive, less beholden to corporations and wealthy individuals, and more responsive to the public. Now, the hard work of fighting for a new, more democratic economy must continue.