Once every generation or so, America’s social contract changes. After half a century in which capital has been in the driving seat, Joe Biden has a chance to tilt the advantage back to labour.
Such an opportunity would have been unthinkable a year ago. The US left can thank the pandemic for this change in the political weather. Biden has so far not let the global health emergency go to waste. The question is whether he can build on the recently passed fiscal stimulus to shift bargaining power towards the American worker.
The macro-conditions Biden faces are close to ideal. With the US set to reach herd immunity in the early summer thanks to its vaccination programme, growth will come roaring back as social distancing recedes. The coming boom will be fuelled by the release of pent-up consumer demand that has pushed America’s personal savings rate to a record high, now being lifted even higher by the latest federal stimulus. Growth is expected to top 6 per cent this year, according to the Federal Reserve, which will more than erase last year’s losses.