Biden relief plan would decrease wages after boosting output, analysis finds

Published February 3, 2021 3:41pm ET



President Biden’s $1.9 trillion coronavirus recovery package is projected to boost GDP by 0.6% in 2021 but will contribute to a decline in output in the following years and a dip in hourly wages, according to a report from the University of Pennsylvania’s Penn Wharton Budget Model.

The PWBM said that Biden’s proposal suffers from both the amount of debt necessary to finance such a large proposal — the aid is projected to increase the government debt by more than 7% by 2022 — and the package’s timing.

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