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Affordable High-Speed Internet is Spurring Economic Growth and Boosting Small Businesses

Fri, 05/31/2024 - 14:00

Heather Boushey, Chief Economist, Investing in America Cabinet

Access to affordable, reliable, high-speed internet is a cornerstone of the American economy and essential for economic growth. This is also a bipartisan view—Congress has found that “[a]ccess to affordable, reliable, high-speed broadband is essential to full participation in modern life in the United States.” However, nearly a quarter of American households continue to lack access to high-speed internet at home due to high costs, and in certain communities, a lack of necessary infrastructure. In particular, communities of color, Native communities, rural communities, and low-income households are disproportionately disconnected. That’s why, as part of his Internet for All initiative, President Biden committed to connecting every household in America by 2030, deploying over $80 billion in federal funding to expand access to affordable, reliable, high-speed internet across the country.

Core to the success of the President’s plan is the Affordable Connectivity Program (ACP), which provides qualifying households with up to $30 per month (or $75 per month for households on qualifying Tribal Lands) off their internet bill. The ACP is the largest and most successful internet affordability program in our nation’s history, with over 23 million households enrolled—one in every six households. Because the Administration worked with internet providers to offer high-speed internet plans that are fully covered by the Affordable Connectivity Program, most of these 23 million households have received high-speed internet for free.

Without further funding from Congress, the Affordable Connectivity Program will expire today. This expiration would increase the price of internet for the more than 23 million households enrolled in the program with significant economic implications. That 23 million includes nearly 11.5 million military families, 4 million seniors, 5.75 million African American households, 5.75 million Latino households, and 320,000 households on Tribal lands. Many families would lose internet all together—a recent FCC survey found that more than three-quarters of respondents would have their service disrupted by losing their ACP benefit. Depriving these families of this funding would leave them without money to spend on other necessities like groceries, education, or healthcare. In some states like Kentucky, Ohio, and Nevada, one in four households are enrolled.

That’s why, since last October, President Biden has called on Congress to extend this benefit through 2024. Democratic Members and Senators have joined him in this effort. But Republican leaders in Congress have failed to act. President Biden is once again calling on Republicans in Congress to join their Democratic colleagues in support of extending funding for the Affordable Connectivity Program, so tens of millions of Americans can continue to access this essential benefit.

This blog describes the economic benefits of access to affordable high-speed internet and the consequences of letting the ACP expire, with a particular focus on the role of internet access in supporting small business creation and economic growth.

The significance of access to high-speed internet in the U.S. economy

The COVID-19 pandemic brought into sharp focus the importance of affordable, reliable, high-speed internet for American businesses and families in the 21st century economy. Even pre-pandemic, an extensive literature pointed to the significance of access to affordable, reliable, high-speed internet for an array of economic outcomes, including small business formation and economic growth. Small businesses, in particular, are a crucial part of local economies and communities—they are responsible for more than 40% of America’s economic output and two-thirds of net new jobs.

Access to internet is now a must-have for creating and running businesses in the U.S. economy. Businesses engage with customers, suppliers, and services (such as banking and accounting) online; online sales account for 15.9 percent of total retail sales, nearly nine percent more than a year ago; and most job seekers now look for jobs online. Several recent papers have found causal links between expansions of broadband (high-speed internet) access and the creation of new businesses, as well as the growth of existing businesses, in urban and near-urban areas. The literature indicates that rural broadband expansion also likely affects business growth and formation, particularly in knowledge-intensive industries.

These results may stem from increased access to new ideas, supply chains, and customers. Additionally, some researchers have described the effects of the internet as allowing businesses in smaller cities or more rural areas to “borrow size”—to take advantage of the benefits of larger cities without the costs associated with physically locating in those cities.

The economic benefits of access to high-speed internet extend beyond small business formation to health and education. Researchers have found that virtual visits with trained medical professionals can improve patient outcomes at a lower cost and lower risk of infection than traditional care provided in-person. Unfortunately, a survey of community-based health centers found that, among those not using telehealth, lack of access to broadband was a barrier to adoption, especially for those living in rural areas. In education, survey data show that students in rural school districts with high-speed internet at home had higher grades and standardized test scores than their peers without access, with ensuing economic effects.

These effects and others mean that affordable high-speed internet supports a stronger and more resilient economy. One study comparing countries that belonged to the Organization for Economic Cooperation and Development between 1996 and 2007 found that a 10-percentage-point increase in broadband penetration was associated with a 0.9 to 1.5 percentage point increase in per capita economic growth. Another study focused on the United States estimated that counties gaining broadband access in the early 2000s experienced a 1.8 percentage point  increase in employment rates. More generally, a number of studies support benefits of broadband internet for employment, labor productivity, and economic resilience.

Expanding access to reliable, high-speed internet

Despite the importance of affordable, reliable, high-speed internet for economic equity and growth, in 2022, only 75.9 percent of U.S households had wired high-speed internet service at home according to the American Community Survey with adoption varying by income, race, and the density of their community (Figure 1).

This variation means that expanded access to and adoption of broadband is important for reducing economic disparities. Additionally, it points to two separate challenges for broadband adoption. First, some households—particularly those in rural communities—do not have access to broadband internet because it is not offered in their community. According to the latest data by the Federal Communications Commission, 7.2 million physical locations—either homes or small businesses—are unable to access broadband internet due to a lack of the necessary infrastructure. A second challenge is that some households are unable to afford it; in the beginning of 2021, 15 percent of home broadband users reported having trouble paying for high-speed internet service, including 34 percent of users in households with less than $30,000 in income.

Through its Investing in America agenda, the Biden-Harris administration is making targeted investments in addressing both of those challenges and thereby gaining the benefits of widespread high-speed internet adoption for business formation, employment, health, education, and economic growth. The Broadband Equity Access and Deployment program, created by the Bipartisan Infrastructure Law, invests over $40 billion in building out high-speed internet infrastructure in every U.S. state and territory. In addition, $2.75 billion is included for the Digital Equity Act, which provides grants for communities to take advantage of high-speed internet connections. At the same time, the Affordable Connectivity Program reduces the price of internet for eligible households.

Over time, these investments will connect every American with affordable, reliable, high-speed internet. But connectivity is not enough, it’s essential that Americans can afford the service. The Biden Harris-Administration is asking Congress to extend funding the Affordable Connectivity Program, so that millions of households do not lose the connections that enable them to run their own business, access telehealth, and participate in remote and virtual education.

Conclusion

Without action from Republican leaders, funding for the ACP will soon lapse. This means that families will see their internet bills increase by $30 or more, and communities across the country will lose out on the economic benefits of connectivity. When accounting for lost economic opportunities, education, and telehealth services, one study found that vulnerable communities are projected to lose over $20 billion annually in economic benefits. Furthermore, the first two years of the Biden-Harris Administration were the two highest years of applications to start businesses on record—the third year is on track to surpass both. The loss of ACP subsidies could threaten to slow this pace because many of these businesses rely on access to high-speed internet to succeed.

The economic benefits of programs that expand access to high-speed internet, like the Affordable Connectivity Program, are well-established. Continued funding for the Affordable Connectivity Program would not only benefit the 23 million households that are able to afford high-speed internet through the program, but also all Americans who benefit from thriving small businesses and strong, stable, equitable economic growth.

The post Affordable High-Speed Internet is Spurring Economic Growth and Boosting Small Businesses appeared first on The White House.

Following Up on the Four Priorities of President Biden’s Workforce Strategy

Thu, 04/25/2024 - 05:00
Introduction

The President’s Investing in America agenda delivers historic public investments to American communities through legislation like the American Rescue Plan, Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act. These investments are crowding-in private investment into critical industries—to date, private companies have announced $825 billion in investments in growing industries like semiconductors, clean energy, and electric vehicles—and creating hundreds of thousands of jobs.

Creation of high-quality jobs for American workers is central to the President’s economic growth agenda. Already, since President Biden took office, the economy has added 15 million jobs while the unemployment rate fell to its lowest level in half of a century, remaining below 4 percent for a record 26 months. But as the President’s agenda brings clean energy and manufacturing back to America after decades of offshoring, the Biden-Harris Administration recognizes that this transition won’t be fully achieved if we don’t build the workforce we need. Expanded commitments to workforce development are necessary to successfully create durable, lasting industries through the Investing in America agenda.

As described in the Administration’s Roadmap to Support Good Jobs, the Biden-Harris Administration’s workforce strategy has four central priorities. First, it is designed to connect people to good jobs, including through evidence-backed training solutions like registered apprenticeships and other high-quality “earn and learn” pathways, and supportive services like child care that expand opportunity for American workers. Second, it is focused on ensuring that we have a skilled, diverse workforce for our transformational investments, with targeted workforce programs that align with growing sectors like clean energy and manufacturing that President Biden’s agenda has focused on. Third it ensures every community can meet its foundational labor needs, with policies designed to support short- and long-term labor supply in critical sectors like health care and transportation that often struggle to recruit and retain talented workers. Fourth, it prioritizes the creation of good-paying jobs with benefits, safety, stability, and worker voice to ensure that American families and businesses thrive.

This blog provides additional detail on the economic context for the President’s workforce strategy along with, for each of these priorities, recent actions taken, and recent progress in enacting them. 

The economics of the President’s workforce strategy

President Biden took office in the midst of a global pandemic with staggering economic consequences. In January 2021, the unemployment rate was 6.4 percent and the labor force participation rate was 61.3 percent—two percentage points below the rate only a year earlier. However, the workforce problems did not begin with the 2020 pandemic. The United States had seen a multi-decade-long decline in the labor force participation rate for workers between the ages of 25 to 54, falling behind many of its peer countries. In manufacturing communities, the offshoring of domestic manufacturing in the 1990s and early 2000s led to the loss, by 2011, of one million U.S. manufacturing jobs and 2.4 million jobs overall.

President Biden came into office determined to address these challenges. His American Rescue Plan enabled the strongest recovery in decades. And moving forward, external estimates predict that over the next decade, the Administration’s Investing in America agenda will create more than a million jobs in industries like construction and manufacturing. In addition to making bold investments in 21st century infrastructure and industries, President Biden has an evidence-backed workforce strategy designed to ensure that all Americans have the opportunity to get a good, well-paid job in their community.

The Administration has made investments in evidence-backed training programs that ensure employers and counselors can play an active role in providing workers with the skills they actually need in industries with actual demand for labor. Research shows that demand-driven, sector-focused employment programs can not only increase employment in targeted sectors, but also have positive effects on earnings—especially for underserved workers entering these programs. These initiatives do not require students or workers to know on their own what skills the future job market requires. Instead, programs that produce the largest and most persistent earnings gains make strong connections to employers to determine in-demand jobs and skills. These programs also tend to provide larger investments per participant, upfront screening of participants on basic skills and motivation, and wraparound support services for participants.

Registered Apprenticeship programs have been shown to be particularly effective at increasing workers’ earning potential. A study of apprenticeships in 10 states finds that, over their lifetime, individuals who completed their training earned an average of $240,037 more than nonparticipants, with net social benefits of $49,000 over the course of the apprentice’s career. Apprenticeships also benefit employers; one study found that, on average, for every $1.00 invested, employers receive $1.44 in direct and indirect benefits in the years during and after training an apprentice.

The Biden-Harris Administration invests holistically in places across the United States, so that workers can get jobs in their communities. Job programs that are targeted towards regions that have been underinvested in can have particularly strong payoffs. One recent study found that the economic benefits of policies that add jobs in a given place (such as government-funded infrastructure projects) are at least 60 percent greater in “distressed” regions than in “booming” ones.

The President’s investments to empower and educate workers are already paying off. After Georgia received over $37 billion in private investments for clean energy technology, the city of Augusta has partnered with five major regional employers to develop their workforce and meet this increased demand through an Investing in America Workforce Hub. Terrence Tillman, a recent graduate of a newly expanded apprenticeship program, said “This is going to change my lifestyle. […] Knowing what the job entails and what its purpose is, I feel like I’m helping the country and the community.” Augusta is emblematic of how the Investing in America agenda can deliver good paying jobs and prepare the workforce for the future.

The President’s workforce strategy prioritizes job quality. An extensive economic literature lays out the benefits of improved job quality for workers, households, and businesses. By improving job quality, employers can more easily attract and retain workers—benefitting their bottom line. At the same time, improved job quality enables workers to bring home the pay and benefits that provide an opportunity to reach the middle class, which in turn supports economic growth.

Paying workers fair wages and providing benefits like paid leave can increase productivity, reduce turnover, and facilitate hiring and retention. Providing childcare lowers turnover while increasing the likelihood that parents can invest in training or additional education and work (especially full-time). Manufacturing firms that focus on job quality, like increasing pay and providing avenues for workers to have inputs into the firms’ practices, are better able to attract skilled workers, experience lower turnover, and generate higher productivity. Similarly, unions are already playing a central role in developing and training the workforce for the President’s investments in America.

Conclusion

President Biden has prioritized the creation of high-quality jobs for American workers in two ways—a strong and rapid labor market recovery and a comprehensive workforce strategy that prepares workers for the 21st century economy. As a result, while forecasters predicted that in 2023 the economy would fall into a recession, the US economy grew at a healthy 3.4 percent in the fourth quarter of 2023, added over 15 million jobs, saw the unemployment rate fall below 4 percent for a record 26 months, and hit a record low gap between the highest and lowest state unemployment rates. Further, employment growth remains solid in specific industries where growth has been catalyzed by the Investing in America agenda—since January 2021, the economy has added 848,000 jobs in construction, 768,000 jobs in manufacturing, and 27,500 jobs in clean energy employment.

The Biden-Harris Administration is committed to making the necessary investments to connect Americans to good jobs, prepare them for our transformation investments, ensure every community can meet its foundational labor needs, and boost job quality. Case in point: President Biden’s FY25 Budget proposes a new $8 billion Career Training Fund that would provide approximately 750,000 workers with training and wrap-around supports, as well as funds to expand public-private partnerships to offer high-quality training in growing industries. Investments like these lay the foundation for a thriving U.S. economy and strong, shared, and stable economic growth.

The post Following Up on the Four Priorities of President Biden’s Workforce Strategy appeared first on The White House.

How to Watch President Biden’s 2024 State of the Union Address

Wed, 02/28/2024 - 09:00

Tuesday, March 7th, 2024, 9 PM ET

Where can I watch the State of the Union livestream?

To watch the State of the Union speech live, visit WH.gov/sotu. Tune into the official social media streams of the White House for President Biden’s State of the Union address.

YouTube: President Biden’s Third State of the Union (Español)
X: @WhiteHouse or @POTUS
Facebook: White House on Facebook or President Biden’s Facebook

The White House feed will include ASL interpretation for accessibility.

When does the State of the Union start?

The President will address a Joint Session of Congress at the United States Capitol on Thursday, March 7, 2024 at 9 PM ET.

What was in President Biden’s first State of the Union address?

Visit WH.gov/sotu-2023 to view last year’s speech and full remarks. Or read excerpts from his address.

The post How to Watch President Biden’s 2024 State of the Union Address appeared first on The White House.

POTUS 46    Joe Biden

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