Center for American Progress

RELEASE: Investing in Workers Can Further Ease Inflation and Boost Economic Growth 
Press Release

RELEASE: Investing in Workers Can Further Ease Inflation and Boost Economic Growth 

Washington, D.C. — While the U.S. labor market has largely recovered from the recession that resulted from the COVID-19 pandemic, policymakers cannot afford to waste any time in taking action to build on this economic progress by investing in workers. A new CAP report offers recommendations for key groups who would likely seek more good jobs under the right circumstances. 

This report makes the case that investing in workers can further bring down inflation over the medium term, all while boosting economic growth. Increasing labor supply is a proven method to grow the economy by growing the middle class. The benefits of increasing labor supply would help ease supply-side bottlenecks, better prepare for an aging population, and, ultimately, expand the economy’s productive capacity. 

To best ease inflation and boost economic growth, this report examines the unique challenges six key groups face in getting good-paying jobs and what policymakers can do to make these jobs more attainable: 

  • Workers without a four year college: Implement skills-based hiring practices where appropriate, particularly in the state and local government workforce, to increase and diversify the employer recruitment pool beyond just those with four-year college degrees. 
  • Workers with caregiving responsibilities: Guarantee paid, job-protected family and medical leave and paid sick leave so that workers remain paid and attached to the labor market. 
  • Workers with disabilities: Provide greater enforcement of Title I of the Americans with Disabilities Act (ADA) and increase access to workplace accommodations. 
  • Workers with a criminal record: Enact employment policies that facilitate access to the labor market through automatic record clearance measures such as clean slate, fair chance hiring measures such as “ban the box,” and fair chance licensing laws that remove restrictions on professional licenses for people with unrelated prior convictions. 
  • Older workers: Provide better enforcement of the Age Discrimination in Employment Act (ADEA) and provide paid extended medical leave. 
  • Black and Latino workers: Enforce anti-discrimination laws in hiring and firing decisions, ensure access to affordable job training programs, and expand the use of apprenticeships. 

“It’s long past due for policymakers to tackle the challenge to open up high-quality work for millions of workers who have been sidelined for far too long,” said Rose Khattar, director of economic analysis at CAP and co-author of the report. “Taking action now by investing in our workers will reduce longer-term inflationary pressures and grow the economy by growing the middle class.”

Read the report: “Investing in Workers Can Further Ease Inflation and Boost Economic Growth” by Rose Khattar, Christian E. Weller, and David Correa 

For more information or to speak with an expert, please contact Sarah Nadeau at [email protected].

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