A dynamic economy
On the one hand, the economy is recovering, as evidenced by the creation of more than 6 million jobs in 2021, including 807,000 in December alone (ADP business service figures). This is more than double the employment forecasts. The year 2022 began with a new rise in recruitment: more than 467,000 new positions are available, while economists estimated around 155,000. Theoretically, this suggests ideal conditions for immigration to the US, considering the economic dynamism. Virtually all sectors are recruiting, with transport, logistics, leisure, hospitality, retail, health and business services facing a labour shortage. Innovative professions are always on the lookout for international talent. But the impact of inflation on the American dream cannot be neglected.
Rising inflation
The United States has not experienced such inflation (+7% in 2021) since 1982. While prices are soaring, wages are increasing, recruitment is massive, and unemployment is low. But CNN puts things into perspective and recalls that the current price increase cannot be compared with that observed in the 80s. Is that supposed to reassure expatriates and foreigners considering a move to the US? We haven't yet mentioned the loss of purchasing power as a direct consequence of inflation. Stock markets are increasingly concerned about the possible drop of the dollar, which would impact other economies around the world in the long term. Despite the labour shortage, the country was recently in the headlines for the "great resignation". More than 38 million people quit their jobs in 2021, and today, they have no trouble finding a new job. Faced with workers' strength, companies are resorting to increasing salaries to retain their workforce and attract new profiles. This rise is expected to boost the current demand and the economy. However, the Covid pandemic had a significant impact on the offer. The shortages concern energy, raw materials, components, containers to transport the goods, carriers, delivery trucks, to name but a few. These shortages led to delays, which also meant additional costs for companies.
Loss of purchasing power: Has the US lost its attractiveness?
Consumers, the last link in the chain, bear the consequences of multiple shortages. Despite the increase in wages, workers were compelled to save money during the lockdowns. Although government aid has helped in supporting their purchasing power, supply is not keeping up with demand. This situation, unfortunately, concerns expats and anyone looking to move to the US. Last November, the country reopened its borders. But what are the conditions for travelling to the US today?
Republicans criticise the Biden stimulus plans, in particular, the checks issued to the population. The first two were however signed by Trump, at the height of the crisis. Biden signed his during the economic recovery phase, which, according to his opponents, explains the current inflation rate. But the President maintains that "Inflation is all about the supply chain." This statement is supported by economists who point out energy shortages. Demand exploded with the Covid and lockdowns, but the producers could not follow as they were themselves impacted by the crisis. When production sites fully reopened, they struggled to keep up with demand due to continuous. So if the United States wants to remain attractive, it has to address all these issues first. The whole focus is now on the Federal Reserve of the United States (the Fed), but there's a fear that its next step will slow down the economic recovery. So things look quite tricky for the Biden administration overall.
Covid-19, the unwanted guest
Meanwhile, the situation hasn't improved in the US with the Covid variants. Since his election, Joe Biden signed around fifty decrees. Most of them concern the fight against the coronavirus and the cancellation of Trump's decisions on climate (return to the WHO and the Paris Agreement) and immigration (border wall with Mexico put on hold, end of discrimination to enter the US territory). Biden promised the end of the pandemic through vaccination. During a press conference on January 19, the President conceded that his mandate started with a lot of hurdles, including Covid. Still, he encouraged vaccination. Today, only 64% of the population is fully vaccinated, though. While the borders remain open, foreigners travelling to the United States must be fully vaccinated and present a negative PCR or antigen test obtained within 24 hours.
Successes and oppositions
In March 2021, Congress adopted the American Rescue Act, a broad support and economic recovery plan of 1,900 billion dollars (1,618 billion euros), including a rise in family allowances and unemployment benefits, support for SMEs, etc. The plan targets the entire population and can be considered Biden's first achievement. The next step was the Infrastructure Investment and Jobs Act. This plan is expected to modernise public and digital infrastructures while integrating environmental issues. It also provides for the creation of thousands of jobs, thus contributing to the country's economic dynamism. At the same time, the United States encourages companies to invest and innovate. The successes of the American groups Pfizer-BioNTech, Johnson&Johnson and Moderna are perfect examples. It is a sign that American-style multiculturalism is paying off. Like Stéphane Bancel, French CEO of Moderna, and Özlem Treci and Ugur Sahin, German co-founders of the BioNTech laboratory have now associated with the American Pfizer. The United States is thus opening its doors to international talent.
But the opposition did not miss the opportunity to criticise the stimulus policy. Republicans refused to sign the American Rescue Act. Some members voted for the infrastructure plan, ultimately less ambitious than expected: 1 billion dollars (nearly 874 million euros), instead of the 2.3 billion (2 billion euros) expected by Biden, and there were no major environmental measures. Biden acknowledged that he did not "anticipate such obstruction from the opposition". His Build Back Better plan was challenged by two Democratic senators: Kyrsten Sinema, Senator from Arizona, and Joe Manchin, Senator from West Virginia. Sinema and Manchin even refused to vote on a capital text on the right to vote. With inflation, Covid, and the lack of unity among Democrats, mid-term elections, which will be held next November, look challenging. Joe Biden must keep the majority if he wants to pass his reforms.
International tensions
Internationally, the President is respected for his wisdom and ordinary communication without sensationalism, which suggests more peaceful exchanges. But even for Biden, America comes first. Fortunately, the submarine conflicts with France didn't have a major impact, and these diplomatic negotiations do not affect expat life as such, compared to the situation in Afghanistan. While the Americans support the President's decision to withdraw American troops, they regret the chaos. The Afghans say they have been abandoned by the United States and the international community. 2021 is also the year of tensions with Russia due to Ukraine. The Biden administration is increasing warnings against Russia with the support of European allies. But on February 10, Joe Biden called on American expats to leave Ukraine immediately. So despite diplomatic negotiations, the risks of a war exist.
What should expats expect in 2022?
Build Back Better is Joe Biden's signature project. Hence the urgency for the Democrats to reunite. He estimated a budget of nearly $6 trillion for investment in 2022. The American Jobs Plan, a plan for employment of 2.3 billion dollars (2 billion euros), and the American Families Plan (plan for families) of 1.8 billion dollars (a little more of 1.5 billion euros) is expected to support the middle classes and the most precarious. “Our prosperity comes from people who get up every day, work hard, raise their families, pay their taxes, serve their Nation and volunteer in their communities", he said. Joe Biden also has plans to support the most fragile companies and increase control of large groups. Besides, the US President intends to bring back corporate tax to its initial rate 28% (it was previously lowered by Trump). So 2022 shall be the year of protecting the middle classes, fighting discrimination, supporting businesses, modernisation, fighting tax fraud, and for the Democrats, of great environmental changes.
Joe Biden now has to deal with inflation and Covid, among other challenges. The American President will hold the traditional general policy speech on March 1 before Congress. Through his reforms, he intends to reinvent and rebuild a new American economy that invests in the promise and potential of every American.
