In only a few more months, the debate will be over and the U.S. will have its next president. Currently, it’s a race between former President Donald Trump of the Republican party and Vice President Kamala Harris of the Democratic. Regardless of who wins, there could be some changes to the economy coming.
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Some people — economists and the public alike — are wondering what might happen if Harris wins and whether or not she’d be better for the economy than the current president, Joe Biden. GOBankingRates spoke with Dennis Shirshikov, an economics professor with a focus on macroeconomic policy at the City University of New York (CUNY) and head of growth at GoSummer, what he thinks.
These are one economist’s predictions as to why the economy could be better under Harris — and why it might not be.
Focus on Inclusivity
Harris and Biden have sported similar policies over the years, but Shirshikov believes that Harris’ focus on inclusive economic policies might ultimately prove more beneficial for the economy.
“Harris has long championed equity-based initiatives that could help improve workforce participation among underserved communities, which would increase overall productivity,” he said.
For example, Harris has prioritized affordable child care and paid family leave for those in the workforce. According to Shirshikov, this could help boost labor force participation as more caregivers — traditional and nontraditional — enter or reenter the workforce. As a byproduct, it could also drive economic growth.
Economic growth is essentially the increase in everyday services and goods in the economy. Many factors can contribute to it, not least of which are human capital and the existing labor force. With possible incentives for working families, the economy could benefit in this area.
That’s not to say that Biden didn’t strive for something similar. The Biden-Harris administration has long been an advocate of equity, racial justice and supporting underserved communities.
In a White House press release, Vice President Harris said:
“Since day one of our Administration, President Biden and I have been fully committed to ensuring that every person in America has equitable access to opportunity and the ability to thrive – whether that be supporting small businesses, forgiving $137 billion in student loan debt, investing billions of dollars in our Historically Black Colleges and Universities and Hispanic Serving Institutions, removing lead pipes, cutting prescription drug prices, and taking on the maternal health crisis with the urgency it demands.”
As president, it seems likely Harris would continue to strive to address the existing barriers and support these communities.
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Emphasis on Job Creation
Many economies thrive on innovation. Innovation can lead to higher productivity, which can result in greater production of goods and services and economic growth. Shirshikov pointed out that Harris’ advocacy for innovation in certain industries could be beneficial, too.
“Her presidency could lead to expanded investment in green energy and tech, sectors poised for long-term growth,” he said. “This could stimulate job creation in emerging industries and help the U.S. maintain a competitive edge globally.”
An estimated 206,000 new jobs were created in June 2024, according to a statement from Joe Biden. A record number of new jobs — 15.7 million — were created during President Biden’s administration. The national unemployment rate has also remained at or under 4% during his term.
Right now, it’s too soon to say whether Harris will accomplish something similar or even better as president. The rate of job growth is also likely to depend on the industry, so areas — like green energy — might see more opportunities than others.
Commitment to Small Businesses
Shirshikov also said that it’s likely that Harris’ continued commitment to helping small businesses and entrepreneurs thrive will give the economy a boost.
Under the Biden-Harris administration, efforts to support small businesses led to the creation of 19 million new business applications. Harris’ plan is to boost this number to 25 million during her first term through a variety of tax deductions, expanding contract opportunities (particularly in underserved or rural communities) and incentives that lessen regulations.
Considering small businesses are the backbone of the American economy, this could be a major boon. It could also lead to greater productivity and innovation.
Ways Harris May Not Be Better for the Economy
While a Harris presidency could prove beneficial for the economy, Shirshikov said that there could be some drawbacks.
“One potential drawback is that Harris might push for more aggressive tax reforms, particularly on wealthier individuals and corporations,” he said. “While this could increase revenue for government programs, it might also reduce incentives for private investment, especially in the stock market.”
Along with this, the next president — whether it’s Harris or not — has some major challenges ahead of them when it comes to key issues like inflation and housing prices. The federal budget deficit is also a very real concern. Harris has put forth certain tax proposals, which would impose higher taxes and help tackle the deficit, but this could negate the benefits of some of her proposed tax credits, like an expanded child tax credit and a $25,000 first-time homebuyer credit (also part of the Biden-Harris administration).
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This article originally appeared on GOBankingRates.com: I’m an Economist: 3 Reasons I Believe the Economy Can Be Better Under Harris Than It Was Under Biden
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