By David Lawder

WASHINGTON, (Reuters) – President Joe Biden urged U.S. Mayors to increase their use of state and local COVID-19 funds for worker training and child care workers. This could help to reduce inequality and improve the supply of labor.

In remarks made to the United States Conference of Mayors, Biden stated that he would use resources from the American Rescue Plan to help “build for the better future around those who make our communities run.”

Biden stated, “Use your money to pay child care costs or to provide temporary paid leave for Omicron workers.” Union-based apprenticeships and on-the job training can help to create pathways that lead to higher-paying jobs. Give people of every ZIP code the opportunity to make their own decisions.

This call is coming as Biden’s administration shifts the way that it promotes their economic agenda. It casts the “Build Back Better” social and climate spending program as a way of increasing the economy’s productivity by increasing labor availability. Republicans have criticized it as adding to inflationary pressures.

Earlier on Friday, U.S. Treasury Secretary Janet Yellen branded the new approach https://www.reuters.com/business/yellen-rebrands-biden-economic-agenda-modern-supply-side-economics-2022-01-21 “modern supply side economics,” twisting around a phrase normally associated with the Reagan-era tax cuts and reduced regulation favored by Republicans.

The Biden administration is facing pressure to control inflation, which soared by 7% last year, the biggest annual increase in nearly 40 years https://www.reuters.com/world/us/us-consumer-prices-increase-strongly-december-2022-01-12 as demand for goods and housing outstripped supply, a phenomenon which economists attribute partly to a lack of qualified workers.

Biden claimed that spending legislation will increase labor supply through cutting child care expenses, which would allow for women to return into the workforce.

Biden declared that “this bill would reduce inflationary forces on the economy — it will not increase it or reduce it.”

The $350 billion State and Local Fiscal Relief Fund is available to cities in a wide range of ways. It was authorized by the American Rescue Plan COVID-19 aid legislation.

The Treasury Department published final rules earlier in the month for the program, which allow for greater flexibility when using funds for programs such as affordable housing or early childhood education.