On Monday, November 15, 2021, President Joe Biden signed a $1.2 trillion Bipartisan Infrastructure Bill into law. As the first of many initiatives on the Biden administration’s plan, this deal has taken months to receive the stamp of approval from bipartisan legislatures, undergoing many revisions in the process.
The original bill proposed by President Biden included funding for both human and transit infrastructure investments. Jim Tankersley, White House correspondent for The New York Times, notes that ultimately compromises we compromised to win over a larger group of Senate Republicans. As a result, the ambitions of investing in human infrastructure withdrew from this bill. While the new legislation does not include allocations for social spending as President Biden originally intended, administration executives, external economists, and business organizations widely agree that this law is a fundamental step toward enhancing U.S. infrastructure.
The signed bill will deliver $550 billion in new investments over the next decade into American infrastructure. The prioritized projects include repairing and building federal-aid highways, roads, bridges, railways, airports, ports, and waterways. Investments in the power grid, broadband access, climate resiliency, environmental remedies, and electric vehicles are also highly anticipated projects. To fully consider the effects of these investments, many state and regional agencies have begun to perform resilience and vulnerability assessments to identify areas for improvement and guide the effective use of federal resources.
Likewise, REMI will be discussing the effects of this new legislation during “Economic Impacts of the Bipartisan Infrastructure Bill.” This webinar discussion will consider the critical impacts of the funding outlined in this framework using the REMI economic model. To participate and learn more about this presentation, please click here.
The entire H.R. 3684 bill, titled “Infrastructure Investment and Jobs Act,” can be read here.
Click here to read more from Jim Tankersley at the New York Times about Biden’s other provisions in his next bill.
America has been surviving within an inflation bubble for the past year and has left people wondering if it will ever burst. Every significant barometer of inflation has soared in 2021, particularly the consumer price index. As measured by the CPI, the cost of living has jumped 5.4% in the past year to mark the most considerable increase in 13 years, as noted by Jeffry Bartash, an author at MarketWatch. Many economists credit the high inflation rate in 2021 as a byproduct of temporary disruptions caused by COVID-19 and will return to pre-pandemic rates. However, other economists have concluded the higher rates are here to stay. The question of will inflation decrease, and if it does, what will the economic impacts be, has gripped the fiscal analysis community.
Mr. Jeffrey Bartash, a reporter for MarketWatch in Washington, D.C., notes that the U.S. Federal Reserve claims that the burst of inflation is only temporary. Their reasoning faults the reopening of the economy for the widespread shortages of supplies and labor, leading to mismatched supply and demand. The subsequent increase in prices or wages contributed to the current inflation. The Fed predicts that inflation will return to the pre-pandemic average of 2% a year or less once the workforce is rebuilt and labor shortages subside.
As illustrated in the mapping of inflation changes below, the inflation rate has risen drastically throughout the year. The highlights include grocery food inflation rates increasing by 22% in a single year, car insurance increased by 57%, and car rentals have increased by 110% compared to a year ago.
Pictured: Inflation percentage change by year in America from “The Economist.”
According to Columbia Threadneedle Investments, a global firm dedicated to informing fiscal decisions, low and predictable inflation levels similar to what we’ve experienced over the past 20 years generally positively influence supply and demand, employment, and economic growth. Although inflation has appeared to be devastating, it could be viewed as an overall positive outlook on the country’s progression. Since the 2008 financial crisis, central banks have struggled to meet their inflation targets to generate enough demand. Adrian Hilton, Columbia Threadneedle Investments’ Head of Global Rates and Emerging Market Debt, suggest that with the labor markets as strong as they have been for the past 20 years, you can’t create inflation. Adrian argues that if there is no inflation, there may never be a point where interest rates rise. Continuing, if rates do not rise, there will be a dilemma when the next downturn occurs because little to no opportunity will exist to cut rates and stimulate the demand needed to energize a recovery. With inflation on the rise, Columbia Threadneedle Investments predicts rates will increase, such as the mortgage increased in mid-2020 until the current day in 2021. The firm also believes that this will increase the probability of central banks reaching their inflation goals and retain their ability to raise rates.
Earlier this year, REMI hosted “The Broader Implications of the Global Minimum Tax,” a webinar discussion that considered the effects of tax policy changes on inflation in various industry sectors. More information about this presentation, including presentation slides and recording, can be accessed by clicking here.
To read more from Mr. Bartash at the MarketWatch on the inflation bubble, click here. To read more from Columbia Threadneedle Investments and their inflation analyses, please click here.
Last week, REMI had the pleasure of hosting the 2021 Annual Users’ Conference, “Progress and Prosperity: Guiding Policy through Uncharted Waters” in St. Pete Beach, Florida! During the conference, speakers shared their insights on various vital subjects, from energy and resiliency to infrastructure and regional economic development. For your information, you can find all of the presentations by clicking here.
We appreciate our clients’ interest in our event and look forward to seeing you next year in the conference location selected by the 2021 conference attendees, Memphis, Tennessee! We are already planning for what we anticipate will be another exciting event! Stay tuned for details about next year’s conference.
Client Spotlight: Luis Nieves-Ruiz, East Central Florida Regional Planning Council
Luis Nieves-Ruiz serves as Economic Development Manager for the East Central Florida Regional Planning Council, a council of governments located in Orlando, Florida. Luis’s areas of expertise include economic impact analysis, health, and regional food systems planning, and industry cluster analysis.
His professional and volunteer work has been recognized by Big Brothers Big Sisters of Central Florida, the Wallace Center at Winrock International, NADO, ULI, Toastmasters International, Next City, and Leadership Florida. Mr. Nieves-Ruiz holds a Master’s Degree in Regional Planning from Cornell University and is a member of the American Institute of Certified Planners.
At REMI’s 36th Annual Users’ Conference, Luis presented “Assessing the Economic Value of Recreational Assets”. The presentation uses REMI PI+ to estimate the value of recreation assets and leisure activities. The discussion concludes with an overview of best practices when developing simulation variables and assumptions. You can learn more about Luis’ presentation by clicking here.
Pictured: REMI PI+ model esimations of employment contributions of the Wekiva River System by industry
REMI SEI: Analyzing Policy and Socioeconomic Indicators (SEI)
REMI SEI is the premium modeling solution for evaluating the socioeconomic indicators (SEI) of projects, programs, and policy changes. Decision-makers employ REMI SEI to understand the relationship between public policies in their industry and the varying economic effects across demographic groups.
REMI SEI provides insight into the relationship between
public policy and the varying economic effects across populations including:
– Jobs by Race/Gender
– Regional Disparities by County
– Labor Force by Race/Gender
– Jobs by Education Level
– Income by Quintile
– Inflation Impact by Income
This premium component can be added to any REMI model to fortify your SEI analysis on your local, state, regional, or national economy. Please click here to learn more about REMI SEI capabilities and the benefits of using REMI’s economic modeling software.
The industries of economic development that rely on dynamic socioeconomic analysis to influence their policies and practices include:
– Housing and Community Development
– Taxation
– Energy and Environment
– Immigration
– Healthcare and Social Services
– Transportation
– Labor and Workforce Development
– Consulting Firms
Understanding the Reality of the Net-Zero Emmissions Objective
Nationwide efforts to thwart negative climate impacts motivate the reduction of global greenhouse gas (GHG) emissions by 50% by 2030 and reach net-zero around mid-century. Given the urgency of the matter, a wide variety of countries have agreed to limit warming below 3.6 degrees Fahrenheit. The London School of Economics and Political Science (LSE) describes net-zero as reducing the GHG emissions that cause global warming to zero by balancing the amount released into the atmosphere from sources with the amount removed and stored by carbon sinks. This reduced emissions outcome may also be described as carbon neutrality and sometimes climate neutrality.
World Resources Institute claims the first call to action should be to reduce human-caused emissions (such as those from fossil-fueled vehicles and factories) as close to zero as possible. For example, switching from fossil fuels to renewables, including wind and solar power, to generate electricity is significantly reducing carbon dioxide emissions in many countries. Once human-caused emissions are reduced, carbon removal, which can happen by restoring forests or using direct air capture and storage technology, will diminish all remaining GHG emissions.
Countries and corporations around the globe are promoting their climate credentials by pledging to achieve net-zero emissions or become carbon neutral in the next few decades. Unfortunately, most of these pledges seldom live up to their promises due to complications of the unknowing repercussion of the current technology. Research from the Taskforce on Scaling Voluntary Carbon Markets shows less than 5% of offsets remove carbon dioxide from the atmosphere.
Lancaster University’s Duncan McLaren, Ph.D. analyzes the current concerns of net-zero promises. Professor McLaren suggests combining emissions reductions and harmful emissions into a single target of reaching “net-zero” may create problems. These problems could include delayed emissions cuts but also insufficient focus on developing negative emissions technologies. However, most negative emissions technologies are still only prospective technologies and do not exist as large-scale sociotechnical systems ready for deployment. While strategies for reducing emissions are researched, achieving such ambitious strides to become net-zero emission may prove difficult to accomplish. There are industry professionals, such as Professor McLaren, investigating the precise details of cutting emissions.
During the 2021 Annual REMI User’ Conference, Stanley McMillen, Ph.D., Visiting Assistant Professor of Economics and Consultant at the University of Connecticut, discussed the economic and fiscal impacts of Connecticut’s greenhouse gas reduction strategies.
You can access his full presentation here.
Staff Spotlight: Guyesha Blackshear, Analyst – Business Development
Guyesha Blackshear is a Business Development Analyst at Regional Economic Models, Inc. (REMI). She ensures REMI users are able to effectively incorporate the REMI model into their organizations and support their economic modeling needs. Prior to coming to REMI, Ms. Blackshear worked as a research assistant for a law firm and lobbying group. Guyesha also served as an Implementation Consultant for a technology consulting firm where she performed data analysis and UX research.
Since joining the REMI team, Guyesha has spoken at multiple conferences on behalf of REMI, meets with current and prospective clients across the country, and works regularly with senior staff to improve our economic modeling practices and methodology.
Guyesha earned her Master’s in Economics at Georgia State University and her Bachelor’s in Economics from Spellman College.
What’s Next at REMI?
Guiding Policy through Economic Modeling: Socioeconomic Indicators (SEI) and Regional Development
On Tuesday, November 2nd, from 2:00 to 3:00 p.m. (ET), we will be hosting “Guiding Policy through Economic Modeling: Socioeconomic Indicators (SEI) and Regional Development.” This discussion will provide an overview of “Using Socioeconomic Indicators (SEI) in Regional Economic Modeling,” a study that presents the methodology and sample applications for standardized socioeconomic indicators (SEI) that provide metrics for understanding the distributional impacts of public policies. Register Here!
D.C. Luncheon
REMI will be hosting our monthly luncheon on Thursday, November 16, 2021, from 11am to 1pm (ET) at Metro Center, 700 12th Street, NW, Suite 700, Washington D.C. 20005. We look forward to offering this event free of charge; however, we do ask that you register in advance. Register Here!
REMI Special Session: Diversity, Equity, and Inclusion in Regional Economic Development
REMI will be hosting a special session and sponsoring the 68th North American Meeting of the Regional Science Association hosted by NARSC, an international Regional Science organization that promotes the exchange of knowledge, theory, and analysis of regions across the globe. Our session focuses on the socioeconomic implications of regional structures, policies, and futures. Learn More!
Nationwide efforts to thwart negative climate impacts motivate the reduction of global greenhouse gas (GHG) emissions by 50% by 2030 and reach net-zero around mid-century. Given the urgency of the matter, a wide variety of countries have agreed to limit warming below 3.6 degrees Fahrenheit. The London School of Economics and Political Science (LSE) describes net-zero as reducing the GHG emissions that cause global warming to zero by balancing the amount released into the atmosphere from sources with the amount removed and stored by carbon sinks. This reduced emissions outcome may also be described as carbon neutrality and sometimes climate neutrality.
World Resources Institute claims the first call to action should be to reduce human-caused emissions (such as those from fossil-fueled vehicles and factories) as close to zero as possible. For example, switching from fossil fuels to renewables, including wind and solar power, to generate electricity is significantly reducing carbon dioxide emissions in many countries. Once human-caused emissions are reduced, carbon removal, which can happen by restoring forests or using direct air capture and storage technology, will diminish all remaining GHG emissions.
Countries and corporations around the globe are promoting their climate credentials by pledging to achieve net-zero emissions or become carbon neutral in the next few decades. Unfortunately, most of these pledges seldom live up to their promises due to complications of the unknowing repercussion of the current technology. Research from the Taskforce on Scaling Voluntary Carbon Markets shows less than 5% of offsets remove carbon dioxide from the atmosphere. Lancaster University’s Duncan McLaren analyzes the current concerns of net-zero promises. Professor McLaren suggests combining emissions reductions and harmful emissions into a single target of reaching “net-zero” may create problems. These problems could include delayed emissions cuts but also insufficient focus on developing negative emissions technologies. However, most negative emissions technologies are still only prospective technologies and do not exist as large-scale sociotechnical systems ready for deployment.
While strategies for reducing emissions are researched, achieving such ambitious strides to become net-zero emission may prove difficult to accomplish. There are industry professionals, such as Professor McLaren, investigating the precise details of cutting emissions.
During the 2021 Annual REMI User’ Conference, Stanley McMillen, Ph.D., Visiting Assistant Professor of Economics and Consultant at the University of Connecticut, discussed the economic and fiscal impacts of Connecticut’s greenhouse gas reduction strategies. You can view Dr. McMillen’s full presentation by clicking here.
To learn more about the effects of GHG and learn how to reach net-zero carbon, click hereto read The London School of Economics and Political Science. You can also gain more insights from the World Resources Institute by clicking here.
Click here to read more about the possible negative outcome of attempting net-zero emissions from Taskforce and Kristina Partsinevelos from CNBC.
To learn more from Professor Duncan McLaren, click here on the problem with net-zero emissions targets.
Many states, including Hawaii, Florida, Nevada, and many others, have highlighted tourism as a prominent economic driver. With tourism as the fundamental contributor to these regional economies, many state economies have struggled to prosper with tourism revenue being less consistent due to the COVID-19 pandemic. The global health and safety concerns led to substantial job losses in the tourism-related sectors, leaving businesses to shut down or operate at a lower capacity. In addition, travel restrictions and nationwide shutdowns greatly impacted the lifestyles and livelihoods of communities in these states and under similar conditions.
All tourism-driven economies were affected by the pandemic differently, and there was crucial impact variation across multiple regions. For instance, Hawaii was challenged and continues to suffer from the impacts of inadequate international travel. Tourism from Asia has declined drastically because of travel restrictions. This issue has impacted Hawaii’s economic recovery post-pandemic, as their tourism and revenue estimations are significantly lower compared to pre-COVID rates. Hawaii also experienced labor force changes in the form of job loss early in the pandemic, and this obstacle has remained. In fact, tourism-related businesses currently have labor shortages equivalent to rates during the pandemic. There are essential factors for labor shortages in Hawaii, such as increased automation to withhold short-staffed companies. Child care shortages also present obstacles for people rejoining the labor force, and the high costs of living in the state also make it burdensome for lower-wage workers to recover from the pandemic. These cascading impacts have created severe economic implications for the state.
REMI has recently hosted a webinar discussion, “The Economic and Fiscal Effects of Reimagining Tourism,” that evaluates the necessary criteria for reinstating tourism as a regular economic activity in the U.S. compared against our current trajectory. To view the slides and recording of this presentation, click here.
For more about how Hawaii is recovering from COVID, click here. You can also become informed on the continued job loss in the state by clicking here.
