Chester is a prime example of corporations benefiting from public investments in South Carolina at the expense of local communities
Between 2020 and 2024, South Carolina’s job growth meaningfully outpaced job growth nationally. Our recent report analyzes the state’s economic boom in recent years, fueled in part by federal investments in the Bipartisan Infrastructure Law and the Inflation Reduction Act. A key industry in the state is manufacturing, especially tires, auto, and auto parts manufacturing. South Carolina’s political leaders boast that the state leads the nation in the export of tires and completed passenger vehicles.
Even before federal investments spurred the state’s manufacturing growth, lawmakers were using generous economic development subsidies to lure manufacturing to South Carolina. While the state’s approach has created jobs, the quality of those jobs and the overall benefit to South Carolina communities—at substantial public cost—remains dubious.
Workers of color made historic gains over the last five years, but Trump’s anti-worker and anti-equity agenda threatens to reverse this progress
Workers of color make up more than 40% of the U.S. labor force, and that share is growing as more of the white non-Hispanic population reaches retirement age and recent immigration trends help sustain the growth of our labor force and economy. Over the last five years, workers of color—who identify as Black, Hispanic, Asian American and Pacific Islander (AAPI), and American Indian and Alaska Native (AIAN)—made significant gains in employment and earnings. This was a direct result of the Biden-Harris administration’s commitment to full employment during the post-pandemic recovery and the Federal Reserve’s successful navigation of a soft landing. But Trump’s anti-worker, anti-immigrant policy actions could soon erase this progress.
The broad-based nature of the labor market recovery is most evident when examining the employment-to-population (EPOP) ratio of prime-age workers between the ages of 25 and 54. Unlike the unemployment rate, the EPOP ratio is not influenced by changes in labor force participation since it captures the share of workers during a given period that have a job. The prime-age EPOP ratio is also less influenced by college attendance and the aging of the population when compared with the employment rate of all workers. As shown in Figure A, the employment rate of prime-age Black, Hispanic, AAPI, and AIAN workers hit record highs within the past few years. For example, the share of prime-age Black workers with a job reached a historic peak of 77.7% in 2023.
The blatant Trump attack on workers you may not have heard about: Cutting the wages of hundreds of thousands of workers
In a move that starkly exposes just how disingenuous the Trump administration’s pro-worker rhetoric really is, President Trump rescinded the Biden administration’s executive order that increased the minimum wage for workers on federal contracts. The Biden-era rule implementing that executive order raised the minimum wage for workers on federal contractors to $15 an hour in 2022 and indexed it to inflation going forward. As of January 1, it was $17.75 an hour.
Trump rescinded this order two weeks ago and I’ve been struck by the lack of attention it has received. This action is not just a bureaucratic adjustment—it is a direct assault on the livelihoods of hundreds of thousands of workers.
When the Biden-era rule was being developed, we estimated that it would give a raise to nearly 400,000 low-wage federal contractors. Who are these workers? They are janitors who clean government buildings, food service workers on military bases, cashiers in gift shops in national parks, and security guards protecting federal property—everyday people trying to make rent, buy groceries, and support their families. A minimum wage of $17.75 an hour translates into annual earnings of less than $37,000 for a full-time worker. The Trump administration is acting to ensure they get even less.
The Trump Department of Labor (DOL) will need to go through the rulemaking process to actually overturn the higher minimum wage for federal contractors—just rescinding the executive order doesn’t overturn the rule that was put in place to implement it. Until that happens, the minimum wage for federal contractors is still technically $17.75. However, Trump’s DOL has publicly announced they will no longer be enforcing the higher minimum wage. In other words, there won’t be any consequences for not complying, inviting employers to cheat their workers.
The stock market is not the economy, but this time they really are sinking together
Many of Donald Trump’s economic plans put forward during the presidential campaign seemed extremely unwise even to the corporate leaders who supported him and care about profits over everything else. Universal and large tariffs and mass deportations, for example, were clearly anti-growth policies that could hurt profit growth. Often, these corporate leaders and other campaign supporters pushed the narrative of a “stock market veto” that would keep the Trump administration from pursuing some of its most anti-growth policies. The thinking was that President Trump constantly invoked stock market increases during his first term as evidence of his good economic management, so any policy effort that could cause stock market declines would be quickly abandoned.
So far, the “stock market veto” has turned out to be nothing more than wishful thinking. In his second term, President Trump has continued to loudly proclaim his support for the anti-growth policies of broad and high tariffs and mass deportations. He has also added a new anti-growth twist of arbitrary and illegal firings of federal employees and cancellations of federal contracts. Finally, he has enthusiastically backed a U.S. House budget resolution that would slash disposable incomes for the bottom half of U.S. households. Besides being substantively unwise, these policy efforts have been undertaken with maximum chaos.
And the stock market has indeed rebelled. The S&P 500, for example, is down 8% in the last month.
This raises the question: Was there ever anything useful in the “stock market veto” view of the world? After all, there is no general correlation between stock market movements and what’s good for broadly shared growth, so it seemed odd to think a stock market veto would somehow come to the aid of the broader U.S. economy.
In what follows, we’ll present the good and the bad of stock market ups and downs and what they might mean for the trajectory of economic policy. In the end, it turns out that today the stock market and the economy are mirroring each other: Stock market weakness is reflecting broader economic weakness. In short, if there was ever going to be a “stock market veto” of broadly anti-growth policies, it is past time for it to kick in.
Equal Pay Day: Gender pay gap hits historic low in 2024—but remains too large
Today is Equal Pay Day, a reminder that there is still a significant pay gap between men and women in our country. The date represents how far into 2025 women would have to work on top of the hours they worked in 2024 simply to match what men were paid in 2024. On an hourly basis, women were paid 18.0% less on average than men in 2024, after controlling for race and ethnicity, education, age, marital status, and state.
In our 2024 blog, we documented the lack of progress in narrowing this gender wage gap for the majority of the past three decades. We show that despite a decline in the pay gap between 1979 and 1994—due as much to men’s slower growing wages as to notable increases in women’s wages—it has remained mostly flat up until 2022. Since then, our data library shows slight improvement toward closing the gender wage gap, from 20.0% in 2022 to 18.9% in 2023 and 18.0% in 2024, the lowest it has ever been. These gains are promising and likely driven by a strong labor market recovery from the COVID-19 recession that lifted wages more at the lower end of the overall wage distribution. If this strong recovery is threatened—as it has been by recent Trump administration actions—these gains could be short-lived.Read more
Deliberate policy decisions have disempowered workers and increased labor market inequality: The new State of Working America Data Library shows the latest trends in productivity, wages, labor markets, unionization, and CEO pay
Below is an excerpt from a piece originally published in The Briefing Book, a Substack publication. Read the full commentary here.
Rising inequality has been a major social and economic problem for the United States for decades. The policy agenda to stop or even reverse this inequality must start with a clear understanding of what drove it. In our view, inequality has come from the labor market, and more particularly from a range of intentional policy decisions that disempowered typical workers when they have sought wage increases from employers. In an effort to disseminate facts about labor market trends more broadly, the Economic Policy Institute has constructed the State of Working America Data Library, which allows users to easily browse and collate detailed data on wages, incomes, and employment. We hope this tool fosters a broadly shared understanding of the labor market changes we need to achieve a fairer society.
Despite recent reductions in inequality, decades of policy failures fueled public discontent and enabled billionaire public influence
In any single year since 1979 there has been a maddening gap between what the U.S. economy could be delivering for working families and what it actually delivered. The richest country in the history of the world has routinely failed to offer broad-based economic security and prosperity through a cascade of policy failures. This gap between the potential and the reality of what typical families eke out of the U.S. economy has shown up directly in skyrocketing incomes for the richest households.
There is a strong case to be made that the 2024 economy—despite just being a few years clear of two global economic catastrophes (the COVID-19 pandemic and the Russian invasion of Ukraine)—had re-attained its pre-crisis performance in record time and in a way that directed more benefits to the lowest-paid workers.
Yet the anxieties driven by the crisis, the unfamiliar burst of inflation, and a decades-long legacy of typical families rightly feeling they weren’t the main focus of policymakers made U.S. households extremely sour about the economy. A fairer distribution of economic rewards in the decades before the crises might have made the public more optimistic about the rocky economic road of 2020–2024 and less willing to take a chance on the extreme policy shift that will come as a result of their election of Donald Trump.
Read the full piece in The Briefing Book.
Trump administration is gutting the National Center for Education Statistics: Here are five things we only know about schools thanks to the NCES
Reports indicate that the Trump administration has laid off nearly all staff at the National Center for Education Statistics (NCES) as part of a massive number of staff cuts across the Department of Education. The NCES collects and analyzes crucially important datasets for researchers to use throughout the world. It’s likely that most Americans have never heard of the NCES, but all of us benefit from the work it does.
Here are five things we only know about our schools thanks to the NCES.
The right wing has always had an asymmetric power to destroy—DOGE makes it much worse
In parliamentary systems, winning an election gives one party control of both legislative and executive powers. This means there are big policy swings after elections when parties switch. In the United States presidential system, the separation of powers combined with legislative chokepoints—like the Senate filibuster—means that opportunities for very large policy swings are much less common.
Even during times when the President is the same party as the majority of both the House and the Senate (a governing trifecta), the weirdness of Senate procedure (specifically the reconciliation budget process that allows one big budget bill per Congress to escape the filibuster) generally means that parties get one chance to affect a major policy change each congressional session.Read more
No tax on overtime is another gimmick that would do more harm than good
With Congressional Republicans having passed a budget resolution, one of the tax provisions certain to be discussed in federal budget deliberations will be President Trump’s expressed priority to exempt overtime pay from taxation. The idea has gained steam across the country, with lawmakers in 19 states already introducing bills in 2025 to exempt overtime pay from state taxes.
Like the misguided “no tax on tips” bills that have also been moving in some states, these “no tax on overtime” measures are a gimmick. Though pitched as support for regular working people, the primary beneficiaries of these proposals would be employers and high earners who game the system. Exempting overtime from taxation would do more harm than good, and there are far better ways to support workers putting in long hours.
In summary, exempting overtime from taxation would:
- Encourage excessive hours of work while exacerbating inequities between workers able to work long hours and those who cannot.
- Put downward pressure on base wages.
- Open up a tax loophole easily gamed by high earners that would drain public budgets while further complicating the tax system.
The macroeconomics of the Trump administration: Chaotic and harmful policies will make the United States poorer—either rapidly or gradually
The Trump administration inherited the strongest economy of any president since George W. Bush—and unlike that economy, there was no obvious macroeconomic imbalance set to pull down growth. In short, the stage was set for the incoming administration to ride the desirable trends of rapid growth in jobs and real wages—as well as declining inflation—for an entire term of economic strength.
Instead, the administration seems determined to squander and wreck the strong economy. Each of the individual policies they are pursuing—illegal layoffs of federal workers, mass deportations, constant threats and retractions of broad-based tariffs, and Medicaid spending cuts—would be bad for the economy. But each policy is also being pursued with maximum levels of chaos and incoordination, creating unprecedented levels of economic uncertainty. This uncertainty is itself a serious economic threat.
Below, we sketch out the macroeconomic dangers posed by each of the administration’s big policy initiatives so far, and end with an assessment of where this leaves the U.S. economy. The best outcome that could result from continuing these policies would be avoiding a recession but still sharply reducing growth and creating an U.S. economy that is significantly poorer than it would have otherwise been. The most likely outcome, however, is a recession in the coming year.