Trump Will Lower American Workers’ Standard of Living
For workers, Donald Trump’s second term promises to make America worse. With deportation threats, union busting, and disastrous tariffs, his economic agenda will ensure that working-class Americans pay for his political theatrics.
US president-elect Donald Trump attends the America First Policy Institute Gala held at Mar-a-Lago on November 14, 2024, in Palm Beach, Florida. (Joe Raedle / Getty Images)
Donald Trump was elected for a second term as president by millions of working-class voters who believe the economy no longer works for them. These voters were largely motivated by standard-of-living issues like inflation, wage growth, and affordable housing. Many of these votes were seemingly won by scapegoating immigrants as a major cause of the working class’s economic troubles. However, economists and union representatives largely agree that the incoming president’s economic policies could worsen the issues that blue-collar workers care about.
Trump’s economic agenda essentially amounts to a ticking time bomb for the American economy. He has proposed deporting millions of undocumented immigrants, most of whom have jobs and pay taxes. The self-proclaimed “tariff man” has also floated the idea of imposing import duties as high as 60 percent on items shipped from China and maybe 20 percent for goods from any other country. Economists say this would require American consumers to pay higher prices for necessary goods like food and gasoline and create significant headwinds for the US economy overall.
Trump also supports increasing corporate power over workers, which union reps say could reverse the wage and membership gains they saw over the last four years. During a town hall with X/Twitter owner Elon Musk in 2022, Trump said striking workers should be fired. He has also appointed anti-union officials to the National Labor Relations Board (NLRB) — the federal agency that advocates for workers’ rights — and encouraged employers to offshore jobs to find cheaper labor. With more measures like these likely in store, Trump’s second term could be devastating for American workers.
Reversing Worker Gains
“Just using history as an example, Donald Trump is catastrophic for workers,” Steve Smith, a spokesperson for the AFL-CIO, told Jacobin. “His administration will attack workers on a number of fronts.”
Over the last four years, American workers have seen their standard of living steadily rise. Real median household income increased by 4 percent in 2023, up to more than $80,000 per year, which was the first increase since the pandemic began in 2020, according to census data. Moreover, average hourly wages for production and nonsupervisory workers — which account for roughly 80 percent of the workforce — grew to $30.27 in October 2024, meaning that the average wage for most American workers is higher now than on Election Day 2020. Support for union membership, which reached a fifty-year high in 2022, has driven these trends by providing workers avenues to advocate for higher salaries and enjoy protections from abusive employers.
However, that progress is at risk of being reversed under a second Trump administration. Project 2025, the 922-page conservative mandate for reimagining the federal government, calls on Trump to appoint loyalists throughout the government to make it easier to carry out his agenda. That means having Trump sycophants on the National Labor Relations Board, which would make it harder for unions to organize and be politically active and protect workers.
Trump could stack the NLRB with pro-Trump appointees if the agency’s chair, Lauren McFerran, a Democrat, does not receive Senate approval for another five-year term. Trump’s anti-labor activities are also getting a boost from outside the government as Elon Musk’s SpaceX and Jeff Bezos’s Amazon continue trying to convince the courts that the NLRB itself is unconstitutional.
“It sets an absolutely horrible precedent that the president is going to have civil service workers who only report to him and respond to his agenda, and that’s simply not good for the country,” Smith says.
Labor Shortages
Not only would Trump take an ax to union activity, but he also seems eager to redefine who an American worker is. Trump has proposed deporting millions of undocumented immigrant workers, a move he said has “no price tag.” Economists have noted that mass deportation actions like this are economically devastating, and doing so would reduce economic productivity and result in a lower standard of living for the remaining workers.
Immigrants are a vital part of the US economy. According to data from the Immigration Research Initiative, immigrant workers and business owners created more than $4.6 trillion of economic output in 2022, or roughly 18 percent of the country’s total economic productivity. These workers often take jobs that other Americans won’t do, working as construction laborers, maids, or janitors. Immigrant workers also help replace aging workers, which helps keep the economy growing at a stable rate.
Arizona carried out a similar mass deportation strategy to the one Trump has mentioned ahead of the 2007–2008 financial crisis. The state passed a series of laws that punished employers who hire undocumented immigrants. Those laws led to about 40 percent of the state’s undocumented immigrants leaving the workforce. Arizona’s economy also contracted by about 2 percent per year between 2008 and 2015 because of lower productivity, according to an analysis by the Wall Street Journal and Moody’s.
Removing millions of workers from the country would also lower the standard of living for remaining American workers by inflating the prices of goods, services, and housing. Reducing the number of workers in America would cause labor shortages and supply chain issues and ultimately extend the time it takes for consumers to buy goods. It would also decrease the productivity of home builders — who rely heavily on immigrant labor — thereby causing home prices to rise.
The Cost of Deportations
“It would be detrimental to the construction industry and our labor supply and exacerbate our housing affordability problems,” Jim Tobin, CEO of the National Association of Home Builders, told CNBC in October. Tobin added that immigrant workers are a “vital and flexible” labor source for home builders because they make up about one-third of employees in trades such as carpentry, plastering, masonry, and electrical.
If Trump successfully deports millions of workers, the consequences could be economically devastating, says Daniel Costa, who leads the immigration law and policy research team at the Economic Policy Institute. Most significantly, deporting these workers would cause the remaining workers to pay higher prices for necessary goods like food and gas. Deporting up to 7.5 million undocumented workers could result in a long-term dip of US GDP by about 6.2 percent, or roughly $1.7 trillion at 2023 levels, over the next two decades, according to an analysis from the Peterson Institute for International Economics. It could also cause a 3.6 percent decline in total hours worked and cause inflation to spike by 3.1 percent.
Although accomplishing Trump’s deportation plans will not be easy, Costa says they could have widespread impacts on labor relations in the United States going forward. He explains that Trump could essentially scare immigrant workers with temporary immigration protections into self-deportation. These scare tactics would also decrease the likelihood that remaining workers would report workplace safety and wage violations to regulators out of fear of retaliation. As Costa notes,
the ultimate result of these disparities is to increase the fear that unauthorized immigrants already have when considering whether to report workplace violations, thereby making it even less likely that labor standards enforcement agencies will know about employer lawbreaking and be able to adequately respond.