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.

Chester County, South Carolina, is a prime example. Between 2014 and 2023, growth in manufacturing jobs in Chester County vastly exceeded that of South Carolina as a whole—43.7% compared with 14.3%.1 As a result of successful efforts to attract corporations to Chester County, it is home to more than 50 manufacturers across industrial sectors, including Giti Tire, a Singapore-based tire manufacturing company featured on the Chester County Economic Development website.

Despite the rapid growth in manufacturing in Chester County, its residents, particularly the ones living in the city of Chester, are seeing limited benefits from that growth, despite generous subsidies to manufacturers for locating in Chester County. Giti Tire, for example, received over $35 million from the Coordinating Council for Economic Development’s Rural Infrastructure Fund as well as $12 million in local tax breaks between 2018 and 2022, with at least $4 million more per year expected at least through 2026. The company promised to create 1,700 jobs. Their website indicates they began production in 2017 and surpassed one million tires in 2018. Yet their Chester plant employs between roughly 600 to more than 900 workers, with the most optimistic number being just over one-half of the promised number of jobs.

This highlights one of the many problems with economic development subsidies: They frequently lack any penalties for subsidized companies that fail to meet their promises. Further, many subsidies that go to corporations are not coupled with requirements that local communities benefit. Rather, many subsidies simply divert tax dollars away from investments in local schools, public roads, and health care. This has been particularly problematic in Chester, which faces some of the largest losses of public school funding to tax abatements, losses which have increased in almost every year since 2017 with the exception of 2020 when it remained roughly stable.

Workers and families in Chester recognize that the benefits major corporations receive for locating in their communities go far beyond just subsidies. Chester provides manufacturers with broad access to varied transport options for importing raw materials and exporting finished goods including by railroad, port, and major highway networks. Auto and tire manufacturing particularly benefit from their proximity to other auto and auto parts manufacturers and related supply chains supporting these manufacturers.

Of course, the region’s greatest asset is an available workforce, ready to work if given access to quality jobs. Chester is an area that has long been neglected by state lawmakers and whose residents have been exploited by corporations historically and continue to be exploited today, including by large multinationals like Giti Tire.

For decades, lawmakers in South Carolina have embraced an economic development strategy common in the South, centered on disempowering workers and communities, keeping wages and benefits low, and limiting worker protections. South Carolina is one of just five states in the country that does not have a state minimum wage.2 It is one of two-dozen states with a so-called right-to-work law, which guarantees neither workers’ rights nor a job. Instead, these laws make it more difficult for workers to build and sustain a union, one of the most effective avenues for workers to collectively demand a living wage, safe workplaces, and basic benefits such as health insurance and paid sick days.

As we illustrate in our recent report, these policies and the state’s history of strong opposition to multiracial worker solidarity have left South Carolina with the lowest union coverage rate of any state in 2023, and the third lowest rate in 2024.

These factors are compounded by a range of labor market disadvantages faced by Chester residents. Table 1 shows both Chester County (35.8% Black) and the city of Chester (64.3%) are disproportionately Black compared with their counterparts nationally (12%) or statewide (25.1%). Just 8.4% of those in Chester County and 10.5% of those in the city of Chester hold a bachelor’s degree, roughly half the national (21.3%) or state-wide (19.4%) rate. Chester residents are also about twice as like to fall below the poverty line—19.3% of Chester County, 25% of the city of Chester, compared with 12.4% of Americans nationally and 14.2% of all South Carolinians.

Table 1

The higher poverty rates shown in Table 1 reflect to some degree low median wages. Median earnings in Chester County ($44,908) and the city of Chester ($38,687) are just 74.7% and 64.4%, respectively, of the earnings of workers nationally ($60,096).

Workers in the Giti plant report that instead of hiring the promised number of workers, the company forces them to work mandatory overtime, in unsafe working conditions, and segregated by gender. Occupational sex segregation is a key factor in women’s lower pay relative to their male counterparts, and earnings data for manufacturing workers in Chester are consistent with this finding. The data show that in the city of Chester, women are paid just 57.1 cents for every dollar paid to male workers. Nationally, women in manufacturing are paid 77.5 cents for each dollar paid to men.

Investments in South Carolina need to benefit South Carolina communities. Lawmakers should not be raiding public funds for schools, roads, and hospitals to give subsidies to large corporations, and businesses being welcomed into communities like Chester should be creating good jobs for local residents. In Chester, and across the state, workers are coming together to demand higher wages and better working conditions, and they are supported by their communities, faith leaders, and unions. Employers and lawmakers should listen.

1. Author’s calculation of Bureau of Labor Statistics Quarterly Census of Employment and Wages (QCEW) data.

2. In states that lack a state minimum wage, as in South Carolina, the federal minimum wage of $7.25 per hour applies.

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.

Figure A

The rapid and sustained labor market recovery also helped deliver stronger wage growth for workers of color (see Figure B). Black workers experienced the fastest wage growth of any group between 2019 and 2024. In fact, Black and Hispanic real wages grew more than three times faster over the last five years than the four decades prior, on an annualized basis. Much of this is explained by low-wage workers (who are disproportionately workers of color) experiencing strong wage growth since 2019, as the tight labor market with low unemployment compelled employers to expand their hiring networks and compete for workers by offering higher wages. 

Figure B

These historic gains should be protected and continued through a policy regime centered on low unemployment and pro-worker, pro-equity policies. Instead, all of these things are now under threat. Since taking office, President Trump has signed several executive orders centered on deporting migrants, including taking actions that will make it harder for migrants to legally work and support their families in the United States. He also signed orders ending critical diversity, equity, inclusion, and accessibility programs within the federal government, which were dedicated to promoting goals of racial and gender equity within the economy and beyond.

Further, President Trump has stifled the Equal Employment Opportunity Commission (EEOC) by illegally firing Commissioners Charlotte Burrows and Jocelyn Samuels, who were appointed by President Biden and confirmed by the Senate. As an independent agency, EEOC commissioners are intended to be insulated from presidential interference once nominated and confirmed. These illegal firings have prevented the EEOC from reaching a quorum to hear cases and fulfill its mission to enforce federal laws that prohibit employment discrimination and harassment.

Beyond these executive actions, the Trump administration has engineered an economic climate of chaos by announcing (and seemingly walking back) a temporary freeze of federal assistance and broad-based tariffs against trading partners.

But it’s not just Trump who poses a threat. Republicans in Congress are considering plans to gut the social safety net, including Medicaid, a move that would make economically vulnerable families pay for tax cuts for the wealthy. These efforts are likely to severely limit our capacity to recover quickly from the next economic crisis as well as exacerbate the persistently high levels of poverty that disproportionately burden families and children of color.

These policies don’t just threaten the historic gains for workers of color over the last five years. All workers and their families are now forced to contend with heightened uncertainty and chaos that put their employment and broader economic security at risk. As attacks on public-sector employment continue, and the prospects of a self-inflicted recession rise, it’s likely workers of color will once again be among the first to contend with setbacks, reversing the forward movement of the last five years.

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.

It is not clear how low the Trump administration will ultimately set the minimum wage for federal contractors. If they revert the federal contractor minimum wage to what it was before the Biden-era rule, it would drop to $13.30 an hour. That would mean a 25% pay cut for a full-time federal contractor earning the minimum wage—a loss of over $9,000 a year.

The most drastic move the administration could take would be to eliminate the higher minimum wage for federal contractors entirely, which is well within the realm of possibility given that Trump has argued that a nationwide minimum wage “wouldn’t work” because of regional price differences.

If the Trump administration does end up eliminating the higher minimum wage for federal contractors, then federal contractors—unless they are in a state with a higher state minimum wage—will be subject to the disgracefully low national minimum wage of $7.25 per hour, which has not increased since 2009. Reverting to the national minimum wage of $7.25 would mean a nearly 60% pay cut for a full-time federal contractor making the minimum wage—a loss of roughly $22,000 a year. (It’s worth noting that all workers—not just federal contractors—need a higher minimum wage, but the president only has the authority to raise wages for federal contractors. It would require action from Congress to raise the minimum wage for all workers.)

For those who might believe that paying the lowest-wage federal contractors less could be a good-faith attempt at boosting government “efficiency,” think again. Rescinding this rule is much more likely to boost the profits of large government contractors—because they can pay workers less—rather than reduce the costs of government contracts.

To distract from his policies that actively harm workers for the sake of boosting the profits of their employers, Trump has floated gimmicky ideas like eliminating taxes on tips. Let’s be clear, “no tax on tips” isn’t a gift to workers, it’s a smokescreen that would benefit employers of tipped workers and harm more workers than it helps. If he really wanted to help tipped workers, he would push to end the subminimum wage for tipped workers and raise the minimum wage. Instead, he’s cutting minimum wages where he can—for federal contractors. But that’s Trump’s playbook: use pro-worker rhetoric while taking concrete steps to undermine workers’ rights and wages. Taking raises away from hundreds of thousands of low-wage workers while peddling a tax-break gimmick is just the latest example of his billionaire-first agenda.

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.

What does the stock market measure?

Most of the time when people are talking about the stock market, they are referring to an index that measures changes in the prices of stocks of a number of publicly traded companies. Examples are the S&P 500 index (which includes 500 firms) and the Dow Jones Industrial Average (which includes about 30 firms).

In theory, the stock price of any given firm reflects investors’ expectations about the returns they will see from holding its stock into the future. These returns include the annual dividends paid out from these firms to shareholders and the capital gain that would be available if shares were sold in the future (with the capital gain being the difference in price between when it is sold and when it was bought).

The stock market does not measure broader economic health

Because stock market prices generate a new data point every day (or even every hour), they tend to be discussed far more than broader measures of economic health. However, many know that the stock market has little to do with the economic health of U.S. households. For one, the stock market doesn’t tell us anything about jobs and wages. There are times when broad-based economic strength pushes up jobs, wages, and the stock market, and other times when broad-based weakness causes these all to fall together. But more often what is happening to stock prices gives us no insight into the wider economy. And as we will talk more about below, there are times when stock market strength can be a pure zero-sum transfer away from the wages of typical workers—reflecting stronger profits earned solely from successful wage suppression strategies.

Because most households depend overwhelmingly on wages from work as their primary source of income and not returns from wealth-holding, the stock market tells us nothing about these households’ economic situations. The wealthiest top 10% of households own over 85% of all corporate stock, and the top 1% alone own roughly 50%. Roughly half of all U.S. households have essentially zero invested in the stock market, even when including indirect investments they might have, like holdings in 401(k)s.

What causes stock prices to rise or fall?

There are dozens of reasons why an individual firm’s stock price might rise or fall. A drug company might announce the discovery of a new blockbuster drug. An oil company’s stock might rise if the global price of oil begins rising. For the stock market as a whole, it is usually macroeconomic trends that cause increases or decreases in stock indexes. But just because it is macroeconomic trends that drive overall stock indexes, this does not mean they always move in the same direction—sometimes favorable macroeconomic trends can push up stock prices, but sometimes they can actually push stock prices down.

Overall pace of growth

One macroeconomic influence that can affect stock prices broadly is expectations about the pace of economic growth in the future. If, for example, investors believe that economic growth will accelerate in coming years, this should (all else equal) lead them to believe that profits will accelerate, and this should lead to some combination of faster dividend growth or higher capital gains in the future. Expectations about the pace of future economic growth can be driven either by expectations of long-run productivity growth (how fast the economy can grow on average over long periods of time holding inputs fixed) or by expectations about the business cycle (i.e., whether the economy is about to enter or emerge from a recession).

Redistribution from wages to profits

A redistribution of income from wages to profits is another macroeconomic influence that affects stock prices. For any given rate of expected growth in corporate sector income, the value of owning stock rises if profit’s share of this income rises. A number of things influence this distribution of corporate income between profits and wages. A rise in monopoly power in product markets, for example, will boost profits and therefore raise the share of corporate income claimed by shareholders. Similarly, a decline in labor’s bargaining power in labor markets will also cause such a redistribution by boosting profits. For example, some estimates indicate that nearly half of the rise in real corporate sector wealth between 1989 and 2017 can be attributed to a zero-sum transfer from wages to profits.

Reduction in corporate income taxes

U.S. corporations pay income taxes on their profits. Reductions in this corporate income tax rate (either through legislation or tax avoidance strategies) will hence make any $1 in pre-tax income more valuable to investors, and this will broadly bid up the price of stock.

Interest rate movements

We’ve established that the price of a given stock represents investors’ expectations of the returns to owning this stock in the future. But whenever future gains must be assigned an economic value to compare with current values, one must use an appropriate discount rate, which measures how much more valuable $1 is today than $1 is a year from now. Even ignoring inflation, there are reasons for this discounting. For example, people are impatient and $1 in consumption today is valued more highly than $1 next year. Further, every $1 in consumption foregone today can be invested and yield more than $1 next year.

The measure of how much money invested today can earn over the next year risk-free is usually proxied by something like the rate of return to U.S. Treasury bonds, which are assumed to never default. As discount rates fall, the value of wealth today rises. This means that falling interest rates push up the current value (and price) of the stock market broadly. This effect is sometimes underrated in how powerful it can be. Say that you think stock prices generally reflect what investors believe returns will be over the next 10 years. In this case, a fall in interest rates from 7% to 3%—essentially the fall we have seen over the past 30 years in the U.S. economy—will boost the value of stock prices by almost 20%.

The Trump administration’s policy agenda is weakening the economy—including the stock market

The real value of the S&P 500 rose a stunning 27% in the last year of the Biden administration. Further, the share of corporate sector income claimed by profits instead of wages remains extraordinarily high in historical terms. Despite this, many felt after the election that stock markets would continue rising during the Trump administration because they inherited a fundamentally strong macroeconomy that would continue to generate profit (and wage) growth. Further, the inflationary spike of the immediate post-COVID recovery was clearly over, and there seemed to be some room for the Federal Reserve to reduce interest rates.

There was zero concern among investors that the Trump administration would raise taxes on corporations, and even some hopes that they would be cut further. Finally, the first Trump administration was a never-ending assault on institutions and policies that provide bulwarks to typical workers’ leverage and bargaining power in labor markets. These assaults had been successful in keeping real wage growth lower than one would have expected based on historical experiences with unemployment rates as low as what prevailed in the late 2010s. In short, as long as the second Trump administration did not do something extremely stupid to upend the strong inertial growth they were inheriting, their tax policies and their policy aim of redistributing money from wages to corporate profits were expected to bolster stock prices.

And yet stock prices have been falling in the past month as the Trump administration’s policy agenda comes into clearer view. The agenda is anti-growth and inflationary—a rare and bad combination. Slowing overall growth will slow profit (and wage) growth in coming years, which will depress stock prices. The administration’s illegal cutbacks to federal employment and contracts—and the spending cuts in the House budget resolution (if passed)—will drag sharply on economy-wide demand. The chaotic tariff policy and threatened mass deportations will constitute a large and inflationary supply-side shock. This will both slow growth and provide a real obstacle to the Federal Reserve continuing to cut interest rates.

The current Trump administration has predictably launched a number of attacks on workers’ bargaining power, and these might prove effective in boosting profits at the expense of wages. But the profit share of income in the corporate sector is already starting from an extremely elevated level, making further increases likely harder to attain. Further, the effect on stock prices of any such redistribution will likely be overwhelmed by the broader downward pressures noted above.

If a recession caused by the Trump policy agenda (as well as by any consumption cutbacks spurred by the falling stock market itself) is sharp enough, the Federal Reserve will cut interest rates. Given what we noted about the powerful effect of interest rate cuts on stock prices, this could halt the fall in stock prices and even provide some slight rebound. But by then the damage to the real economy— households’ jobs and wages—will have been done.

In short, while the stock market isn’t the economy, the stock market declines we have seen in recent weeks are genuinely worrying. They are a symptom of much larger dysfunctional macroeconomic policy that will likely soon start showing up in higher unemployment and slower wage growth for the vast majority. If ever there was a time for the “stock market veto” to activate, it is right now.

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.

Women are paid less than men across the wage distribution

Women are paid less than men due to occupational segregation, devaluation of women’s work, societal norms, and discrimination, many of which take root well before women entered the labor market. Despite experiencing exceptionally fast wage growth relative to men over the past four decades, as we note in our State of Working America Wages report, women are still paid less than men at all parts of the wage distribution (Figure A).

The wage gap is smallest among lower-wage workers, in part because the minimum wage creates a wage floor. At the 10th percentile, women are paid $1.29 (or 8.7%) less an hour than men, while at the middle the wage gap is $4.00 an hour (or 14.9%). These low- and middle-wage gaps translate into annual earnings gaps of nearly $2,700 and over $8,300, respectively, for a full-time worker. The 90th percentile is the highest wage category we can reliably compare due to issues with topcoding in the data, which make it difficult to measure wages at the top of the distribution, particularly for men. Women are underrepresented among the highest wage jobs because of occupational segregation, excessive hours, and discrimination. Women at the 90th percentile of their wage distribution are paid $12.63 (or 18.6%) less an hour than men at the 90th percentile of the wage distribution. This difference would translate into an annual earnings gap of over $26,000 for a full-time worker.

Figure A Women are paid less than men at every education level

Although women have seen gains in educational attainment over the last five decades, they still face a significant wage gap. Among workers, women outnumber men in the college-educated labor force and are more likely to obtain a graduate degree than men. Even so, women are paid less than men at every education level, as shown in Figure B.

Among workers who have only a high school diploma, women are paid 20.1% less than men. Among workers who have a college degree, women are paid 24.2% less than men. That gap of $12.12 on an hourly basis translates to roughly $25,200 lower annual earnings for a full-time worker. Women with an advanced degree also experience a significant wage gap of $15.66 on an hourly basis, or over $32,500 annually, in 2024.

What’s very clear from the data is that women with advanced degrees are paid less per hour, on average, than men with only college degrees. Men with a college degree only are paid $50.01 per hour on average compared with $49.45 for women with an advanced degree. 

Figure B Black and Hispanic women experience the largest wage gaps

If the overall gender pay gap isn’t enough cause for alarm, the wage gaps for Black and Hispanic women relative to white men are even larger due to compounded discrimination and occupational segregation based on both gender and race/ethnicity. In Figure C, we compare middle wages—or the 50th percentile of each group’s wage distribution—for Asian American/Pacific Islander (AAPI), Black, Hispanic, and white women with that of white men.1

White women and AAPI women are respectively paid 82.9% and 93.1% of the amount non-Hispanic white men are paid. Black women are paid only 69.6% of white men’s wages at the middle, a gap of $9.09 on an hourly basis, which translates to roughly $18,900 lower annual earnings for a full-time worker. For Hispanic women, the gap is even larger: Hispanic women are paid only 65.3% of white men’s wages, an hourly wage gap of $10.36. For a full-time worker, that gap is over $21,500 a year.

Figure C

Even when controlling for age, education, marital status, and state, Black and Hispanic women are paid 24.7% and 27.4% less than their white male counterparts, respectively. In other words, very little of the observed difference in pay is explained by differences in education, experience, or regional economic conditions.

Challenges to closing the gender pay gap

An array of policy solutions is required to not only close pay gap by gender but also by race and ethnicity. These include requiring federal reporting of pay by gender, race, and ethnicity; prohibiting employers from asking about pay history; requiring employers to post pay bands when hiring; and adequately staffing and funding the Equal Employment and Opportunity Commission (EEOC) and other agencies charged with enforcing nondiscrimination laws.

We also need policies that lift wages for most workers while also reducing gender and racial/ethnic pay gaps, such as running the economy at full employment, raising the federal minimum wage, and protecting and strengthening workers’ rights to bargain collectively for higher wages and benefits. Because these policies provide disproportionate gains to workers the lower they are in the wage distribution, they will work powerfully to close gender and racial wage gaps.

Recent actions by the Trump administration will harm women and workers of color across the country, and in doing so will worsen wage gaps across gender and race/ethnicity. The banning of words like “gender,” “race,” “equity,” and “discrimination,” and attacks on the EEOC will weaken our ability to track pay equity and enforce nondiscrimination laws. There have also been ongoing threats to the availability and continued collection of key data throughout federal agencies. If agencies that collect data on wages and incomes by demographic characteristics pullback, it would be a disaster for anybody—policymakers, researchers, employers, or workers—who wants basic facts about how well the economy is performing for different workers and different sectors.

Further, in just two months, the administration has taken actions which will weaken the demand for employment and reduce the wage growth that we have seen over the pandemic business cycle. They include assaults on the public sector, eliminating grants and contracts, deportations, proposed cuts to SNAP and Medicaid, and broad-based tariffs (see our State of Working America Wages report for more detail). These actions—and the chaotic and often lawless way they have been implemented—will drag heavily on economic growth, and this will in turn cause irreparable harm to working people and families across the country. If these actions are not reversed soon, the labor market gains made over the pandemic business cycle could be squandered.

1. Race/ethnicity categories are mutually exclusive in this analysis. Here we denote white to mean white non-Hispanic, Black is Black non-Hispanic, Asian American/Pacific Islander (AAPI) are AAPI non-Hispanic, and Hispanic refers to Hispanic of any race.