If Congress allows the enhanced Affordable Care Act (ACA) premium tax credits to expire, millions of working families will lose health care coverage while millions of others will face sharply higher premiums. With four Republicans breaking ranks to vote with Democrats and force a House vote on whether to extend the credits, Congress now has a chance to avert this crisis. Losing the tax credits would be an added blow for households already squeezed by rising costs and tight budgets. But a deeper story emerges when we look at who stands to lose the most. A forthcoming analysis from the Economic Policy Institute and Groundwork Collaborative finds that Black Americans in some of the nation’s largest metropolitan areas would face deep coverage losses and financial harm if credits expire.1

This analysis was produced in partnership with Groundwork Collaborative.

More than 170,000 Black adults in 10 major metro areas would lose health care coverage in 2026 if the ACA credits expire, with the largest losses in Atlanta, Houston, Dallas, and Miami. Losing insurance wipes away a basic source of security for working families and reverses gains made under the ACA, which disproportionately reduced uninsured rates for Black adults​​—narrowing longstanding racial coverage gaps. 

Our analysis shows that coverage loss is only the first shock. Families who lose insurance and families who remain covered both face significant new burdens, and the costs are substantial across the 10 metropolitan areas.

• Allowing the ACA credits to expire would lead to more than 200 preventable Black deaths each year. These deaths stem directly from the loss of affordable coverage and reduced access to timely care. 
• Black families would pay $740 million more in annual premium costs. Black families who are able to keep their health insurance would be squeezed by higher health care costs, further straining already tight household budgets.
• Local economies in major metros with large Black populations would lose more than $1.9 billion each year. Atlanta, Houston, and Dallas metros would lose the most economic activity as federal subsidies disappear and household spending contracts because families must redirect more of their income toward higher premiums and away from spending on local goods and services. 

Table 1

Allowing the ACA premium tax credits to expire would make it harder for U.S. families to access health care, worsen an ongoing affordability crisis, and negatively impact local economies. These shocks would be felt acutely by Black workers and their families because they reflect longstanding structural inequities that influence who has access to affordable health care. Black workers are less likely to hold jobs that provide employer-provided health insurance, more likely to live in states that did not expand Medicaid, and more likely to skip or delay medical care due to costs. Moreover, ending the tax credits would reduce economic activity and lower productivity in the cities where Black families live.

The pursuit of equity in this moment requires us to hold fast to the gains we have made thus far, both to limit the suffering of as many U.S. families as possible and to help us build toward further progress. Acting to extend the ACA premium tax credits until such a time that health costs can be significantly reduced is smart, responsible, and race-conscious economic and public health policy.

Note

1. Pre-Trump economic conditions were examined in these 10 metro areas in EPI’s “A tale of 10 cities” report, which discusses various threats imposed by the Trump administration’s historic rollback of federal, civil, and workers’ rights protections. The underlying methodology combines Census microdata, federal Marketplace enrollment data, and state-level projections of coverage loss. The forthcoming report will provide complete technical details.

Last month, U.S. Senator Bill Cassidy (R-La.) unveiled a package of four bills that he described as advancing President Trump’s purported “pro-worker” agenda. But there is nothing in the legislation to address the problems workers face when they try to organize unions at their workplace. In fact, Senator Cassidy’s bills construct new barriers to worker organizing and create new incentives for employers to undermine workers’ rights.

Below, we compare Senator Cassidy’s bills to the Protecting the Right to Organize (PRO) Act, which is comprehensive legislation to reform our nation’s broken labor law system. As you can see, it’s clear which legislation actually helps workers.

Table 1

Three key takeaways:

• More than 8.3 million workers will get a raise starting January 1 as 19 states raise their minimum wages.
• For the first time, there will be more workers in states with a $15 or greater minimum wage than in states with the federal minimum of $7.25.
• Minimum wage increases are critical for improving affordability. State and federal policymakers should ensure wage floors meet the needs of all workers.

Nineteen states will increase their minimum wages on January 1, boosting earnings for more than 8.3 million workers by a total of $5 billion. In addition, 47 cities and counties will raise their minimum wages, adding to the number of workers likely to get larger paychecks because of lawmakers—or in some cases, voters—taking action to lift state and local wage floors.

Figure A

State minimum wage increases this January will boost wages for a broad range of working people and help shape a more equitable economy. Our estimates account for all affected workers: Both those directly receiving an increased minimum wage and those indirectly affected as employers adjust their wage ladders to the new wage floor. According to our analysis:

• Women make up the majority (58.1%) of affected workers.
• Black and Hispanic workers will disproportionately benefit. 10.7% of affected workers are Black, despite being 8.7% of the workforce in these states. Meanwhile, 38.3% of affected workers are Hispanic, despite being 19.8% of the overall workforce in these states.
• The vast majority (87.4%) of affected workers are adults, not teenagers.
• A quarter (25.3%) of affected workers are parents. 4.8 million children live in households with at least one worker receiving a pay increase.
• Nearly half (49.4%) are full-time workers and 41.4% have at least some college education.
• More than one in five (21.0%) affected workers have household incomes below the poverty line and 48.8% are within 200% of the poverty line.

Boosting the minimum wage is good affordability policy

Minimum wage increases are an essential tool for putting money in workers’ pockets. As concerns about rising prices and affordability dominate the news cycle, it is critical to recognize that “affordability” is a function of both prices and wages. And while prices in most cases are unlikely to decline significantly, policymakers can make decisions that boost wages for workers. In Hawaii, the minimum wage increase from $14.00 to $16.00 an hour will raise annual wages by $1,346 for a full-time worker (see Figure A). Missouri’s increase from $13.75 to $15.00 an hour will boost annual wages by $920 for a full-time worker.

Price increases are squeezing workers today because lawmakers for decades have made policy decisions that suppress workers’ pay, including allowing the federal minimum wage to stagnate. The federal minimum wage has not increased from $7.25 an hour in more than 15 years, during which time its value has eroded by more than 30%. In 2025, the federal minimum wage is below the poverty line, but it is still the law of the land in 20 states that have more than 60.2 million total workers (see Figure B).

Policymakers can protect the value of the minimum wage over time as prices increase. Many of the states with small wage increases in January, like Minnesota, are making annual inflation adjustments to their wage floor. Not only do these adjustments automatically protect workers’ purchasing power over time, they also provide predictability to employers, allowing them to anticipate and plan modest adjustments to worker pay each year. Despite the prudence of inflation adjustments, conservative policymakers in some states have still opposed it. In Missouri, Republican lawmakers stripped a successful minimum wage ballot measure of its indexing provision, leaving low-wage workers vulnerable to a weakening wage standard over time.

In 2026, more workers will live in a state with at least a $15 minimum wage than a $7.25 minimum wage

In the past decade, dozens of states have passed significant minimum wage increases to counteract federal inaction. In 2026, minimum wages in Arizona, Colorado, Hawaii, Maine, Missouri, and Nebraska will reach or exceed $15 an hour for the first time, meaning that a total of 17 states and Washington D.C. will reach that threshold. For the first time, there will be more workers living in a state with a $15 or higher wage floor than workers living in states still stuck at $7.25 (see Figure B). These increases have taken place in urban and rural states as well as politically “blue” and “red” ones. This milestone reflects the progress of the minimum wage movement over the past decade but also underscores the gap between how workers in some states are paid relative to their peers doing the exact same jobs elsewhere in the country. There are still 14 million workers earning less than $15 an hour who have been left behind because Republican lawmakers at both the federal and state level have denied them a raise.

Figure B

More states could pass a $15 minimum wage soon, despite interference from conservative policymakers. In 2020, Virginia passed legislation to reach a $15 minimum wage by 2026, but the law required reauthorization by the state legislature by July 2024. Republican Governor Glenn Youngkin repeatedly vetoed those planned increases. Governor-elect Abigail Spanberger has promised to support a minimum wage increase. In Oklahoma, Republican Governor Kevin Stitt delayed a vote on a 2024 $15 minimum wage ballot measure until June 2026.

These delays not only push back potential wage gains for workers, they also chip away at the value of those increases because of inflation. Because the Oklahoma policy is a ballot measure, the language cannot be adjusted to account for the lost time since 2024. However, policymakers in Virginia could enact a new minimum wage target that accounts for the higher-than-expected inflation since the pandemic. This would likely mean a minimum wage of $16.64 in 2026 or $17.02 in 2027.1

Rising prices mean higher minimum wage targets are necessary throughout the country

Rising costs of living throughout the country will require policymakers to target minimum wages at higher levels than have been typical in recent years. When striking fast food workers in New York City sparked the Fight for $15 movement in 2012, the buying power of a $15 minimum wage was substantially higher than it is today. In 2025, a $15 minimum wage does not achieve economic security for working people in most of the country. This is particularly true in the highest cost-of-living cities. Table 1 compares the 2026 minimum wage and living wage for select metro areas across the country. The living wage standards are from EPI’s Family Budget Calculator (FBC), a measure of a modest yet adequate standard of living for families in each U.S. metro area and county. The living wage standards are for a single adult, assuming 81% of their total income is from wages.

The minimum wage does not exceed the FBC’s living wage in any county, but minimum wage increases make a significant difference for workers. Oklahoma City has the lowest living costs listed in the table, but the state minimum wage of $7.25 is only 42% of the living wage ($17.31). By comparison, Seattle will have a $21.30 minimum wage in 2026, almost 80% of the living wage in the metro despite its higher cost of living. Even outside of especially high-cost localities, strong minimum wage policies have set wage floors much closer to the living wage needs for workers. For instance, Missouri’s $15 minimum wage is 81% of the living wage in Kansas City, Mo. ($18.51).

Table 1

Workers are continuing to demand higher wages so that they can afford to live in the communities where they work. Hospitality workers in Los Angeles are poised to gain a $30 minimum wage, although the city council could water down the increases. The New York City mayoral campaign and new efforts in D.C. are also elevating ambitious minimum wage policies. As shown in Table 4, dozens of localities in Arizona, California, Colorado, and Washington are already implementing minimum wage targets above $17, $18, and $19 an hour. Seven localities in Washington will have minimum wages above $20 an hour.

Research has consistently shown that increasing the minimum wage remains a powerful tool for making the economy more equitable without causing job losses. The affordability crisis underlines how essential it is for federal, state, and local policymakers to take action so that workers are not left further behind, but lawmakers have taken relatively little new action on minimum wage policy in recent years. Of the 19 state increases this January, only two (Rhode Island and Michigan) are the result of policies passed in 2025. In addition, while Colorado, D.C., and Michigan all boosted their minimum wage this year, they also reinforced carve-outs for tipped workers. Even as millions of workers get raises this January, state and federal policymakers must do more to ensure their wage floors meet the needs of all workers.

Table 2 Table 3 Table 4 Note

1. According to CBO CPI-U projections in January 2020, $15.00 in 2026 was equivalent to $13.00 in 2020. If we adjust $13.00 an hour to account for actual CPI-U increases and CBO projections for future growth (September 2025 projections), the equivalent value is $16.64 in 2026 or $17.02 in 2027. 

Below, EPI senior economist Elise Gould offers her insights on the jobs report released this morning, which showed 41,000 jobs lost over October and November. Read the full thread here. 

Today the BLS releases two months of payroll data and one month of household data. A little jarring to see the first gap in data on the unemployment rate in the history of the survey. Second thing to note is that the unemployment rate is now 4.6% a significant rise from 4.0% in January.
#NumbersDay

[image or embed]

— Elise Gould (@elisegould.bsky.social) Dec 16, 2025 at 7:36 AM

On the payroll side, there were net job losses in three of the last six months. Job growth averaged only 17,000 over the last six months, a significant slowdown.
#EconSky #NumbersDay

[image or embed]

— Elise Gould (@elisegould.bsky.social) Dec 16, 2025 at 7:50 AM

Downward revisions for August and September plus large losses in October—due to an enormous drop in federal workers at the end of September—has meant a significant slowing in the pace of job growth. The three-month moving average of job growth fell from 232k in January to 62k in November.
#EconSky

[image or embed]

— Elise Gould (@elisegould.bsky.social) Dec 16, 2025 at 8:03 AM

Attacks on the federal workforce reached a fever pitch in October as federal employment fell by a whopping 162,000. Federal employment has shrunk an alarming 271,000 since January. The shutdown furloughs have no impact on these data. The cost of these losses are only beginning to be felt.
#EconSky

[image or embed]

— Elise Gould (@elisegould.bsky.social) Dec 16, 2025 at 8:16 AM

Health care employment continued to rise, adding 46,000 jobs in November. Construction added jobs as well, but manufacturing and transportation and warehousing sectors continues to lose jobs, 58k losses in manufacturing and 60k losses in transportation and warehousing since January.
#NumbersDay

[image or embed]

— Elise Gould (@elisegould.bsky.social) Dec 16, 2025 at 8:29 AM

While federal cuts drove large losses in October, it’s important to note that private-sector employment grew an average of only 44k per month over the last six months, down from an average growth rate of 130k in 2024. Employment is undeniably slowing this year and it’s not just about federal cuts.

[image or embed]

— Elise Gould (@elisegould.bsky.social) Dec 16, 2025 at 8:46 AM

The U.S. Department of Justice filed suit on Tuesday, December 11, against the Minneapolis school district, alleging that the contract the district signed with the teachers’ union—the Minneapolis Federation of Educators (MFE)—discriminates against white teachers by requiring the school district to shield Black and brown teachers from layoffs. The lawsuit fundamentally misrepresents the innovative Minneapolis union contract, which protects educators from arbitrary dismissal while also seeking to preserve a diverse teaching workforce. The lawsuit is however aligned with the Trump administration’s revisionist version of history that positions white workers as the primary victims of employment discrimination. At the same time, this ahistorical narrative dismisses the long and well-documented record of discrimination against Black and brown workers evident in persistent racial disparities in unemployment and pay—patterns the contract seeks to remedy. The lawsuit was filed soon after the Trump administration’s racist decision to target Minnesota’s Somali community and is yet another example of how racial animus is a defining feature of Trump’s policies.

Throughout 2025, the Trump administration has discriminated against Black and brown federal employees—and taken actions that make it easier for all employers to follow suit—by weaponizing the enforcement of antidiscrimination laws against the people they were justifiably created to protect. This includes redirecting EEOC priorities toward so-called “DEI-motivated race and sex discrimination and anti-American national origin bias,” restricting use of disparate impact liability, and effectively ending enforcement of equal employment laws for the civilian federal contracting workforce by gutting the Office of Federal Contract Compliance Programs. The administration’s actions clearly demonstrate how risky it is for workers not to have the protections of a legally binding union contract.

A key element of any union contract is protection from unfair and arbitrary dismissals. For school employees, as for so many, the greatest risk is an employer who plays favorites. Whenever an employer has the unfettered right to decide who stays and who goes, workers suffer. In K–12 education, the risk of layoff is a persistent issue because school districts face endemic funding challenges and are frequently forced to reduce staffing levels. Because educator unions don’t want to give principals and superintendents the right to pick and choose who gets laid off based on their own whims, they have traditionally fought for seniority protections, often known as “last in, first out,” or LIFO. Under LIFO contract provisions, seniority is the sole determining factor in layoff decisions, with newer teachers laid off before more senior ones.

However, LIFO has a tremendous drawback: It hinders efforts to recruit and retain Black and brown teachers. In Minneapolis, for example, only 20% of Minneapolis teachers are people of color, even though fully two-thirds of the student body is Black or brown. Similar patterns are observed nationally. Almost half (49.5%) of K–12 students in the U.S. are Black, Hispanic, or Asian American and Pacific Islander, compared with only 24.4% of teachers. As studies have long documented, LIFO contributes to this disparity because even if a school district is able to hire more Black and brown teachers, they will be the first let go as more senior white teachers are retained.

At the same time, however, teachers’ unions are right to fight for layoff provisions that take away the arbitrary power of school districts to pick and choose who they keep. A core function of unions has always been to protect workers across occupations from being subject to the whims of supervisors. Indeed, Black and Hispanic workers report higher levels of unfair dismissals, suggesting that racial inequities would persist or even get worse in the absence of union protections. Union protections are also critical to narrowing pay disparities. According to a 2024 Rand report, Black teachers received lower average salaries and pay raises than white teachers. This difference was further linked to the fact that Black teachers were less likely to live in states with collective bargaining. The inadequacy of pay is one of the main reasons teachers report for leaving the profession, further contributing to the demographic mismatch between teachers and students.

This is the conundrum that MFE sought to address when the union went on strike in 2022: preserving protections against unfair dismissal while mitigating the inequities of LIFO. The solution they reached in 2022, a solution approved by 76% of MFE’s majority-white membership, was elegant and fair. The contract does not guarantee that Black or brown teachers will be protected from layoffs, contrary to the claims of right-wing groups that the contract is “woke” and “racially discriminatory.” Rather, the contract states that, when the district is forced to lay off teachers, it will protect teachers from populations that are “underrepresented among licensed teachers in the district.”

This means the contract’s protections can and will shift over time, as the composition of the teaching workforce changes. If and when Black teachers are no longer underrepresented in the district, they will no longer be afforded special protections against layoffs. Indeed, if someday it is white teachers who are underrepresented, the same contract provisions would apply to them. Far from embedding racial discrimination into the contract, these provisions support the development of a diverse teaching workforce while protecting worker rights.

The goal of a diverse teaching workforce is not just a noble one but also supports the success and well-being of students of color. Research indicates that the presence of teachers who reflect the diversity of the student body is linked to lower rates of suspension, lower dropout rates, greater college aspirations, and improved test scores. The contract MFE fought for will support the careers of Black and brown teachers and will lead to a teaching staff that looks more like its students, while continuing to protect all educators from arbitrary dismissal. The Department of Justice’s claims are a complete distortion of reality. Sadly, that is what we have come to expect from this administration, which seems dead set on rolling back decades of civil rights protections and abdicating the 60-year position of the federal government in setting a higher standard for employing a workforce that represents the diversity of the U.S. population. Hopefully, the courts will recognize this and allow Minneapolis Public Schools to continue its innovative program to protect a diverse workforce.

If the Trump administration follows through on its goal of deporting 4 million people over four years, the direct care industry would lose close to 400,000 jobs—affecting 274,000 immigrant and 120,000 U.S.-born workers. This dramatic reduction in trained care workers would compromise home-based care services, forcing family members to scramble for informal arrangements to support relatives who are older or have disabilities.

The Trump administration has consistently prioritized aggressive and arbitrary immigration enforcement, with the ultimate goal of deporting 1 million people every year of his term—regardless of their contributions to their communities and the U.S. economy. While the Department of Homeland Security’s pace currently falls short, increased enforcement would curtail business operations and reduce employer demand for both immigrant and U.S.-born workers. Over four years, 1 million annual deportations could cause total employment in the United States to fall by 5.9 million jobs, with particularly severe losses in construction and child care industries.

The direct care sector is also highly vulnerable to these enforcement actions. Amanda Kreider and Rachel Werner’s recent research indicates that job losses will significantly affect workers who provide long-term care in home- and community-based settings. The direct care sector—which includes home health aides, personal care aides, orderlies, psychiatric aides, and some nursing assistants—relies heavily on immigrant labor. Immigrants constitute nearly 30% of the direct care workforce, compared with 20% of overall employment. Among home health aides who assist with daily living and healthcare tasks, four in 10 workers are immigrants.

Kreider and Werner found that previous increases in immigration enforcement caused the direct care sector to shrink. If these patterns hold under the current enforcement regime, four million deportations over four years could cause direct care employment to fall by 394,000 (see Figure A).

Figure A

The majority of this employment decline—274,000 jobs—will result from the loss of immigrant workers. However, in addition to removing a supply of labor, deportations also make the labor market more precarious for immigrant workers. When immigrants face heightened risk of arrest, detention, or deportation, their ability to change jobs becomes severely constrained. With reduced labor market leverage, employers can worsen working conditions and suppress wages for all workers in the sector, not just those directly affected by deportations.

Contrary to the misconception that deportations will increase job opportunities for U.S-born workers, existing research consistently demonstrates that increased immigration enforcement reduces the employment for both immigrant and U.S.-born workers. Deteriorating pay and conditions for direct care workers would make U.S.-born workers unlikely to step in to replace the shortfall of immigrant workers, consistent with what studies have found when immigration enforcement decreased the size of the construction and child care sectors. In direct care, about 30% of the employment decline—the equivalent of around 120,000 jobs—will affect U.S.-born workers.

While employment reductions will be widespread, they will hit certain states particularly hard due to the geographic concentration of noncitizen immigrants in the direct care sector (see Table 1). New York faces especially severe challenges. Immigrants comprise two-thirds of the state’s direct care workforce, and more than one-third of all noncitizens working in direct care nationwide live in New York. If the Trump administration achieves its deportation goals, New York’s direct care sector could shrink by 45%.

Table 1

These large employment losses would translate directly into reduced availability of direct care services. Kreider and Werner found that past escalations of immigration enforcement led to substantial increases in the number of older adults living without any help at home. Among the Medicaid population, formal nonfamily caregiving declined while family-based caregiving increased, reflecting the contraction of the formal direct care sector.

This shift from formal to family-based care suggests that job losses in the direct care sector will have large spillover effects across the economy, greatly increasing their potential harm to even U.S.-born workers. As direct care supply becomes constrained due to deportations, some family members may need to leave their jobs or reduce their work hours to assume new caretaking responsibilities. Indeed, other research has shown that increases in immigration enforcement caused U.S.-born mothers to work fewer hours due to declining availability of household services like cleaning and child care. Family members may well be forced to choose between their careers and caring for aging and disabled relatives.

The Trump administration’s deportation agenda threatens to trigger a cascading crisis in senior and disability care that will harm families across the economic spectrum. Even in the absence of deportations, caretaking needs will accelerate as the older population grows tremendously, especially in the next five years. If the direct care workforce contracts by nearly 400,000 workers due to deportations, millions of older adults and people with disabilities will be left without the professional assistance they need to remain safely in their homes. Rather than creating jobs for U.S.-born workers as proponents claim, mass deportations eliminate employment opportunities for citizens and immigrants alike while dismantling a care infrastructure that seniors, people with disabilities, and families depend on.

Earnings above a cap aren’t subject to the payroll taxes that fund Social Security. As a result, billionaires pay the same tax as someone earning $176,100 in 2025 (the cap is indexed to the average wage, so it changes every year).

“Scrapping the cap” is a popular and effective way to address Social Security’s funding gap. Nearly three-fourths of Social Security’s projected long-term shortfall would be eliminated if the cap were scrapped without increasing benefits.

But wouldn’t such a move be opposed by high earners? The answer isn’t as obvious as you might think, because most workers with earnings above the cap stand to lose more from benefit cuts than from higher taxes. If nothing is done to shore up Social Security’s finances, EPI estimates that 70% of workers aged 32–66 who earned more than the taxable maximum in 2024 would lose more in benefit cuts than they would pay in higher taxes if the cap were scrapped.

The remaining 30% of these high earners, would, however, be better off losing 22.4% of their benefits beginning in 2034 than paying Social Security taxes on earnings above the cap. Unfortunately, this group includes politically influential multi-millionaires and billionaires.

Figure A

Figure A shows the break-even line below which workers are better off paying taxes on earnings above the cap than experiencing benefit cuts sufficient to eliminate the projected shortfall. For example, if the cap were eliminated, a worker who was 35 years old and earned below $236,000 in 2024 would pay taxes on earnings above the cap through age 66, but the value of these additional taxes would be lower than the value of forgone benefits if these were reduced by 22.4% (the amount necessary to restore the system to long-term balance).

Ultimately, most high earners stand to lose more from potential Social Security benefit cuts than from paying taxes on earnings above the cap. Scrapping the cap remains the most fair and practical path to safeguarding Social Security for future generations.

Methodology

This exercise assumes benefits are reduced across the board by the amount needed to restore the system to long-term balance (22.4%). This is a deeper cut than the initial 19% cut that would happen automatically in 2034 if nothing were done to increase revenues (a cut, however, that would increase to 28% over the projection period). It is, however, less than the 26.8% cut that would be needed to restore the system to long-term balance if retirees and others already receiving benefits are spared from cuts in 2034.

Real earnings are assumed to grow steadily by 1.13% per year, the Social Security actuaries’ long-term wage growth assumption. Future values are discounted to the present using a 2.3% real interest rate, also based on the actuaries’ long-term assumption. Life expectancy in retirement varies by birth year and is based on the actuaries’ cohort life expectancy tables, averaged between men and women.

The working age range covers 35 years before age 67, Social Security’s normal retirement age for most current workers. For many workers, these are their highest-paid 35 years and therefore the earnings that factor into Social Security benefit calculations.

The shares of workers with earnings above the cap and with earnings below the break-even amounts are estimated based on March 2025 Current Population Survey annual earnings microdata accessed through IPUMS, which reflect earnings over the previous 12 months. Break-even earnings are rounded to the nearest $1000.