Class of 2025: Young workers were poised to graduate into a promising labor market, but Trump policy actions could unravel progress
Key findings:
- Young workers—those 16–24 years old—have experienced historically strong real wage growth (9.1%) since February 2020, exceeding the wage growth for workers ages 25 and older (5.4%).
- Wages for young workers have also grown faster than the prices of rent and college tuition since February 2020.
- A smaller share of young adults is unemployed, underemployed, or “idled”—neither employed nor enrolled in further education—than their averages over the prior three decades.
- However, recent Trump administration policy actions could be devastating for young adults trying to get a foothold in the labor market as they enter the workforce following graduation.
Young workers have experienced a strong labor market coming out of the pandemic recession, with better job opportunities and faster wage growth than they experienced in much of the prior four decades. However, the Trump administration’s recent attacks on the federal workforce, higher education, and registered apprenticeships—as well as imposing extreme tariffs—threaten to reverse these gains. In this first post in a series on young adults, we examine their labor market prospects as they graduate from high school and college this spring and discuss how policy changes might impact their prospects.1
The five-alarm fire that public education is facing
Acknowledgments: This blog post would not have been possible without the intellectual contribution and data analysis conducted by Joanna LeFebvre and Katja Krieger.
All children deserve to attend welcoming and well-funded schools where they can learn and grow, regardless of race, disability, or income. But funding for public schools, where nearly 90% of all U.S. students learn, is at a near crisis point. The Trump administration’s goals, which are taken right out of Project 2025, seem to be to defund public education to the point that it doesn’t work, then offer private school vouchers as a solution to a manufactured problem. In this post, we highlight five ways public education is on fire in the United States and the damage this will do to students’ abilities to learn and thrive. Instead of cutting funds, lawmakers should invest in public schools, one of the best tools we still have to build a prosperous, equitable country.
Alarm level 1: COVID-19 relief funding for public schools is winding down. In some cases, the administration is ending it prematurely
This academic year (2024–2025) marks the end of the financial support schools were receiving to address the impacts of the COVID-19 crisis, the Elementary and Secondary Schools Emergency Relief III funds (ESSER III). The COVID-19 pandemic, and the changing learning environments that ensued, meant that schools needed funds to address the significant academic, social, emotional, physical, and mental health needs of their students. This funding was distributed in recent years with the last distribution, ESSER III, worth a total of $122 billion allocated to districts around the country. Many students, especially those living in poverty, have not recovered from pandemic-related learning loss. The end of this funding means that districts will now have fewer resources to help students get back on track. Rigorous research has demonstrated that this federal aid to public schools was highly successful, with measurable improvements to student outcomes in states and districts where more aid was spent. Taking the educational challenges imposed by the pandemic seriously would mean recognizing the high value this aid has provided.
However, in late March, the Trump administration canceled extensions that had been granted to states to spend remaining ESSER funds. Effectively, districts are losing out on the funding allocated to them in the form of COVID-19 relief funds. Canceled extensions represent almost $3 billion in lost funding that had already been committed to tutoring services, reading interventions, building improvements, and more. Clawing back these funds jeopardizes improved academic outcomes for many students and their ability to learn in healthy and safe environments. The administration’s refusal to reimburse school districts for funding that has already been spent could force them to cut teaching and other staff positions to make up the cost, ultimately harming students.
Jobs report doesn’t reveal clear signs of broad economic weakness—yet
Below, EPI senior economist Elise Gould offers her insights on the jobs report released this morning, which showed 177,000 jobs added in April. Read the full thread here.
Some states and localities will be better prepared to fight a possible recession because of how they used ARPA fiscal recovery funds
With today’s news that GDP declined in the first quarter of 2025, there are increasing signs that the economy is headed in the wrong direction, with the risks of a recession and higher unemployment on the rise. Working families will face increased challenges in a recession. As always, government policies can do a lot to alleviate its worst impacts. During the COVID-19 recession, the Biden administration’s American Rescue Plan Act (ARPA) helped fuel a fast recovery. The fiscal recovery funds provided to state and local governments were critical to that recovery. Some of those states, cities, and counties did more than just support an economic recovery—they made wise investments that will be help lessen the harms of the next recession in their communities. Read more
Too many workers die on the job every year. Trump’s attacks on OSHA will kill more.
This Monday marked Workers Memorial Day, an annual international day of remembrance of workers who have died on the job, as well as a day of action to continue the fight for workplace safety. An estimated 140,587 U.S. workers died from hazardous working conditions in 2023, according to a new AFL-CIO report. This amounts to roughly 385 workplace-related deaths a day. While mourning these lives lost, there is also reason to fear this death toll will only rise due to aggressive Trump administration attacks on basic health and safety protections long taken for granted in most U.S. workplaces.
Trump has spent his first 100 days in office waging a war against workers, firing tens of thousands of federal workers, and slashing the wages of hundreds of thousands of workers on federal contracts. He has also issued dozens of executive orders to roll back or review existing regulations, including an order directing agencies—including the Occupational Health and Safety Administration (OSHA)—to eliminate 10 existing protections before enacting any new guidelines.
Above all, Trump has empowered Elon Musk—a billionaire whose own companies are under investigation for dozens of serious health and safety violations—to destroy and disable already understaffed federal agencies that prevent workplace deaths and injuries. The administration’s damaging actions include:
- effectively eliminating the National Institute for Occupational Safety and Health (NIOSH), the sole agency responsible for research that informs OSHA policymaking with evidence-based assessments of injury and fatality risks and actionable guidance for employers to use to improve safety;
- closing down 11 OSHA offices in states with the highest workplace fatality rates;
- eliminating 34 offices of the Mine Safety and Health Administration (MSHA), which protects coal miners from hazards like black lung disease;
- pausing a new rule on silica exposure to prevent coal miner disease and death from silicosis;
- allowing Musk to access sensitive OSHA data that could compromise ongoing investigations of alleged violations (including analysis of hazards that caused fatalities) and increase the risk of retaliation against injured workers and whistleblowers.
Cuts to SNAP benefits will disproportionately harm families of color and children
Republicans in Congress and the Trump administration passed a budget blueprint to pay for tax cuts that overwhelmingly favor rich households at the expense of working people. Communities of color will be disproportionately impacted by these potential cuts. In addition to targeting Medicaid—we highlighted how Medicaid cuts would be especially harmful for people of color and children here—the budget resolution also tees up Congress to slash $230 billion in agricultural spending over the next 10 years. Finding cuts that large will almost certainly require reducing nutrition spending by cutting the country’s largest food assistance program, the Supplemental Nutrition Assistance Program (SNAP), which is run out of the U.S. Department of Agriculture (USDA).
These draconian cuts, along with the troubling momentum to add even more stringent work requirements to benefits like SNAP and Medicaid, will leave economically vulnerable families who depend on these support systems exposed to even more hardship during a time of unprecedented economic mismanagement, chaos, and uncertainty. Read more
What to watch for in this week’s labor market data: Will there be signs of widespread economic distress?
As the Trump administration pursues a deeply chaotic policy agenda, key labor market data haven’t yet revealed strong signs of economic weakness, but other sources indicate growing recessionary pressures. Consumer expectations are more pessimistic about inflation and unemployment, manufacturing and construction activity are declining, the stock market has fallen and remains volatile, and GDP forecasts look grim. These “softer” measures could take time to reflect in the official jobs data, particularly at the national level. This week’s data releases—including the Job Openings and Labor Turnover Survey (JOLTS) tomorrow, unemployment insurance claims on Thursday, and the jobs report on Friday—should provide more clarity.
The federal minimum wage is officially a poverty wage in 2025
In 2025, the federal minimum wage is officially a “poverty wage.” The annual earnings of a single adult working full-time, year-round at $7.25 an hour now fall below the poverty threshold of $15,650 (established by the Department of Health and Human Services guidelines). The limitations of how the federal government calculates poverty understate how far the minimum wage is from economic security for workers and their families.
Set at an adequate level, the minimum wage is one of the strongest policy tools for improving the economic security of low-wage workers, and an effective tool at lowering poverty. Yet instead of addressing this massive hole in our economy’s social safety net by working to raise the minimum wage, congressional Republicans are pushing policies like imposing work requirements on safety net programs and cutting Medicaid. Supporters of these proposals characterize them as tools to incentivize work and protect the dignity of work, but these policies fail to account for the nature of low-wage work in our economy. Instead, they stand to deepen hardship for low-income workers with no economic upside for working people or the larger economy.
How should we assess and characterize worker wage growth in recent decades?
Key takeaways:
- Real median wages grew too slowly and only in fits and starts over the last 45 years. This pattern was even starker for low-wage workers.
- Median wages grew only one-third as fast as economy-wide productivity growth.
- Wage growth was reasonably healthy during tight labor markets but almost zero in other years.
- While tight labor markets persisted only in the clear minority of years since 1979, the last decade has been largely characterized by persistent low unemployment and this has been good for wage growth.
- Unfortunately, the Trump administration’s chaotic and harmful policy agenda threatens these recent gains.
Our recently released State of Working America wages report includes new data on wages through 2024. Cumulative median wage growth was just 29% since 1979—or less than 0.6% per year on average.
This was far slower than the economy’s potential to deliver wage growth for all workers. In fact, as Figure A shows, median wage growth was only one-third as fast as how much could have been delivered to all workers by growing productivity. This disconnect between pay and productivity is why we now refer to the post-1979 trajectory of wages as “wage suppression” rather than “wage stagnation.”
Median wage growth greater than zero, but still lags potential growth since 1979: Cumulative growth rate of real median wages and productivity
| Median wage | Productivity | |
|---|---|---|
| 1979 | 0.0% | 0.0% |
| 1980 | -0.8% | -2.5% |
| 1981 | -1.8% | -0.9% |
| 1982 | -1.9% | -1.9% |
| 1983 | -2.3% | 1.2% |
| 1984 | -1.4% | 3.6% |
| 1985 | -0.5% | 5.3% |
| 1986 | 1.4% | 7.7% |
| 1987 | 1.4% | 7.3% |
| 1988 | 1.0% | 8.7% |
| 1989 | 0.3% | 9.4% |
| 1990 | -0.2% | 9.8% |
| 1991 | 0.0% | 10.6% |
| 1992 | 0.2% | 14.8% |
| 1993 | 0.8% | 15.3% |
| 1994 | -0.4% | 16.3% |
| 1995 | -0.8% | 16.4% |
| 1996 | -1.3% | 17.9% |
| 1997 | -0.2% | 19.7% |
| 1998 | 3.7% | 22.1% |
| 1999 | 6.2% | 24.8% |
| 2000 | 6.6% | 26.4% |
| 2001 | 8.9% | 28.5% |
| 2002 | 10.7% | 32.7% |
| 2003 | 11.7% | 37.3% |
| 2004 | 12.0% | 41.4% |
| 2005 | 11.4% | 44.1% |
| 2006 | 11.9% | 45.1% |
| 2007 | 12.3% | 46.7% |
| 2008 | 12.2% | 45.5% |
| 2009 | 14.7% | 51.4% |
| 2010 | 13.6% | 55.9% |
| 2011 | 11.2% | 54.5% |
| 2012 | 10.6% | 55.1% |
| 2013 | 11.2% | 56.9% |
| 2014 | 11.2% | 58.0% |
| 2015 | 13.8% | 61.0% |
| 2016 | 16.4% | 62.0% |
| 2017 | 18.2% | 64.0% |
| 2018 | 19.3% | 66.2% |
| 2019 | 21.9% | 68.8% |
| 2020 | 29.9% | 75.4% |
| 2021 | 27.0% | 79.7% |
| 2022 | 25.8% | 77.2% |
| 2023 | 27.4% | 79.5% |
| 2024 | 29.0% | 83.1% |
Source: Median wage data from Economic Policy Institute, State of Working America Data Library, "Hourly wage percentiles - Real hourly wage (2024$)" and "Productivity and pay, real dollars per hour (2024$)".
Too often, the bar for policy success on wage growth has been set at anything greater than zero. So long as literal wage stagnation was avoided, discussion about the urgent task of boosting typical workers’ wage growth could be forestalled.
The unlawful abduction and imprisonment of Kilmar Abrego Garcia puts all workers in peril
UPDATE August 25, 2025 — As detailed below, in March, 2025, the Trump administration illegally removed Sheetmetal worker Kilmar Abrego Garcia from his home in Maryland to an El Salvador mega-prison where he endured torture and inhumane conditions.
After months of legal challenges and public outcry, in July the administration returned Abrego Garcia to the U.S., then immediately brought criminal charges against him which his attorneys say are baseless and to which he has pleaded “not guilty.”
On August 25 in response to Abrego Garcia’s refusal to accept a plea deal in a case legal experts have described as “a farce,” the Trump administration took Abrego Garcia back into ICE custody and threatened to deport him to Uganda, a country he has no ties to and which the Trump State Department warns is dangerous for U.S. citizens to travel to because of “crime, terrorism, and laws targeting persons on the basis of sexual orientation.”
The Trump administration’s unlawful removal of Kilmar Armando Abrego Garcia to a prison in El Salvador—and willful defiance of court orders to facilitate his return—are demonstrating a flagrant disregard for due process that puts all U.S. residents in danger. The case has become the biggest test of the rule of law so far in the second Trump administration and illustrates the threats now facing all working people if the administration’s abuses of power are left unchecked.
U.S. Immigration and Customs Enforcement (ICE) agents detained Abrego Garcia—a union sheet metal apprentice and father of three from Maryland—on March 12 while he was driving home from work. Despite the fact that Abrego Garcia had a work permit and court-ordered protection from deportation to El Salvador, the Trump administration flew him there and put him in a prison infamous for inhumane conditions and violence—known as CECOT and operated by Salvadoran dictator Nayib Bukele—in defiance of an initial court order, along with 238 others. Three-fourths of the people on that flight had no criminal record, according to major media investigations. Irrespective of their individual backgrounds, every single person on the flight was illegally removed from the U.S. and imprisoned for life without an opportunity to have their cases heard in court.
The Department of Justice admitted in court that removing Abrego Garcia from the U.S. was unlawful (what attorneys for the U.S. have called an “administrative error”), but the Trump administration has refused to take steps to bring him home. In the Oval Office last week, Trump and Bukele even seemed to gleefully bond over Abrego Garcia’s fate, with Trump announcing his intent to send U.S. citizens to CECOT next.