Our decisions about whom and how to tax are decisions about which community needs we have the capacity to address and at what scale. Progressive taxes like personal, investment, and corporate income taxes generate more revenue from those who have the greatest ability to pay, and for whom the cost of losing the next dollar is small, relative to the last dollar of a family struggling to make rent and afford groceries. On the other hand, regressive revenue strategies like non-strategic tariffs, fees and fines, and an overreliance on sales taxes, especially when combined with cuts to social programs, heighten the sense that the system is unfair. Where progressive revenue strategies can bind a community together in mutual support and expand capacity to meet needs through good governance, regressive strategies erode people’s trust in the public sector.

H.R. 1 presents a vision of public finance that is unsustainable and erodes trust in government

Much of the federal tax code is in fact progressively structured, but for decades conservatives have weakened and attacked that progressivity. H.R. 1 (which the White House has referred to as the “One Big Beautiful Bill Act” or “OBBBA”) is the latest Republican-led effort toward breaking down trust in the public sector and social contract. H.R. 1 provides a suite of tax breaks to households across the income distribution; however, the wealthiest households and corporations see a far bigger tax cut from the package than the typical household does. In service to these tax breaks, the bill introduces devastating cuts to Medicaid, SNAP, and critical government agencies designed to help workers and their families thrive. Despite their size and the pain they will cause, these drastic cuts in the federal government’s capacity to serve and support working families are not enough to cover the costs of the corporate tax breaks; the Tax Policy Center estimates that H.R. 1 could increase the federal deficit by between $3.7 trillion and $5.1 trillion by 2034.

But unlike the federal government, states and localities cannot run budget deficits; their budgets must be balanced yearly. When major federal cuts happen, states and localities that rely on federal dollars to maintain critical services are forced to curtail and eliminate services, dive into emergency savings where they exist, or else shift to revenue generation strategies that often fall disproportionately on Black, brown, and poor households. The combination of directly hampering public services working people rely on while shifting more of the burden of raising revenue toward Black, brown, and poor workers and their families weakens worker power and exacerbates racial disparities.

H.R. 1 combines a shift toward regressive revenue strategies with massive tax breaks to corporations and the wealthiest households, in service to the Trump administration’s overarching goal: reasserting white, wealthy, and corporate privilege through tax cuts, deregulation, and the defunding of public institutions.

Regressive revenue strategies: Taking from the poor to give the rich even more breaks

The Trump administration has floated using tariffs as a replacement (either in full or part) for the federal income tax. This is not a new Republican strategy: Tariffs are a kind of consumption tax (on imported goods, along with the intermediate products businesses need to create goods and provide services domestically), and Republican-led state governments tend to rely more on consumption taxes1 (like sales taxes) and less on income taxes to increase revenue. Because poorer households spend a larger share of their income purchasing goods and services than the rich do, consumption taxes are inherently more regressive. The current federal income tax is progressively structured, in spite of the ways conservatives have attempted to weaken that progressivity over time. While tariffs can be a sensible part of a larger industrial policy strategy, governments place too large a burden on low- and moderate-income households when they try to use consumption taxes as a primary source of revenue. 

States and localities may turn to fines and fees to raise revenues in the absence of adequate federal support. These penalties are a poor substitute for progressive taxes. Fines and fees historically have only been able to cover a small fraction of state and local budget costs. And this is baked into the design: If the point of a fine or fee is to deter behavior, the best-case scenario (ending the behavior) would result in no revenue.

Even so, fines and fees cause significant economic pain for working-class families in the Black communities that are most affected by them. On an ethical level, a modern idiom applies: “If the penalty for a crime is a fine, that crime only exists for the poor.” The criminal justice system can trap poor folks in a cruel cycle of penalization for being unable to pay traffic tickets, court fees, and even their own surveillance through ankle monitors. Fines and fees increase the economic burden on those with the least ability to pay, all for a low return, making them a poor substitute for broad, progressive taxes.

Faux-progressive revenue strategies are ineffective and distract workers, their families, and policymakers from the need for real change

Ineffective tax gimmicks like temporary deductions on overtime and tipped income distract from the need for real reform around worker pay and scheduling. The point of requiring businesses to pay time-and-a-half for overtime is to discourage pushing workers to work beyond what we have collectively decided is a full and reasonable period of labor. Tipping is an outdated practice with racist roots, designed to shift the cost of maintaining a workforce onto consumers, rather than having employers properly compensate employees. Instead of cynically gesturing toward affordability through encouraging bad business practices, we should empower workers to fight for better wages and consistent scheduling.

Conservatives may also try to balance budgets by allowing progressive tax expenditures to expire (e.g., the recent expiration of the ACA premium tax credits or the expiration of the expanded child tax credits passed as pandemic relief). Temporary tax breaks themselves are not the most effective means of addressing structural economic issues; if health care or health insurance is persistently inaccessible to wide swaths of the population, we should seek to remedy that by making access universal—or, at the very least, making the credits that allowed greater access in the first place permanent. Allowing tax breaks implemented to address structural inequities to expire without an alternative solution to the problem being addressed is negligence. There are ways to balance budgets that do not involve reversing hard-won progress toward equity.

Progressive ways to generate revenue: Worker-centered tax policies can reduce inequality and expand the tax base

There are better ways of raising revenue that will support workers and their families, rebuild public trust in government, and get us the public goods and services we want and need. Since most Americans earn their living through selling their labor, it makes sense to keep some progressive tax on income to ensure people remain invested in the social contract. But with so much wealth and income concentrated amongst a few individuals, a necessary step is shifting more of the tax burden toward extremely high earners, wealth, and investment income. This will generate more revenue to improve public services and infrastructure, while tamping down on inequality. Adding tax brackets for the highest earners, adopting a legitimate tax on wealth holdings, and taxing the income made from investments at a rate closer to that of income from wages and salaries progressively raise revenues without increasing the burden on most U.S. households.

Proper enforcement of the current tax code would go a long way toward improving both our ability to raise funds and the public’s trust in public finance. The tax code is rife with opportunities for wealthy individuals and corporations to evade paying their fair share of taxes, allowing them to skirt holding up their end of the social contract. The IRS is also critically underfunded and recovering from recent staff reductions from the Trump administration. With enough resources to enforce existing tax law effectively, the IRS could go after the largest tax evaders and see returns that matter, as opposed to disproportionately targeting Black households without the funds to instigate a drawn-out legal battle over an audit.

Table 1

We need a tax code that supports states and localities and promotes full economic participation, not temporary tax gimmicks and handouts to the wealthiest

Taxpayers (literally) cannot afford to accept the conservative propaganda that all taxation is a burden on households. Taxes are one way of binding a democratic community together and allowing us to share in the costs of creating collective prosperity and community. Especially at the state and local levels, tax revenues are essential to providing the services people need to thrive. When federal funding gets pulled back and states and localities turn to regressive revenue strategies, it is working-class families who pay the price.

If we are going to rebuild a sense of trust in the social contract, we need to structure the tax code such that it becomes more progressive, tapping into a greater portion of the massive amounts of wealth and income that have pooled at the top. We can use that revenue to fund programs and new infrastructure that allow more people to fully participate in the economy:

• improved funding for public schooling, increasing teacher pay and quality of education
• a fully funded federal food assistance program, and/or adequate funding to states to support their own cash-assistance programs more comprehensive than Temporary Assistance for Needy Families (TANF)
• expanded access to and adequacy of Medicaid, or Medicare for All

Each of these initiatives could improve affordability and remove the need for state and local governments to pursue revenue regressive strategies that do more harm than good (like fines and fees). We won’t solve every structural inequality and eliminate all disparities through reforming the tax code; but building the resources and will to collect taxes in a progressive way are steps toward a fairer economy and a government that earns the public’s trust.

1. Consumption taxes have some potential uses. Carbon taxes, for example, tax the consumption of goods whose production intensively uses greenhouse gas-emitting inputs; if consumers look to avoid these goods by switching to others whose production involves fewer greenhouse gas emissions, we achieve an important social good.

Since the second Trump administration swept into office in January 2025, it has undertaken a range of damaging and destabilizing actions that have weakened the economy, undermined workers, hurt businesses and consumers, and threatened core elements of our democracy. While Trump has targeted numerous Democratic-led states and cities, the Washington, D.C., region has faced acute and prolonged harms since day one. From the first set of executive actions signed on Inauguration Day, the Trump administration has attacked people and businesses in the capital region repeatedly and intensely. These initial actions announced the president’s dubious claims of authority to fire large segments of the federal workforce, eliminate long-standing federal agencies and programs, and begin a campaign of illegal and inhumane mass deportations.  

The Trump administration’s damaging actions have been enabled and abetted by Republican members of Congress. Their passage of H.R. 1, the bill that the White House has referred to as the “One Big Beautiful Bill Act” (OBBBA), amplifies the administration’s mass deportation agenda and shreds critical health care and food supports for lower-income families to finance tax cuts for the wealthy. This funding bill will only cause more pain in the years ahead for Washington, D.C.-area households and throughout the country.

Congress also passed a federal spending bill that constrained the District of Columbia’s ability to spend its own tax revenue (Koma 2025) and a resolution that may force the district to adopt local tax code changes that match the OBBBA, whether the city wants to or not—changes that will jeopardize hundreds of millions of dollars for city programs (D.C. Fiscal Policy Institute 2026).

In this report, we assess the early indicators of the damage of Trump’s actions and their effects on the Washington, D.C., regional economy, with particular attention to effects on workers and the labor market. We focus on this region due to its prominence as an early target of the Trump administration, in part due to its large federal workforce. Additionally, the district’s unique status as a non-state means that its leaders have far less legal authority to resist Trump’s interference than other target areas do.

Throughout this report, unless otherwise indicated, the data describe economic conditions for the Washington, D.C., metropolitan statistical area (MSA), which includes the District of Columbia, four nearby counties in Maryland, six cities and 11 counties in northern Virginia, and one county in West Virginia. We also refer to this region as the DMV (Washington, D.C.; Maryland; and Virginia). While we do not yet have the requisite data to fully and precisely document all the effects of the administration’s actions, we can see clear signals that the regional economy is already struggling, with more severe impacts likely to register in the data soon.

We then explore some of the factors that make other regions particularly vulnerable to significant economic harm from the Trump administration’s agenda. These include counties with large concentrations of federal workers, areas where federal transfer income (such as Medicaid and Social Security) makes up a significant portion of the region’s economic base, and places with significant immigrant populations. Though Trump has largely targeted prominent, Democratic-led areas, many of the regions most susceptible to the harmful economic consequences of the administration’s actions are rural counties, frequently represented in Congress by Republicans.

Trump’s actions in Washington, D.C., have led to reduced employment and rising unemployment

The clearest sign of the harm that the Trump administration’s actions have done to the Washington, D.C., regional economy is the substantial drop in the region’s employment rate. Based on EPI analysis of Current Population Survey data from the Bureau of Labor Statistics, from December 2024 to December 2025, the share of the regional working-age population with a job fell by 3.2 percentage points.1 As shown in Table 1, this compares with a decline of just 0.4 percentage points for the country over the same period. Among prime-age workers (those ages 25–54), the share employed in the DMV fell by 2.7 percentage points, compared with a decline of just 0.1 percentage points for the country overall.

This dramatic drop in regional employment is a direct result of the Trump administration’s relentless attacks on federal government workers, cuts to federal programs and agencies, and their cascading effects on connected regional industries. Prior to Trump’s taking office, federal employees made up 11.2% of the metro area’s total workforce (BLS-CES-SAE 2025).2 Between the end of 2024 and 2025, federal employment in the DMV region fell by more than 53,800 jobs (-14.2%) (BLS-CES-SAE 2026).3 These losses reverberated through the regional economy as affected households pulled back on spending, and many may have even opted to move, as data show the DMV region had the largest increase in home sale listings of any major metro last year (Brookings Institution 2026).

These significant cuts to federal employment, though highly damaging on their own, are only the first layer of the administration’s harm on the regional labor market. The DMV has a non-federal workforce of over three million people (BLS-CES-SAE 2026), many of whom work at firms that consult with, contract with, are funded by, or are otherwise connected to the government.4 The Trump administration has terminated thousands of grants to scientific research institutions (Kozlov, Tollefson, and Garisto 2026) and frozen or delayed funding for tens of thousands of nonprofit organizations, causing those targeted to limit operations or lay off staff (Tomasko et al. 2025). These cuts have also shrunk the funding pool for nonprofit groups, causing budget challenges even for those not previously receiving federal funding, as they must compete with groups previously funded through federal programs that are now scrambling to fill gaps with private support (Barrett 2025). The administration has also moved to cancel contracts with any company that maintains a commitment to DEI standards (Singh 2026). Although these cuts affect organizations everywhere, the DMV is disproportionately vulnerable to the economic harms of attacks on this sector as it has one of the highest concentrations of nonprofits in the country (Friesenhahn 2025). This is evident in the region’s slight dip (-0.3%) in private-sector employment from December 2024 to December 2025, a change from the consistent, albeit slowing, growth that had marked the years following the COVID-19 pandemic. At the national level, private-sector employment experienced slow but still positive change (0.5%) over the same period (BLS-CES-SAE 2026).5

The widespread impact of the administration’s actions can be seen in the breadth of employment declines across racial, ethnic, gender, and age groups in the region. As shown in Table 1, the employment rate fell by at least 2 percentage points for every demographic category of workers in the DMV. Notably, young workers under age 25 (-4.3 percentage points), workers age 55 and older (-3.3 percentage points), men (-3.5 percentage points), and Black workers (-5.9 percentage points) all experienced drops in their employment rates larger than the regional average. For older workers, the above-average decline likely reflects, at least in part, the firings and retirements of many federal employees, including many who had been near retirement age and opted into the so-called “Fork in the Road” deferred resignation program. For young workers, the administration’s funding and programmatic cuts directly reduced many traditional Beltway early-career opportunities (internships, fellowships), while weakness in the broader regional economy simultaneously forced area employers to pull back on entry-level positions.

Still, not all groups have been equally affected by Trump’s actions. As Table 1 shows, Black workers in the DMV region have suffered the largest employment declines, with the share employed falling by 5.9 percentage points in 2025. This is nearly triple the employment drop experienced by white workers (2.0 percentage points) in the region and, notably, more than seven times the employment drop of Black workers throughout the country overall (0.8 percentage points). Again, this is a direct consequence of the administration’s attacks on the federal workforce. Black workers have long tended to make up a larger share of the public sector than they do in the private sector—both in the DMV and across the country. This is because the public sector has historically been a pathway to the middle class for workers of color who face labor market discrimination in the private sector (Maye and Marvin 2025).

Trump’s massive cuts to federal employment have also rapidly undone what had been considerable progress in shrinking the regional Black-white employment gap. Figure A shows the employment rate of DMV workers, overall and by race/ethnicity, since the end of 2018. The rapid drop in the Black employment rate since the start of President Trump’s second term is striking, bringing the regional Black employment rate back down to its pandemic-era low. It is also notable that before that drop began, Black workers in the region were employed at essentially the same rate as their white counterparts—the only time in the last two decades when that occurred. These losses in employment will exacerbate existing racial and gender inequity across wages, poverty, and unemployment (Markoff and Zielinski 2026; Zielinski 2025; Busette and Elizondo 2022).

Recent increases in the DMV’s overall unemployment rate underscore the damage Trump is doing to the region. The non-seasonally adjusted unemployment rate jumped more than a full percentage point, from 3.1% in January 2025 to 4.4% in January 2026—more than four times the increase in the national figure. (Importantly, this increase understates the weakening of the area labor market, as the BLS estimates the DMV labor force shrank by 3% over the same period—meaning that many workers who would have been counted as unemployed simply left the area labor force.) For comparison, the national non-seasonally adjusted unemployment rate increased by less than half a percentage point, moving from 4.4% in January 2025 to 4.7% in January 2026 (BLS-LAUS 2026).

These numbers do not capture the full extent of the economic downturn in the DMV area, nor can they give us precise insight into where the pain has been most acutely felt. The administration’s violent deportation agenda, for example, will lead to a drop in immigrant and U.S.-born Hispanic workers’ employment, but resulting changes in Hispanic employment rates may be muted by the corresponding shrinking of the overall Hispanic population (Zipperer 2025). In other words, while the overall Hispanic population in the U.S. may fall dramatically in coming years, the ratio of remaining employed workers to remaining total population may stay somewhat consistent. This will mask the true scale of the economic and social harm being done to immigrant communities in the DMV and across the country.

It is also difficult to fully quantify how the deployment and continued presence of National Guard troops, violent immigration actions, and other authoritarian, fear-inducing tactics have impacted D.C.-area businesses, workers, and families, particularly in neighborhoods with predominately Black and Latino populations. Early data show regional declines in tourism, consumer spending, and foot traffic; harder to capture are the emotional and long-term economic consequences (Montgomery 2025; Hadden Loh and Haskins 2025; Sachs and Cocco 2025). Other recent analyses estimate similar economic harms in cities where targeted federal immigration enforcement actions have been aggressively deployed (Rosenthal and Sojourner 2026). A full accounting of the Trump administration’s harms on the Washington, D.C., region will take years to document.

Other localities should brace for similar consequences

Some of the Trump administration’s actions and their acute consequences are unique to the DMV, a function of the region’s high concentration of federal employees and government contractors, as well as the District of Columbia’s lack of statehood and full constitutional rights. However, the anti-government attacks the administration has unleashed on DMV-area households, workers, and businesses will have cascading consequences for communities throughout the country. The effects of the administration’s authoritarian attacks on the civil service, democratic institutions, and immigrants (Human Rights Watch 2026) that first registered across the DMV should be viewed as a preview of the consequences that will be felt in other regions. While no locality will be spared, regions particularly at risk include those with large shares of government workers (especially federal workers, but state and local government workers too), localities in which federal funding and social safety net programs make up a large portion of total area income, and those with large immigrant populations.

Trump’s attacks on the federal workforce will harm communities that rely on their employment

The day Trump returned to power in January 2025, he began attacking the federal workforce, first by moving to reclassify tens of thousands of federal employees to make it easier to fire and replace them with political loyalists (EPI 2026c), and then by stripping more than one million federal workers of their collective bargaining rights (EPI 2025a). The Trump White House subsequently worked feverishly to slash federal employment, attempting large and chaotic reductions in force, shuttering entire agencies, and coercing tens of thousands of staff to resign, among many other attacks (Poydock 2025). As of March 2026, the administration’s actions have reduced nationwide federal government employment by over 350,000 (11.7%) since January 2025 (Gould 2026).

Though federal workers make up a sizeable share of the DMV’s workforce, over 80% of federal workers live outside the region (Partnership for Public Service 2024). For instance, in Alaska, Hawaii, and New Mexico—states that are home to large swaths of federal and Native land, military bases, and federal research institutions—federal workers make up at least 4.5% of total employment (EPI 2025c). Within states, federal workers tend to be concentrated in specific localities. For instance, in Apache County, Arizona, which is largely made up of the Navajo Nation and the White Mountain Apache Reservations, lands that extend beyond county lines, the federal government employs 12% of the county’s workers, more than double the next most significant county for federal worker employment in the state (EPI 2025c). There are 22 U.S. counties, spread across the South, Midwest, and West Census regions, where federal workers comprise at least 10% of the county’s workforce (see Table 2).

In these counties and elsewhere, federal workers are the backbone of the regional economy, both through the essential services they provide and through their contributions to the local economy. Trump’s attacks simultaneously threaten federal workers’ livelihoods and the economic health of communities in which these workers’ spending on goods and services makes up a large share of economic activity in the region. In Apache County, Arizona, civilian government workers’ earnings comprise 11.7% of total economic activity in the county (see Table 3)—roughly the same as their share of overall county employment. However, in some counties, federal employees’ earnings are a disproportionate share of the regional economic base. For instance, in Leavenworth County, Kansas, where federal employees make up 10.0% of employment (Leavenworth has a large federal prison), federal civilian earnings comprise 22.1% of total income in the county.

The effects from lost federal jobs and income in these regions could be devastating. Some of these communities are places that have already faced historic disinvestment and in which there are few local employment opportunities that can match the quality of federal government jobs. These jobs are historically stable, good quality, union jobs that offer a pathway to the middle class, particularly for workers without a college education.6

Regions highly dependent on federal revenue will also suffer from a reduction in services and a loss of income

Beyond the harm to localities from reductions in the federal workforce, localities that are particularly reliant on federal government revenue and services will bear the consequences of Trump’s actions most acutely, though no locality will be spared from harm. For example, the Trump administration has announced or considered $23 billion in cuts to federal clean energy projects in nearly every state (CATF 2025) and $8 billion in cuts to colleges and universities that will impact every state’s economy (Bedekovics and Ragland 2025). Trump’s 2025 budget bill also made massive cuts to federal safety net programs that millions of low-income households rely on in order to finance tax cuts for the wealthiest households and corporations.

Funds from federal programs such as SNAP, Medicaid, and other social programs not only help struggling families make ends meet, they also comprise a significant share of a locality’s “economic base,” the amount of money circulating in that region, as shown by sociologist Robert Manduca in a recent working paper (2025). Indeed, an often-overlooked benefit of Medicaid coverage is its role as a source of income for low-income households (money they would have had to spend on medical care in the absence of Medicaid). For the bottom 20% of households in the U.S., Medicaid comprised 70% of their total money income, based on recent data from the Congressional Budget Office (Bivens, Wething, and Morrissey 2025). In fact, government transfers such as Social Security, Medicare, and Medicaid collectively made up 40% of the economic base of U.S. regions in 2022 (Manduca 2025). Substantial cuts to government social programs that support low-income households could reduce the economic base of these localities, at a scale equivalent, in many cases, to the loss of entire private industries in those areas.

Without deliberate intervention by state lawmakers to offset lost federal revenues, localities in every state face dire economic losses, but states particularly reliant on government transfers will suffer most. For instance, take Clay County, West Virginia, which is represented in Congress by Rep. Carol Miller (R-WV01), who voted in support of Trump’s budget bill (Miller 2025). Clay County’s poverty rate is more than double the national rate, and its per capita income is half the national amount (U.S. Census 2024a). Of the 10 U.S. counties that rely most on each of the largest federal social insurance programs (Medicare, Medicaid, SNAP, and Social Security) as a share of their economic base, Clay is the only county in the country to show up three times (see Table 4). Federal government transfers in the form of Medicare, SNAP, and Social Security payments comprise 57% of Clay County’s economic base, 20 times the share comprised by the earnings of every private industry in the county combined. Alaska, Arizona, Florida, Georgia, Kentucky, Tennessee, and West Virginia all have at least three counties that are ranked in the top 10 in the country for their reliance on a given social safety net program as a share of the county’s economic base (see Table 4).

Localities that have significant shares of federal workers and rely heavily on federal government transfers may face particularly significant consequences as a result of Trump’s attacks on the federal workforce and the Republican budget bill’s cuts to essential social safety net programs. For example, in Rio Arriba County, New Mexico, and Apache County, Arizona, federal government workers make up 16.1% and 12.0% of all workers in the county, respectively (EPI 2025b). At the same time, both counties are ranked in the top-10 counties most reliant on federal government transfers—Apache is #2 for Medicaid, and Rio Arriba is #10 for SNAP. In Apache County, federal government transfers account for three-quarters (76.9%) of the county’s economic base, and the earnings of federal government civilian workers account for 11.7%—the Navajo Nation Tribal Government is the county’s largest employer (NACOG 2023). Meanwhile, private earnings account for a mere 2.8% of the county’s economy. In Apache, Trump’s cuts to both the federal workforce and federal government programs mean that the federal government may be unable to fulfill its legal obligations to tribal communities (Brown 2025) that have faced decades of disinvestment and depressed economic outcomes resulting from historic land theft and forced assimilation. Apache County’s poverty rate of 31.2% (AZ Economics 2026) is nearly triple the national rate of 11.1% in 2023 (Shrider 2024).

Trump’s anti-immigrant crackdown and deportation agenda hurt localities with large immigrant populations

Trump has launched a campaign of terror against immigrant communities, communities of color, and those who stand with them. Last summer, Trump federalized local police and deployed thousands of federal troops to diverse cities with large immigrant populations (Kim 2025). Though Washington, D.C., may have experienced the most visible federal troop presence, a function of the district’s lack of statehood and the president’s unchecked authority to mobilize the National Guard there (Dallas 2025), Los Angeles was the first city Trump targeted after public opposition to aggressive immigration raids (Kim 2025). It was soon followed by Washington, D.C.; Memphis, Tennessee; Portland, Oregon; New Orleans, Louisiana; Minneapolis, Minnesota; and Portland, Maine.

These attacks are characteristic of an authoritarian playbook that includes forcing the leaders of diverse, opposition-led communities to bend to the strongman government’s will (McManus, Benson, and Herman 2024). Minneapolis, home to a large immigrant population, was subjected to an unprecedented immigration crackdown that drew widespread protests (Boone 2026). During “Operation Metro Surge,” as it was called, federal immigration enforcement officials made 4,000 arrests and killed two U.S. citizens. Though the true toll of this violent operation may never be fully quantified, initial economic data show clear cause for concern. A recent analysis estimated that Trump’s immigration crackdown has led to a 2.9% decline in consumer spending in Minnesota over a single month—the equivalent of the state’s economy losing $626 million (Rosenthal and Sojourner 2026). Relative to overall consumer spending, the food and accommodation sector (which employs a large share of immigrant workers) saw the most significant decline in January 2026—3.8% or a $46 million reduction in economic activity. Researchers also estimated that nearly 3% of workers in the Minneapolis-Saint Paul region were unable to work during the occupation, resulting in a loss of over $100 million in wages (Sojourner and Rosenthal 2026).

Trump’s deportation agenda will continue to destabilize local communities and result in job losses for immigrant and U.S.-born residents alike (Zipperer 2025). Though immigrants live in counties across the U.S., coastal urban areas tend to have the largest shares of foreign-born residents. Counties with the largest foreign-born populations include Miami-Dade, Florida; Queens, New York; Aleutians, Alaska; and Hudson, New Jersey (see Table 5). Counties with relatively large shares of immigrants may see particularly acute harms from aggressive immigration enforcement.

Communities face overlapping economic threats from attacks on federal workers, the social safety net, and immigrants, but state and local lawmakers can resist them.

The Trump administration’s attacks on the federal workforce, the social safety net, and immigrant communities are designed to exacerbate economic precarity in many communities that are already struggling (Bivens 2026). The implementation of Trump’s authoritarian agenda in the DMV region may be the first, clearest, and in some cases most direct manifestation of its harms, but other localities across the country—particularly those with large federal workforces, those that are heavily dependent on federal revenue and those with sizeable immigrant populations—are far from immune, and many will suffer as much, if not more, from this agenda.

While state and local leaders cannot stop federal attacks, they do have the power to resist Trump’s agenda by improving state labor standards (EPI 2026b), advancing protections for immigrant workers (Díaz and Whitaker 2026), investing in the public-sector workforce (Bivens and Shierholz 2026), and using progressive tax policies (Austin and Davis 2025) to stabilize funding for critical social programs and other investments that workers, families, and communities need.

Notes

1. Throughout this report, unless explicitly noted, the source for all employment rate data is the authors’ analysis of Current Population Survey data (EPI 2026a). We compare an average of calendar year 2025 with calendar year 2024 in order to have adequate sample sizes for the noted demographic groups.

2. Employment level by industry and sector data come from the authors’ analysis of the Bureau of Labor Statistics’ Current Employment Statistics (CES) State and Metro Area (SAE) data.

3. These numbers are calculated using monthly totals rather than annual averages. A quarterly comparison of 2025Q4 to 2024Q4 finds roughly the same results—employment fell by 52,600 jobs (13.9%). The quarterly analysis omits October in both years to maintain an apples-to-apples comparison, accounting for missing data due to the government shutdown that began in October 2025 and the subsequent lapse in Bureau of Labor Statistics funding.

4. The non-federal workforce includes private sector workers as well as state and local government employees.

5. These numbers are calculated using monthly totals rather than annual averages. Quarterly comparisons of 2025 Q4 to 2024 Q4 produce similar results—private sector employment fell by 0.1% in the DMV and grew by 0.7% nationally. The quarterly analysis follows the methodology outlined in note 2.

6. On average, federal workers with advanced degrees typically earn less in wages and total compensation than their private-sector counterparts. Federal workers without an advanced degree typically earn more than their private-sector counterparts and have access to retirement benefits that have become less common in the private sector (CBO 2024).

References

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AZ Economics. 2026 “Apache County, Arizona.” U.S. Economic Research. Accessed April 2026.

Barrett, William P. 2025. “America’s Top 100 Charities: A Year of Pain After Trump Cuts.” Forbes, December 12, 2025.

Bedekovics, Gréta, and Will Ragland. 2025. Mapping Federal Funding Cuts to U.S. Colleges and Universities. Center for American Progress, July 2025.

Bivens, Josh. 2026. The Trump Administration’s Macroeconomic Agenda Harms Affordability and Raises Inequality. Economic Policy Institute, February 2026.

Bivens, Josh, and Heidi Shierholz. 2026. “You Can’t Starve the Public Sector to Excellence.” Working Economics Blog (Economic Policy Institute), February 27, 2026.

Bivens, Josh, Hilary Wething, and Monique Morrissey. 2025. Cutting Medicaid to Pay for Low Taxes on the Rich Is a Terrible Trade for American Families. Economic Policy Institute, February 2025.

Boone, Rebecca. 2026. “A Timeline of Trump’s Immigration Crackdown in Minnesota.” PBS Newshour, February 13, 2026.

Brookings Institution. 2026. “Active Residential For-Sale Listings,” DMV Monitor. Last updated February 18, 2026.

Brown, Alex. 2025. “For Indian Country, Federal Cuts Decimate Core Tribal Programs.” Stateline, March 4, 2025.

Bureau of Labor Statistics, Current Employment Statistics State and Metro Area (BLS-CES-SAE). Various years. Public data series accessed through the CES State and Metro Area Databases and through series reports. Accessed April 2026.

Bureau of Labor Statistics, Local Area Unemployment Statistics (BLS-LAUS). Various years. Data from the LAUS are available through the LAUS database and through series reports. Accessed April 2026.

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Table 1

The benefits of raising the minimum wage

Raising the minimum wage is a research-backed policy that increases earnings for low-wage workers without causing increases in unemployment or other negative economic side effects. A strong wage floor is also a powerful tool for making a more equitable economy. Almost two-thirds of the workers who would be affected by SQ 832 are women (63.3%). The policy would also disproportionately benefit workers of color. Hispanic workers make up 18.2% of the affected workers, compared with 11.0% of the total Oklahoma workforce. Black workers would be 10.6% of affected workers, while only making up 7.1% of the workforce (see Table 3).

The policy would also provide critical support to workers experiencing significant economic insecurity. Nearly three-fifths (59.3%) of the affected workers have incomes below 200% of the poverty line. Research shows that raising the minimum wage significantly reduces poverty, even as higher wages simultaneously reduce some workers’ and families’ eligibility for, and reliance on, public assistance programs.

A higher minimum wage would help combat the affordability crisis

While dozens of states and cities have passed minimum wage increases over the past 15 years, Oklahoma is one of 20 states that still uses the dismally low federal minimum wage of $7.25 an hour. Policymakers have not raised the federal minimum wage since July 2009, meaning that as prices throughout the economy have risen, the buying power of a paycheck at the federal minimum wage has fallen—substantially. Adjusting for inflation, the federal minimum wage is worth 30% less than it was in 2009. In fact, since 2025, the federal minimum wage has officially been a poverty-level wage under the Department of Health and Human Services’ guidelines. The stagnant federal minimum wage is one example of how economic policy in recent decades has suppressed workers’ wage growth, squeezing them as prices have continued to rise and creating the affordability crisis.

Fortunately, SQ 832 would not only raise the state minimum wage to more adequate levels, but also automatically adjust it for inflation beginning in 2030. Twenty-one states already use these automatic increases to ensure that low-wage workers don’t lose ground over time as prices rise.

SQ 832 would go a long way toward improving conditions for the lowest-paid workers in the state as they contend with rising housing, energy, and health insurance costs. However, the reality is that most Oklahoma workers face higher living costs than can be supported by a $15-per-hour wage. Figure A shows estimates of a living wage for a single adult in different Oklahoma metro areas using EPI’s Family Budget Calculator. All Oklahoma metro areas have living wages above $16 an hour. Workers in Tulsa, Oklahoma City, and Lincoln County must earn at least $18 an hour to meet the Family Budget Calculator threshold. Even the lowest-cost county in the state (McIntosh County, not shown) has a living wage greater than $15 an hour.

Figure A

SQ 832’s $15 target would help hundreds of thousands of Oklahoma workers earn closer to a living wage and put Oklahoma’s wage standards more in line with many other states. As of January 2026, 17 states and the District of Columbia had at least a $15 minimum wage—including states such as Arizona, Missouri, and Nebraska.

Lawmakers and voters in many states have adopted higher state and local minimum wages both in response to federal inaction and because economic research has reached a strong consensus that raising the minimum wage, at least to levels attempted thus far, has not caused any measurable harm to employment.  

A $15 minimum wage in Oklahoma is not an outlier compared with policies in other states, even after accounting for differences in the labor markets of different jurisdictions. Economists use the minimum-to-median wage ratio (sometimes called the Kaitz index) to assess the “bite” or strength of the wage floor relative to wage levels in the area where the policy is taking place. This measure allows us to see how a $15 minimum wage compares in New York and Oklahoma, where the overall distribution of wages is substantially different. Most minimum wage research has studied policies with minimum-to-median wage ratios of .67 or less (i.e., a minimum wage raised as high as two-thirds the median wage in the same jurisdiction.) Table 2 shows the current and projected path of Oklahoma’s minimum-to-median wage ratio if SB 832 passes. The ratio would grow as the policy goes into effect, but it would likely never exceed 60%—meaning it is solidly in the range of policies that economists have studied and found no negative effect on employment.

Table 2

Oklahoma’s current minimum wage suppresses pay for workers

Establishing and periodically raising a strong wage floor is necessary to counteract employers’ excess market power over workers, which keeps wages lower than they would be in a truly competitive market. Workers face a multitude of barriers which provide wage-setting leverage for employers. Workers often have limited information about wages and work policies at alternative employers and can be constrained in their job choices by limited transportation options or the need to maintain specific schedules for child care and other family needs. Low-wage workers typically have less financial ability than higher-wage workers to overcome these obstacles, and are more likely to encounter take-it-or-leave-it wage offers that prevent them from negotiating pay. These challenges (sometimes called “frictions”) add up, providing leverage for employers to pay lower wages than workers need—and lower than what is optimal for the local economy.

Oklahoma’s weak wage floor suppresses pay for hundreds of thousands of workers. The state has the third-highest share of workers earning less than $15 an hour (21%). Although there are relatively few workers who earn exactly $7.25 an hour, one undervalued benefit of a strong wage floor is that it supplies upwards pressure on the wages of low-wage workers who earn more than the minimum wage. These “spillover effects” mean that workers above the new minimum wage threshold also see wage increases as employers adjust other workers’ pay to maintain wage ladders and preserve seniority.

Oklahomans have a consequential opportunity to strengthen the wage floor and deliver a meaningful raise to hundreds of thousands of workers. A $15 minimum wage is evidence-backed, both by rigorous economic research and the recent experience of many other states. SQ 832 would support families as they struggle with the affordability crisis and generate lasting improvements to the health and equity of the economy.

Table 3

Key takeaways:

• The persistent gender wage gap widened slightly in 2025; women were paid 18.6% less than men on average after controlling for race and ethnicity, education, age, marital status, and state.
• Women are paid less than men across all education levels. Women with a graduate degree earn less, on average, than men with only a college degree.

• The gender pay gap worsened following a year of Trump administration attacks on workers, including cuts to the federal workforce; attacks on diversity, equity, and inclusion efforts; ordering mass deportations; and undermining child care and home care providers.
• States can narrow the gender pay gap with policies that guarantee access to paid family and medical leave, mandate pay transparency, raise the minimum wage, and make it easier for workers to form unions.

March 26 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 2026 women would have to work on top of the hours they worked in 2025 simply to match what men were paid in 2025.

On an hourly basis, women were paid 18.6% less on average than men in 2025, after controlling for race and ethnicity, education, age, marital status, and state. After narrowing to a series low of 18.0% in 2024—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—the gender wage gap widened slightly in 2025. Though far from a total reversal of the last few years’ progress, the slight worsening in 2025 reflects the slowing of low-end wage growth and the economic consequences of Trump’s first year back in office.

Women are paid less than men due to discrimination associated with occupational segregation, devaluation of women’s work, and societal norms, much of which takes root well before women enter the labor market. The wage gap is smallest among lower-wage workers partly because the minimum wage creates a wage floor. At the 10th percentile, women are paid $1.39 (or 9.1%) less an hour than men, while the wage gap at the middle is $4.12 an hour (or 14.7%). Women at the 90th percentile of their wage distribution are paid $14.05 (or 19.6%) less an hour than men at the 90th percentile of the wage distribution.

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 slightly outnumber men in the college-educated labor force and are significantly 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 A.

Figure A

Among workers who have only a high school diploma, women are paid 21.5% less than men. Among workers who have a college degree, women are paid 23.8% less than men. That gap of $12.07 per hour translates to roughly $25,100 lower annual earnings for a full-time worker. Women with an advanced degree also experience a significant hourly wage gap of $17.70 in 2025, amounting to over $36,800 annually.

What the data makes very clear is that women cannot educate themselves out of the gender wage gap. Systemic inequities are so persistent 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 $50.61 per hour on average compared with $49.67 for women with an advanced degree.

Black and Hispanic women experience the largest wage gaps

For Black and Hispanic women, the pay gaps relative to white men are even larger due to compounded discrimination and occupational segregation based on both gender and race/ethnicity. In Figure B, 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 and AAPI women are paid 81.9% and 93.3%, respectively, of the amount non-Hispanic white men are paid. Black women are paid only 68.3% of white men’s wages at the middle, down from 69.6% in 2024. This is a gap of $9.87 on an hourly basis, which translates to roughly $20,500 lower annual earnings for a full-time worker. For Hispanic women, the gap is even larger: Hispanic women are paid only 64.5% of white men’s wages, an hourly wage gap of $11.06. For a full-time worker, that gap is over $23,000 a year. This disparity has also risen slightly compared with last year.

Figure B

Even when controlling for age, education, marital status, and state of residence, Black and Hispanic women are paid 25.3% 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.

Trump administration policies exacerbate lower pay and make it harder to enforce antidiscrimination laws

Over the last year, the Trump administration has repeatedly taken actions that harm women workers, including:

• slashing the federal workforce;
• weaponizing agencies meant to defend workers and combat discrimination by turning them into defenders of discriminatory practices;
• eliminating enforcement of race- and gender-based equal employment practices for federal contractors;
• ordering mass deportations;
• undermining child care providers and vital state funds;
• limiting access to funding for higher education;
• rolling back protections for home care workers; and
• normalizing harassment and retaliation in the workplace.

Black and Hispanic women have endured and will continue to suffer the consequences of these attacks more intensely than many of their white, non-Hispanic male colleagues. Trump’s reckless decimation of the federal workforce, for instance, has disproportionately affected Black women, for whom government jobs have historically been a powerful tool for economic mobility and security. In 2025, Black women’s employment rate fell by 1.4 percentage points to 55.7%. This is one of the sharpest one-year declines in the last 25 years and is a much more dramatic drop than that of other women or Black men. College-educated Black women experienced the largest drop in employment, likely because nearly half of Black federal government workers have a bachelor’s degree or higher. This drop in well-paid, traditionally stable jobs will almost certainly lead to increased economic insecurity. Additionally, mass deportations will likely reduce jobs for both immigrant and U.S.-born women, particularly in the care sector, disproportionately impacting Hispanic women.

The Trump administration has also stifled the government’s ability to protect workers and penalize discriminatory employers. The restriction of the use of words like “gender,” “race,” “equity,” and “discrimination,” and attempts to weaponize the Equal Employment Opportunity Commission (EEOC) against women and workers of color will harm all workers, while weakening our ability to track pay equity and enforce nondiscrimination laws. Staffing levels at the EEOC have fallen steadily over the last four decades, but recent funding cuts and shifting priorities will exacerbate its already reduced capacity for enforcement. 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 pull back, it would be a disaster for anyone—policymakers, researchers, employers, or workers—who wants basic facts about how well the economy is performing for different workers and different sectors.

Despite federal threats, states can help close the gender pay gap

Closing pay gaps by gender and by race and ethnicity will require policy solutions on multiple fronts. Although attacks on gender and racial equity continue at the federal level, state lawmakers can and must take steps to address the gender wage gap. Potential solutions include enacting pay transparency laws, mandating Paid Family and Medical Leave (PFML), raising the minimum wage, funding universal child care, and removing anti-worker, so-called “right-to-work” (RTW) statutes. Figure C highlights the states that have already passed some of these critical pieces of legislation, while underscoring the need for strong federal standards to cover the millions of workers who live outside of these states.

Figure C

Only 14 states have mandatory, comprehensive PFML policies, even though they provide essential benefits that help workers maintain their livelihoods while taking care of themselves and their families. Studies show that access to PFML improves outcomes for parents and children, workforce participation, and job retention, and that this a beneficial policy for both employees and employers. Access to paid leave is also shown to bridge racial gaps in care and pay.

Pay transparency laws are another useful tool that prevents employers from offering unequal pay by requiring them to include wage information in job postings. While there is some variation in laws, all include some requirement that employers provide salary information in job postings, but employers in Connecticut, Maryland, and Rhode Island only must furnish that information if requested by applicants. This wage transparency has the potential to reduce gender-based discrimination by arming jobseekers with more information and limiting employers’ ability to pay different amounts to similarly qualified candidates. A Colorado pay transparency law, for example, reduced gender wage gaps for workers who changed jobs by as much as 8.9%.

Policymakers effectively stopped protecting workers’ rights to form unions and bargain collectively starting in the 1980s, resulting in less leverage for workers and increased income inequality. Weak labor law allows employers to retaliate against union organizing and undermine workers’ right to collectively bargain. Union contracts can help narrow gender and racial wage gaps by providing clear wages for a given level of experience and education, reducing employers’ ability to discriminate in wage setting. Unfortunately, 26 states have RTW laws that make it even harder for unions to effectively organize and bargain for better contracts. States with these laws not only have lower unionization rates but also have wider gender wage gaps. By making it easier for workers to form unions, policymakers can help reduce these pay gaps.

The minimum wage keeps wages from falling below a mandated floor. While the real value of the federal minimum wage has been allowed to decline, down nearly $5 an hour since its peak in 1968, states have stepped in and increased their minimum wage. As of January 2026, 30 states and D.C. have minimum wages higher than the federal minimum, covering more than half of U.S. workers. Since women are disproportionately found in the low-wage workforce, these laws are key to increasing their economic security and narrowing wage gaps at the lower end of the wage distribution.

Although there is no single policy that will close the wage gap, each of these solutions will narrow it and improve conditions for workers across the country. In his first year back in office, Trump has rolled back critical labor standards, decimated federal unions, and laid off tens of thousands of federal workers. Now, more than ever, it is critical that states step up to protect workers under attack, prevent the gender wage gap from expanding, and build an equitable economy that works for all. 

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.

Key takeaways:

• Trump has weaponized the EEOC to go after employers with diversity, equity, and inclusion (DEI) programs, accusing them of “reverse racism” against white workers—but nothing in the EEOC’s own data points to evidence of systemic discrimination against white workers.
• People of color have made up a growing share of the U.S. working-age population since 1989, while the share of the white working-age population has fallen from 76.9% in 1989 to 55.4% in 2025.
• According to data submitted to the EEOC by large employers, workers of color make up more than 40% of the workforce but hold only 1 in 5 executive or senior-level positions—a pattern that contradicts the administration’s narrative of bias against white workers.

Trump’s Equal Employment Opportunity Commission (EEOC) recently opened a federal investigation into Nike and its diversity, equity, and inclusion (DEI) initiatives—alleging systemic discrimination against white workers. This is the first time the EEOC has targeted a large private employer with a federal investigation and subpoena explicitly linked to their DEI initiatives and hiring goals. Shortly thereafter, the EEOC sued a Coca-Cola bottling company for sex discrimination following a networking event it held for female employees. The EEOC chair closed a busy February with a letter to Fortune 500 companies, warning them about “unlawful discrimination” related to their use of DEI initiatives.

These recent EEOC actions reflect Trump’s undue control over the agency and his administration’s effective weaponization of the EEOC to fight against DEI, a broad set of programs and initiatives designed to remedy the long and well-documented history of systemic injustices against people of color and women in the labor market. Established by the Civil Rights Act of 1964, the EEOC has operated as an independent federal agency throughout its 60-year history enforcing employment nondiscrimination laws—until last year.

EEOC Chair Andrea Lucas has repeatedly affirmed her commitment to redirecting the EEOC’s priorities toward those of the administration; she has made the scrutiny of DEI programs and initiatives a top enforcement priority. This restructuring of EEOC priorities follows the administration’s revisionist version of history that centers white men—not people of color and women—as the primary victims of labor market discrimination. In an unprecedented move last December, Chair Lucas actively solicited discrimination complaints from white male workers, arguing that DEI initiatives function as illegal quotas that make it easier for employers to discriminate against white men. Previous EEOC chairs have avoided using their platform to solicit charges from specific demographic groups. In January 2026, the Republican majority voted to give the chair more power to decide which matters reach the full commission and to require nearly all litigation to be approved by the commissioners. The vote to centralize power with the chair and Republican majority completely neutralizes bipartisan decision-making over which cases to pursue.

Right-wing commentators have cited a now debunked report that over 90% of new corporate hires were people of color as evidence of DEI gone too far. In this post, we expose the fallacy of such claims by showing increased employment among people of color is consistent with demographic changes in the working-age population. The Trump EEOC’s targeting of employers with programs aimed at improving hiring and promotion of historically underrepresented groups defies the ongoing demographic changes of the U.S. labor force and the spirit of the Civil Rights Act that created the agency. Under current law, anyone who believes they’ve experienced discrimination based on race, sex, color, religion, national origin, age, and disability can file a charge. By prioritizing so-called “reverse discrimination,” fewer of the underfunded agency’s resources will be available to investigate systemic inequities against workers of color or members of any other protected class.

DEI programs or not, the U.S. working population is increasingly more diverse and less white

 As Trump’s EEOC goes after private employers based on their efforts to improve workplace diversity, equity, and inclusion, it is important to understand that non-Hispanic white workers are a smaller share of the U.S. workforce than they were decades ago. In 1989, for example, more than 3 out of 4 people between the ages of 16 and 64 were white (see Figure A). This share declined by 28% over the course of the last three decades. In 2025, just over half (55.4%) of the U.S. working-age population was white. People of color, on the other hand, have become an increasing share of the working-age population since 1989.

Figure A

Last year, more than 2 in 5 individuals between the ages of 16 and 64 were either Hispanic, Black, or Asian American and Pacific Islander (AAPI). This figure nearly doubled between 1989 and 2025. A significant share of this growth can be attributed to the growth of the Hispanic working-age population, which nearly tripled over the course of the last three decades with increased immigration.

Figure B

This demographic shift is most evident among younger workers—the new hires who will gradually replace less diverse cohorts of older workers as they retire. Nearly 1 in 2 individuals between the ages of 16 to 24 are either Black, Hispanic, AAPI, or American Indian and Alaska Native (see Figure B), up more than 80% since 1989. Based on these numbers, it is only logical that historically underrepresented groups of workers account for a larger share of employment now and in the future than they did decades ago—regardless of DEI initiatives. In fact, workplaces that reflect the growing diversity of the labor force are a sign of less discrimination, not of a bias against white workers. Moreover, employers who set and pursue DEI goals that develop the talent and career growth of workers of color are making forward-looking investments in the leadership of the future workforce. This has been a primary motivation and justification for many DEI initiatives.

Despite the growing diversification of the U.S. workforce, EEOC data suggest that people of color continue to be underrepresented in leadership positions

While Trump’s EEOC targets and accuses employers with equity initiatives of bias against white workers, demographic statistics reported to the regulatory agency paint a different picture when it comes to representation in leadership roles. Private employers with 100 or more employees and federal contractors with 50 or more employees are required to file an annual EEO-1 report. These data are used to support EEOC enforcement efforts and can raise flags about systemic patterns of discrimination. Based on publicly available EEO-1 data for 2023 (latest year), white workers are significantly more likely to be overrepresented in leadership positions (see Figure C). In 2023, for example, Black, Hispanic, AAPI, and AIAN workers accounted for more than 40% of workers in all job categories at EEO-1 reporting firms, but only about 1 in 5 employees in executive- or senior-level positions. Similarly, less than 1 in 3 workers in mid-level, managerial positions identified as Black, Hispanic, AAPI, or AIAN in 2023.

Figure C

Table 1 presents the 2023 data along with data for 2020—the year several private employers launched DEI initiatives in response to the racial reckoning that followed the murder of George Floyd at the hands of police officers—and 2017. While it is impossible to disentangle DEI from demographic and pandemic effects based on these data alone, we can see changes in the racial composition of employees at EEO-1 reporting firms over these years that are generally consistent with changes in the working-age population shown in Figure A. More importantly, nothing in these statistics points to evidence of systemic “DEI-motivated discrimination” against white workers. Relative to the preceding three years, between 2020 and 2023, there was a larger increase in the share of all people of color employed in executive-/senior- level and first-/mid-level management positions—3.7 and 3.3 percentage points, respectively—but white workers remained significantly overrepresented in these roles. Throughout the entire period, Black and Hispanic workers remained grossly underrepresented relative to their share of all positions.

Table 1

The Trump EEOC’s intentional diversion of attention and resources away from more prevalent forms of discrimination will hurt all workers

Aggregate results alone neither qualify nor disqualify a charge of discrimination against a specific employer. All charges, whether filed by an individual or an EEOC commissioner, are individually investigated— a process involving extensive information gathering and detailed examination of the facts to assess the merits of the charge. The administration’s aggressive search for evidence of “reverse discrimination” diverts the limited resources of an already understaffed and underfunded agency away from investigating more prevalent forms of racial and gender discrimination that are consistent with persistent racial and gender wage gaps and patterns of occupational segregation.

It would be a mistake to assume that Trump and the Republican majority leading the EEOC don’t understand the nature of demographic changes in the U.S. population and labor market. The administration’s campaign against DEI initiatives and accusations of bias against white male workers represent an emboldened assertion of white supremacy to stoke fear and to recast growing racial, ethnic, and gender diversity as a threat to social and economic advantages historically afforded to white men. This is a strategy that has often led to periods of slower economic growth and greater economic inequality. In the end, it not only makes the American workplace less fair, but it also risks lowering the standard of living for all working people and their families. 

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. 

This interactive chartbook provides a statistical snapshot of race and ethnicity in the United States, depicting racial/ethnic disparities observed through

• Population demographics
• Civic engagement
• Labor market outcomes
• Income, poverty, and wealth
• Health

The chartbook also highlights some notable intersections of gender with race and ethnicity, including educational attainment, labor force participation, life expectancy, and maternal mortality. The findings are bracing, as they show how much more work we need to do to address longstanding and persistent racial inequities.

Most charts include data for five racial/ethnic groups in each of the charts—white, Black, Hispanic, Asian American and Pacific Islander (AAPI), and American Indian and Alaska Native (AIAN). In the charts and text, “Americans” refers to all U.S. residents, regardless of citizenship status.

Researchers seeking disaggregated data and statistics for AAPI and AIAN groups are encouraged to look at sources cited in the companion essays in the Anti-Racist Economic Research and Policy Guide: AAPI Data and the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis.

As our efforts illustrate, collecting and maintaining data sources that are representative of the entire U.S. population is an essential first step toward overcoming the invisibility, neglect, and lack of understanding experienced by many communities of color. Future work on this project will involve identifying comparable data from alternative sources that fill in as much of the missing information in the chartbook as possible.

In this interactive chartbook, additional notes and source information can be accessed by clicking on the ellipses ( … ) in the notes and sources lines under the charts.

Population demographics

The U.S. has become more racially and ethnically diverse over the last two decades: Share of U.S. population by race and ethnicity, 2000, 2010, and 2020

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Each decennial Census since 2000 has revealed a more racially and ethnically diverse U.S. population. While the share of people who identify as Black (about 12%) or American Indian and Alaskan Native (0.7%) has remained constant, the non-Hispanic white share of the population has declined from 69.1% in 2000 to 57.8% in 2020. On the other hand, a growing share of U.S. residents identify as Hispanic (increasing from 12.5% in 2000 to 18.7% in 2020) or Asian American and Pacific Islander (increasing from 3.7% in 2000 to 6.1% in 2020). These changing population demographics reflect different trends in birth, mortality, and immigration rates across groups. Since 2000, there have also been significant changes in how people identify racially. Notably, a growing share of people identify as being of two or more races (this would include people who, for example, identify as Black and AAPI, but would not include people who identify as Black and Hispanic, as they are identifying Black alone as their race and Hispanic as their ethnicity). Also, a growing but still small share of people identify as being of a race other than those explicitly defined by the Office of Management and Budget (OMB).

As Trevon Logan notes in his essay, it is the OMB that issues regulations regarding the classifications of race and ethnicity by federal agencies, including the U.S. Census Bureau, which conducts the major household and business surveys used by researchers. There are six permitted race categories and two ethnicity classifications, Hispanic and non-Hispanic. As such, everyone is a member of both a race and ethnicity. For more on the current classifications, see Logan’s essay.

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While U.S. residents are overwhelmingly citizens, Asian American/Pacific Islander and Hispanic citizens are more likely to be first-generation immigrants: Share of U.S. population by race/ethnicity and nativity, 2024

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Across all racial and ethnic groups, an overwhelming majority of people in the United States are U.S. citizens, according to data from the Current Population Survey. However, nativity shares vary across racial groups. White persons (95.9%), American Indian and Alaskan Native (AIAN) persons (81.3%), and Black persons (88.6%) are most likely to have been born citizens (born in the United States or to United States citizens abroad), compared with over half of the Hispanic population (66.7%) and more than one-third (37.8%) of the Asian American and Pacific Islander (AAPI) population.

Immigration status also varies widely. AAPI residents are most likely to be immigrants: more than one-third (38.3%) were not born U.S. citizens but became U.S. citizens (i.e., are naturalized U.S. citizens), while another 23.9% are not citizens. Hispanic residents are next most likely to be immigrants: 12.6% are naturalized citizens and 20.7% are not citizens. These statistics highlight only a fraction of the diversity represented within and across different racial and ethnic groups. As several essays in the Advancing Anti-Racist Economic Research and Policy guide explain, analyses that use categories or group descriptions that are too broadly defined can lead to inaccurate conclusions.

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The uneven geographic distribution of racial and ethnic populations highlights the influence of state and local policy on racial inequality: Share of state population by race and ethnicity, 2020

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The U.S. Census Bureau projects that Black, Hispanic, AAPI, and other people who do not identify as white will collectively account for over half of the population of the United States by 2044. In California, Hawaii, Maryland, Nevada, New Mexico, Texas, and the District of Columbia, the white population is already in the minority, and in Arizona, Florida, Georgia, New Jersey, and New York, white persons make up just over half of the population. This interactive map shows areas of population density for each race or ethnic group (click on a race or ethnic group) along with the racial and ethnic distribution of each state’s population (click on a state). It shows that Southern states and the District of Columbia have the largest shares of residents who are Black, with the highest shares in the District of Columbia (40.9%), Mississippi (36.4%), and Louisiana (31.2%). Southwestern and Western states are home to a large percentage of Latinos, with the highest shares in New Mexico (47.7%), Texas (39.3%), and California (39.4%). AAPI residents, including Native Hawaiians, predictably account for nearly half (46.8%) of the population of Hawaii but are also a significant share of the population in California (15.5%) as well as New Jersey and Washington state (10.2% each). Also, as the group’s name would indicate, American Indian and Alaska Native residents account for the highest share of the population in Alaska (14.8%), followed by New Mexico (8.9%), South Dakota (8.4%), and Oklahoma (7.9%). White Americans account for the largest majority of the population in several Northeastern states (90.2% in Maine, 89.1% in Vermont, and 87.2% in New Hampshire) and West Virginia (89.1%).

The patterns illustrated in the map trace each group’s unique history of settlement, immigration, and migration in this country. But they also help to make a point about the important role that state and local policies play in either improving or worsening racial disparities in the United States. As just one example, EPI research shows that Southern states, which have a high density of Black residents, are more likely than states in other regions to use preemption laws to stop local governments from setting strong labor standards, such as raising the minimum wage and guaranteeing paid sick leave.

For more on preemption laws in the South, see Hunter Blair et al., Preempting Progress: State Interference in Local Policymaking Prevents People of Color, Women, and Low-Income Workers from Making Ends Meet in the South, Economic Policy Institute, September 2020.

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Current population demographics by race/ethnicity and age support projections that people of color will become the collective majority by 2050: Share of U.S. population within given age ranges, by race and ethnicity, 2024

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The changing racial and ethnic makeup of the U.S. population is foretold in the age distribution of different racial and ethnic groups. In 2024, over a quarter (28.9%) of people who identified as Hispanic were under the age of 18, as were about a quarter of those who identified as Black (24.5%), American Indian and Alaska Native (AIAN) (27.9%) and a fifth within those who identified as Asian American and Pacific Islander (19.9%). A smaller share of the white population (17.8%) belonged to this younger age cohort while over a third (36.9%) of white residents were near or at retirement age (age 55 or older)—a much larger share than for other racial and ethnic groups. As the current population ages, the older population will remain predominantly non-Hispanic white while Black, Hispanic, AAPI, and AIAN persons will be a growing share of the younger population. This racial and ethnic generation gap will require balancing the interests of a younger, less wealthy, more racially and ethnically diverse population with those of an older, wealthier, predominantly white population. However, these generations are linked in important ways. Older workers and retirees have a stake in worker, economic, and racial justice for those younger workers who in the years ahead will be a growing share of workers driving the national economy and providing many of the services the aging population relies on. Census population projections from 2022 (the latest available) indicate that in 2050, non-Hispanic white persons will account for less than half (48.4%) of the U.S. population (see U.S. Census Bureau, 2023 National Population Projections Tables, Table 4).

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Men’s educational attainment is highly stratified by race and ethnicity, with American Indian and Alaska Native, Hispanic, and Black men most likely to be “working class”: Share of men aged 25 and older within given level of educational attainment, by race and ethnicity, 2024

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The term working class has been used to describe working-age adults who have less than a bachelor’s degree. Based on their high shares without a bachelor’s degree or more education, American Indian and Alaska Native (AIAN) (85.3%), Hispanic (80.9%), and Black (76.5%) men are more likely to be considered working class (under this definition) than are white (60.3%) or Asian American and Pacific Islander (AAPI) (40.7%) men. Even among the groups of men most likely to be considered working class, there is still a wide range of educational attainment that includes everything from less than a high school diploma to some college. The some college category includes attendance at a four-year or two-year institution, but no degree; it also includes completion of a two-year associate or technical degree. The groups with the highest shares of people with less than a high school education are Hispanic men (27.6%) and AIAN men (23.5%) and 57.7% of Hispanic men and over half of AIAN men (58.2%) have no education beyond high school. While about half (47.0%) of Black men also have no education beyond high school, Black men are more likely than either Hispanic or AIAN men to have a bachelor’s or advanced degree, but still much less likely to have that level of education than either white or AAPI men. AAPI men lead all other racial groups in the share (59.2%) who have a bachelor’s or advanced degree. These patterns of educational attainment are shaped by multiple factors, including differences in immigration policies applied to Asian versus Latin American countries, as well as the legacy of racial discrimination and oppression that severely limited educational opportunities for generations of Black and Native Americans.

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Most women have more than a high school education, but Latinas and AIAN women lag behind other groups in attaining higher education: Share of women aged 25 and older within given level of educational attainment, by race and ethnicity, 2024

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In 2024, across most racial and ethnic groups, at least half of women aged 25 or older had some education beyond a high school diploma. Latinas were the exception—only 49.1% had some level of education beyond high school and 24.2% had less than a high school education, a much higher percentage than any other group of women (1.2 to nearly 5 times as much). Those women least likely to have a bachelor’s or advanced degree were American Indian and Alaskan Native (AIAN) women (19.7%) and Latinas (23.9%). Asian American and Pacific Islander (AAPI) and white women had the highest levels of educational attainment with 56.9% of AAPI women and 41.8% of white women having at least a bachelor’s degree, followed by 29.9% of Black women. As with men, these patterns of educational attainment are shaped by multiple factors, including differences in immigration policies applied to Asian versus Latin American countries, as well as the legacy of racial discrimination and oppression that severely limited educational opportunities for generations of Black and Native Americans. But compared with male educational attainment by race and ethnicity women tend to have higher levels of educational attainment (see Chart 5).

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While the Black and AIAN imprisonment rate has decreased, Black and AIAN people are still five times as likely as white people to be imprisoned: Imprisonment rates per 100,000 U.S. residents by race and ethnicity, 2012–2022

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In response to the demand for criminal justice reform and a shift away from the “tough on crime” politics of the 1980s and 1990s, imprisonment rates for Black, American Indian and Alaska Native (AIAN), Hispanic people have fallen over the last decade. But Black, AIAN, and Hispanic people are still much more likely to be incarcerated than white people, whose imprisonment rate has stagnated over the past decade. Over 1,000 out of every 100,000 U.S. residents who are Black or American Indian and Alaska Native (AIAN) were imprisoned in 2023, followed by 603 out of 100,000 Latino U.S. residents, 229 out of 100,000 white U.S. residents, and 88 out of 100,000 Asian American and Pacific Islander U.S. residents. Thus, the approximately 1.8 million people held in U.S. prisons at the end of 2022 —an often-forgotten segment of the U.S. population—are disproportionately Black, AIAN, Hispanic, and other people of color. 

Data on the size of the overall incarcerated population come from the “Correctional Populations in the United States, 2022—Statistical Tables” published by the U.S. Department of Justice in May 2024. 

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Black and AIAN men have an exceptionally high imprisonment rate: Imprisonment rates per 100,000 U.S residents, by race/ethnicity and gender, 2022

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This chart makes two facts very clear: That imprisonment in the United States is not only a gendered issue—with men being much more likely to be imprisoned—but also an issue of racialized gender, with Black and American Indian and Alaska Native (AIAN) men being far and away the most highly imprisoned group. Among women, AIAN residents had the highest imprisonment rate (173 per 100,000), followed by Black residents who had an imprisonment rate (64 per 100,000) in 2022. AIAN women were almost three times as likely to be imprisoned as Black women, around four times as likely to be imprisoned as White and Hispanic women, and 34 times as likely to be imprisoned as AAPI women. Among men, Black residents had the highest imprisonment rate (1,826 per 100,000), followed by AIAN men (1,443 per 100,000). Black men were more than twice as likely to be imprisoned as Hispanic men, more than five times as likely to be imprisoned as white men, and almost 13 times as likely to be imprisoned as AAPI men. AIAN men were almost twice as likely to be imprisoned as Hispanic men, more than four times as likely to be imprisoned as white men, and more than ten times as likely to be imprisoned as AAPI men.

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Civic engagement

Consistently higher turnout among white voters was challenged by historic Black voter turnout in 2012 and, to a lesser extent by historic Hispanic and Asian voter turnout in 2020: Voter turnout in presidential election years by race and ethnicity, select years 1992 to 2024

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The right to vote is the most powerful right of U.S. citizenship—and widespread voter participation is essential to a functional democracy. Yet many U.S. citizens ages 18 and older do not vote. Data on voter participation during presidential election years since 1992 reveal that turnout varies significantly by race and ethnicity and changes over time. Since 1992, voter turnout has typically been highest among white voters—ranging from 60.7% to 70.9%—although Black voter turnout saw a huge increase in 2008 and 2012 during the election and reelection of the nation’s first Black president, Barack Obama. In fact, 2012 was the only election in which Black voter turnout (66.2%) exceeded white voter turnout (64.1%). Hispanic and Asian voter turnout was less than 50% in all presidential election years between 1996 and 2016, until both groups had the largest turnout in decades in 2020 (53.7% and 59.7% respectively). In the 2024 presidential election, voter participation declined among Black, Hispanic and AAPI adults. While one’s personal decision to participate in an election can be influenced by any number of factors—including enthusiasm about a particular candidate or confidence in the democratic process—rampant forms of voter suppression in some states undoubtedly contribute to these disparities as well.

For more on the impact of state laws that limit access to voter registration, revoke the right to vote for returning (formerly incarcerated) citizens, or otherwise make it more difficult for certain populations to cast a ballot, see “State Voting Laws,” Brennan Center for Justice, accessed May 5, 2022;  “State Voting Rights Tracker,” Voting Rights Lab, accessed May 5, 2022.

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Amid dramatic decline in union membership since the 1970s, Black workers have held onto the highest rate of union membership for decades: Union membership rates, by race and ethnicity, 1973–2024

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Like the constitutional right to vote in civil society, union membership gives workers a voice—in this case, a voice at work. But as the chart shows, since 1973, union membership has declined for all racial and ethnic groups. Union membership is an important metric of the state of the American worker given the role that labor unions play in giving workers a stronger, collective voice to advocate for higher pay, better benefits, and training and promotional opportunities, as well as protections against discrimination and harassment. In a unionized workforce, for example, collective bargaining results in labor contracts that help to create greater transparency through clearly defined policies and pay structures. These contracts help reduce the potential for pay discrimination by limiting an employer’s discretion in paying different wages to comparably qualified individuals doing the same job and by providing workers with critical protections and direct recourse against other forms of exploitation or mistreatment. The benefits of union membership are a likely contributor to the higher union membership rate of Black workers, given their long history of unequal treatment relative to other groups of workers. Between 1973 and 1980, Hispanic workers also had higher rates of union membership than white workers. While the subsequent across the board decrease in union membership has brought union membership rates by race and ethnicity closer together, in 2024, Black workers were still more likely to be union members (11.7%) compared with white workers (10.0%), Asian American and Pacific Islander workers (8.9%), and Hispanic workers (8.5%).

Still, the labor movement, like any other U.S. institution, is not immune to racism. Unions must continue to become more diverse, inclusive, and dynamic as they serve the vital role of leveling the playing field for all workers.

For more on the benefits and protections conferred by union membership, see Celine McNicholas et al., Why Unions Are Good for Workers—Especially in a Crisis Like COVID-19, Economic Policy Institute, August 2020 and Valerie Wilson, “The Costs of Racial and Ethnic Labor Market Discrimination and Solutions That Can Contribute to Closing Employment and Wage Gaps,” testimony before the U.S. House of Representatives Select Committee on Economic Disparity and Fairness in Growth, January 20, 2022.

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Labor market

Black women have maintained the highest labor force participation rate amid post-1970 rise in women’s labor force participation overall: Labor force participation rate for women by race and ethnicity, 1973–2024

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The labor force participation rate is an important indicator of economic well-being. It shows the number of people in the labor force—people who are employed or unemployed but looking for work—as a share of the number of civilian, noninstitutionalized people ages 16 and older. Across racial and ethnic groups, women’s labor force participation rose significantly from the 1970s through the 1990s for a number a reasons: increased access to higher education, and the introduction and widespread availability of the birth control pill, to name a few. After leveling off during most of the first decade of the 2000s, labor force participation by women declined during or after the Great Recession of 2007–2009. And it declined again during the 2020 COVID-19 pandemic and recession as the burden of job losses and care responsibilities disproportionately impacted women. In 2024, Black women had the highest labor force participation rate at 60.5%, followed by Hispanic (58.9%), Asian (58.6%), white (56.7%), and American Indian and Alaska Native women (55.1%). While Latinas have historically had the lowest rates of labor force participation among women, their labor force participation rate had been climbing steadily in the four years leading up to the COVID-19 pandemic. Historically, Black women have had stronger labor force attachments than other groups of women. This is part of the legacy of being forced to work as enslaved people, but the necessity of work has continued for Black women who are often co-breadwinners if not sole earners for their households.

For more on the rise of women’s labor force participation from the 1970s see Elisabeth Jacobs and Kate Bahn “Women’s History Month: U.S. women’s labor force participation”, Washington Center for Equitable Growth, March 22, 2019.  

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Hispanic men have maintained the highest labor force participation rate even as labor force participation of all men has declined since the 1970s: Men’s labor force participation rate by race and ethnicity, 1973–2024

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Across all racial and ethnic groups, men’s labor force participation rates have declined significantly since the 1970s, with the sharpest decline occurring during and since the Great Recession of 2007–2009. While this trend in part reflects an aging population with a growing share of retirees, researchers have suggested that labor force participation has fallen among prime-age men (ages 25–54) due to a rise in serious health conditions that are a barrier to work, the emerging opioid crisis, or technological changes that encourage younger men  (under age 30) to allocate less time to work and more time to leisure activities like playing video games. Unlike with Black women, who have the highest labor force participation rate among women, Black men in 2024 had the lower labor force participation rates than white and Asian men (65.9%). And unlike with Hispanic women, who have historically had the lowest labor force participation rates among women, Hispanic men have had the highest labor force participation rate, which reached 75.5% in 2024. The ranking of men’s labor force participation rates by race and ethnicity has remained constant over the last three decades.

For more on the likely reasons for declining male labor force participation see Alan Krueger, Where Have All the Workers Gone? An Inquiry into the Decline of the U.S. Labor Force Participation Rate, Brookings Papers on Economic Activity, September 2017; and Mark Aguiar et al., “Leisure Luxuries and the Labor Supply of Young Men,” National Bureau of Economic Research Working Paper 23552, June 2017.

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Black and AIAN unemployment is consistently higher than unemployment of all other racial and ethnic groups: Annual unemployment rate by race and ethnicity, 1979–2024

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Relative rates of unemployment by race and ethnicity have been remarkably consistent over time. Typically, the annual unemployment rates of American Indian and Alaska Native (AIAN), Black, and Hispanic workers are significantly higher than those of white workers. The difference between Asian and white unemployment rates is smaller, and the size of the gap fluctuates, as does which group has the lower unemployment rate. In 2024, this pattern held, with an unemployment rate of 6.5% for AIAN workers, 6.0% for Black workers, followed by 5.1% for Hispanic workers, 3.6% for white workers, and 3.5% for Asian workers. While 2023 saw historical low rates for Black unemployment, one of the most enduring features of the U.S. labor market is the roughly 2-to-1 ratio of the Black and white unemployment rates.

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Higher education typically lowers a worker’s chances of being unemployed but does not eliminate racial and ethnic disparities in unemployment rates: Unemployment rate by race/ethnicity and educational attainment, 2024

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A breakdown of unemployment rates by race, ethnicity, and education level shows the limits of educational attainment as a factor in addressing inequitable economic outcomes. As the chart shows, racial and ethnic disparities in unemployment rates exist at every level of educational attainment. And Black workers have the highest rates of unemployment among all groups without a college degree. In fact, even at historically low rates of unemployment in 2024, only the most highly educated Black workers approached anything near unemployment rate parity with their white counterparts. The figure also shows that while education can contribute to better outcomes—unemployment rates are lower for all groups at higher levels of education—education alone does not necessarily create equal outcomes. Reading this chart alongside Chart 13 suggests that differences in the average unemployment rates of racial and ethnic groups can only be partially explained by relative differences in education, skill, experience or local labor market conditions—discrimination remains an undeniable factor.

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Black, Hispanic, and AIAN workers earn lower wages and have smaller gender wage disparities than their white and AAPI counterparts: Median wages by race/ethnicity and gender, 2024

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There are sharp differences in the wages earned by typical workers of different racial groups in the United States. Asian American and Pacific Islander (AAPI) and white workers are paid the highest wages at the median, while Black, Hispanic, and American Indian and Alaska Native (AIAN) workers are paid significantly less. The gender differences are also greater among AAPI and white workers than among Black, Hispanic and AIAN workers. While AAPI and white men far out-earn AAPI and white women, Black and Hispanic men and women have much more similar median wages.

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Even after controlling for education and other factors known to affect earnings, women—particularly Black and Hispanic women—are paid far less than white men: Regression-adjusted hourly wage gaps for women relative to non-Hispanic white men, by race and ethnicity, 2024

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Women of all racial and ethnic groups in the U.S. have a significant pay penalty by virtue of their gender, even when we account for several factors that could reasonably influence a worker’s productivity or wage rate, including education, marital status, age (a measure of potential experience) and geographic area (a measure of local labor market conditions). Black and Hispanic women face an additional pay penalty by virtue of their race or ethnicity. The chart depicts these wage gaps, presented as how much less women make than non-Hispanic white men. The fact that Black and Hispanic women earn about a quarter less than white men on average when calculating regression-adjusted wage gaps mean, then, that the pay penalty is not a result of differences in formal education between those groups of women and white men. One partial explanation for these wage disparities is occupational segregation, by which women of color are more highly concentrated in occupations with low pay, even relative to their education level. However, women of all races and ethnicities also often earn less than men in the same occupation (not shown in the chart), an indication of potential pay discrimination.

For more on occupational segregation and on gender pay gaps by occupation, see Jessica Schieder and Elise Gould, Women’s Work” and the Gender Pay Gap: How Discrimination, Societal Norms, and Other Forces Affect Women’s Occupational Choices—and Their Pay, Economic Policy Institute, July 2016; Emily Carew and Valerie Wilson, “Latina Equal Pay Day: Latina Workers Remain Greatly Underpaid, Including in Front-Line Occupations,” Working Economics Blog, Economic Policy Institute, October 20, 2021; Valerie Wilson, “Black Women Face a Persistent Pay Gap, Including in Essential Occupations During the Pandemic,” Working Economics Blog, Economic Policy Institute, August 2, 2021.

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Income, poverty, and wealth

Racial and ethnic disparities in median household income have been largely persistent across time: Inflation-adjusted median household income (2024 dollars), by race and ethnicity, 1972–2024

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In the United States, households of different racial and ethnic backgrounds bring in significantly different amounts of income and have done so for decades. At the median, Black, Hispanic, and American Indian and Alaska Native (AIAN) households earn the least on an annual basis, while Asian and white households earn the most. It is notable, though, that in 2023, Black households had the highest household income on record and experienced the largest increase in income between 2020 and 2023. Significant gaps in employment opportunities (shown in Chart 13) and lower wage levels (shown in Chart 15) translate into lower incomes among Black, Latino, and AIAN households. Household income is also a function of the number of earners in a household. Though not shown here, past EPI research found that in the pre-pandemic economy, about a third of Black nonelderly households (where the head of household is age 18–64) had two or more earners, compared with nearly half of white and Hispanic nonelderly households. This racial disparity in the number of household earners is not just a function of how many working-age adults live in the household, or family structure, but is another measurable consequence of the persistent 2-to-1 ratio between the Black and white unemployment rates (shown in Chart 13). As income inequality in the United States has increased in general over the past 50 years, disparities between the least and most well-off groups have continued to persist and, in some cases, have grown.  

For more on earners per household by race, see Elise Gould and Valerie Wilson, Black Workers Face Two of the Most Lethal Preexisting Conditions for Coronavirus—Racism and Economic Inequality, Economic Policy Institute, June 2020. For more on increasing income inequality, see Elise Gould, “Decades of Rising Economic Inequality in the U.S.,” testimony before the House of Representatives Ways and Means Committee, Washington, D.C., March 27, 2019.

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Black and AIAN households are more likely to have the lowest annual incomes—under $25,000 per year in 2024: Share of households within given income range by race and ethnicity, 2024

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This chart extends beyond the data on median or midpoint of household income shown in Chart 17 to provide a more detailed look at where different groups fall across the entire household income distribution. In 2024, 22.9% of Black households, 23.3% of American Indian and Alaska Native households, 15.1% of Hispanic households had annual incomes under $25,000, compared with just 11.4% of white households and 9.3% of Asian households. This $25,000 figure is well below the 2024 official poverty threshold for a family of two adults and two children ($31,812). Conversely, 29.3% of Asian households and 17.8% of white households had annual incomes at or above $200,000—the highest income category—compared with only about 6%-10% of Black, AIAN, and Hispanic households.  

Poverty threshold data can be found in the U.S. Census Bureau’s Poverty in the United States: 2024 data tables, published September 09, 2025 

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Persistently elevated AIAN, Black, and Hispanic child poverty rates have thwarted progress reducing overall child poverty in the U.S.: Child poverty rates, by race and ethnicity, 1974–2024

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A cruel and unfortunate reality of structural racism in the U.S. economy is that even in the “best” of economic times, Black, American Indian, and Alaska Native (AIAN), and Hispanic children experience much higher rates of poverty than white children. In 2024, 30.5% of AIAN children, 25.4% of Black children and 20.2% of Hispanic children lived below the official poverty threshold, compared with just 8.2% of non-Hispanic white children 6.4% of Asian children. While child poverty has fallen significantly for Black, Hispanic, and Asian American children over the past 40 years, Black and Hispanic child poverty rates remained over 20% in 2024. Additionally, in 2024, AIAN children had the highest rates of child poverty at over 30 percent (30.5%). This large and persistent disparity in child poverty combined with the fact that Black and Hispanic children have become an increasing share of the underage 18 population over time (see Chart 1 and Chart 4) has resulted in very little change in the overall child poverty rate since 1974. Given the long-term effects of exposure to poverty in childhood, addressing these persistent disparities must play a role in our approach toward building equity and moving the needle on child poverty.

For more on the long-term effects of exposure to poverty in childhood, see Kerris Cooper and Kitty Stewart, “Does Money Affect Children’s Outcomes? An Update,” CASEpapers (203), The London School of Economics and Political Science, July 2017; Randall Akee et al., “Parents’ Incomes and Children’s Outcomes: A Quasi-Experiment,” American Economic Journal: Applied Economics, January 2010.

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Poverty rates are higher among AIAN, Black and Hispanic working-age adults: Poverty rates for age 18–64, by race and ethnicity, 1974–2024

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While poverty across the working-age population (ages 18 to 64) is lower than that for children (see Chart 19), disparities by race and ethnicity follow a similar trend, with American Indian and Alaska Native (AIAN), Black, and Hispanic adults more likely to be impoverished than white and Asian adults. Poverty is a measure of economic deprivation, and among working-age adults in particular, reflects disparities in unemployment, wages, and income. Life circumstances, such as severe disability and major illness—which can also limit earned income or quickly deplete any available savings—also contribute to poverty for this age group. The racially coded misrepresentation of poverty as some kind of moral or cultural pathology has hindered the political will needed to sustain and strengthen vital income supports that have proven effective in fighting poverty.  

For more on the misrepresentation of poverty as a cultural pathology see William “Sandy” Darity Jr., “Revisiting the Debate on Race and Culture: The New (Incorrect) Harvard/Washington Consensus.” Du Bois Review: Social Science Research on Race 8, no. 2, 467–476. For more on the vital income supports that would lessen poverty see Asha Banerjee and Ben Zipperer, “Social Insurance Programs Cushioned the Blow of the COVID-19 Pandemic in 2020,” Working Economics Blog, Economic Policy Institute, September 14, 2021.

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There are large racial disparities in poverty at older ages (65 and older)—likely reflecting differences in retirement preparedness and/or lifetime income disparities: Poverty rates for people ages 65 and older, by race and ethnicity, 1974–2024

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The poverty seen among older Americans in the chart is most likely the result of a lifetime of low earnings and a lack of retirement preparedness. While research shows that Social Security plays a critical role in keeping poverty rates among older Americans lower than they otherwise would have been (not depicted in the chart), older Black, Hispanic, and American Indian and Alaska Native (AIAN) adults still have relatively high poverty rates. Older Asian Americans are also more likely to live in poverty than older white Americans. Additionally, older Asian Americans have higher poverty rates than younger Asian Americans (see Chart 19 and Chart 20). This is likely due to a larger share of older Asian Americans having worked comparatively few years in the United States, or in jobs where they were unable to accumulate the necessary years for Social Security eligibility, leaving them less able to take advantage of work-based social safety net programs like Social Security.

For more on the causes of poverty among older Americans and the capacity of Social Security to lift older Americans—particularly women and people of color—out of poverty, see Kathleen Romig, Social Security Lifts More People Above the Poverty Line Than Any Other Program, Center on Budget and Policy priorities, April 2022. For more on the economic condition of the older Asian American population, see Victoria Tran, “Asian American Seniors Are Often Left Out of the National Conversation on Poverty,” Urban Wire (Urban Institute blog), May 31, 2017.

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Racial wealth disparities are stark and persistent, reflecting a history of exploitation and exclusion: Median family net worth by race and ethnicity, selected years from 1989 to 2022

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The chart shows sharp racial and ethnic disparities in net worth observed across time in the United States. Though not shown in the chart, these disparities reflect the differences in lived economic experiences between white, Black, Hispanic, and Asian families. Wealth can be accumulated both within and across generations, such that a high net worth can result from the benefit of prime earning years with 1) relatively few employment disruptions, 2) access to wealth-building savings and investment vehicles, 3) relatively few serious negative health shocks, and 4) well-timed wealth transfers from parents and grandparents.  The typical white household has many times the wealth of the typical Black or Hispanic household due to 1) their privileged position in the American labor market, which grants them access to more consistent and higher-quality employment opportunities, 2) their more limited exposure to the health risks brought on by poorer living conditions and discrimination, and 3) their history of access to wealth-building opportunities from which other groups have been excluded. 

In 2022, the Survey of Consumer Finances reported household wealth data for the Asian American population for the first time. Asian household wealth far outstrips that of other households in 2022, though this statistic should be couched with appropriate context: Asian Americans are an incredibly diverse group with varying economic circumstances related to, among other things, immigration history and country of origin; moreover, the SCF oversamples households that are likely to be wealthy. Further disaggregation of wealth data by immigration history could be useful in illuminating wealth disparities within the Asian American population.  

For more on the systemic barriers to Black wealth building see Natasha Hicks, Fenaba Addo, Anne Price, and William Darity Jr., Still Running Up the Down Escalator: How Narratives Shape Our Understanding of Racial Wealth Inequality, The Samuel Dubois Cook Center on Social Equity, 2021. For more on the barriers to Hispanic wealth building see Dedrick Asante-Muhammad, Alexandra Perez, and Jamie Buell, “Racial Wealth Snapshot: Latino Americans.” National Community Reinvestment Coalition, September 17, 2021.

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Health

Racial disparities in life expectancy reflect the cumulative disadvantage of living as a minority in the United States: Women’s and men’s life expectancy at birth, by race and ethnicity, 2022

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Racial disparities in life expectancy have been documented as far back as statistics on life expectancy have been recorded in the U.S, with clear and persistent distinctions between privileged groups and disadvantaged groups. That is, rather than groups shifting in their ranking of life expectancy randomly across time, there are distinct patterns in which groups live longer lives than others. In general, Black and AIAN women and men live much shorter lives than white and Asian women and men. 

In 2022, Asian American women and men had the longest life expectancies, at 86.3 years and 82.3 years respectively. AIAN women and men had the lowest life expectancies, at 64.5 years and 71.3 years respectively. This massive gap in life expectancy approaching two decades can be attributed to several factors, many of which are structural and rooted in economic disparity. In recent years, life expectancy gains have disproportionately gone to those in the highest income categories, who are disproportionately white and Asian (see Chart 18). Alongside the history of white supremacy and anti-Black racism in the United States, these economic roots of also help to explain persistent the persistent Black-white gap in life expectancy. That Black-white gap has fluctuated somewhat over the past decade, shrinking due to the impact of opioid-related “deaths of despair” on lowering white life expectancy, and reopening as COVID-19 related mortality disproportionately impacted Black and brown communities. 

Hispanic women and men tend to live longer than white women and men, though that life expectancy advantage has been shown to diminish with subsequent generations of U.S.-born Latinos. This suggests that there may be something uniquely deleterious about living as a minority in the United States.

For more on gaps in life expectancy, effects of the opioid crisis, and Hispanic life expectancy see Congressional Research Service, The Growing Gap in Life Expectancy by Income: Recent Evidence and Implications for the Social Security Retirement Age, CRS Report R44846, July 6, 2021; Helena Hansen and Julie Netherland, “Is the Prescription Opioid Epidemic a White Problem?” American Journal of Public Health 106, no. 12 (December 2016), 2127–2129 (doi: 10.2105/AJPH.2016.303483); Osea Giuntella, “The Hispanic Health Paradox: New Evidence from Longitudinal Data on Second and Third-Generation Birth Outcomes,” SSM – Population Health, vol. 2 (December 2016), 84–89 (doi.org/10.1016/j.ssmph.2016.02.013).

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The Affordable Care Act significantly reduced uninsured rates across racial and ethnic groups, but disparities remain: Uninsured rates by race and ethnicity, 2008–2024

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The Affordable Care Act (the ACA or “Obamacare”) expanded health insurance coverage to middle- and low-income Americans, which disproportionately benefited those groups with the least access—Hispanic Americans and American Indians and Alaska Natives (AIAN), and to a lesser extent Black Americans. Despite the marked improvement in health insurance coverage rates since the implementation of ACA, disparities between groups remain stark, with Hispanic and AIAN uninsured rates double Black rates, and approaching four times as high as the uninsured rates of white and Asian American and Pacific Islanders (AAPI). Early diagnosis and treatment are essential to minimizing the severity of chronic illnesses, and regular health care is important for promoting better overall health. The lack of health insurance often results in a choice to delay receiving health care until one’s condition is critical, contributing to racial disparities in health outcomes and life expectancy.

For more on how the ACA expanded health coverage, particularly to certain groups, see Samantha Artiga, Latoya Hill, Kendal Orgera, and Anthony Damico. “Health Coverage by Race and Ethnicity, 2010–2019,” Kaiser Family Foundation, July 16, 2021; Jesse Cross-Call, Medicaid Expansion Has Helped Narrow Racial Disparities in Health Coverage and Access to Care, Center on Budget and Policy Priorities, October 2020.

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Black mothers are far more likely to die from pregnancy-related causes than are white and Hispanic mothers: Pregnancy-related deaths per 100,000 live births by race and ethnicity, 2023

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Maternal mortality rates are a stark indicator of racial disparities in public health in the United States. Black women are over twice as likely to die from a pregnancy-related cause as white women, almost three times as likely as Hispanic women, and almost four times as likely as Asian women. Although not shown in the chart, these racial disparities persist regardless of a woman’s social or economic status. Health status and differential access to quality prenatal care play a major role in maintaining these disparities, as does structural racism more generally. To adequately address these disparities in maternal health outcomes, we must confront racism and bias in the U.S. health care system and the implications for how health care providers and personnel communicate with and treat patients.

For more on the causes and solutions to Black maternal mortality, see “Working Together to Reduce Black Maternal Mortality,” Centers for Disease Control and Prevention, April 6, 2022.

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AIAN population 1-year estimates and 3-year rolling averages, select charts

Appendix

Appendix

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Although job growth began to wane in the second half of 2024, the current administration’s economic mismanagement has led to a significant slowdown in job growth this summer. The most recent jobs report confirmed that the economy actually lost jobs in June 2025, and job growth for August was much weaker than anticipated.

Despite all this chaos and uncertainty, Hispanic workers have managed to hold on to their previous job market gains. This resilience is largely a story about employment growth among Latinas. But there are growing signs that these workers and their families remain vulnerable to economic hardship as the current administration attacks immigrants, basic needs programs, and common-sense economics.

Despite a labor market slowdown, Hispanic workers continued to show strength in the first half of 2025

By 2023, the employment rate of Hispanic workers (63.8%) had achieved a near-full recovery from the shock of the COVID-19 pandemic. Despite weaker overall job growth earlier this year, the same share of Hispanic workers remained employed in April 2025 (see Figure A). While this figure declined marginally to 63.4% in August 2025, it is much less pronounced than the decline Black workers are now experiencing. This is because Black workers are more directly affected by federal government layoffs and are generally among the first to sharply experience the adverse effects of an economic slowdown and eventual downturn.

Figure A

Latina workers remain the backbone of this story of resilience

Although Latinos have historically enjoyed higher employment rates than Latinas, the record gains for Hispanic workers over the last few years have been largely driven by Latinas. Despite being disproportionately affected by the pandemic recession, Latinas reached a record-high employment rate (56%) in 2023. The share of Latinas with a job reached a new peak (59.6%) in April 2025 (see Figure B). Once again, this experience differs from that of Black women, who have been adversely impacted by the weaker job growth since February of this year. In fact, the employment rate of Latinas surpassed that of Black women for the first time in March 2025.  

Figure B

Hispanic workers continue to face persistent disparities in earnings and poverty

Undoubtedly, Hispanic workers have shown remarkable resilience in the face of the Trump-Vance administration slowing job growth dramatically in 2025. But these workers and their families remain vulnerable to economic insecurity as fears of a downturn continue to rise. Income disparities and variability leave Hispanic workers and their families with less financial cushion than their peers to maintain their standard of living in case of a job loss. Less than half of Hispanic adults have enough savings to cover an unexpected $400 expense with cash or its equivalent.   

Latinas and Hispanic children are especially vulnerable to economic insecurity and hardship. Latinas face a greater pay gap than most other groups of women in the labor market. Inequities in household incomes also leave Hispanic children three times more likely to experience poverty than their white peers. Given their material needs, these families and children will be unfairly affected by a weakening economy and Trump’s attacks on basic needs programs like food stamps and Medicaid—not to mention a senseless approach to immigration and trade policy.

It’s worth emphasizing that the upcoming Census data do not reflect any economic developments in 2025. Some policymakers will attempt to claim any good news from the data as validation of the current U.S. policy path, but this would be completely misleading given the radical policy shifts in 2025 under the Trump administration. In this piece, we argue:

• Data for 2024 will likely reflect continued labor market strength. Inflation decelerated rapidly in 2024, which should boost last year’s income growth. 
• Even the likely strong 2024 income and poverty data will still show an economy that has left many workers, families, and children in an economically precarious position. Racial disparities in income, for example, leave people of color much more vulnerable to economic insecurity and poverty.
• Trump administration policies—including chaotic and historically high tariffs, mass deportations, and attacks on the federal workforce—have already led to a softening labor market and more inflationary pressures in the economy. Given this, income and poverty measures are likely to worsen when these data are released next year for 2025.  
• In 2026 and beyond, cuts to food assistance and Medicaid that were part of the Republican-passed spending bill will increase food insecurity and the number of people without health insurance, particularly for families of color.
• The Census data are incredibly valuable and provide transparent and non-politicized data that allow Americans to make informed decisions about what policies are delivering economic security for working people. The Trump administration has begun attempting to politicize and erode trust in federal statistical agencies and to manipulate the reporting of anything that seems like bad news for the economy. This is deeply undemocratic.

The labor market mostly held strong in 2024 

Between 2021 and 2023, the labor market rebounded dramatically from the pandemic recession as large-scale policy interventions—like expanded unemployment insurance—helped families stay afloat and drove a recovery several times faster than the Great Recession. In 2024, the labor market remained relatively strong, growing by 2 million jobs over the year. The unemployment rate rose slightly but maintained a 4.0% average over the year. 

The prime-age employment-to-population ratio—the share of workers between the ages of 25 and 54 with a job—held steady at a high level of 80.7% in 2024. Prime-age Hispanic workers saw their employment rise, as prime-age Hispanic men increased their employment rates by 0.7 percentage points. Employment also rose slightly for prime-age Black and white women by 0.2 and 0.3 percentage points, respectively. At the same time, Black and white men experienced mild declines in their employment rates. 

Real (inflation-adjusted) wages continued to increase in 2024. Figure A shows that inflation fell sharply from 3.9% to 2.6% over the course of the year. At the same time, the strong labor market allowed workers to maintain a solid pace of nominal wage growth: nominal hourly wages and weekly earnings growth decelerated by much smaller amounts than price growth for goods and services. This combination of inflation falling faster than nominal wage growth is exactly the macroeconomic “soft landing” from the COVID-19 inflation shock that so many thought would be impossible to achieve. Together, this translated into a 1.4% increase in average real hourly wages over the year. Average real weekly earnings—perhaps a better signal for the annual income data out next week—rose by 0.9%. 

While these are meaningful averages, we also know that real wage growth was particularly strong for lower–wage workers and workers with lower levels of educational attainment. Along with steady employment, these advances bode well for improvements to income and poverty rates in next week’s report.

Figure A

Persistent economic disparities leave families of color disproportionately vulnerable

The upcoming Census release will continue to show persistent racial inequities that can only be corrected through years of sustained progress. In 2023, typical Black and Hispanic households were paid just 63 cents and 74 cents, respectively, for every dollar paid to the median non-Hispanic white household. These disparities are especially harmful to low-income families of color who live in a constant state of economic insecurity. In a new report, we find that Black and Hispanic families with children make up more than half (61.1%) of economically vulnerable families, defined as those with incomes below 200% of the federal poverty line. Even within the group of economically vulnerable families, Black and Hispanic workers are also more likely to have incomes below the poverty line (see Figure B below). Narrowing these racial disparities will demand stronger and more persistent income gains for these families in the years to come.  

Figure B

Policy changes are weakening the economy in 2025

There are several reasons to suspect that 2025 will be a worse year for incomes and poverty. For one, labor market indicators have weakened: unemployment inched up to 4.2% by July 2025, and job growth slowed to 85,000 per month compared with 168,000 in 2024. The last three months saw average job growth of just 35,000 per month. While layoffs have not yet surged, both employers and workers appear to be sitting tight in anticipation of a weaker economy going forward. Federal employment has fallen by 84,000 since January, which doesn’t include the many workers who will leave federal payrolls on September 30 at the end of the fiscal year. According to Trump official Scott Kupor, 2025 will end with 300,000 fewer federal workers.

The Trump administration’s damaging and chaotic tariff policy also threatens economic security, with nearly universal tariffs set at the highest level in a century or more. This is causing severe business uncertainty and already leading to higher prices for households because tariffs are taxes on both imported and domestically produced goods. Since lower-income families spend a higher share of their income on goods consumption, these tariffs will disproportionately harm their real incomes.

In addition, the administration’s mass deportation agenda will substantially harm the labor market. The damage will not just be felt by immigrant workers and their families—they will spill over and hurt U.S.-born workers as well. If the Trump administration successfully follows through on its goals of deporting 1 million people each year during their term, there will be 3.3 million fewer employed immigrants and 2.6 million fewer employed U.S.-born workers by 2029.

Health insurance coverage and access to food assistance will fall over the next several years

Health insurance, Supplemental Nutrition Assistance Program (SNAP) coverage, and Supplemental Poverty Measure (SPM) rates in 2024 will likely represent high-water marks over the next few years. That’s because the Republican spending bill passed in July cuts Medicaid spending by $793 billion and SNAP benefits by $186 billion over the next decade—all to pay for tax cuts for the richest Americans.

The share of the population without health insurance was 8.0% in 2023, or about 26.5 million people. This ranked near historic lows in the United States—driven by a strong labor market, enhanced Affordable Care Act (ACA) subsidies, and pandemic-era coverage protections (particularly in Medicaid). 2024 saw a slight rollback in some of the pandemic-era coverage protections, but the strong labor market and ACA subsidies likely kept uninsurance rates relatively low. However, we can expect uninsurance rates to climb in 2025 and beyond because the Republican spending bill both cut Medicaid and allowed the enhanced ACA subsides to lapse. This will lead to more than 14 million people losing health insurance coverage by 2035, increasing the number of uninsured people by more than 40%.1

The Republican budget will also lower incomes and increase food insecurity by cutting SNAP. Benefit reductions and more stringent eligibility requirements will reduce SNAP participation by an average of 2.4 million in the next decade. A weakening labor market will exacerbate this problem by making it more difficult to satisfy new SNAP work requirements as people work fewer hours due to shrinking job opportunities.

Black and Hispanic households will likely represent a disproportionate share of those losing health insurance coverage and access to SNAP benefits. Figure C below shows that people of color are more likely to rely on Medicaid and SNAP benefits. In 2023, SNAP lifted more than 3 million people out of poverty—over half of those were Black or Hispanic, and nearly 40% were children. Cuts to Medicaid, SNAP, and other government support programs mean that the 2024 rate of poverty as measured by the Supplemental Poverty Measure will also likely be the lowest for many years to come.

Figure C

Timely and accurate data are essential but under threat

Next week’s release will also mark the last year in which data from federal statistical agencies could be reliably assumed to be completely free of politicization or manipulation. Staffing cuts and politically motivated firings at government agencies threaten the credibility of future data releases. On August 1,^, Trump fired the Bureau of Labor Statistics Commissioner because he did not like the jobs numbers they released. High-quality public data inform how well the economy is delivering for the majority of working people—whether job opportunities exist, how families make ends meet, and whether families have access to vital services such as nutrition and health care. There is simply no substitute for the government data infrastructure, and pressure from the executive branch to alter data to fit political aims will damage a valuable public good that is critical for business decisions, policymaking, and planning by all stakeholders in the economy.

It is possible that the extreme competence and professionalism of federal workers who staff the statistical agencies will shield most of the data they release from manipulation or quality-erosion. But this will take near-heroic measures and is too much to ask of our civil service—they work hard enough collecting and analyzing this data in professional and non-politicized ways, they should not also have to be activists safeguarding its integrity.

Note

1. CBO projected that 32.4 out of 363.3 million people would be uninsured in 2034. Adding 10 million uninsured due to Medicaid cuts brings the uninsurance rate to 11.7%, compared with the actual 2023 uninsurance rate of 8.0%.

Daniel Navarrete
Division of Regulations, Legislation, and Wage and Hour Division,
U.S. Department of Labor
Room S-3502
200 Constitution Avenue NW
Washington, D.C. 20210

Comments on RIN 1235-AA51: Application of the Fair Labor Standards Act to Domestic Service.

Dear Mr. Navarrete:

The Economic Policy Institute (EPI) submits this comment to strongly oppose the Department of Labor’s Notice of Proposed Rulemaking Application of the Fair Labor Standards Act to Domestic Service. We strongly oppose stripping basic wage and hour protections, which should be the fundamental right of every worker, away from one of the most critical sectors of the U.S. workforce. We urge the Department of Labor (DOL) to instead support the agency’s proposed alternative that would preserve the existing regulations that provide for a minimum hourly wage (currently $7.25 at the federal level) and overtime protections for the millions of workers that provide care and services in the home.

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-income workers, and assesses policies with respect to how well they further those goals.

For years, EPI has conducted research on the low-wage workforce, including on domestic workers and the home care workforce specifically. EPI research and those from other trusted sources have repeatedly found that, despite the invaluable nature of their work, most home care workers face low pay, rarely receive benefits, and have less access to full-time work than other workers. Because they work in private homes, they are outside of public view and isolated from other workers, leaving them particularly vulnerable to exploitation.1

Overturning Fair Labor Standards Act (FLSA) protections for these workers would represent a massive blow to low-wage workers, and to women and people of color in particular, who are heavily overrepresented in this industry, as we discuss further below. Caregiving work can be meaningful and rewarding, but it is also often physically, mentally, and emotionally demanding work. Home care workers work with elders, people with disabilities, people recovering from illness or medical procedures, and assist with intimate day-to-day including administering medication, monitoring health vitals, bathing, preparing meals, providing transportation, and engaging in activities. This provides essential caregiving support to both clients and their families. As the U.S. population ages, and more and more people, both seniors and people with disabilities, prefer to receive care in their homes and integrated community settings rather than in institutional settings such as nursing homes or group homes, we should support, not undermine, the home care workforce as they help to meet these needs.

Many groups of domestic workers were originally excluded from the FLSA. This policy decision explicitly left domestic and agricultural workforces–which, at the time of enactment in the New-Deal era, were majority-Black–without the basic minimum wage and protections being extended to other workers. As the NPRM notes, Congress extended FLSA protections to some groups of domestic workers in 1974, including those who were employed directly by a member of a household to perform tasks. But the 1974 changes to the bill also established the vague and overused “companionship exemption.” Over time, employers have applied the companionship exemption far wider than its original intent. We argue that the companionship exemption was never meant to say that workers providing caregiving services for pay through third-party employers, such as through home health care staffing agencies, should not receive at least the minimum wage. The current NPRM seeks to rescind the Department’s 2013 home care regulation (2013 final rule) that narrowed this exemption. In these comments, we discuss how the Department’s economic impact analysis for this NPRM is incomplete, methodologically flawed, and internally inconsistent.

The Department’s NPRM contains inadequate economic analysis and understates the economic costs of this regulation that would be borne by home care workers.

The regulatory impact analysis (RIA) in the NPRM is fundamentally incomplete. It significantly understates the complexity and scope of impacts arising from this proposed rule. It (1) fails to quantify key transfers, (2) overlooks distributional harms, and (3) makes unsupported claims of benefits and downplays costs and transfers. This RIA cannot support informed decision-making or a rational comparison of regulatory alternatives.

Failure to quantify key impacts

The RIA is less than 5 pages long and provides no dollar impacts—no estimated regulatory familiarization costs; no estimated changes in hiring costs; no estimated transfers from workers to employers as a result of loss of minimum wage protections, overtime protections, or compensation for travel time; no estimated impacts of changes in the rate of turnover; no estimates of employment impacts; nothing. The analysis is entirely speculative. By contrast, the RIA in the 2013 final rule2—which this proposal would rescind—included all of these estimates and more. Omitting them here is a flagrant violation of the Administrative Procedures Act requirement to assess reasonably quantifiable impacts.

Overlooks distributional harms

The Department acknowledges that rescinding the 2013 rule will transfer income from workers to employers and consumers, yet it fails to provide even a range of those transfers, or to acknowledge the distributional harms that will result. These harms are not abstract: home care workers are among the lowest-paid workers in the U.S. economy, and shifting income away from them will directly harm them and increase inequality.

In 2022, EPI produced a chartbook with detailed information about the demographics, wages, benefits, and poverty rates of several domestic worker occupations, including home care workers.3 The chartbook uses the same definition of home care workers used in the Government Accountability Office (GAO) study cited by the Department in the NPRM.4 As detailed below, the demographic profile of home care workers is different from that of workers as a whole, with home care workers disproportionately likely to come from demographic groups—like women and people of color—that have lower average earnings due to the impact of broad structural biases on labor market outcomes. But the EPI chartbook shows that even after controlling for gender, nativity, race/ethnicity, educational attainment, age, marital status, and geography, agency-based home care workers have an hourly wage that is 25.6% less than other similar workers, and non-agency-based home care workers have an hourly wage that is 31.3% less than other similar workers. Annual earnings gaps are even larger—42.8% and 58.3%, respectively.

Home care workers are also much less likely to have workplace benefits than other similar workers: after applying the same set of controls listed above, agency-based home care workers are 17.1 percentage points less likely to have employer-provided health insurance and 14.1 percentage points less likely to have an employer-provided retirement plan than other similar workers. Similarly, non-agency-based home care workers are 24.9 percentage points less likely to have employer-provided health insurance and 20.6 percentage points less likely to have an employer-provided retirement plan.

Finally, home care workers are much more likely than similar workers to live below the poverty line or below twice the poverty line—the latter being what researchers often use as a measure of what it takes to make ends meet. Again after applying the same set of controls, agency-based home care workers are 7.0 percentage points more likely to live in poverty than other similar workers, and 19.9 percentage points more likely to live below twice the poverty line. Non-agency-based home care workers are 7.1 percentage points more likely to live in poverty than other similar workers, and 13.6 percentage points more likely to live below twice the poverty line.

Using the same definition of home care workers, we have done related calculations using updated data (pooled 2022-2024 data).5 We found that 85.0% of home care workers are women, 63.3% are people of color, 32.6% are immigrants, 85.7% do not have a college degree, 28.4% are custodial parents of at least one child under 18, and only 8.6% are represented by a union. The median home care worker earns $16.57 per hour, which is less than $35,000 per year for a full-time, full-year worker and on par with the 20^th percentile of the overall wage distribution.6 Taking away minimum wage and overtime protections from such a vulnerable group virtually guarantees a regressive transfer of income.

Unsupported claims of benefits and downplaying costs and transfers

The main benefit the Department cites for the recission of the 2013 rule is that, by lowering labor costs, it will expand access to health care services by encouraging more providers to enter or grow in the home care market. This claim is absurd, as it ignores the fact that there is a severe shortage of home care workers. This fact is very explicitly detailed elsewhere in the NPRM, which notes, for example, that “the supply of home care workers is failing to keep pace with the growing demand for home care services” and cites a 2023 industry report that “the workforce shortage in home-based care has reached crisis proportions,” with “home health care providers [reporting that they turn] away over 25% of referred patients due to staff shortages.”7

With providers already forced to reject patients because of too few workers, there is no meaningful room for expansion given the current supply of workers. Lowering wages will not expand labor supply. Virtually the only way to draw more workers into the profession is to improve these jobs. Stripping away protections that boost pay will make recruitment harder, not easier, and will worsen the problem of insufficient access to home care services. Interestingly, the NPRM does acknowledge that the rule could “lead to increased employee turnover and difficulty attracting skilled workers to the industry.”8 This admission directly contradicts the Department’s central claim that rescission will expand access to home care services, underscoring the internal inconsistency of the analysis.

It is worth noting that a worsening home care worker shortage does not mean, as the NPRM suggests, that the 2013 final rule failed to attract workers to the industry. The NPRM states:

And although the Department predicted in 2013 that ‘‘guarantee[ing] minimum wage and overtime compensation for home care jobs . . . will attract more workers to the home care industry,’’ growth in the home care workforce ‘‘slowed’’ in the years following the 2013 rule, with ‘‘the number of home care workers per100 [individuals receiving home and community-based services] declin[ing] by 11.6 percent between 2013 and 2019.

First, the number of home care workers per 100 individuals receiving home care is a deeply flawed measure to use as evidence that the 2013 rule didn’t attract workers. That ratio depends not only on workforce growth, but also on growth in the number of people needing care—a factor driven by external forces like demographic shifts, not by labor supply. In fact, the number of individuals receiving care grew by more than 25% between 2013 and 2019, according to the study the department cited.9 If instead that population had grown at roughly the same pace as the overall nonfarm payroll workforce—1.7% annually on average—the ratio would have meaningfully increased.

However, the report the Department cited in that passage does indeed show that the home care workforce grew more slowly from 2013–2019 than from 2008–2013.10 But it is crucial to recognize the vastly different macroeconomic conditions in those two periods. The first period, 2008–2013, consisted of the Great Recession and a very weak recovery—the unemployment rate reached 10% in 2009 and was still 7.4% on average in 2013. In that environment, workers often had little choice but to take whatever jobs they could get, including the low-paying home health care jobs that were available because demand for home health services was growing.

By contrast, the 2013–2019 period was marked by a steadily strengthening labor market, with the unemployment rate getting below 5% by 2016 and as low as 3.5% in 2019. In this context, workers were far less compelled to take whatever jobs they could find, no matter how low the pay—and, as described above, home health care jobs are among the lowest paid in the economy, even after the 2013 rule. It is therefore unsurprising that growth in home care employment would slow between these two periods. The fact that the Department took the slowdown in growth between two periods—periods that were very different on measures that had nothing to do with the rule—as evidence that the rule didn’t draw people into the profession is an egregious error in economic reasoning.

The Department further claims that “workers who are employed by multiple home care agencies…may be able to consolidate their employment with one agency, thus yielding a convenience-related benefit.” This would apply to at most a very small fraction of home care workers: we find that just 7.4% of home care workers have more than one job. It is also worth noting that the GAO report cited by the Department in the NPRM finds no evidence that the share of home care workers with multiple jobs increased following the rule.11

It is also important to note that the fact that the federal minimum wage is currently set at a historically low level does not imply that rescinding minimum wage protections for home care workers would have little practical effect, as the NPRM suggests. First, workers who become exempt from FLSA coverage as a result of this rescission may be at risk of losing coverage under higher state and local minimum wage laws in any states/localities that don’t have their own home care worker coverage. But perhaps more importantly, although the federal minimum wage has been allowed to erode in real terms, it should not be assumed that this will persist indefinitely. Over time, it is reasonable to expect that the federal minimum wage will be increased, in which case exempting home care workers would prevent them from sharing in those future improvements.

Evidence confirms that, unsurprisingly, minimum wage increases do indeed raise the wages of home care workers. For example, a 2022 study published in the journal Home Health Care Management & Practice found that home health aides’ hourly wages were $1.00 higher in states that increased their minimum wages from below $8 to above $10.12

The Department also discusses that the benefits of the rule will include decreased regulatory compliance burden on home care providers. However, the Department does not provide any meaningful evidence for this assertion. And as the National Domestic Workers’ Alliance has noted, the record-keeping requirements of the FLSA–which include basic timesheets and information on hours worked that are already widely used by all covered employers in the U.S.–are not any more burdensome than compliance with other regulations, such as tax law. Recordkeeping for both employers and for state agencies are critical in public transparency–particularly since so many agencies receive public funds through Medicaid in order to operate.

Finally, the Department’s assumptions that the recission will have limited negative effects relies heavily on the 2020 GAO study mentioned above which concluded that the 2013 final rule was not associated with higher hourly or weekly pay for home care workers relative to other occupations with similar entry requirements. However, the Department ignores more recent research by an Associate Professor at Rutgers University that uses narrower comparison groups that are more similar to the home care workers impacted by the rule and finds that the 2013 rule was indeed associated with higher hourly pay and higher weekly earnings among agency-based home care workers.13

In sum, the Department’s economic impact analysis is incomplete, methodologically flawed, and internally inconsistent. It omits quantifiable impacts that were standard in the 2013 rulemaking, disregards the regressive distributional consequences for a disproportionately vulnerable workforce, and relies on selective evidence. By overstating potential benefits and minimizing costs and transfers, the NPRM fails to provide a sound analytical basis for rescission.

DOL should withdraw this rule and instead focus on strengthening protections and enforcing existing labor rights for home care workers.

Home care occupations are projected to grow at a much faster pace than the rest of the workforce. Home care workers are critical to supporting families and households across the country. To draw workers into this vital industry, it is crucial home care jobs become good jobs that pay family-sustaining wages and that provide dignified protections and working conditions to workers.

For far too long before DOL’s final rule went into effect in 2015, the home care industry was reliant on an exploitative labor model dependent on paying low wages. Taking away basic protections for these workers is a loss for the workers themselves, who will find their pay and benefits slashed even further, and will harm patients and clients who need caregiving services and struggle navigating an industry that has long faced challenges with worker turnover and retention. The home care industry has already adjusted to providing these basic protections, as the rule has been in full effect for a decade. Revoking these protections is legally unwarranted, economically damaging, and unjust. We urge the agency to withdraw the rule as proposed.

Sincerely,

Heidi Shierholz, Ph.D.
Executive Director
Economic Policy Institute

Samantha Sanders
Director of Government Affairs & Advocacy
Economic Policy Institute

1. Laura Dresser, Valuing Care by Valuing Care Workers: The Big Cost of a Worthy Standard and Some Steps Toward It, Roosevelt Institute, October 2015.

2. 78 Fed. Reg. 60497.

3. Asha Banerjee, Katherine deCourcy, Kyle K. Moore, and Julia Wolfe, Domestic Workers Chartbook 2022, Economic Policy Institute, November 2022.

4. Government Accountability Office (GAO), Fair Labor Standards Act: Observations on the Effects of the Home Care Rule, October 2020.

5. Economic Policy Institute, Current Population Survey Extracts, Version 2025.8.8, https://microdata.epi.org. (Pooled 2022-2024 data).

6. The average of the overall 20^th percentile wage from 2022-2024 is $16.37. Economic Policy Institute, “Hourly wage percentiles – Real hourly wage (2024$),” State of Working America Data Library, 2025.

7. 90 Fed. Reg 28981.

8. 90 Fed. Reg 28982.

9. Amanda R. Kreider and Rachel M. Werner, “The Home Care Workforce Has Not Kept Pace with Growth in Home and Community-Based Services”, Health Affairs no.5, April 2023. https://doi.org/10.1377/hlthaff.2022.01351.

10. Amanda R. Kreider and Rachel M. Werner, “The Home Care Workforce Has Not Kept Pace with Growth in Home and Community-Based Services”, Health Affairs no.5, April 2023. https://doi.org/10.1377/hlthaff.2022.01351.

11. Government Accountability Office (GAO), Fair Labor Standards Act: Observations on the Effects of the Home Care Rule, October 2020.

12. Di Yan, Helena Temkin-Greener, Ronni Pavan, Hao Yu, and Shubing Cai, “Did Minimum Wage Policy Changes Impact Home Health Workforce?”, Home Health Care Management and Practice no.25, pp. 206-212, December 2022. https://doi.org/10.1177/10848223221140502.

13. Joy Jeounghee Kim, “Extending the FLSA Protection to Home Care Workers: Effects on Workers’ Labor Market Outcomes,” Rutgers University, 2021. https://doi.org/10.7282/00000139.