Division of Humanitarian Affairs
Office of Policy and Strategy
U.S. Citizenship and Immigration Services
Department of Homeland Security
5900 Capital Gateway Drive
Camp Springs, MD 20746

Re: DHS Docket No. USCIS-2025-0370, Employment Authorization Reform for Asylum Applicants, Notice of Proposed Rulemaking (Feb. 23, 2026) ¹

To whom it may concern:

The Economic Policy Institute (EPI) submits this comment strongly opposing the Department of Homeland Security’s (DHS) Notice of Proposed Rulemaking (NPRM) titled Employment Authorization Reform for Asylum Applicants, published February 23, 2026. and assigned DHS Docket No. USCIS-2025-0370 (i.e. the proposed rule).

About EPI and organizational interest

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank established 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 policies that protect and improve economic conditions and raise labor standards for low- and middle-income workers—regardless of immigration status—and assesses policies with respect to how well they further those goals.

EPI has researched, written, and commented extensively on the U.S. system for labor migration, including on temporary immigration protections and Employment Authorization Documents (EADs), and on labor standards enforcement for both the low-wage and professional workforce. EPI has also provided expert testimony about the U.S. immigration system to both the U.S. Senate and House of Representatives, as well as state legislatures.

Summary of the comment

The proposed rule is designed to force asylum applicants seeking haven in the United States to live in the country without being able to work or support themselves and their families. Among other changes, the proposed rule introduces extreme and potentially indefinite delays to obtain a work permit, as it proposes to extend the waiting period to apply for work authorization from 150 days to 365 days, increase the mandatory processing timelines once an initial work permit application is received from 30 days to 180 days, and pause initial work permit processing completely when average affirmative asylum processing times exceed an average 180 days.1 The proposed rule also imposes many new eligibility barriers for both initial and renewal work permits, and would make approval of both applications completely discretionary, meaning asylum-seekers may be denied employment authorization for no reason at all.2

This proposed rule would be acutely harmful to asylum-seekers, but also to employers, coworkers, and spouses and children who rely on asylum-seekers’ employment and income. From the perspective of worker rights, labor standards, and growth in the overall economy, this NPRM raises at least four significant concerns that should be avoided by withdrawing the proposed rule in full.

First, DHS ignores the true value and impact of work authorization on the workforce, and fails to estimate the negative economic impacts that will result from the NPRM. In addition, the proposed rule would impact many workers already participating in the U.S. workforce, including individuals the NPRM classifies as “initial” asylum applicants who previously held lawful employment authorization through programs such as Temporary Protected Status (TPS), humanitarian parole, or deferred action. By focusing on deterrence of future migration while overlooking these workforce impacts, the NPRM substantially understates both the disruption the rule would cause and the reliance interests at stake.

Second, the NPRM rests on the flawed assumption that employers can easily replace asylum-seeking workers who lose employment authorization, and that such replacement can happen quickly and without disruption to the economy. In reality, sudden workforce losses that result from the NPRM terminating or putting in jeopardy the work authorization of roughly 2 million current workers would disrupt operations across multiple industries, forcing employers to increase mandatory overtime, heightening workplace safety risks, and creating significant operational instability that would impact not only asylum-seekers but also their coworkers. Employers would also lose the experience and job-specific skills that many asylum applicants already possess.

Third, by making it far more difficult for asylum-seekers to obtain or renew work authorization, the proposed rule would eviscerate the workplace rights of millions of current and future workers, pushing many into the informal economy, increasing the risk of wage theft, retaliation, and other forms of worker exploitation. This shift would also undermine labor and employment law enforcement by making workers less likely to report violations or cooperate with investigators, weakening workplace protections and lowering labor standards for all workers. The NPRM fails to acknowledge the scope of these enforcement and labor-standards consequences for U.S.-born citizens and foreign-born workers, half of whom are U.S. citizens.

Fourth, the NPRM fails to consider the substantial reliance interests that workers have developed around a predictable system of asylum-based employment authorization, which the NPRM would upend.

Far from streamlining the regulation of asylum-related employment authorization, the proposed rule would harm workers across the board. For these reasons, DHS should withdraw the proposed rule.

The worker rights of millions are protected by EADs

The role that Employment Authorization Documents (EADs) play when it comes to protecting worker rights and uplifting workplace standards should not be ignored and cannot be overstated. For workers who lack a permanent or more durable immigration status, obtaining a temporary EAD can mean having enforceable workplace rights that an individual would otherwise not have. While all workers have some labor and workplace rights under U.S. law—regardless of immigration status—enforcing them in practice becomes virtually impossible because of the threat of deportation, which prevents workers who lack an immigration status or an EAD from calling out lawbreaking employers and demanding that they comply with the law, or from reporting workplace violations to labor enforcement agencies. But having an asylum-based EAD, or protection from deportation through temporary administrative immigration protections like parole, Temporary Protected Status, deferred action—accompanied by an EAD—means that, in practice, workers can report workplace violations to government officials without fear of retaliation that can lead to deportation. It also means that a worker with an EAD can be employed by just about any U.S. employer and change jobs or employers, unlike, for example, migrant workers employed with temporary visas who can only be employed by the sponsor of their visa.

Altogether, nearly 5.6 million people in the U.S. held a temporary but precarious immigration status in 2024, including over 2 million people who are asylum-seekers. (see Table 1 below).

Table 1

While these statuses and protections are only a band-aid for a flawed immigration system that is deeply in need of reform,3 they have been shown to protect millions of workers from some of the worst forms of employer lawbreaking. Employers also greatly benefit from workers having a protective status and a work permit because it allows them to lawfully employ millions of people who would otherwise not be eligible to work, leading to billions in economic contributions to the U.S. economy and generating demand that stimulates growth.

DHS ignores the positive value and impact of work authorization on the workforce and economy, and the negative impacts of terminating and delaying work authorization

In the NPRM, DHS does not estimate and consider the true value and impact that EADs have on the workforce and economy, not even specifically for asylum-seekers. There are examples of existing research showing the important economic contributions that workers with temporary immigration protections and EADs are able to make thanks to being work-authorized. These estimates are relevant because parole, TPS, and DACA recipients are likely to see similar wage gains associated with having an EAD, due to gaining the ability to work lawfully, which brings with it the practical ability to enforce workplace rights and standards. In addition, may persons with protections like TPS and DACA may also be asylum applicants.

One estimate from the American Immigration Council estimated that when the TPS population was approximately 354,000 in 2021, “TPS holders contributed more than $2.2 billion in taxes, including almost $1 billion to state and local governments,” as well as “held $8 billion in spending power.”4 Another estimate by Moriarty found that TPS-eligible individuals “annually contribute some $31 billion in wages to the national GDP.”5

Research has also quantified some of the contributions made by persons who have an EAD because they qualified for Deferred Action for Childhood Arrivals (DACA). DACA was created by DHS in 2012, and recipients are eligible for protections from deportation and EADs that are valid for two years and renewable. More than 835,000 persons have benefitted from DACA, and more than 500,000 were enrolled as of 2024.6 Svajlenka and Truong found that DACA recipient households “pay $6.2 billion in federal taxes and $3.3 billion in state and local taxes each year,” and “after taxes, these households hold $25.3 billion in spending power,” and that DACA recipient families “own 68,000 homes, making $760 million in mortgage payments and $2.5 billion in rental payments annually.”7

When it comes to measuring the workplace impact and economic benefits of workers being issued an EAD, there are a few examples that are worth citing here. One is an annual survey of DACA recipients that was conducted in 2024 for the ninth time. The most recent survey, conducted by Wong et al. and published by the Center for American Progress, showed that DACA has been an essential tool to improve the economic and educational outcomes of recipients.8 In terms of the impact that deferred action and an EAD have had on the employment of DACA recipients: 59.1% of respondents moved to a job with better pay; 47.3% moved to a job with better working conditions; 47.5% moved to a job that “better fits [their] education and training”; 49.6% moved to a job that “better fits [their] long-term career goals”; 57.3% moved to a job with health insurance or other benefits; and 19.6% of respondents obtained professional licenses.

Wong et al. also measured the impact of EADs on DACA recipients’ wages, finding that “[d]ata from the past nine years show that DACA has had a significant and positive effect on wages: Recipients’ average hourly wage more than doubled from $11.92 to $31.52 per hour—an increase of 164.4 percent—after receiving DACA.” These significant wage increases are no doubt a result of the labor and workplace rights and stability that DACA recipients gain from having an EAD.

Orrenius and Zavodny examined the wage and employment impact of TPS9—which allows those who are eligible to also be granted an EAD. They looked specifically at migrants from El Salvador, finding that having TPS increased employment rates, and that less-educated Salvadoran men who were employed earned 13% more if they had TPS. They note that “As a whole, the results suggest that less-educated Salvadoran men who receive TPS are able to move into better jobs and become more selective about the jobs they hold, increasing their earnings but also their job search and unemployment incidence.”

One other analysis comes from Kallick,10 looking specifically at asylum-seekers in New York and nationwide, assesses the wage impact of being issued an EAD. Relying on previous methodologies for measuring the impact of a lawful immigration status being granted to unauthorized immigrants, Kallick estimates that asylum-seekers who are granted EADs increase their wages by 10%.

While the relative benefits of precarious and temporary immigration protections and EADs to migrant workers and the broader economy are clear, it is important to note here that because of the NPRM’s new provisions and pauses in processing, a significant share of the 2 million EADs held by asylum-seekers are unlikely to be renewed, or at a minimum, will be substantially delayed—and initial applications will not be granted—despite meeting the statutory requirements for issuance. This violates the statute and will leave hundreds of thousands of workers at least, and possibly millions, unemployed and without the ability to feed and house themselves, causing them to rely on homeless shelters and food banks, which are already overstretched given the current state of the economy and the affordability crisis. Thus, DHS through this NPRM will intentionally hurt the economy and eliminate the economic benefits for workers and employers that EADs held by asylum-seekers create—and exacerbate a crisis among social safety net providers—a fact that the NPRM does not grapple with or address.

In the meantime, EADs obtained through the asylum process, like those obtained through TPS, parole, and DACA, can mean the difference between having rights on the job or being extraordinarily vulnerable to the worst abuses by employers. While the current administration has claimed they want to help U.S. workers, actions like the mass detention and deportation of millions of workers and canceling EADs reveal they are willing to degrade conditions and standards for all workers, as well as kill jobs and shrink the economy, in order to carry out their extreme immigration enforcement agenda.11

If the NPRM is not withdrawn, millions of workers will be more easily exploited by their bosses and driven into the informal economy. That, in turn, will reduce their tax contributions that support the social safety net and lower their wages significantly12—ultimately hurting U.S workers in low-wage industries and the U.S. economy writ large by driving down demand for goods and services. It will also leave employers without millions of reliable employees in industries like construction, hospitality, childcare, agriculture, food processing and production, and more.

The NPRM underestimates the economic harm to initial asylum applicants who are already employed in the U.S. workforce

The NPRM rests heavily on the premise that restricting access to asylum-based work authorization will deter future asylum applicants by reducing the perceived “pull factor” of employment opportunities in the United States given the lengthy asylum backlog.13 While briefly referenced above, it is worth highlighting that this premise overlooks that many “initial” asylum employment authorization applicants are workers who are already here, including many who are gainfully employed.

Since January 2025, the federal government has terminated or moved to dismantle legal immigration programs that provided work authorization to hundreds of thousands of individuals, including several countries’ TPS designations, the CBP One parole program, the parole program for Cubans, Haitians, Nicaraguans, and Venezuelans (CHNV), multiple family reunification parole programs, and DACA.14 Many workers whose work permits have been terminated or threatened by these changes—and who are also eligible for asylum—are filing asylum applications and seeking initial employment authorization based on their pending applications.

The NPRM acknowledges this trend in passing,15 but largely sidesteps its implications—namely, that the NPRM’s sweeping restrictions on employment authorization for “initial asylum applicants” will largely fall on individuals who are already integrated into the lawful workforce. These workers are not hypothetical future entrants; they are experienced employees currently working in hospitals, manufacturing facilities, construction sites, hotels, schools, and public services. The NPRM therefore risks removing from the workforce hundreds of thousands of workers who have already been performing essential roles in the U.S. economy.

By focusing on speculative deterrence effects for future migrants while overlooking the proposed rule’s immediate impact on workers already embedded in the U.S. economy, the NPRM fails to accurately assess the scope of the disruption the proposed rule would cause. This flawed premise permeates the NPRM’s analysis and projected impacts and, on its own, warrants withdrawal of the proposed rule.

The NPRM incorrectly assumes that asylum-seekers who lose employment authorization can easily be replaced and ignores the resulting disruption to the economy

The NPRM suggests that asylum-seeking workers who lose employment authorization may be replaced and that the resulting shifts may lead to increased hours or compensation for currently employed workers.16 Although the NPRM acknowledges that restrictions on asylum-based employment authorization may lead employers to rely more heavily on currently employed workers through increased hours or overtime, it largely treats these effects as a potential transfer of compensation rather than as a source of workforce disruption.17 These assumptions simply do not reflect the realities in which many asylum applicants work.

A) The NPRM would shrink the legal workforce, exacerbating staffing issues in key industries

Asylum applicants are employed in a number of key industries, such as construction, transportation, manufacturing, food preparation and service, and building and grounds maintenance.18 Employers in sectors such as health care, long-term care, hospitality, education, and logistics frequently report difficulty recruiting and retaining sufficient numbers of workers.19 In these and other industries, the loss of experienced workers cannot easily be offset by replacement hiring. This is the case, in part, because of the Trump administration’s immigration enforcement policies, which are resulting in stagnant population and workforce growth, leaving fewer available workers to fill positions previously held by asylum-seekers.20

The NPRM as a result will exacerbate staffing issues in key industries, by pausing, terminating, or simply not adjudicating EAD applications. Further, the NPRM provides no empirical analysis demonstrating that employers will be able to replace workers who lose asylum-based employment authorization. Instead, the proposed rule rests on speculative assumptions that are inconsistent with the experience of the industries most affected.

B) The NPRM would increase mandatory overtime and workload pressures on remaining workers

Across unionized industries, abrupt workforce losses rarely produce the seamless labor substitution envisioned in the NPRM. Instead, employers often struggle to recruit qualified replacements, leaving operations understaffed for extended periods. In some cases, employers may scale back operations or lay off additional workers when they can no longer meet production or service demands due to the loss of experienced personnel.21 These dynamics are particularly severe in rural areas and specialized industries where the available labor pool is already limited and recruiting new workers can take months or even years.

When employers cannot quickly replace lost staff, the burden falls on the remaining workforce. Workers may be required to work extended shifts, mandatory overtime, or intensified production schedules to maintain operations. These conditions increase worker fatigue and place significant strain on the remaining workforce.22

C) The NPRM would increase workplace safety risks by disrupting experienced workforces

Staffing shortages and excessive overtime can also create significant safety risks. In many safety-sensitive workplaces, such as construction sites, manufacturing facilities, warehouses, and healthcare settings, the sudden loss of experienced workers can create immediate hazards for the remaining workforce. Short-staffing often forces employees to perform additional tasks or work at faster production speeds, increasing the likelihood of fatigue-related injuries and other workplace incidents. Efforts to rapidly replace experienced workers with new or inexperienced hires can further heighten safety risks for the entire workforce. Unionized workplaces have reported increased injury rates, higher stress levels, and exacerbated turnover and burnout following sudden staffing reductions tied to immigration policy changes.23

D) The NPRM would weaken bargaining power in unions and organizing capacity

Many asylum-seekers and other immigrant workers are union members, and their ability to work lawfully is critical to the stability of union bargaining units. By severely restricting asylum-seekers’ access to employment authorization, the NPRM would harm not only individual workers but also the unions that represent them by disrupting membership, weakening collective representation, and undermining unions’ capacity to maintain stable bargaining relationships with employers.

Labor history and modern labor-market research confirm the central role immigrant workers play in sectors where unions organize and represent workers.24 Immigrant workers are disproportionately employed in high-turnover, demanding industries where unions depend on workforce stability to sustain membership and bargaining strength.25 As immigrant employment has grown, so too has immigrants’ share of union membership, making them an increasingly important source of union participation and organizing.

By sharply curtailing asylum-seekers’ access to employment authorization, the NPRM would destabilize the workforce in industries where unions are building and maintaining collective representation. Denying or delaying work authorization would force many workers out of lawful employment or prevent workers from entering lawful employment relationships and joining unions, weakening existing bargaining units and reducing unions’ membership base. It would also disrupt organizing efforts by removing workers from the workforce before they can participate in union campaigns or collective bargaining.

The NPRM’s restrictions on asylum-seekers’ work authorization would significantly impair unions’ ability to represent and grow their membership.

The NPRM would push workers into the underground economy, increase labor and employment violations, weaken labor standards enforcement, and lower wages in numerous industries

The proposed rule would significantly restrict asylum-seekers’ ability to work legally while their asylum claims—often pending for years—are adjudicated, effectively forcing many asylum-seekers to support themselves and their families for extended periods of time without lawful employment.

The NPRM does not meaningfully analyze how individuals in this situation are expected to sustain themselves during those years, nor how effectively eliminating asylum-seekers’ access to employment authorization will impact the enforcement of labor standards, including wage and hour laws, labor laws, and workplace safety laws. In practice, without work authorization, many people will turn to informal or off-the-books employment arrangements in order to support themselves and their families. And we know from existing research that employees who lack work authorization are more than twice as likely to be victims of wage theft for minimum wage violations than U.S.-born citizens.26 Workers in these circumstances are significantly more vulnerable to exploitation. Employers may take advantage of workers’ immigration status to suppress wages, deny overtime pay, ignore workplace safety standards, or retaliate against workers who attempt to assert their rights.

When workers are pushed into informal employment, the resulting labor violations extend beyond those workers themselves—to all workers—regardless of immigration status or the country where they were born. Employers who exploit vulnerable workers not only depress wages and benefits for authorized workers in the same workplace, but they also gain a competitive advantage over law-abiding employers that comply with labor laws and collective bargaining agreements.27 In this way, the NPRM’s restriction of lawful employment authorization would distort workplace competition by rewarding employers that exploit vulnerable workers while disadvantaging those that comply with labor laws and collective bargaining agreements, thus lowering wages for all workers in the many industries where asylum-seekers are employed.

These consequences would reverberate across workplaces and industries. When employment moves into the informal economy, labor violations become harder to detect and enforce, enabling exploitative employers to undercut law-abiding competitors and driving down wages and working conditions for other workers. The NPRM does not meaningfully analyze these foreseeable effects. By failing to account for the predictable expansion of informal employment created by the proposed rule, the NPRM substantially understates its impact on labor standards and the broader labor market.

The NPRM disregards the significant reliance interests created by the existing system of asylum-based employment authorization

Under the Administrative Procedure Act (APA), agencies must consider the reliance interests that regulated parties have developed under existing policies before adopting regulatory changes that would disrupt those settled expectations.28 The NPRM fails to meaningfully account for the reliance interests that workers and unions have developed around the current system of asylum-based employment authorization.

For years, asylum-seekers and labor organizations have relied on a predictable regulatory framework under which individuals who meet the criteria for employment authorization can obtain a work permit within a defined timeframe. Workers make critical life decisions—including housing, transportation, and family support—based on the expectation that, if they satisfy the applicable requirements, they will be able to work lawfully while their asylum claims are pending. By introducing sweeping delays, additional eligibility barriers, and broad discretionary authority to deny applications, the proposed rule would upend these settled expectations and inject profound uncertainty into a system on which workers have long depended.

These reliance interests are particularly significant because many individuals the NPRM characterizes as “initial” asylum employment authorization applicants are not new entrants to the labor market. As described above, many have already been participating in the lawful workforce through programs such as TPS, humanitarian parole, deferred action, or other programs that allow for employment authorization. When those programs are terminated or curtailed, many workers eligible for asylum turn to the asylum system in order to maintain lawful employment authorization—relying on claims for asylum that are almost certainly valid given the circumstances that allowed them to qualify for temporary protections like TPS and parole—but which they did not assert sooner because of their eligibility for other programs which could be approved more quickly. Closing off this pathway for these current lawful employees in the U.S. labor market who also have valid asylum claims will eliminate the only remaining pathway for them to continue working lawfully in jobs they already hold. Their coworkers, employers, and entire workplaces depend on their continued participation in the labor force.

By imposing new eligibility barriers and expanding the circumstances under which renewal applications may be denied, along with creating unjustified lengthy bureaucratic pauses in adjudication, the proposed rule would significantly slow the renewal process and increase the likelihood that workers will lose lawful employment authorization while their applications remain pending. Given the scale of the existing asylum backlog, these changes threaten to create widespread gaps in work authorization for workers who have already been lawfully employed for years.

The NPRM would bring the asylum-based employment authorization system to a functional standstill. Workers who have relied on timely adjudication of work authorization applications would face prolonged periods without lawful employment authorization, while co-workers who depend on those workers would face sudden and unpredictable staffing disruptions. The NPRM does not meaningfully engage with these reliance interests or the systemic consequences of destabilizing an employment authorization framework on which hundreds of thousands of workers and employers have come to depend.

Because the proposed rule disregards these substantial reliance interests and fails to evaluate the disruptive consequences of overturning longstanding expectations about the availability and timing of employment authorization, the NPRM fails to consider an important aspect of the problem before the agency.

Conclusion and recommended action

The NPRM rests on a chain of flawed assumptions that do not reflect the realities of the modern U.S. labor market. It ignores the positive economic benefits and value of Employment Authorization Documents for asylum-seekers, and fails to estimate the many negative impacts that will result, harming not only asylum-seekers, but also U.S. employers and U.S.-born citizen workers. It mischaracterizes who will be impacted by the proposed rule, failing to recognize that many “initial” asylum applicants who would face the harshest aspects of the proposed rule are already embedded in the workforce. It disregards the substantial reliance interests that workers and employers have developed around a predictable system of asylum-based employment authorization. It ignores the predictable expansion of informal employment that will result from leaving asylum-seekers without lawful means of supporting themselves for years. And it assumes—without evidence—that employers will be able to easily replace workers who lose employment authorization.

In practice, the proposed rule would not streamline the administration of asylum-based employment authorization. Instead, it would destabilize workplaces, disrupt established workforces, weaken labor standards enforcement—leading to lower wages for workers in many industries—and impose significant costs on workers, employers, and the broader labor market.

For these reasons, the Economic Policy Institute urges DHS to withdraw the proposed rule.

Comment submitted by:

Daniel Costa
Director of Immigration Law and Policy Research
Economic Policy Institute

Endnotes

1. See Employment Authorization Reform for Asylum Applicants, 91 Fed. Reg. 8616, 8618–20 (Feb. 23, 2026).

2. See id. at 8618–19.

3. Daniel Costa, Josh Bivens, Ben Zipperer, and Monique Morrissey, The U.S. benefits from immigration but policy reforms needed to maximize gains: Recommendations and a review of key issues to ensure fair wages and labor standards for all workers, Economic Policy Institute, October 4, 2024.

4. American Immigration Council, The Contributions of Temporary Protected Status Holders to the U.S. Economy (fact sheet), September 19, 2023.

5. Andrew Moriarty, “Temporary Protected Status (TPS): 5 Things to Know,” Policy Brief, FWD.US, February 29, 2024.

6. President’s Alliance on Higher Education and Immigration (President’s Alliance), Breakdown of Dreamer Populations—Both with and Without DACA, Updated May 23, 2024.

7. , Nicole Svajlenka and Trinh Q. Truong, “The Demographic and Economic Impacts of DACA Recipients: Fall 2021 Edition,” Center for American Progress, November 24, 2021.

8. Tom Wong, Ignacia Rodriguez Kmec, Diana Pliego, Karen Fierro Ruiz, Silva Mathema, Trinh Q. Truong, and Rosa Barrientos-Ferrer, 2023 Survey of DACA Recipients Highlights Economic Advancement, Continued Uncertainty amid Legal Limbo, Center for American Progress, March 25, 2024.

9. Pia Orrenius and Madeline Zavodny, “The Impact of Temporary Protected Status on Immigrants’ Labor Market Outcomes,” Federal Reserve Bank of Dallas Working Paper no. 1415, December 2014.

10. David Dyssegaard Kallick, “’Let Us Work’: The Wage Gain When Asylum Seekers Gain Work Authorization,” Immigration Research Initiative, September 7, 2023.

11. See for example, Ben Zipperer, Trump’s deportation agenda will destroy millions of jobs: Both immigrants and U.S.-born workers would suffer job losses, particularly in construction and child care, Economic Policy Institute, July 10, 2025.

12. See for example, Carl Davis, Marco Guzman, and Emma Sifre. 2024. Tax Payments by Undocumented Immigrants, Institute on Taxation and Economic Policy, July 30, 2024.

13. This rationale—the validity of which is beyond the scope of this comment—is repeated throughout the NPRM. See, e.g., Employment Authorization Reform for Asylum Applicants, Notice of Proposed Rulemaking, 91 Fed. Reg. 8616, 8620 (Feb. 23, 2026) (“[T]he affirmative asylum application backlog serves as a magnet pulling aliens into the U.S. illegally.”); id. at 8664 (same); id. at 8629 (“filing fraudulent, frivolous, or otherwise meritless asylum cases primarily to access employment authorization” is a “pull factor for illegal immigration,” such that the NPRM “should decrease the number of illegal border crossers”); id. at 8659 (proposing new eligibility bar on asylum-based work permits to “curb the pull-factor of employment authorization for those who have been present in the United States for more than 1 year”); id. at 8660 (“This rule will prioritize the safety and security of the American people by disincentivizing illegal migration and criminal conduct for [sic] aliens who would like to obtain employment authorization.”); id. at 8669 (“tethering (c)(8) EAD application acceptance to asylum processing times . . . will permanently eliminate the possibility that asylum backlogs may serve as a magnet attracting illegal immigration”).

14. See Temporary Protected Status (TPS): Fact Sheet, Forum (Feb. 4, 2026), https://forumtogether.org/article/temporary-protected-status-fact-sheet/ (listing recent TPS termination announcements, including TPS protections for Venezuela, Haiti, Nepal, Honduras, Nicaragua, Syria, Afghanistan, Cameroon, South Sudan, Burma, Ethiopia, Somalia, and Yemen); Dep’t of Homeland Sec., DHS Issues Notices of Termination for the CHNV Parole Program, Encourages Parolees to Self-Deport Immediately (June 12, 2025), https://www.dhs.gov/news/2025/06/12/dhs-issues-notices-termination-chnv-parole-program-encourages-parolees-self-deport; U.S. Citizenship & Immigr. Servs., Termination of Family Reunification Parole Processes for Colombians, Cubans, Ecuadorians, Guatemalans, Haitians, Hondurans, and Salvadorans, 90 Fed. Reg. 58032 (Dec. 15, 2025); Gregory Royal Pratt & Laura Rodríguez Presa, DACA delays lead to lost jobs, less stability and anxiety over potential deportation under Donald Trump, Chicago Tribune (Mar. 15, 2026), https://www.chicagotribune.com/2026/03/15/daca-delays-trump-immigration/.

15. See 91 Fed. Reg. at 8652-53, 8658 (acknowledging former TPS, parole, and DACA holders often apply for asylum).

16. 91 Fed. Reg. at 8620–21, 8664-65.

17. See id. (noting that lost compensation may be transferred to currently employed workers through additional hours or overtime).

18. See, e.g., fwd.us, People seeking asylum are contributing to the workforce (Jan. 31, 2026), https://www.fwd.us/news/people-seeking-asylum-are-contributing-to-the-workforce/.

19. See, e.g., Brief of Amici Curiae AFL-CIO and Ten Affiliated Labor Unions, Lesly Miot v. Trump, No. 26-5050 (D.C. Cir. Feb. 17, 2026) (“AFL-CIO and Affiliated Labor Unions Haiti TPS Brief”), at 16–17.

20. See, e.g., Julia Gelatt, “Trump Restrictions on Legal Immigration Could Sharply Reduce U.S. Population Growth,” Migration Policy Institute (April 2026), https://www.migrationpolicy.org/news/trump-legal-immigration-cuts-us-population-growth; and Chair Jerome Powell, “Transcript of Chair Powell’s Press Conference, March 18, 2026,” Federal Reserve, https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20260318.pdf (March 18, 2026).

21. See, e.g., Brief of Amici Curiae AFL-CIO and Affiliated Labor Unions, Svitlana Doe et al. v. Noem et al., No. 25-1384 (1st Cir. July 7, 2025) (“AFL-CIO and Affiliated Labor Unions Parole Brief”), at 13.

22. See, e.g., id. at 8–17 (discussing the chaos and harmful fallout that union members and employers experienced when DHS abruptly ended work authorization through the CHNV parole program); Andrea Hsu, Factories from GE to Kraft Heinz lose immigrant workers, stressing those who remain, NPR (Aug. 11, 2025), https://www.npr.org/2025/08/11/nx-s1-5496335/trump-immigration-workers-parole-tps.

23. See, e.g., AFL-CIO and Affiliated Labor Unions Haiti TPS Brief at 36 (noting that “[a]s a direct result of DHS’s actions [in terminating TPS for Haiti], nurses and other healthcare workers will feel pressure to work longer hours to attend to more patients, exacerbating the turnover and burnout that is endemic to the industry”).

24. See, e.g., Mae M. Ngai, Impossible Subjects: Illegal Aliens and the Making of Modern America (2004) (discussing historical links between immigrant labor and industrial unionization); Joint Econ. Comm. of the U.S. Cong., Unions Protect Employment and Raise Earnings, Including for Workers Who Are Immigrants (June 14, 2023) (finding unionization increases wages, benefits access, and workplace protections for immigrant workers); Andrea Hsu, Factories from GE to Kraft Heinz lose immigrant workers, stressing those who remain, NPR (Aug. 11, 2025), https://www.npr.org/2025/08/11/nx-s1-5496335/trump-immigration-workers-parole-tps.

25. See, e.g., Kevin Appleby, The Importance of Immigrant Labor to the US Economy, Center for Migration Studies (Sept. 2, 2024), https://cmsny.org/importance-of-immigrant-labor-to-us-economy/ (noting foreign-born workers were mainly employed in service occupations, construction, transportation, and material moving occupations); Dorothy Neufeld, Ranked: Union Membership by Industry in America, Visual Capitalist (Nov. 7, 2024), https://www.visualcapitalist.com/union-membership-by-industry-in-america/ (listing top industries with union membership based on Department of Labor statistics, including construction and transportation); Migration Policy Institute, Immigrants and Union Membership in the United States (2004) (demonstrating rising absolute numbers of immigrant workers in unions despite lower overall union density among foreign-born workers).

26. Annette Bernhardt et al., Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities, Center for Urban Economic Development, National Employment Law Project, and UCLA Institute for Research on Labor and Employment, 2009.

27. See, e.g., AFL-CIO and Affiliated Labor Unions Parole Brief at 15–16 (when the hotel industry is faced with labor shortages, employers often use temporary labor agencies to supply workers, which not only “undermin[e] the wages and working conditions” for U.S. citizen workers employed by the hotel “by paying substandard wages and benefits,” but also “often violate immigration law by hiring undocumented workers”).

28. See FCC v. Fox Television Studios, Inc., 556 U.S. 502, 515–16 (2009) (noting that an agency must sufficiently explain its decision when it departs from a previous position, which requires a “reasoned explanation” as to why it is “disregarding” any “factual findings . . . which underlay its prior policy” and “contradict” the factual findings underlying its new policy).

1. The proposed rule includes multiple reference numbers, which are listed here out of an abundance of caution: No. 2799-25; DHS Docket No. USCIS-2025-0370; DHS Docket No. 2025-0370; and RIN 1615-AC97.

Originally held Thursday, February 19, 2026

Webinar links, notes and discussion

Timestamped themes, discussion, and resources mentioned in the webinar

MORE ABOUT THE HOLDING THE LINE SERIES

Federal worker protections are under attack

Long-standing U.S. worker rights and protections are under acute threat. These include attempts to roll back standards that set a national floor for minimum wages, health and safety, nondiscrimination, unemployment insurance, and other rights and protections long taken for granted in most U.S. workplaces.

The crisis calls for urgent action. At a minimum, states must be equipped to maintain and enforce basic protections should at-risk federal standards disappear. The crisis also presents opportunities for states to do much more to:

• remedy longstanding gaps and exclusions in weak or outdated labor and employment laws;
• advance new policies that address the pressing challenges of eroding worker power, growing income inequality, persistent racial and gender wage gaps, and declining job quality; and
• position states over the long term to assume more expansive, effective roles in enacting and enforcing key protections that form the bedrock of an economy that works for all.

Holding the Line: State solutions for the workers’ rights crisis provides a roadmap to defending and strengthening protections at the state and local level. 

Go to the series →

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Enjoy this conversation with Economic Policy Institute President, Heidi Shierholz; Director of the Program on Race, Ethnicity and the Economy, Valerie Wilson; and Chief Economist, Josh Bivens; moderated by Samantha Sanders, about what’s missing from the current debate!

Originally held Thursday, January 22, 2026.

Webinar links, notes and discussion

Timestamped themes, discussion, and resources mentioned in the webinar

Other affordability resources

The missing piece in the affordability debate: Higher paychecks

The free market won’t solve our nationwide housing affordability problem: Equity-focused policy is the solution

The federal minimum wage is officially a poverty wage in 2025

Holding the Line: Minimum wage state solutions to the U.S workers rights crisis

Raising taxes on the ultrarich: A necessary first step to restore faith in American democracy and the public sector

The impact of the Raise the Wage Act of 2025 factsheet

Listen on The State of Working America Podcast

If you are an academic, student, non-profit researcher or advocate, or a journalist, you may view and use the content of this webinar and its related materials without requesting any further permission.

This is permitted under a non-commercial use Creative Commons license CC BY-NC-SA 4.0.

If you are a commercial enterprise looking to this information or data in any product that will be sold or as part of services and data you provide to paying customers, request commercial use by contacting EPI.

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December 1, 2025

Paul Buono
Chief, Business and Foreign Workers Division
Office of Policy and Strategy
U.S. Citizenship and Immigration Services
Department of Homeland Security
5900 Capital Gateway Drive
Camp Springs, MD 20746

Re: Removal of the Automatic Extension of Employment Authorization Documents, CIS No. 2826-25; DHS Docket No. USCIS-2025-0271, RIN 1615-AD05 (October 30, 2025)

Chief Buono:

The Economic Policy Institute (EPI) submits this comment strongly opposing the October 30, 2025 Interim Final Rule (IFR) eliminating automatic extensions of Employment Authorization Documents (EADs). The 2025 IFR unlawfully reverses DHS’s nearly decade-long policy choice of providing automatic EAD extensions; ignores ongoing adjudication delays and economic evidence; disregards reliance interests that DHS itself recognized less than a year ago; rejects feasible alternatives; and relies solely on an unsupported security rationale all while unlawfully bypassing notice-and-comment procedures as required by the Administrative Procedure Act (APA). The result is a rule that will strip employees of their workplace rights, destabilize the workforce, disrupt employer operations by creating gaps in employment authorization with unknown durations, and inflict severe harm on workers and their ability to provide for their families solely due to the government’s bureaucratic processing delays. We urge DHS to withdraw the IFR in full.

EPI fully supports and endorses the written comments and recommendations submitted by the Asylum Seeker Advocacy Project (ASAP), which includes a number of examples of the IFR’s impact on ASAP members.

About EPI and organizational interest

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank established 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 policies that protect and improve economic conditions and raise labor standards for low- and middle-income workers—regardless of immigration status—and assesses policies with respect to how well they further those goals.

EPI has researched, written, and commented extensively on the U.S. system for labor migration, including on temporary immigration protections and EADs, and on labor standards enforcement for both the low-wage and professional workforce. EPI has also provided expert testimony about the U.S. immigration system to both the U.S. Senate and House of Representatives, as well as state legislatures.

The worker rights of millions are protected by EADs

For workers who lack a permanent or more durable immigration status, obtaining a temporary EAD can mean having enforceable workplace rights that an individual would otherwise not have. While all workers have some labor and workplace rights under U.S. law—regardless of immigration status—enforcing them in practice becomes virtually impossible because of the threat of deportation, which prevents workers who lack an immigration status or an EAD from calling out lawbreaking employers and demanding that they comply with the law, or from reporting workplace violations to labor enforcement agencies. But having protection from deportation through temporary administrative immigration protections like parole, Temporary Protected Status, deferred action—accompanied by an EAD—means that, in practice, workers can report workplace violations to government officials without fear of retaliation that can lead to deportation. It also means that a worker with an EAD can be employed by just about any employer and change jobs or employers, unlike migrant workers employed with temporary visas who can only be employed by the sponsor of their visa.

Altogether, nearly 5.6 million people in the U.S. held a temporary but precarious immigration status in 2024, including over 2 million people who are asylum-seekers. (see Table 1 below).

Table 1

While these statuses and protections are only a band-aid for a flawed immigration system that is deeply in need of reform,1 they have been shown to protect millions of workers from some of the worst forms of employer lawbreaking. Employers also greatly benefit from workers having a protective status and a work permit because it allows them to lawfully employ millions of people who would otherwise not be eligible to work, leading to billions in economic contributions to the U.S. economy and generating demand that stimulates growth.

While comprehensive data are limited, we know, for example, that in 2017 the top five industries for TPS beneficiaries from El Salvador, Honduras, and Haiti were construction, restaurants and food services, landscaping, child day care services, and grocery stores.2 Employers in these industries and many others are in danger of losing their current workforce and will be prohibited from legally recruiting millions of other workers. Just one example is the GE Appliance Park in Louisville, Kentucky, a unionized plant where nearly 200 employees received a letter from the administration terminating their status and work authorization.3 Overnight, GE lost 200 employees.

DHS ignores the value and impact of work authorization on the workforce

In the IFR, DHS does not estimate and consider the value and impact that EADs have on the workforce and economy. There are examples of existing research showing the important economic contributions that hundreds of thousands of migrants with temporary protections and EADs are able to make thanks to being work-authorized. For example, when the TPS population was approximately 354,000 in 2021, the American Immigration Council estimated that “TPS holders contributed more than $2.2 billion in taxes, including almost $1 billion to state and local governments,” as well as “held $8 billion in spending power.”4 Another estimate by Moriarty found that TPS-eligible individuals “annually contribute some $31 billion in wages to the national GDP.”5

Research has also quantified some of the contributions made by persons who have qualified for Deferred Action for Childhood Arrivals (DACA). DACA was created by DHS in 2012, and recipients are eligible for protections from deportation and EADs that are valid for two years and renewable. More than 835,000 persons have benefitted from DACA, and more than 500,000 were enrolled as of 2024.6 Svajlenka and Truong found that DACA recipient households “pay $6.2 billion in federal taxes and $3.3 billion in state and local taxes each year,” and “after taxes, these households hold $25.3 billion in spending power,” and that DACA recipient families “own 68,000 homes, making $760 million in mortgage payments and $2.5 billion in rental payments annually.”7

When it comes to measuring the workplace impact and economic benefits of being issued an EAD for the workers themselves, there are limited examples, but three are worth citing here. One is an annual survey of DACA recipients that was conducted in 2024 for the ninth time. The most recent survey, conducted by Wong et al. and published by the Center for American Progress, showed that DACA has been an essential tool to improve the economic and educational outcomes of recipients.8 In terms of the impact that deferred action and an EAD have had on the employment of DACA recipients: 59.1% of respondents moved to a job with better pay; 47.3% moved to a job with better working conditions; 47.5% moved to a job that “better fits [their] education and training”; 49.6% moved to a job that “better fits [their] long-term career goals”; 57.3% moved to a job with health insurance or other benefits; and 19.6% of respondents obtained professional licenses.

Wong et al. also measured the impact of DACA and EADs on wages, finding that “[d]ata from the past nine years show that DACA has had a significant and positive effect on wages: Recipients’ average hourly wage more than doubled from $11.92 to $31.52 per hour—an increase of 164.4 percent—after receiving DACA.” These significant wage increases are no doubt a result of the labor and workplace rights and stability that DACA recipients gain from having an EAD.

Orrenius and Zavodny examined the wage and employment impact of TPS9—which allows those who are eligible to also be granted an EAD. They looked specifically at migrants from El Salvador, finding that having TPS increased employment rates, and that less-educated Salvadoran men who were employed earned 13% more if they had TPS. They note that “As a whole, the results suggest that less-educated Salvadoran men who receive TPS are able to move into better jobs and become more selective about the jobs they hold, increasing their earnings but also their job search and unemployment incidence.”

One other analysis that assesses the wage impact of being issued an EAD comes from Kallick, which looks specifically at asylum seekers in New York and nationwide.10 Relying on previous methodologies for measuring the impact of a lawful immigration status being granted to unauthorized immigrants, Kallick estimates that asylum seekers who are granted EADs increase their wages by 10%.

While the relative benefits of precarious and temporary immigration protections and EADs to migrant workers and the broader economy are clear, it is important to note here that the protections and EADs are only temporary and will end if renewals are not approved, or if renewals are delayed. Thus, DHS through this IFR will intentionally hurt the economy and eliminate the economic benefits for workers and employers that EADs create, a fact that the IFR does not grapple with or address.

An alternative to the path that DHS has chosen of terminating temporary statuses and EADs would be if Congress provided these workers with a permanent immigration status like a green card—and the rights that accompany it—allowing them to have full, equal, and permanent workplace rights and to exercise them in practice. That, in turn, would lead to even higher wages and improved labor standards for all workers,11 not just those who newly obtain green cards. However, the current administration so far has shown no appetite for supporting Congress in the creation of even one new green card.

But in the meantime, EADs through tools like TPS, parole, and DACA can mean the difference between having rights on the job or being extraordinarily vulnerable to the worst abuses by employers. While the current administration has claimed they want to help U.S. workers, actions like the mass detention and deportation of millions of workers and canceling protections like TPS and parole, reveal they are willing to degrade conditions and standards for all workers, as well as kill jobs and shrink the economy, in order to carry out their extreme immigration enforcement agenda.12

If the IFR is not withdrawn, millions of workers will be more easily exploited by their bosses and driven into the informal economy. That, in turn, will reduce their tax contributions that support the social safety net and lower their wages significantly13—ultimately hurting U.S workers in low-wage industries and the U.S. economy writ large by driving down demand for goods and services. It will also leave employers without millions of reliable employees in industries like construction, hospitality, childcare, agriculture, food processing and production, and more.

DHS ignores significant reliance interests

The 2025 IFR also disregards the significant reliance interests that DHS itself reaffirmed less than a year ago when it issued a permanent 540-day automatic extension, and which have existed since the agency’s issuance of the 2016 Final Rule. For nearly a decade, USCIS has automatically provided an extension of some length to some groups of workers with expiring EADs.14 In the 2024 Final Rule, DHS invited stakeholders to rely on a permanent 540-day extension and explicitly sought comment on making the extension permanent to provide regulatory certainty and workforce stability.15 Employers and workers reasonably structured hiring, staffing, payroll planning, and employee retention around that assurance.

Additionally, the only reliance interests DHS barely acknowledges—but does not meaningfully consider—are those of migrants and their employers. Yet, DHS entirely failed to consider the reliance interests of other stakeholders who rely on regulatory stability preventing immigrant communities from suffering government-caused lapses in employment authorization. These other stakeholders include state, city, and local governments; entire regional economies; educational institutions; healthcare providers; legal and social service providers; and the broader public, among others.

DHS cannot now abruptly withdraw the permanent 540-day automatic extension without addressing these significant reliance interests. Doing so violates core administrative law principles.16 In short, DHS invited workers, employers, families, schools, service providers, and communities to rely on regulatory stability, then pulled the rug out from under them without explanation. DHS failed to properly consider these significant reliance interests when issuing the 2025 IFR.

DHS fails to consider feasible alternatives as required by the APA

DHS fails to meaningfully consider feasible, less disruptive alternatives, in violation of the APA. 

Consecutive EADs. For instance, DHS claims that “proper planning” by renewal applicants could ensure no lapses in work authorization, yet this fails to recognize that DHS does not issue consecutive EADs. When individuals file well in advance of expiration, USCIS routinely issues overlapping validity periods rather than tacking the new approval onto the end of the existing authorization. As a result, early filers lose usable work-authorization time, forcing them into an ever-accelerating renewal cycle where they must apply earlier and earlier at significant personal and financial cost merely to maintain continuous work authorization. Filing fees, legal fees, time off work to prepare filings, and the emotional and economic strain of constant renewal planning make this approach untenable. If DHS truly believed early filing was the solution, it was required to consider—and explain why it rejected—the obvious alternative of issuing consecutive EAD validity periods so that applicants could file early without losing work authorization time and money. This straightforward fix would allow individuals to apply far in advance, provide USCIS a longer adjudication window, and preserve the full period of authorized employment. DHS’s failure even to address this option underscores the inadequacy of its “proper planning” rationale and confirms that the agency did not meaningfully consider reasonable, less disruptive alternatives.

Concurrent vetting. Nor does DHS explain why it cannot simply continue to conduct vetting during the renewal process and deny renewal of employment authorization if “potential hits of derogatory information” arise—a process it already uses.17 With or without the automatic extension, the individual remains in the United States; the only question is whether they are forced out of lawful employment while being vetted. In other words, DHS already has a system that protects security while letting people keep working, and it has not explained why it cannot keep using it.

Secure paper. DHS’s concern that its own receipt notices are printed on “non-secure” or “plain” paper ignores an obvious solution: printing the extension notices on secure paper.18 Rejecting straightforward, commonsense solutions in favor of a rule that causes sweeping economic harm and predictable worker displacement is the definition of arbitrary and capricious decision-making.

DHS’s use of an Interim Final Rule violates APA requirements

DHS made the 2025 IFR effective immediately, without providing the notice or opportunity to comment required by the APA. Thus the agency’s use of an interim final rule was unlawful.

First, DHS has not satisfied the “meticulous and demanding” standard for invoking the APA’s “good cause” exception.19 That narrow exception allows an agency to bypass notice and comment only where it “for good cause finds . . . that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”20 While DHS claims that notice and comment would be impracticable and contrary to the public interest, it relies almost entirely on the unsupported security rationale discussed above, along with stating it is “self-evident” that more workers would “rush” to apply for EAD renewals before the rule took effect.21 Again, DHS has not provided evidence of any security risks caused by automatic extensions.22 DHS therefore cannot satisfy the good cause exception to avoid notice-and-comment rulemaking.

Second, the 2025 IFR improperly relies on the exception for normal rulemaking involving the “foreign affairs function of the United States.”23 This exception, too, comes with a “high bar.”24 In particular, courts have warned against “[t]he dangers of an expansive reading of the foreign affairs exception” in the immigration context, where inevitable “incidental foreign affairs effects” would “eliminate[] public participation in this entire area of administrative law.”25 DHS cannot meet that high bar here, as the potential effects on international relations that it puts forward are all speculative, tenuous, or otherwise reliant on unsupported claims of security risks.26

Conclusion and recommended action

For all of these reasons, DHS should withdraw the 2025 IFR in its entirety and reinstate the permanent 540-day automatic extension. The IFR contradicts DHS’s statutory mandate, its own 2016 and 2024 Final Rules, and the factual and economic record. It rests on speculation, ignores constitutional concerns, and will cause predictable, major harm to worker rights and workers themselves, as well as families, employers, and the broader economy—all due to bureaucratic processing delays caused by the government alone.

Comment submitted by:

Daniel Costa|
Director of Immigration Law and Policy Research
Economic Policy Institute

Endnotes

1. Daniel Costa, Josh Bivens, Ben Zipperer, and Monique Morrissey, The U.S. benefits from immigration but policy reforms needed to maximize gains: Recommendations and a review of key issues to ensure fair wages and labor standards for all workers, Economic Policy Institute, October 4, 2024.

2. Robert Warren and Donald Kerwin, A Statistical and Demographic Profile of the US Temporary Protected Status Populations from El Salvador, Honduras, and Haiti, Center for Migration Studies, 2017

3. Keely Doll, “Letters warn nearly 200 GE Appliances workers to leave U.S. as immigration program ends,” Louisville Courier Journal, April 4, 2025.

4. American Immigration Council, The Contributions of Temporary Protected Status Holders to the U.S. Economy (fact sheet), September 19, 2023.

5. Andrew Moriarty, “Temporary Protected Status (TPS): 5 Things to Know,” Policy Brief, FWD.US, February 29, 2024.

6. President’s Alliance on Higher Education and Immigration (President’s Alliance), Breakdown of Dreamer Populations—Both with and Without DACA, Updated May 23, 2024.

7. , Nicole Svajlenka and Trinh Q. Truong, “The Demographic and Economic Impacts of DACA Recipients: Fall 2021 Edition,” Center for American Progress, November 24, 2021.

8. Tom Wong, Ignacia Rodriguez Kmec, Diana Pliego, Karen Fierro Ruiz, Silva Mathema, Trinh Q. Truong, and Rosa Barrientos-Ferrer, 2023 Survey of DACA Recipients Highlights Economic Advancement, Continued Uncertainty amid Legal Limbo, Center for American Progress, March 25, 2024.

9. Pia Orrenius and Madeline Zavodny, “The Impact of Temporary Protected Status on Immigrants’ Labor Market Outcomes,” Federal Reserve Bank of Dallas Working Paper no. 1415, December 2014.

10. David Dyssegaard Kallick, “’Let Us Work’: The Wage Gain When Asylum Seekers Gain Work Authorization,” Immigration Research Initiative, September 7, 2023.

11. Daniel Costa, Josh Bivens, Ben Zipperer, and Monique Morrissey, The U.S. benefits from immigration but policy reforms needed to maximize gains: Recommendations and a review of key issues to ensure fair wages and labor standards for all workers, Economic Policy Institute, October 4, 2024.

12. See for example, Ben Zipperer, Trump’s deportation agenda will destroy millions of jobs: Both immigrants and U.S.-born workers would suffer job losses, particularly in construction and child care, Economic Policy Institute, July 10, 2025.

13. See for example, Carl Davis, Marco Guzman, and Emma Sifre. 2024. Tax Payments by Undocumented Immigrants, Institute on Taxation and Economic Policy, July 30, 2024.

14. See 2016 Final Rule, 81 Fed. Reg. at 82,455. 

15. 2024 Final Rule, 89 Fed. Reg. at 101,230. 

16. Dep’t of Homeland Sec. v. Regents of the Univ. of Cal., 591 U.S. 1, 30 (2020) (agency must meaningfully consider reliance interests when abandoning prior policy).

17. 2025 IFR, 90 Fed. Reg. at 48,804 (“If the application is denied, the automatically extended employment authorization and/or EAD generally is terminated on the day of the denial.”); id. at 48,806, 48,808–10 (citing concerns about “potential hits of derogatory information”).

18. See 2025 IFR, 90 Fed. Reg. at 48,809–10, 48,817 (concerns about automatic extension being memorialized on “non-secure” paper).

19. Sorenson Commc’ns Inc. v. FCC, 755 F.3d 702, 706 (D.C. Cir. 2014) (citation omitted). 

20. 5 U.S.C. § 553(b)(3)(B).

21. 2025 IFR, 90 Fed. Reg. at 48,813.  

22. Cap. Area Immigrants’ Rts. Coal. v. Trump, 471 F. Supp. 3d 25, 46 (D.D.C. 2020) (good cause exception not satisfied where agencies only provided a single example of potential adverse consequences and “offer[ed] no other data or information that persuasively supports their prediction of a surge” in border crossings before rule took effect). 

23. 5 U.S.C. § 553(a)(1). 

24. Cap. Area Immigrants’ Rts. Coal. v. Trump, 471 F. Supp. 3d 25, 55 (D.D.C. 2020). 

25. City of New York v. Permanent Mission of India to United Nations, 618 F.3d 172, 202 (2d Cir. 2010). 

26. 2025 IFR, 90 Fed. Reg. at 48,814. 

Key takeaways

• The last decade marks a shift in the prime-age labor force participation rate (LFPR). It moved away from a long-term decline toward rebounded participation in the wake of strong labor markets. Current prime-age LFPR is now back to its 2001 level, erasing much of those losses. Key conclusions from this: Full-employment labor markets are needed to keep LFPRs strong, and long-term structural determinants of LFPR growth cannot be accurately diagnosed during times of cyclical labor market weakness.
• Since 1979, key drivers of the decline in men’s labor force participation included the following:
  • extended periods of excess unemployment rates
  • the labor market scarring effect of mass incarceration
  • the decline of historical sources of employment for noncollege men like the manufacturing and military sectors
  • increased opioid usage
• During the strong labor market in the late 2010s and following the tremendous recovery from the pandemic recession, noncollege men and Black men have seen substantial increases in    labor force participation.
• Women, by contrast, experienced historical gains in labor force participation throughout the 1980s and 1990s but then their participation stalled out in the early 2000s —and began falling behind relative to peers in OECD countries. In the U.S., insufficient support for balancing paid work and family responsibilities has been a limiting factor in further increases in women’s labor force participation. However, increases in workplace flexibility, with the rise of hybrid or remote work following the pandemic, may have boosted labor force participation, particularly for women with caregiving responsibilities.

Policy recommendations for maintaining and improving gains in labor force participation:

• In addition to policies that prioritize tight labor markets, policies should target the following for adults:
  • reductions in opioid use
  • reductions in incarceration rates
  • improvements in policies that support parents and caregivers
  •  substantial improvements in the pay and working conditions of jobs of the future (like caregiving jobs) to attract and retain workers
• Investments in today’s children are crucial for boosting the labor force participation of future generations, such as safety net policies that promote long-term health and educational investments. The future labor market benefits of investing in children are so strong in the long run that they may even be fiscally self-financing.

Executive summary

Labor force participation is both a key input and a consequence of strong economic growth. While there are many reasons some do not participate in the formal labor market—school, family caregiving responsibilities, retirement, work-limiting disabilities—a strong labor market with high employer demand for workers is a necessity to give as many willing workers as possible a chance for employment.

In an aging population in which college attendance is far more common than it used to be, demographic trends have a strong influence on the overall labor force participation rate. Few people think that it’s a problem that many older Americans choose to enjoy retirement or that many younger adults are enrolled in school rather than searching for work. What is, however, a potential problem is many prime-age workers—those between 25 and 54—are dropping out of the job search and work. To assess the extent of this problem, this report focuses primarily on prime-age labor force participation, the share of the population between 25 and 54 that is working or looking for work. This measure rose sharply from the mid-1970s to the mid-1990s. After that, it was flat for a period, then fell during the mid-2010s, most notably following the Great Recession. Over the last 10 years, participation has rebounded strongly and is now back to its 2001 level, erasing much of those post-2000 losses.

The rise in participation before 2000 was primarily driven by women as they increased their education, delayed family formation, and chose to participate in the paid labor market, driven in part by greater opportunities to access higher-paying previously male-dominated professions. The rise in participation over the last decade improved outcomes for both men and women, as strong employer demand led to workers entering or returning to the labor market. By 2024, women’s participation hit an all-time high, and men’s participation rate is back to its 2010 level.

Changes in labor force participation over the last nearly five decades varied by gender, but also across various demographic groups. While changes within demographic groups were the most important drivers of overall trends, there were notable differences between groups. For instance, those without a college degree—particularly men—experienced steeper declines in participation. And education upgrading (increasing the share of the population with a college degree) over the long term did little to offset that weakness. Loss of jobs in areas that traditionally were large-scale employers of noncollege men, such as manufacturing and the military, is undoubtedly related to reduced opportunity and participation in the labor force for those without a four-year college degree.

Black men, in particular, experienced notable declines in participation before the strong labor market over the last 10 years returned their participation to its 2000 level. The quadrupling of incarceration rates through the 1980s and 1990s disproportionately impacted Black men, making it harder for them to secure employment because of both the labor market scarring effects of incarceration as well as labor market discrimination.

Across peer countries in the OECD, prime-age labor force participation didn’t fall off to the same extent for men as it did in the U.S. and continued to rise for women over time. Insufficient support for balancing paid work and family responsibilities in the U.S. has been a limiting factor, particularly for women’s labor force participation. A body of international evidence indicates that larger investments in those areas—such as child care and paid leave—have the potential to help boost participation. Recent increases in work flexibility following the pandemic, such as hybrid or remote work, may have aided the entry or reentry of workers with caregiving responsibilities.

Policy choices–both of commission and omission—can affect the future growth of labor force participation, but outside of immigration, the effects will be comparatively modest relative to historical swings in labor force participation. Strengthened public care can increase labor supply, particularly for women. Poor health, pain, and opioid use have been linked to lower participation, so improving population health and the provision of health care could increase labor force participation. Further, investments in today’s children, through programs that provide health care, early education, and food security, can also pay dividends in terms of future labor force participation.

A strong economy and high-quality jobs are strongly related to labor force participation. When the labor market is tight, workers come back in search of better opportunities. Even with the pandemic job losses, the tight labor market over the last decade has all but erased the declines in the 2000s when excess unemployment and slow job growth kept would-be workers on the sidelines.

Introduction

The rate at which people participate in the U.S. labor force—which includes people who are working, as well as those who are unemployed but actively looking for work—has enormous implications for the economy and can serve as a barometer for its overall health.

There is no ideal labor force participation rate, and a society in which 100% of the population is in the labor force is not only unrealistic, but also undesirable. For example, high labor force participation could reflect a strong economy, or it could reflect a lack of access to social safety nets that force the very old and people with work-limiting disabilities into the workforce in order to survive. Falling labor force participation rates could be the result of a recession or other negative event like a global pandemic or could be caused by an aging population with many retired people or increased educational opportunities that delay entry into the labor force among younger cohorts.

Because there is no obvious ideal labor force participation rate, policymakers should think less about particular targets to hit for this rate and should instead aim at removing barriers that stand in the way of willing workers and their ability to search for and secure a decent job. While there are good reasons to not participate, such as gaining education or skills, harmful barriers could include macroeconomic slack in labor markets or more structural barriers like discrimination or insufficient societal investment in workers’ health and skills or insufficient support for balancing paid work and family responsibilities.

Labor force participation that is high due to few barriers between willing workers and the ability to find decent jobs is a key ingredient to a healthy, stable economy. This relationship moves in both directions: A healthy economy is one that sees few barriers to willing workers finding jobs, and growing labor force participation is also a key component of economic growth. When the number of people in the labor force increases, it boosts production and leads to higher consumption.

The overall labor force participation rate in the United States is lower now than at its peak in 2000, largely because the population is aging and members of the baby-boom generation have retired. Participation among younger people has declined over time, raising concerns among some economists and policymakers. But the direction of these trends has not been consistently negative, and there is evidence from the last decade that earlier patterns were less durable than predicted.

This report provides an overview of prime-age labor force participation over the last 45 years, summarizes prior research on possible drivers behind the changes over time, and highlights when and how patterns have shifted over the last decade, concluding with policy recommendations that the data suggest could be most helpful to support a continued upward trajectory.

Overall trends in labor force participation

The prime-age labor force participation rate is the share of the civilian noninstitutional population between ages 25 and 54 that is working or looking for work. We focus on this measure to remove those who may be more likely to be in school or retired. As educational attainment has increased over time, a larger share of the population may be out of the labor force for longer (primarily affecting the population younger than 25). At the same time, the population has aged, and a growing share of the population has moved into retirement. Removing those under 25 and over 54 from our analysis removes those mostly demographic changes in labor force participation. Unless otherwise stated, all analysis in this report will include only the U.S. population 25 to 54 years old and will, therefore, be referred to as the labor force or the labor force participation rate (LFPR).

In this report, our primary data set is the basic monthly Current Population Survey. For most analysis, we have a consistent series from 1976 to 2024 and use that entire period, when possible, to display trends. For consistency when decomposing changes over periods of time, we start with 1979 because it is the first business cycle peak in our data, and we don’t want to capture any cyclical trends that may have impacted the data from 1976. Using endpoints for analyses that are at different points of the business cycles can cloud conclusions on structural changes in the labor market. This is what happened with much of the research on labor force participation rates from the mid-2010s when the economy was still suffering employment losses in the aftermath of the Great Recession.

Prime-age labor force participation increased year over year throughout most of the post-World War II era for which we have data. Between 1976 and 2024, the prime-age labor force participation rate rose 8.8 percentage points from 74.8% to 83.6%. As Figure A demonstrates, there was a sharp rise in labor force participation from 1976 to the mid-1990s when it stabilized somewhat, then fell until the mid-2010s. With the notable exception of the pandemic recession, labor force participation has been on the rise for the last 10 years.

Figure A

Labor force participation rates by gender

The overall trends in prime-age labor force participation are valuable in understanding the overall story of the labor market, but they mask some stark differences between participation rates for men and women. Figure B shows that men’s labor force participation is consistently higher than women’s throughout the entire period. What’s most striking is the rise in participation overall through the 1990s was entirely driven by women. There are a number of cultural and socioeconomic factors behind that rise in women’s participation as women increased their college attendance and graduation rates while narrowing the gender gap in college majors, delayed marriage and childbirth, and acquired more market-relevant skills. Combined, these shifts led to greater opportunities for women to enter previously highly male-dominated occupations and earn higher wages (Goldin 2006). Both men and women experienced declines in participation from around 2000 to the mid-2010s, and then both groups experienced a rise since then, though stronger for women.

Figure B

Labor force participation rates move with overall labor market strength

Labor force participation rates tend to decline under weak economic conditions, like recessionary periods. But when the 2008 recession began, prime-age participation had still not fully recovered losses from the early 2000s, and LFP continued to fall for both men and women after the recession ended and the economy started expanding again. The majority of the decline in prime-age labor force participation occurred in the years after the 2008 recession, when prime-age LFP fell by 2.2 percentage points over the course of six years.

A significant body of research was released in the mid-2010s that highlighted the long-term fall in labor force participation, particularly among men, but the last 10 years have shown us a notable reversal in trend as participation for both men and women have been on the rise. While prime-age women are now experiencing their highest labor force participation rates on record, men’s have stopped their downward movement and risen 1.1 percentage points since their low point in 2014 (except in the pandemic recession).

The strength of the labor market over the last 10 years has meant more and better opportunities for potential labor market entrants. There have been two distinct periods over the last 45 years in which a growing economy has led to more broadly shared prosperity: the late 1990s and the last 10 years. Table 1 maps changes in labor force participation in those particular time periods against unemployment rates. Then, we summarize those two periods of time into two categories. The stronger labor market is defined by 1995–2000 and 2014–2024, while the weaker labor market is defined by the remaining 30 years since 1979.

In the good times, the unemployment rate averaged 4.7%, and labor force participation increased 0.3 and 0.1 percentage points per year, on average for women and men, respectively. In the bad times, women’s labor force participation continued to rise, but was largely driven by the structural increases in opportunities in education and reduced barriers to entry for higher-paying professions that characterized the 1979–1995 period. Men’s participation fell 0.2 percentage points in these times of weaker opportunities and lower wage growth when the overall unemployment rate averaged 6.7% (Gould 2020). Since 2000, periods of high unemployment have been associated with declines in both male and female labor force participation.

Table 1

Periods of higher unemployment for much of the last 45 years appear to be related to lower participation rates, particularly among men. But, as the women’s labor force participation rate stabilized in 2000, the trends have been similar for both men and women. The weaker labor market between 2000 and 2014 meant losses in participation, as workers saw fewer opportunities for themselves in the labor market. Though delayed, the labor market expansion in the lead-up to the business cycle peak in 2019, and in the strong bounceback of the last four years, has coincided with greater labor market participation for new or returning workers.

Mechanically, when workers see fewer opportunities and leave the labor force, the unemployment rate will fall as people who may have been classified as unemployed are now out of the labor force and, therefore, not counted. To the extent this is happening, even the higher unemployment rates in the bad times may be overstating labor market strength or undercounting weakness.

Since men’s and women’s labor force participation rates differ greatly in terms of their absolute levels across the entire period in question, we will conduct separate analyses for women and men. We caution readers to note the change in scale between figures for women and men when comparing trends. Women’s low participation in the 1970s requires a wider range; when men’s are narrowed to the range of interest, it can appear to amplify changes. While there were large losses over the entire period for men, they may appear larger than they are when compared with women’s wider labor force experiences.

Labor force participation rose for all racial/ethnic groups among women, while white and Black men experienced the largest declines

Figure C illustrates prime-age labor force participation rates for women (on the left) and men (on the right) for four groups: Hispanic of any race, white non-Hispanic (white), Black non-Hispanic (Black), and other (non-Hispanic). Other (non-Hispanic) is mostly Asian and Pacific Islander women and men; however, a series for this group doesn’t date as far back as 1976. Among women, Hispanic women have the lowest participation rates, while white and Black women have the highest. White women experienced the sharpest rise in participation through the 1970s, 1980s, and 1990s, and all groups experienced a lack of progress or a softening in participation in the early 2000s. Except for the dip in the pandemic recession, all groups experienced a resurgence in participation over much of the last decade.

Figure C

Over the entire period, Black men had the lowest labor force participation rates, and their declines were the sharpest for much of the last 45 years, never recovering fully in each recovery until the most recent period. With the exception of losses in the pandemic recession, Black men experienced a significant increase in participation over the last decade. Now, their labor force participation rate is the highest it has been in nearly 25 years. White men also experienced declines until the mid-2010s, but their participation rate stabilized and remains just shy of their pre-pandemic levels. Hispanic men experienced milder declines over the entire period and an uptick since the pandemic recession.

Though we do not show a figure for labor force participation rates by nativity (and the data only go back to 1994), it’s worth noting that among women, the participation rate of noncitizens is much lower than that of native or naturalized women (See Appendix Table 1). Among men, the largest fall in participation occurred among the native-born though 2014 but then rose over much of the last 10 years, except during the deep pandemic recession. Non-native men, either naturalized or noncitizens, did not experience large declines in participation, but their presence in the U.S. is often tied to the availability of work so their denominator—the population of each of these groups—also ebbs and flows with the strength of the labor market.

Over the last nearly five decades, the prime-age population has shifted from over 80% to about 55% white non-Hispanic, a drop of about 28 percentage points (EPI 2025a). While the Black share of the prime-age population rose about 4 percentage points, the largest gains were among the Hispanic share, increasing about 16 percentage points between 1979 and 2024 (EPI 2025a).

Given differences in labor force levels by race and ethnicity and the changing composition of the population by race and ethnicity over time, it is useful to decompose the overall change in the labor force into its component parts: the change in population share (or the between effect) and the change in labor force participation within groups (the within effect). Figure D shows these two effects, on the left for women and on the right for men.

Figure D

Compared with the changes due to the changing composition of the workforce, the changes within groups loom much larger. For women, the changing composition pulls down participation in part because Hispanic women were a growing share of the population with lower participation rates, compared with the falling share and higher participation rates of white non-Hispanic women. The rise is due to within-group increases in participation over the entire period.

Among men, the changing composition of the workforce played a small role, though likely driven by a falling population share of white men with higher participation rates in general. The drop in participation rates within each race/ethnic group played a much larger role over the 45-year period.

Labor force participation rate fell sharply for men with less than a four-year college degree, while participation for women with a college degree is at its highest ever

Labor force participation rates for different groups by educational attainment vary but follow the same general pattern for men and women, respectively. Both men and women with lower levels of educational attainment, shown in Figure E as noncollege—less than a four-year bachelor’s degree—exhibit lower levels of labor force participation throughout the last 45 years. For women, the noncollege participation tracked college participation, though their rates notably continued rising into 2000, while college participation peaked in 1997 (before the current period). Then, noncollege women’s participation dropped off in the 2000s and rose only mildly over the last 10 years. After softening for several years, labor force participation for women with a college degree is now at an all-time high.

Figure E

The labor force participation rate for men with and without college degrees has declined over time, but unevenly. Men without a four-year college degree experienced large declines between 1979 and 2014, a fall of 8.2 percentage points. They experienced some gains in the expansion of the late 2010s but were harmed more in the pandemic recession. While their participation rate is now back to their 2019 level, the increase hasn’t put a huge dent in the losses they suffered in the 35 years following 1979.

The reduction in labor force participation for noncollege men over time has been considerably greater than for men with a four-year degree. Technology has reduced employment for some types of workers, especially in manufacturing and jobs made up of routine tasks, while boosting employment for other kinds of work, and there is evidence that middle-skilled or middle-wage occupations have declined and have been replaced with a combination of low- and high-skilled jobs (CEA 2016).1

The decline in jobs that are available to workers with lower levels of formal education—or perhaps more accurately, the decline in the types of jobs these men have traditionally had access to, such as those in manufacturing—may make men more likely to leave the labor force. The decline in routine manual-labor jobs—skilled and semi-skilled jobs in production, maintenance, and material moving occupations, which are concentrated in manufacturing but are common in many other industries as well—has been significant and was accelerated by the 2008 recession.

From 2000 to 2017, routine manual-labor jobs as a share of all nonfarm employment fell by nearly 5 percentage points (Valletta and Barlow 2018). There is a correlation between routine manual-labor jobs and prime-age labor force participation, and in states where the drop was larger, there tended to be corresponding larger declines in participation. Controlling for other state-level economic conditions does not alter the relationship, indicating that the share of routine manual-labor jobs is not a proxy for other broad changes such as changes to the unemployment rate. The reduction in the routine manual employment share from 2000 to 2017 is estimated to have reduced the prime-age participation rate by approximately 1.3 percentage points, slightly more than half of the actual 2.3 percentage point decline in prime-age LFP (Valletta and Barlow 2018).

More specifically, the share of men’s employment in the manufacturing sector has fallen to less than half of what it was in 1979. As shown in Appendix Table 3, men’s share of employment in combined durable and nondurable goods manufacturing was 28.5% in 1979, but by 2024, these shares were reduced to 12.8%. To be clear, women’s participation in manufacturing jobs also declined substantially over the period, dropping from 17.9% to 6.3% of women’s employment; however, given that these jobs made up a smaller share of women’s overall employment composition, the loss was felt less by women than by men.

Additionally, the debate over falling male labor force participation often does not mention an important and heavily male economic sector that has shrunk enormously in terms of the opportunities it provided for those who might otherwise have lower-than-average participation rates: the military.

Figure F shows the overall decline in men’s labor force participation alongside the decline in total military employment scaled to the male noninstitutional prime-age population. To be clear, these are not true shares because our measure of the prime-age population is limited to the noninstitutional population, which excludes those in military service. However, the decline in military employment has meant that millions of noncollege men who might have lower-than-average opportunities in the civilian economy can no longer find work in the military. Throughout the mid-1960s through the 1990s, the share of prime-age men in the military dramatically decreased, from a high of 14% in 1967 leveling out at just under 4% of the prime-age male population in the 2000s.

Figure F

Educational upgrading played a small role compared with within-group changes in labor force participation

As with the composition of the population by race and ethnicity, there were large shifts in the educational attainment of men and particularly women between 1979 and 2024. As shown in Appendix Table 2, the share of women with a college degree rose 30.3 percentage points, while the share of men with a college degree rose 14.3 percentage points. Even though women started out with a smaller share of college graduates, today they are more likely to have a four-year degree relative to men. Given that overall labor force participation is far higher for college degree holders, all else equal, we would expect participation rates to have climbed over the 45-year period. While not the same as the labor force participation rate, prime-age women’s increased educational attainment is estimated to have contributed 2.7 percentage points to their employment rate between 2000 and 2023 (Arnon et al. 2023).

There is evidence that pursuing postsecondary education may be delaying labor force entry, at least for some populations. While most college students are younger than prime age, about one-third of students enrolled at Title IV institutions in the fall of 2023 were age 25 or older, and one-quarter were ages 25 to 39 (NCES 2024). Research comparing prime-age men between millennial and baby-boomer generational cohorts found that school attendance explains a roughly a third of millennial men under 30s’ lower labor force participation, but that this effect has virtually no impact by age 40 (Bengali, Duzhak, and Zhao 2023). And when millennial men are separated by education, labor force participation for those with a high school diploma or less is relatively flat from age 25 to 40, while it increases with age for those with a college degree or more, suggesting that additional educational attainment may play a role in delaying eventual entry into the labor market.

In Figure G, we examine the role that changing education composition played in the changes in labor force participation. As the shift in educational attainment was twice as large among women, it’s not surprising that it played a large role in lifting women’s participation rates overall. But the increases in participation within education groups were even more important since 1979. For men, the declines in participation within each group played an outsized role in explaining declines in labor force participation. As we saw in Figure E, these losses were more acute among noncollege men.

Figure G

Labor force participation among married women rose quickly, as unmarried women saw little change

Participation rates for men and women by marital status display a strikingly different pattern, as shown in Figure H. Married men are more likely to work than unmarried men, while unmarried women are more likely to work than married women. Unmarried women always exhibit relatively high levels of labor force participation, and that has changed little over much of the last few decades, except for mild rising and falling in business cycles. Married women, however, experienced a sharp rise in participation from just over a half (52.3%) to three-quarters (75.8%), currently at their highest level of participation on record.

On average, married men are about 9 percentage points more likely to participate in the labor force than unmarried men. That gap has been relatively consistent over the last 45 years, though unmarried men are more subject to swings in the labor market.

Figure H

Over the last nearly five decades, marriage rates have declined for both men and women, falling by about a quarter overall (see Appendix Table 2). All else equal, the decrease in marriage rates for women would pull up overall labor force participation for women. Figure I illustrates this decomposition. The shift toward unmarried status pulled up women’s participation but depressed men’s, as unmarried women are more likely to work than unmarried men, but unmarried men are less likely to work than married men. Rising participation, especially among married women, was a major factor in the rise of participation among women. Men’s falling labor force participation over the 1979–2024 period is explained by both falling participation among married and unmarried men and falling married rates.

Figure I

Labor force participation among women with young children rose, while men’s labor force remained tied to aggregate labor market conditions

While a small percentage of prime-age workers overall report they are not in the labor force due to family and care responsibilities, family structure and caregiving have strikingly disparate impacts on men’s and women’s participation. Care for children is a significant driver of this difference, as mothers are more likely than fathers to be primary caregivers. Mothers have lower participation rates than similarly aged women without children, even after controlling for demographics and education (Kahn, García-Manglano, and Bianchi 2014).

Participation rates for women with young children tend to lag participation rates for women overall and have not grown at the same rate (see Appendix Table 1). Women with children under age 3 have lower participation rates than women with children under 5, although the gap between these two groups has closed slightly since the early 2000s. Women experience a significant and sharp decline in labor force participation after having their first child. Compared with one year prior to having their first child, mothers are 18 percentage points less likely to be in the labor force in the quarter they give birth, and it takes an estimated two years after the birth of their last child for LFP to recover to roughly the same rate as pre-motherhood (Sandler and Szembrot 2019).

Some of this is likely due to personal preferences and cultural norms around caregiving, but there is also evidence that suggests high prices for child care contribute significantly to lower maternal labor force participation. Previous studies have found a positive relationship between access to child care and the mother’s LFP, although the size of the effect varies across studies (Morrissey 2017). More recent data suggest a close to a 1-to-1 relationship between the price of care and employment; as child care prices increase by 1 percentage point, a mother’s probability of employment declines by 0.9 percentage points, and the relationship is even stronger in states with traditional gender norms (Collins et al. 2021).

Factors thought to have influenced prime-age labor force participation between 2000 and the mid-2010s

The majority of the decline in prime-age labor force participation occurred in the years immediately after the 2008 recession, when the participation rate fell by 2.2 percentage points over the course of six years. This prompted a wave of research and subsequent news coverage aimed at understanding the drivers behind this shift. Labor force participation rates tend to decline under weak economic conditions like recessionary periods. But when the recession began, the prime-age LFP had still not fully recovered losses from the early 2000s, and it continued to fall for several years for both men and women after the recession ended and the economy started expanding again.

The longer-term trends indicated that there were factors exerting downward pressure on prime-age participation beyond the business cycle. Estimates on how much of the change in LFP was caused by cyclical factors vary, ranging from one-sixth to about two-thirds (Shierholz 2012; CEA 2016). But while point estimates varied, there was widespread agreement that structural factors contributed significantly to falling labor force participation after 2007.

Many of the factors identified, such as declining opportunities for men without four-year college degrees and stalled parental and child care policies, have already been discussed. A wide range of other potential causes has also been hypothesized to be behind the reduction in prime-age participation, with an overall focus on the experience of men, given their steeper declines.

Poor health, pain, and the opioid epidemic

The number of prime-age adults who report they are not in the labor force due to poor health or disability has increased over time and is the primary reason for nonparticipation reported by men (Tüzeman and Tran 2019). Prime-age women overall report their health as better and their well-being as higher compared with men, and women’s self-reported health does not vary significantly by labor force status. In contrast, prime-age men who are not in the labor force report worse health indicators compared with working men (Graham and Pinto 2021).

Racial and ethnic disparities in health are well documented (NASEM 2017), but in contrast to decades of findings that people of color experience disproportionate health challenges, white men, among prime-age men not in the labor force from 2010 to 2016, reported worse health, lower well-being, and more pain than men of other racial groups. Among these white men, overall low scores were driven by those with lower educational attainment and those at the older end of the prime-age range, especially those ages 45 to 54. Because their health was so much worse than similar men who are working, this suggests that poor health may be the cause of their nonparticipation rather than its effect (Graham and Pinto 2021).

The opioid epidemic has also been linked to declining labor force participation, although it is difficult to assign causation or separate cause from effect due to a lack of reliable data. Opioid prescriptions increased significantly beginning in the late 1990s and peaked in 2012 (Chai et al. 2018) with 17.8 billion opioid analgesic pills dispensed that year alone (Woods et al. 2021). While the overall decline in prime-age labor force participation predates the opioid epidemic, there is evidence opioid use may have contributed to the trend.

A number of studies show that increases in the use of opioids are associated with negative labor market outcomes, including lower labor force participation, although effect sizes vary (Maclean et al. 2020). One widely cited report found that labor force participation fell more in counties with higher opioid prescription rates. After controlling for race, marital status, age, education, manufacturing jobs, and census region, increased opioid prescriptions are estimated to account for as much as 0.6 percentage points of the decline in prime-age male LFP and 0.8 percentage points of the decline for women—or roughly 20% of the total decline from 1999 to 2015 (Krueger 2017). Subsequent research found an opposite pattern by gender, estimating that a 10% increase in the local opioid prescription rate is associated with a 0.53 percentage point decline in prime-age participation for men and a 0.10 percentage point decline for prime-age women (Aliprantis, Fee, and Schweitzer 2023).

Social Security Disability Insurance

Along with increased self-reported poor health, pain, and opioid use, growing incidence of disability benefits has also been proposed as a cause of falling prime-age labor force participation in the 2000s and 2010s. Social Security Disability Insurance (SSDI) has been an important component of the social safety net since benefits began in 1957. Reforms were made to the disability screening process in the 1980s, and researchers have posited that, coupled with an increase in the real value of benefits, this led to the subsequent large increase in enrollment, with the number of workers receiving SSDI benefits tripling from 1980 to 2013. Some went so far as to suggest that many of the applicants may be making fraudulent claims (Autor and Duggan 2006). Although SSDI benefits replace only a fraction of a disabled worker’s prior earnings and disabled beneficiaries are more than twice as likely to live below the poverty line (CBPP 2025), some researchers hypothesized that SSDI benefits would reduce the incentive for people with some remaining work capacity to stay in the labor force.

Estimates on how much increased SSDI receipt has contributed to declining labor force participation for prime-age men vary but generally account for very little of the total change (CEA 2016). SSDI is suggested to have a particularly chilling effect on LFP for men with lower levels of education since benefit receipt has grown more for prime-age adults without a college degree, a group that has also seen larger declines in participation (Burk and Montes 2018). But research comparing data on SSDI and participation rates between 1975–1984 and 2008–2017 found that increases in disability benefits explain almost none of the decline in LFP for men with less than a high school education and only very small shares of the drop in LFP for prime-age men with only a high school diploma—0.01 percentage points of the decline for men ages 25–34 and 35–44, and 0.3 percentage points for those ages 45–54 (Binder and Bound 2019).

Incarceration rates

The number of people incarcerated in the U.S. quadrupled from 1978 to 1998 (BJS n.d.), and young Black men are disproportionately likely to be impacted. The rise in incarceration has cross-cutting effects on measured labor force participation. Because the surveys that estimate participation do not include the incarcerated population, if those currently incarcerated would be likely to have lower-than-average labor force participation rates in the noninstitutional labor market, a rise in incarceration can actually boost measured participation by removing this population from the denominator.

However, if a spell of incarceration causally reduces the probability of labor force participation because it makes an individual’s connections to the labor force more tenuous (being in an institution categorically means one is not in the labor force) or because skills and work experience can depreciate over time, then a growing stock of people in the market with a spell of incarceration in their history could lower overall participation through these scarring effects. Further, people with a history of incarceration are more likely to experience labor market discrimination (Burk and Montes 2018).

Spells of incarceration are estimated to have accounted for at least a quarter of the decline in LFP among all Black men between 1979 and 2000, and over one-half of the decline in participation rates among Black men ages 25–34 without a high school diploma (Holzer, Offner, and Sorenson 2005). More recently published research found that having received a criminal charge in their youth significantly increased the number of weeks prime-age men spent out of the labor force up to 26 years later. However, the data used in this research may be overestimating effects since it cannot account for reasons why someone is not in the labor force, including school attendance or because of later incarceration (Ellsworth 2017).

While not specifically measuring effects on prime-age labor force participation, additional research quantifies the way prior convictions—which may or may not result in incarceration—impact future employment. Having been convicted of a felony is estimated to have reduced the employment rate for all men in 2008 by 1.5 to 1.7 percentage points, and by 6.1 to 6.9 percentage points for men without a high school diploma (Schmitt and Warner 2011). Later research using state-level modeling estimated that every 1 percentage point increase in the share of the adult population with a felony conviction is associated with a 0.3 percentage point increase in the rate of nonemployment—including unemployment and being out of the labor force—for adults aged 18 to 54 (Larson et al. 2022).

Leisure activities

As previously discussed, prime age women are much more likely to leave the labor force to undertake family responsibilities, and men rarely report this as the reason for their nonparticipation. But regardless of the reason for their nonparticipation, there is also no evidence that men ultimately use the time they may have otherwise used for labor market activities on household work. Time-use data show that prime-age men not in the labor force spend twice as much time on leisure activities compared with other men, but only slightly more time on housework and caring for children (Krause and Sawhill 2017).

From 2000 to 2015, total market hours worked fell more for younger men ages 21 to 30 than for men ages 31 to 55, and younger men’s detachment from the labor market increased. Computer and video game technology advanced over this same period, which increased the appeal of this leisure time, and younger men significantly increased their time spent gaming. While recognizing other factors such as declining demand for younger men’s labor, researchers have hypothesized that video and computer games are a potential factor that contributed to the reduction in the labor supply of younger men, estimating that increased gaming technology was responsible for up 38% to 79% of the differential in work hours reduction between younger and middle-aged men (Aguiar et al. 2017).

Subsequent research confirms that time spent playing video games increased among men in the 2000s (Krueger 2017; Gray 2019). The increase in time spent gaming was concentrated among men under 30, and nonworking young adult men spent more time playing computer and video games than their working peers did. However, total electronics leisure time was flat over this period because time spent on gaming was generally offset by decreased time watching television or movies, not by reduced job search or labor market activity. And while young men who had recently exited the labor force spent more time gaming than employed men did, they spent less time compared with men who had been out of the labor force longer, undercutting the hypothesis that gaming was the reason for their exit (rather than a consequence of it). Overall, the data suggest that shifting cultural norms have made it more socially acceptable for slightly older and non-employed men to spend time playing video games, not that young men were leaving the labor force in order to devote more time to gaming (Gray 2019).

Real and relative wages

Real hourly wages (adjusted for inflation) for prime-age men without a college degree were meaningfully lower in 2015 compared with the early 1970s, while real wages for men with degrees increased over the same time—although the decline is not consistent throughout the entire period, and real wages for all educational groups did increase in the late 1990s (Binder and Bound 2019).

While an individual’s personal level of pay is important to labor market decisions, there is also evidence that men’s relationship to other men’s wages may have a meaningful impact on their beliefs about the financial returns on the time and effort invested in work and subsequent labor supply. Data from 1980 to 2019 show that noncollege prime-age men are more likely to leave the labor force when their earnings decline relative to other prime-age men. Increases in real earnings may not be enough to offset the effect of inequality; it’s the comparison to what other similar-ages men are paid that seems to matter most. The relationship with women’s wages is weaker, and white non-Hispanic men are driving the relationship, indicating that the LFP of historically privileged groups may be more sensitive to changes in relative economic standing. This decline in relative earnings for noncollege prime-age men is estimated to have contributed to 44% of the decline in labor force participation over this period (Wu 2022).

Additional recent research comparing wages in men’s birth states found a positive relationship between the wages paid to other men starting in an individual’s boyhood and their eventual labor force participation when they reach prime age, even after controlling for labor market conditions and demographic variation. The study found that a $0.33 increase in the average experienced aggregate lifetime hourly wage of men raised the probability of prime-age labor force participation by 10 percentage points. The effects persisted even when men moved states, and were stronger within racial categories with an effect twice as strong for Black men compared with white men. Racial decompositions found that white men were most influenced by the wages of other white men, while Black men were influenced by both Black and white wage trajectories (Levin and Vidart 2025). The data suggest that lifetime wage experiences, and what men see other similar men being paid throughout the life course, may shape beliefs about the returns on work, which in turn, influence labor force participation. This may help explain why men’s LFP continued to decline in the 1990s when real wages rose.

More recent changes to the economy 

The research outlined above was largely conducted using data from the years immediately after the 2008 recession, often with endpoints before prime-age labor force participation started recovering in the late 2010s. Labor force participation declined dramatically in 2020 but rebounded faster than predicted, continuing the upward trend in place before the pandemic. Between 2020 and 2024, the prime-age labor force grew about two-and-a-half times faster than the prime-age population (EPI 2025b). And as of 2024, prime-age men’s participation had regained its 2010 level, while women’s hit a historic high.

Research on the drivers of the rapid recovery and longer-term prime-age LFP increases is ongoing, but there are indicators that the single most important factor might simply be the state of macroeconomic slack. The 2010s saw prolonged and large output gaps that persisted for almost a decade after the business cycle peak in 2007. The more recent post-pandemic recovery was far faster, with output gaps essentially erased 18 months after the previous peak.

Since 2015, when prime-age participation started to recover, researchers have found a consistent procyclical relationship between changes in state unemployment rates and prime-age LFP, a relationship that is not present for business cycles between 1990 and 2014. The wage gains experienced by low-wage workers have been larger during the recent economic expansions compared with earlier periods, and since this groups tends to be more responsive to changes in labor market conditions, it is possible that higher wages for workers at the lower end of the wage spectrum drove labor force participation rates up (Prabhakar and Valletta 2024). However, as wage growth has slowed, this procyclical rise has likely cooled for now.

Prime-age women’s labor force participation fell more than men’s in the early months of the pandemic, declining by 3.4 percentage points compared with men’s decline of 2.8 percentage points, although women’s LFP recovered earlier and more consistently than men’s in 2023 (EPI n.d.). Maternal employment and labor force participation were also deeply impacted by the closure of in-person schooling and child care, more so than for fathers and women without children (Landivar et al. 2023). As a result, in contrast to studies done in the 2010s, much of the post-pandemic research has focused on the labor market experiences of women and mothers.

Labor force participation for mothers whose youngest child was under age 5 hit a record high of 71% in September 2023 (Aron-Dine, Bauer, and Powell 2025). There are a number of factors that could have influenced this outcome, including increased access to telework, as mothers with preschool-aged children are the most likely group of prime-age workers to telework, or this could be the result of the procyclical factors previously discussed.

Earlier analysis found that prime-age women contributed the most to the rebound of the overall labor force participation rate post-pandemic, and among all prime-age women, it was mothers with children under 5 who increased their participation the most from 2019 to 2023. However, this seems to be largely because their participation rate, which was already lower than the rate for all prime-age women and mothers of older children, declined the least among mothers in the labor market collapse period (April–May 2019 to April–May 2020). During the recovery period (April–May 2020 to April–May 2023) prime-age women without minor children had a larger impact on the net change in the labor force participation rate, holding population constant. (Bauer and Wang 2023).

Analysis by the Council of Economic Advisers on the impact of the Biden-Harris administration’s $24 billion in child care stabilization funds, which were issued as subsidies to child care providers, estimates a 2–3 percentage point increase in the labor force participation rate for mothers of children under 6 as a result of the funds (CEA 2023). Labor force participation rates stabilized around the time the funds expired, and after that point, growth in LFP for mothers of young children followed the same patterns as those of other women, lending support to the hypothesis that increased child care funding was driving earlier increases. However, these estimates only control for the expanded child tax credit and state unemployment rates, with no control for increases in telework. Telework increases have also been hypothesized to affect all groups of women similarly, but that finding differs by data source. Analysis using Current Population Survey data shows prime-age parents are more likely to telework than workers without children (Aron-Dine, Bauer, and Powell 2025), while others using Census Pulse Survey data found non-mothers were more likely to telework in the first half of 2023 (Bauer and Wang 2023).

Prospects for labor force participation going forward and how policy can affect them

There are many reasons for comparative optimism about prime-age labor force participation going forward, driven by a partial reversal of a number of pressing social challenges. For one, the low points of the 2010s seem to have been significantly driven simply by excess macroeconomic slack. To the degree such prolonged periods of slack can be avoided going forward, labor force participation rates should avoid similar large slumps. For another, the incarcerated population in the United States has fallen significantly in the past 2 decades. To the degree that the future will see fewer workers scarred by a spell of incarceration, this should boost labor force participation. Further, the high point of the opioid epidemic seems to have passed, and rates of addiction are falling, removing another key headwind to labor force participation.

All of these potential tailwinds to labor force participation are obviously contingent on policy decisions—both economic and social. Further, a number of other margins that will affect labor force participation also will be largely driven by policy. Below, we highlight a number of determinants of labor force participation in coming years and assess how policy can increase or reduce their effect.

Efforts to reduce opioid use further may increase labor force participation

Although the exact effects are challenging to measure due to a lack of comprehensive data, there is some evidence suggesting that the increased use of opioids contributed to declining labor force participation in the late 2000s through mid-2010s (Aliprantis, Fee, and Scheitzer 2023). Since that time, a number of laws at the state and national levels have been enacted in response to the opioid crisis. Federally, the Comprehensive Addiction and Recovery Act of 2016, the 21st Century Cures Act, and the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act are intended to lessen the demand and supply of opioids while reducing the harms of opioid use disorder (CBO 2022). These efforts are multifaceted but include strategies such as providing funding to states to invest in prescription drug monitoring programs, increasing budgets for public health services to prevent and treat substance use disorders, and developing treatment alternatives to incarceration.

Tracing the impact of these laws is difficult, in part due to the effects of the pandemic, which contributed to increased opioid use, misuse, and deaths in 2020 (CBO 2022). However, post-2020 some measures have markedly improved. The overall rate of opioid dispensing has declined by roughly 20% since 2019, and opioid deaths involving prescription drugs have declined since their peak in 2017 (CDC 2024; NIDA 2024b). Emergency room visits for suspected nonfatal overdoses related to all opioids also declined over this time period (CDC 2024). At the same time, overdose deaths from any drug and those involving any opioid (not just prescription drugs) continued to increase through 2022 before declining in 2023, although they remain elevated by historical standards (NIDA 2024a).

It is too early to know if these measures will continue to trend downward, but there does not seem to be a simple, straightforward, ongoing connection between opioid misuse and labor force participation. Overdose rates are not a perfect proxy for misuse, but deaths from synthetic opioids increased dramatically after 2014 and remain very high, largely caused by illicitly manufactured fentanyl (NIDA 2024c). This occurred at the same time that prime-age labor force participation has also been increasing. It is possible that there are more complex relationships developing between opioid misuse and LFP, particularly as the opioid crisis changes over time.

Reducing the labor market scarring of incarceration

For Black men in particular, incarceration presents a uniquely challenging obstacle to gaining employment and rejoining the labor force (Pager 2003; Williams, Wilson, and Bergeson 2019; Holzer, Offner, and Sorenson 2005; Ellsworth 2017). At least 1 in 5 Black men will experience incarceration at some point in their lives (Robey, Massoglia, and Light 2023). These results suggest that any successful policy effort to reduce incarceration and recidivism rates would be highly supportive of labor force participation. While recent ban-the-box policies (such as those that do not require job applicants to disclose their criminal history for most jobs) have had mixed results in their ability to promote overall employment (Rose 2021), Bailey et al. (2024) found that children in households that received food stamps had a reduced likelihood of being incarcerated as adults later in life by 0.5 percentage points, suggesting that meeting families’ basic needs can do more than just improve health.

More promising than the ban-the-box policies is California’s 2011 policy to redistribute the costs of sending an adult to prison to the governing locality that makes the decision to incarcerate. This policy is associated with a reduction in the prison population of 50,000 between 2009 and 2019, suggesting that public financing policy can play a surprisingly effective role in supporting labor force participation (Pfaff 2024). The law, AB 109 or colloquially referred to as realignment,” mandated that nonviolent, nonsexual, and nonserious offenders were required to serve sentences under county supervision. Prior to the law, prosecutors, who are paid by the county, were incentivized to prosecute offenses to their highest conviction to get offenders sent to prison, which was paid for exclusively by the state. This redistribution of costs significantly curtailed prosecutors’ incentives to seek higher sentences for less serious offenses and as a result, reduced incarceration rates in California substantially.

Job quality matters to attract workers into the labor market, particularly into some of the fastest-growing occupations

A key headwind for men’s labor force participation in the past few decades has been a slowdown in job growth in sectors like manufacturing and mining that traditionally provided relatively high wages for workers without a college degree. Much of the change in the composition of employment is largely outside the purview of policymakers—but policy can have some effect on the margins of this employment composition. More importantly, how changing employment composition translates into changes in wages or perceived opportunities for different population groups is highly contingent on policy.

Occupational segregation is the tendency for one gender to more likely work in certain occupations than another. For instance, men are more likely to work in manufacturing and construction, while women are more likely to work in education and health care (industrial sectors are provided in Appendix Table 3, but the same phenomenon exists in occupations). Gender stereotypes, such as the idea that women are better suited to caregiving or that men are naturally better at physically demanding tasks, can constrain people’s options and make them more or less likely to pursue traditionally gendered jobs (Palffy, Lehnert, and Backes-Gellner 2023).

Occupational segregation is driven by social and cultural forces that compel women into caring professions (Schieder and Gould 2016). While many people do have choices about which jobs to apply for, accept, or reject, these decisions are made within the context of larger social and cultural influences. Occupational choices are shaped by a lifetime of experiences, including the expectations children are raised with, educational experiences, hiring practices, and norms and beliefs about family roles and the division of household labor held by employers, co-workers, and society. These norms and expectations impact women’s as well as men’s occupational “choice.” As we’ve shown above, the loss of both manufacturing and military jobs in the U.S. came at a cost to men in particular. On the flip side, the growth in jobs in health care will disproportionately benefit those more likely to work in health care, in this case, women.

Figure J illustrates the occupations expected to gain the most jobs, in percent terms, between 2024 and 2034 (BLS 2025a), as well as the share of women in those four occupations in 2024. The industries shown are expected to grow at least twice as fast as the average rate of 4%.

Three of the four fastest-growing occupation groups are dominated by women. The fastest-growing occupation group over the next 10 years—health care support occupations—is expected to grow by 12.4% and is comprised of jobs that pay lower-than-average wages. The median wage in health care support occupations is about three-fourths the median wage overall ($37,000 versus $49,000). Currently women make up about 84% of workers in health care support occupations. Low pay is both a cause and effect of occupational segregation. Jobs in which women are overrepresented tend to provide lower pay and fewer benefits than male-dominated occupations do, and wages tend to fall in occupations as the share of women increases (Levanon, England, and Allison 2009).

Figure J

For workers of any gender to enter those faster-growing occupations, those jobs need to be better. That means better pay, better working conditions, and better benefits. Stronger labor standards, such as a higher minimum wage and overtime protections, can improve those jobs and make them more appealing to a broader range of workers. Increased unionization can also improve pay in those jobs. On average, workers in unionized jobs are paid about 12.8% more than workers in nonunion jobs (EPI 2025c) A key reason jobs in manufacturing could support a middle-class lifestyle was the high unionization rates. There’s no reason currently low-paid health care support occupations couldn’t enjoy such conditions. The number and share of unionized workers in health care support jobs has recently increased, and their wages are higher than those of their nonunion counterparts (BLS 2025b; BLS 2025c).

Labor force participation is more resilient in peer countries

Figure K compares the United States with the OECD average prime-age labor force participation, 1976–2024, women on the left and men on the right. While they display similar overall trends at the endpoints—upward for women and downward for men—there are some notable differences. In the OECD countries, men’s participation also fell between 1976 to the early 2000s, but the losses tapered off quickly, and today, participation remains around its 2000 level. In the United States, men’s participation continued to drop, most notably during the Great Recession and prolonged recovery before starting its upward climb as the economy expanded.

While it is the case that many of our peer countries in the OECD also experienced downturns, particularly in the Great Recession, their labor force participation rates did not fall as far, largely due to different policy responses. Policies such as work sharing and time banking that provide support for workers to stay on the payroll helped blunt the impact of the Great Recession in places like Germany, which saw its unemployment rate tick down at the same time the rate in the U.S. more than doubled (Baker 2018).

Figure K

Women’s labor force participation never stopped its upward rise in the OECD average, even while it softened in the United States following 2000. The steep gains in participation in the U.S. tapered off significantly, while it continued to rise in the OECD until today. The policy environment around work for women is quite different, particularly in Western European countries, which have stronger family leave and child care supports.

There is meaningful evidence that the lack of work-family policies and relatively sparse care infrastructure in the U.S. depresses women’s labor force participation. In 1990, out of 22 OECD countries, the U.S. ranked 6th for women’s prime-age labor force participation, but by 2010 had fallen to 17th place. The lack of family-supportive policies in the U.S., such as paid parental leave and publicly provided child care, can explain 29% of the decline in the U.S.’s ranking of female LFP relative to other OECD countries (Blau and Kahn 2013).

In the subsequent 15 years, the gaps between policies in other OECD countries and the U.S. have typically widened. Compared with other high-income OECD countries, the U.S. is now even more of an outlier on nearly every workplace policy that could help boost labor force participation among workers with family responsibilities.

Since 2010 the total amount of paid parental leave available to two parents in OECD countries has increased from an average of 58.1 weeks to 64.6 weeks (OECD 2024). Yet the United States remains an extreme outlier and is one of the only countries in the world that does not guarantee workers the right to any form of paid parental leave. Across the other 37 OECD countries, mothers are eligible for an average of more than one year (53.5 weeks), and fathers are eligible for more than three months (13 weeks) of paid leave.

Families in the United States also pay more on average for child care than families in other OECD countries. In the U.S., a single parent paid the average wage would need to spend 40% of their wages to pay for center-based care for two toddlers—about 5 times the cost burden (8%) for the OECD, on average (OECD n.d.). And while net costs increased for U.S. families, they declined in most other OECD countries, with the overall OECD average dropping from 15% to 8% between 2004 and 2023.

The cost burden is much greater in the U.S. compared with other countries where child care fees are similarly high or higher because the U.S. does not provide meaningful benefits like child care allowances or fee rebates to help families reduce their financial costs. While there are tax credits that allow some working parents to write off child care expenses, not all families qualify, and the overall impact on net costs is minimal.

The share of GDP the United States spends on early childhood education and care has declined since 2010, while the OECD average has increased (OECD Social Expenditure Database n.d.). In 2021, the last year with complete data on all 38 OECD countries, U.S. spending (0.3% of GDP) was less than half the OECD average (0.7%).

Policies related to remote work and workplace flexibility—such as the ability of workers to alter their start and stop times—were not part of the original analysis conducted by Blau and Kahn (2013). However, flexibility and remote or telework options have been identified as important policies to support labor force participation, particularly among mothers post-2020. As of April 2024, 25 of the 38 OECD countries had laws in place allowing workers to request flexible schedules, remote work, or both (World Bank 2024).

The 2019 Work-Life Balance Directive2 created a right for workers in the European Union to request flexible work arrangements, including remote work, to better coordinate work with family caregiving responsibilities. The law does not guarantee that employers will grant approval to every request, but they are required to seriously consider requests for flexibility and must provide reasons for refusing requests. In the United Kingdom, workers’ rights to request flexible work arrangements were expanded through the Employment Relations (Flexible Working) Act 20233. Workers in the U.K. now have a legal right to request flexibility starting from their first day of employment rather than having to wait 26 weeks before making the request as they did previously.

In the United States, workers do not have an explicit legal right to request remote work or workplace flexibility, and employers are not required to consider such requests when they are made. Although the data are not conclusive, there are indications that increased access to telework during and after the pandemic enabled greater labor force participation, including among mothers of young children. Broadening access to flexibility and remote work would likely further increase entry or reentry into the labor force among workers with caregiving responsibilities, as well as supporting continued participation for current workers.

Investing in children is a long-run strategy to increase labor force participation in the future

Previous sections noted the sharp increase in college attainment among the U.S. population in recent decades and also noted that college graduates saw much slower rates of declines in labor force participation than noncollege workers did. The public sector has supplied the majority of financing for higher education in the United States for the entire post-World War II period. In short, the boost to labor force participation (and economic growth generally) supplied by higher education was a policy choice.

Policy choices about how prepared future generations will be to participate in the labor force are not just confined to education spending (though that is obviously important as well). Investing in children by supporting their basic needs such as food, medical care and child care has been shown to have demonstrable long-term effects on health and economic sufficiency. These, in turn, support attachment to the labor market. Early childhood is a sensitive period, and investments in children tend to have large benefits as they age (Cunha and Heckman 2007; Heckman 2008). Additionally, a stronger welfare state raises the income and resources of a child’s family (Ruhm and Waldfogel 2012). Importantly, these benefits tend to outweigh the costs of the program or any potential impacts on the parents (Aizer, Hoynes, and Lleras-Muney 2022).

Long-term studies have tracked children in households with access to food stamps (SNAP), early childhood education, and Medicaid to assess the impact of these programs on these children as adults. With respect to food stamps, Hoynes, Schanzenbach, and Almond (2016) found that access to food stamps for households with children led to statistically significant improvements in measures of metabolic health when they were adults. Moreover, researchers found positive impacts of receiving food stamps on economic sufficiency (high school completion, use of food stamps, and earnings), with statistically significant increases among adult women who receive food stamps. Bailey et al. (2024) linked the 2000 Census and 2001–2013 American Community Survey to information from Social Security to examine how SNAP program rollouts from 1961–1975 impacted children as adults. They found that children with access to food stamps before age 5 have better outcomes as adults in the form of increased economic self-sufficiency (3% standard deviation increase), human capital (6% SD increase), quality of neighborhood residence (8% SD increase), and a 1.2-year increase in life expectancy. 

Several studies have also documented the long-run impact of Medicaid with implications for labor market participation. Miller and Wherry (2019) studied infants who gained access to Medicaid in utero via their mother’s prenatal coverage. They find that infants with prenatal coverage had lower rates of chronic health conditions as adults, fewer hospitalizations, and increased high school graduation rates. Thompson (2017) examined the long-term impact of Medicaid access and found that each additional year of Medicaid eligibility during childhood improved overall adult health (self-score evaluations) and reduced chronic conditions and asthma prevalence as adults. Given that disability and chronic health conditions are some of the main reasons that individuals stay out of the labor force, these studies show that access to Medicaid as a child can promote the conditions that would lead to labor force attachment.

Finally, Brown, Kowalski, and Lurie (2020) use tax data to estimate the long-term impact of Medicaid eligibility in childhood on a variety of outcomes measured at ages in early adult life. They find that eligibility for Medicaid during childhood increased college enrollment rates, delayed fertility, reduced mortality, and reduced dependence on EITC benefits, and led to higher tax payments among adults, suggesting that access to Medicaid has the long-term benefit of improved economic self-sufficiency and employment.

While the U.S. doesn’t have a national pre-K early-childhood program, studies of individual programs show promising results. Chicago’s Child-Parent Center Education Program preschool was linked to higher educational attainment and socioeconomic status, a higher likelihood of health insurance coverage, and lower rates of justice-system involvement and substance abuse (Reynolds et al. 2011). Michigan’s HighScope Perry Preschool program was linked to fewer arrests, higher earnings, and higher educational achievement and attainment (Schweinhart 2005), and careful cost- benefit analysis estimated that every dollar invested at age 4 yields a return of $60–$300 by age 65 (Heckman et al. 2010). Additionally, studies of state-introduced universal kindergarten programs in the 1960s and 1970s found that this additional early childhood education increased both educational attainment for some groups of students (Cascio 2009, 2010; Dhuey 2011); and labor market outcomes in the form of weeks worked and wages (Dhuey, 2011), suggesting that early childhood education interventions can support labor market attachment.

Studies in Europe have documented the impact of pre-K and early childhood care on long-term outcomes. In Denmark, researchers found that early increased preschool density was positively associated with completed schooling, particularly for daughters of less educated mothers, and later adult earnings (Bingley and Westergaard-Nielsen, forthcoming). In France, researchers found that the large-scale universal preschool program increased test scores, high school graduation rates, and adult wages, with larger effects for children from disadvantaged backgrounds (Dumas and LeFranc 2010). In Norway, an expansion of subsidized child care led to increased educational attainment (more years of schooling, higher rates of college attendance) and labor market participation (Havnes and Mogstad 2011).

The role labor force participation rates play in the economic future of the U.S.

Labor force growth is a key element of economic growth more generally. At the most basic level, growth in overall gross domestic product (GDP) over brief periods of time can be proxied as the sum of the growth rates of the labor force and of labor productivity—with productivity defined as the amount of output generated in an average hour of work in the economy. Given this, every percentage point rise or fall in the growth rate of the labor force translates one for one into a corresponding change in overall GDP growth.

In coming decades, the question that matters more than any other for projecting labor force growth for the U.S. economy is the pace of net immigration. For example, the Congressional Budget Office projects that the U.S. labor force will grow by just under 7% from 2025 to 2035 (CBO 2025a). But if the influence of immigration flows is removed, this growth will fall to just 0.5% over the entire next 10 years.4

There is no realistic scope at all for changes within U.S.-born labor force participation rates to fundamentally change this and lead to significant increases in the labor force over the next decade. Most importantly, the U.S.-born population is aging fast. Over the next 10 years the share of the U.S. adult population over the age of 65 will rise by another 4 percentage points (to over 27%). Given the gap in labor force participation rates for workers aged 65–74 and those under the age of 65, this translates into a reduction in the overall labor force participation by roughly a full percentage point over the decade—a powerful headwind to growth.5

In theory, the CBO has taken some account of the fact that major headwinds to growth in prime-age participation rates over the past decade or so should likely reverse (or at least, dial down) in the next 10 years. These headwinds include excess labor market slack, the stock of prime-age adults with some spell of incarceration in their past, the prevalence of opioid addiction, and the steady shrinkage of military employment scaled against the civilian workforce. If none of these past headwinds to labor force participation were taken into account in CBO projections, their reversal could conceivably add 1–2 percentage points to prime-age labor force participation rates over the next 10 years. But, again, this doesn’t come close to rivalling the potential effects of changes in net immigration, and CBO has likely accounted for a number of these influences in their projections, at least in part.6

If one of the more ambitious long-run strategies for boosting future labor force participation highlighted in the previous section was undertaken (large investments in child health, nutrition, and education for example), these effects could conceivably add another percentage point to labor force participation rates, but only at a quite long time horizon (well over 10 years).7

One upshot of the dominance of immigration flows in conditioning future labor force growth and the continued downward pressure on labor force growth imposed by the aging of the U.S.-born population is that anybody promising large increases in GDP growth in coming years without calling for higher rates of immigration will have a very hard time fulfilling this. Again, every percentage point decline in the growth rate of the labor force subtracts a percentage point from GDP growth, and changes in labor force growth in the coming decade will be driven near entirely by immigration inflows.

Of course, GDP growth is (roughly) the sum of growth in the labor force plus the growth of productivity. In theory, a slower growth rate of the labor force could be overcome by a surge in productivity growth, and overall GDP growth could still rise. However, productivity growth over the past century in the U.S. economy has fluctuated with a relatively narrow band—essentially between 1% and 2% annually. Since the 1960s, spells of productivity growth over 2% have been rare—just the late 1990s and early 2000s. It is theoretically possible that we are in a stage currently where technological change will accelerate and productivity growth will surge to the higher bands of its historical experience, but this is very hard to bank on. Promises of future growth surges from other technological changes (like robotization in the 2010s) yielded real, but quite modest, productivity growth.

But while productivity growth is unlikely to generate historically fast GDP growth in coming decades, it is the most relevant part of the growth equation to focus on. A higher GDP driven by a larger labor force does not necessarily raise living standards. It is productivity growth alone that makes a country richer over time in the most relevant sense—providing the potential for higher living standards per person.

By far the most substantive way that differing rates of labor force growth can affect Americans’ economic future is through the tax and transfer system. The federal government in the U.S. has historically taken on the role of ensuring adequate income in retirement for all citizens by running social insurance programs—Social Security and Medicare—through the nation’s fiscal system. Very roughly speaking, current workers are taxed to provide benefits to current retirees. As the share of the population that is retired rises relative to the stock of current workers, this means a higher share of workers’ output needs to be devoted to providing income for retirees.

This need not imply any pronounced economic pressure. Productivity growth means that even if a rising share of workers’ incomes is devoted to social insurance for current retirees that workers’ net-of-tax income levels can still rise steadily over time. But this demographic angle of the large social insurance programs run by the federal government does pose potential political challenges. These political challenges could well be lessened by policy decisions that keep the ratio of current workers to current retirees higher than it otherwise would have been—and here is where issues of labor force participation could matter.

Conclusion

Labor force participation is both an input and a consequence of a healthy economy. While there is no ideal labor force participation rate that policymakers should target, they should target any barriers that are keeping willing workers from being able to actively search for work. These barriers include too-slack labor markets stemming from macroeconomic policy failures; labor market discrimination; insufficient investment in workers’ health, skills, and credentials; and a failure to make investments needed to enable parents with young children to also participate meaningfully in the labor market.

Outside of immigration, however, the changes to labor force participation that can be leveraged by even quite ambitious policy changes will be relatively small and will not meaningfully change the trajectory of the U.S. macroeconomy over a decade or so. This does not mean they are not worth doing, instead it means that policymakers should be realistic when claiming that future economic growth can be boosted by increasing growth in the U.S. labor force.

Appendix

Appendix Table 1

Appendix Table 2

Appendix Table 3

Acknowledgments

The authors thank Katie deCourcy and Stevie Marvin for research assistance and Grace Park for editing. This project was made possible by financial support from the Peter G. Peterson Foundation.

Notes

1. We should note that this change in employment shares by skill- or credential-grouping does not predict at all accurately any related change in wages. In short, one can believe that changing employment shares by occupation—even those driven by technological changes—fail to move relative wages or inequality in any significant way, and that non-relationship between employment and wage changes by occupation is validated in the data (see Mishel, Schmitt, and Shierholz 2013).

2. Council Directive 2019/1158, 2019 O.J. (L 188), 79–93.

3. The Employment Relations (Flexible Working) Act 2023, c. 24 (UK), https://www.legislation.gov.uk/uksi/2024/438/made.

4. Authors’ analysis is based on information in CBO 2025a, b. The size of the over-19 labor force over the next decade is provided directly in CBO 2025b. This data also provide the share of growth in the over-19 population that is accounted for by immigration. To obtain the counterfactual growth, we just removed the portion of growth associated with immigration each year and recalculated the level of the labor force for each year in the next decade.

5. Numbers in this paragraph are based on authors’ analysis of data in CBO 2025a, b. CBO 2025b reports that the share of the over-64 population will rise as a share of the total adult population by almost exactly 3 percentage points between 2025 and 2035. Currently, the LFPR for workers between the ages of 65 to 69 is almost exactly 30 percentage points lower than for workers between the ages of 55 to 64. Multiplying these together (which gives 0.9%) should give a very rough sense of the downward pressure on labor supply stemming from aging.

6. Schmitt and Warner (2011) estimated that the scarring effect of incarceration could reduce the employment-to-population ratio of men by between 0.6 to 2.6 percentage points by 2008. Given that the stock of incarcerated men has fallen by roughly 20% since its highest point (and a bit more than this as a share of the population), this penalty going forward could have been reduced by 0.15 to 0.6 percentage points. In regard to opioids, given estimates that rising opioid use throughout the 2000s could have reduced labor force participation rates by as much as 1 percentage point, any leveling off of this could remove a powerful headwind to labor force growth, and any affirmative reduction in the incidence of opioid addiction should, in theory, potentially boost labor force growth.

7. Most estimates of the effect of early childhood investments—whether it be early education, health, or nutritional investments—report the effect on earnings of exposed children when they become adults. Assuming a package of investments in today’s children were able to boost their earnings by 5% when they became adults (which seems plausible given that early childhood educational investments alone have been estimated to increase annual earnings of exposed children by over 20%, and the share of today’s children not currently receiving high-quality early childhood education is estimated to be over half of all children (see Lynch and Vaughul 2015)). If increased labor force participation accounted for a fifth of this total earnings effect (as opposed to lower unemployment rates, higher hours worked during a year, and higher hourly wages), then a range of estimates would indicate that these investments could boost the adult labor force participation rates of today’s children by roughly a percentage point. It seems plausible that increased labor force participation could, by itself, explain a fifth of projected future earnings. For example, annual earnings of workers with a college degree are roughly 60% higher than with only a high school degree. This 60% difference can be very roughly expressed as the sum of differences in labor force participation, unemployment rates, hours worked per year, and average hourly earnings. Labor force participation rates for workers with a bachelor’s degree or greater are roughly 12% higher than for workers with only a high school diploma , which is roughly a fifth of the total difference in annual earnings. 

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Although the economic consequences of reduced or increased immigration flows are often contested, recent research clearly demonstrates that immigration enforcement that increases deportations will also cause job losses for both foreign-born and U.S.-born workers. This report uses that research to estimate the employment consequences for all workers if the Trump administration succeeds in carrying out its goal of 1 million deportations annually over the next four years.

Deportations will lead to employment losses

How deportations reduce jobs for immigrants and U.S.-born workers

Deportations sharply reduce the supply of labor, threatening the ability of employers to generate revenue and pay for business expenses like rent, machinery, and even the labor of any remaining workers. Immigrant labor supply will fall because immigrants tend to have high employment rates, so arresting, detaining, and removing immigrants from the country removes people from the workforce. Also, others who are not formally deported may need to leave the country to accompany their deported family or community members. In addition, deportations raise the risks of arrest and removal for remaining immigrants and cause them to curtail activities with the potential for interaction with the government, like labor market participation.

These chilling effects can even extend to citizens who are by law not subject to deportation but are nevertheless connected to communities at risk. For example, Alsan and Yang (2024) examined the effects of “Secure Communities,” a large interior immigration enforcement program in the United States that began in 2008. This program linked state and local government databases to federal immigration enforcement in order to detect immigrants who are deportable and led to increased detentions and deportations.1 Alsan and Yang (2024) found that Hispanic citizen-headed households reduced their participation in federal safety programs in response to Secure Communities enforcement actions, perhaps out of concern for other family members and close contacts.

Regardless of the exact mechanisms, deportations can cause a sharp and abrupt enough fall in labor supply that some employers will respond by shutting down operations entirely. For example, Ali, Brown, and Herbst (2024) found that Secure Communities, which led to increased immigration-related arrests and deportations, reduced the number of child care facilities, harming both immigrant and U.S.-born employment in the child care sector.

Deportations also reduce labor market leverage that immigrants have with employers. The rising threat of arrest or deportation makes it harder for immigrants to find new employment opportunities that do not risk their ability to stay in the U.S., compelling them to stay with a bad or lawbreaking employer. With shrinking alternative job options, immigrants are forced to settle for lower wages and worse working conditions. These deteriorating conditions for immigrant workers will negatively affect all workers who compete with immigrants in the same labor markets since lower wages and bad conditions for one group will drag down wages and conditions for all workers. Employment will decline for U.S.-born workers, as they are less likely to work at jobs with falling wage rates.

As working conditions deteriorate, so does the willingness of workers (either immigrant or U.S.-born) to report on degraded conditions. For example, Grittner and Johnson (2024) found that the rollout of Secure Communities increased workplace injuries and reduced worker safety complaints at workplaces with higher shares of Hispanic workers. In addition, Grittner and Johnson found that this increased immigration enforcement caused minimum wage violations to increase among Hispanic workers and non-Hispanic workers. Deportations limited the alternative job options of those workers most at risk of expanded immigration enforcement, lowering their labor market leverage, which, in turn, reduced the bargaining power of all workers competing in those same labor markets.

Because jobs held by U.S.-born and immigrant workers are often complementary and economically linked, the shrinking supply of immigrant labor can adversely affect employer demand for jobs held by both groups of workers. As Howard, Wang, and Zhang (2024) observe, when there are fewer immigrant roofers and framers to build the basic structure of homes, there will be less work available for U.S.-born electricians and plumbers. If there are fewer dishwashers and cooks, restaurants may limit their hours or shift their operations toward takeout, reducing the overall employment of waitstaff and managers.

Complementary immigrant and U.S.-born employment can also cut across sectors. East and Velásquez (2024) found that the Secure Communities enforcement program reduced the hours of immigrant child care workers and cleaners, and U.S.-born mothers of young children worked less in response, presumably due to increased care responsibilities at home.

Finally, the reduction in the immigrant population and their public activities is a reduction in consumers and business owners, negatively affecting consumer demand and investment on top of falling local demand due to reduced immigrant and U.S.-born employment. As immigrant employment and earnings fall, so will consumption of goods and services. Removing immigrants will also slow business creation and weaken employment demand, as immigrants are more likely than U.S.-born workers to start businesses (Azoulay et al. 2022).2 A large mass deportation program could also in principle generate very broad chilling effects on consumption. For example, declining numbers of international travelers to the United States will negatively affect the tourism industry. In general, purchases by nonresidents, including foreign students, are a major U.S. export, but that spending may drop precipitously when noncitizens face higher risks of detention and deportation.3

For all these reasons, increased immigration enforcement through arrests, detentions and deportations can reduce employment opportunities for noncitizens, immigrant citizens, and U.S.-born workers.

Recent studies on the employment effects of deportations

Recent empirical research finds that heightened immigration enforcement reduces employment, often causing job losses for both foreign- and U.S.-born workers.

Several studies show that Secure Communities led to large job losses as the program was rolled out across counties beginning in 2008. Secure Communities increased fingerprint and other information sharing between U.S. Immigrations and Customs Enforcement (ICE), the Federal Bureau of Investigation (FBI), and state and local law enforcement. The program allowed local law enforcement to hold those arrested, who may otherwise have been released, for up to 48 hours so that ICE could facilitate removal proceedings. As intended, Secure Communities led to a rapid increase in detentions and deportations. East et al. (2023) calculated that between 2008 and 2014, the program resulted in the deportations of more than 454,000 people.4

East et al. (2023) found that the Secure Communities rollout between 2008 and 2014 led to large overall employment losses for both immigrants and U.S.-born workers. Howard, Wang, and Zhang (2024) found that Secure Communities reduced the size of the construction sector, reducing immigrant and U.S.-born employment and delaying residential homebuilding. Ali, Brown, and Herbst (2024) found that the program reduced immigrant and U.S.-born employment in the child care sector, leading to a significant drop in the number of child care centers. Relatedly, East and Velásquez (2024) found that in response to Secure Communities, mothers of young children were less likely to be employed and worked fewer hours.

These studies demonstrate that increases in immigration-related arrests, detentions, and deportations harm the broader labor market, with particularly large negative consequences for certain sectors.5 The construction industry will be disproportionately harmed because of its large immigrant workforce, and child care centers also face staffing challenges even in the absence of increased immigration enforcement (Fee 2024).

How Trump’s escalating deportations will reduce employment

The scale of Trump’s deportations

The Trump administration plans to increase the number of deportations to unprecedented levels. For the purpose of estimating the employment effects of this policy, this report assumes that the deportation rate could reach 1 million people per year, totaling 4 million deportations over four years, a rate consistent with public and private statements by policymakers. Sacchetti and Bogage (2025) reported that internally the Trump administration has focused on deporting 1 million immigrants in one year. The Department of Homeland Security (DHS) Immigration and Customs Enforcement congressional budget justification for fiscal year 2026 requests funding increases “to support the Administration’s strategy of 1,000,000 removals per year” (DHS 2025b), and in a press release, the White House (2025) quoted the House Judiciary Committee as stating the 2025 Republican-led budget reconciliation bill “provides funding for at least 1 million annual removals.”6 An increase to 1 million deportations is similar to an annual scenario considered by the American Immigration Council (2024) in their report on the costs of mass deportation.

Figure A shows that, typically, the U.S. deports about 300,000 people per year. Deportation rates just exceeded that during the 2014–2019 period but dropped during the onset of the pandemic, primarily due to immigration restrictions that expelled migrants more immediately at the border.7 In fiscal year 2024, the U.S. deported about 330,000 people.

Figure A

Given these data, I assume that the United States baseline or “business as usual” rate of deportations is 330,000 annually. By aiming for 1 million deportations annually, the Trump administration intends to triple the baseline rate, increasing annual deportations by 670,000, for a four-year total increase of 2,680,000. Below, when I estimate the employment effects of the Trump administration’s increase in deportations to 4 million over four years, I use the 2,680,000 increase in deportations as the magnitude of the intensity of the Trump administration’s policies. On the one hand, this will underestimate job losses stemming from deportations generally if the annual rate of deportations prior to the Trump administration was already causing large employment reductions. On the other hand, the estimates will reflect the actual policy change made by the Trump administration; this method is also consistent with how the original research estimated the employment effects of an increase in police-based immigration enforcement due to the Secure Communities program, over and above the baseline immigration enforcement policy.8

Overall employment effects

To estimate the national employment effect of increased deportations, I extrapolate the employment effect estimates of the rollout of the Secure Communities immigration enforcement from East et al. (2023); Howard, Wang, and Zhang (2024); and Ali, Brown, and Herbst (2024). As described above, Secure Communities increased immigration-related arrests, detentions, and deportations across the United States.

East et al. (2023) found that the rollout of the Secure Communities immigration enforcement program reduced foreign-born employment in the United States by an average of 670,000 people over their study period.9 During that period, Secure Communities deported 454,000 people, suggesting that one deportation resulted in 1.47 fewer employed immigrants. Alternatively, a more conservative assumption is that one additional deportation by the Trump administration results in one fewer employed immigrant; this assumption is similar to the initial labor force shock modeled by McKibbin, Hogan, and Noland (2024).

This report takes the average of these two possibilities and assumes that one additional deportation results in about 1.24 immigrant job losses. If the Trump administration deports 4 million people over four years (increasing total deportations above baseline by 2,680,000), immigrant employment will fall by about 3.3 million (see Table 1).

Table 1

As discussed above, reductions in immigrant employment can also lead to U.S.-born employment losses. East et al. (2023) found that the Secure Communities program reduced the number of employed U.S.-born people, where the magnitude of U.S.-born employment losses was about 77.5% of the size of foreign-born employment losses.10 Therefore, I assume that one deportation, leading to 1.24 immigrant job losses, also results in 0.96 U.S.-born job losses. As Table 1 shows, 4 million deportations by the Trump administration will, therefore, cause the number of U.S.-born workers with jobs to fall by 2.6 million. Total job losses due to an increase in Trump administration deportations would be about 5.9 million, with job losses among the U.S.-born population accounting for about 44% of the total employment reduction.

Job losses in the construction and child care sectors resulting from Trump’s deportations

The increase in deportations will cause large declines in construction employment, likely due to large numbers of immigrants working in this sector and the high degree of complementarity among construction jobs held by immigrants and U.S.-born workers. Howard, Wang, and Zhang (2024) found that the increase in immigration enforcement associated with the Secure Communities program had large negative effects on immigrant and U.S.-born construction employment.

Specifically, their estimates imply immigrant and U.S.-born construction employment losses that are, respectively, 42.3% and 33.5% the size of immigrant and U.S.-born overall employment losses estimated by East et al. (2023).11 I then use these ratios to scale the overall job losses per deportation used above, yielding construction employment reductions of 0.52 immigrants and 0.32 U.S.-born workers per deportation.

Table 1 shows that, assuming 4 million total deportations over four years, about 1.4 million fewer immigrants and 861,000 fewer U.S.-born workers will be employed in construction. Some of these workers will no longer be employed, some will work fewer hours, and others may move to other sectors. In total, however, the construction sector will shrink precipitously, losing 18.8% percent of its workforce relative to 2024 employment levels.

Research also shows the child care sector will experience large employment declines after increases in deportations. As Ali, Brown, and Herbst (2024) observe, child care centers may face a particularly intense labor supply shock due to rising fear among immigrants who will increasingly try to avoid governmental authorities. Child care centers have relatively frequent interactions with the government because of regular, unannounced inspections; workers’ personal and earnings information is also often reported to authorities for licensing purposes. In addition, child care centers have high worker turnover and strict staffing ratios, so difficulties in recruiting and retaining staff could quickly lead to shutdowns. In particular, Ali, Brown, and Herbst (2024) found that the number of child care establishments shrank after the rollout of the Secure Communities program.

To estimate child care employment reductions, I use the employment-to-population ratios Ali, Brown, and Herbst (2024) provide for women in the child care sector, as well as separate population-level estimates, and then I divide the implied employment level changes by the deportation counts used in East et al. (2023).12 Table 1 shows the implied employment effects if the Trump administration deports 4 million people over four years. About 104,000 fewer immigrants and 444,000 fewer U.S.-born workers will be employed in the child care sector. Trump’s deportations will cause the total child care sector to shrink by 15.1%, a shock with potentially much broader labor market consequences when working parents are already having significant trouble finding care for their children. As East and Velásquez (2024) show, the broad expansion of immigration enforcement created by Secure Communities also led to a drop in the number of employed U.S.-born mothers who could not continue working without child care.

Trump’s deportations will cause job losses in every state

Because immigrants live throughout the entire country, deportations will cause job losses in every state. To create state-level estimates, I first distribute the additional number of national deportations by each state’s share of the national noncitizen population, under the assumption that states with higher (or lower) shares of noncitizens are more (or less) likely to experience deportations. For example, about 1 out of every 5 noncitizens in the United States lives in California, so I assume about 1 out of every 5 additional national deportations will occur in that state. Then I multiply these additional state-level deportations by the national multipliers of foreign-born (1.24) and U.S.-born (0.96) job losses per deportation. This is equivalent to allocating national job losses by each state’s share of national noncitizen employment; by construction, the sum of all job losses across states equals the national total.

Figure B shows that for a scenario of 4 million national deportations, the job loss levels across states vary widely. California’s 775,000 deportations imply total job losses of 1.1 million, equal to 6.2% of total employment in the state. Other states with very large predicted employment losses in percentage terms include Texas (5.8%), Florida (5.1%), New Jersey (5.1%), Nevada (4.7%), and New York (4.6%).

Figure B

Figure B also shows state-level construction job losses using the national construction deportation multipliers. To account for the fact that some states may have relatively more (or fewer) noncitizen workers in the construction sector, I allocate the national job losses by each state’s share of national noncitizen construction employment.13

Predicted estimates of construction job loss, therefore, vary across states due to the size of their noncitizen construction workforce. Figure B shows that some states, like Alabama, will experience smaller job losses than the average state because their construction sector is small, and fewer noncitizens work in it. Others like Texas (32.1%), Nevada (26.3%), California (25.5%), and North Carolina (25.5%) will see the largest percent reductions; construction job losses for these states will be about 40% of the national construction job loss estimate of 2.3 million workers. (The appendix to this report also shows detailed overall and construction-sector estimates for each state.)

Broader economic effects of the overall employment shock

The total employment effects after four years of deportations would be a historically large and persistent drop in employment, unprecedented outside of the worst recessions in U.S. history. In March, Congressional Budget Office (2025) projected that total civilian employment would grow by 4.2 million people between 2025 and 2029. In contrast, this analysis suggests that employment would actually fall in absolute terms by 2029, given the estimated job loss of about 5.9 million due to four years of Trump’s deportations.

A widespread reduction of immigrants will also likely raise the prices of goods and services throughout the economy. Immigrants are a somewhat deflationary force in the sense that they boost output more than they do demand—mainly because immigrants immigrants are younger and therefore more likely to work than U.S.-born residents, and because some of the immigrants’ income is not spent in the United States but is instead sent as remittances to other countries (Costa et al. 2024). As a result, the removal of immigrants will raise inflationary pressures.

In addition, because aggressive immigration enforcement will lead to a reduction in the number of workers and a subsequent drop in production, some businesses will charge higher prices if they continue to have consumers. For example, Howard, Wang, and Zhang (2024) found the rollout of the Secure Communities immigration enforcement program led to a construction slowdown that increased home prices.

What will happen to wages in the face of these shocks is somewhat unclear. In some cases, employers may try to raise wages to attract new workers, but in other cases, labor demand may fall, or some employers may choose to operate at lower levels of employment and wages.

The evidence in East et al. (2023) suggests that, overall, wages tend to decline in the face of increased deportations, particularly for U.S.-born workers. Howard, Wang, and Zhang (2024) presented some evidence that in the second year after a Secure Communities rollout, hourly wage rates in construction might have increased, perhaps for U.S.-born workers, but as the authors describe it, most of the relative change in construction wages is to keep them flat in the face of declining overall wages.14 Ali, Brown, and Herbst (2024) found that wage rates fell for both U.S.-born and immigrant women who are child care workers in response to increased immigration enforcement, but East and Velásquez (2024) found rising wages for low-educated women in household services.

All told, the existing evidence suggests that Trump’s deportations will not improve the hourly wage rates of the overall workforce or even U.S.-born workers in many instances.

Conclusion

The consequences of immigration on the labor market are often a matter for heated debate. While some studies have findings at odds with others, a fair assessment of the evidence suggests that reduced immigration generally will not lead to increased job opportunities for U.S.-born workers. A comprehensive empirical review by the National Academies (2017) found that “most studies find little effect of immigration on the employment of natives.” However, it is important to understand that the labor market consequences to the United States of increased deportations are likely to be far worse than the effects of gradually changing the size of the immigrant population through reduced immigration flows into the United States.

For immigrants and U.S.-born workers remaining in the United States, the main similarity between reduced immigration and increased deportations is a drop in the supply of immigrant workers. The reduced supply of labor can reduce competition for jobs and make it easier for some remaining immigrant and U.S.-born workers to find work. On the other hand, fewer immigrants lead to a general reduction in aggregate demand and a reduction in employer demand for complementary jobs. A priori, the net employment effect of reduced immigration on remaining workers is ambiguous and may indeed vary, depending on the specific group of workers under consideration.15

Deportations trigger some of the same mechanisms for affecting employment as reduced immigration flows, but there are two additional reasons deportations depress the employment of remaining immigrants and U.S.-born workers. First, unlike a gradual, longer-term reduction in the supply of labor, the sudden removal of the actual and potential workforce can cause employers to rapidly scale back operations and sometimes shut down entirely. Second, deportations greatly weaken the labor market leverage of any remaining immigrant workers, negatively affecting everyone competing in the same labor markets. Increased arrests and removals make immigrants’ employment situation vastly more precarious, reducing their alternative job options, and U.S.-born workers will, in turn, be working alongside ever more precarious employees who cannot reasonably complain about poor conditions and pay or join a union, making it more difficult for those U.S.-born workers to bargain for better conditions and pay as well. As a result, employers can pay lower wages and profitably operate with lower employment so that employment falls for both immigrant and U.S.-born workers.

These additional labor market effects may be why many studies on increased immigration enforcement more clearly signal negative employment effects for both immigrant and U.S.-born workers. Extrapolating from this evidence suggests the Trump administration’s deportation goals will cause a major blow to the U.S. labor market, squandering the full employment that the Trump administration inherited from the Biden administration and also causing immense pain to the millions of U.S.-born and immigrant workers who may lose their jobs.

Appendix

Appendix Table 1

Appendix Table 2

Notes

1. For more background on Secure Communities, see Waslin 2011.

2. See also the outsized immigrant ownership share in retail, restaurants, and neighborhood services described by Kallick 2015.

3. Annual purchases by nonresidents in 2024 were $218 billion, nearly three-quarters of the U.S. annual trade surplus in services (see BEA 2025, Tables 1.1 and 2.4.5U.)

4. See Alsan and Yang 2024 for a description of Secure Communities.

5. For other analysis related to removing immigrants from the United States, see Lee, Peri, and Yasunov 2022, which found that increased repatriations to Mexico between 1929 and 1934 reduced the employment of U.S.-born workers. Clemens, Lewis, and Postel 2018 estimated that the removal of Mexican bracero farmworkers during the 1960s did not increase the employment for U.S.-born farmworkers. The model developed by Chassamboulli and Peri 2015 predicts that deportations will reduce both U.S.-born and immigrant employment. In a review of related research, Lynch and Ettlinger 2024 argue that “deportation of unauthorized immigrants would shrink the economy, cause American workers to lose jobs, likely reduce the wages of U.S. citizens, lose the taxes paid by deported unauthorized immigrants and worsen the finances of federal, state and local governments.”

6. The legislation triples funding for ICE and quadruples the annual funding for immigrant prisons (Costa 2025).

7. Technically, the deportations shown in Figure A are “removals,” based on a formal order of removal and typically carried out by ICE but also sometimes by Customs and Border Protection. In addition to removals, there have been tens to hundreds of thousands of other “returns” of migrants, typically occurring at the border. The figure also omits the pandemic-based Title 42 expulsions used to immediately expel border crossers during 2020–2023. See DHS 2025a.

8. In fiscal year 2007, just before the rollout of the Secure Communities program, the United States deported about 319,000 people (see Table 39 of DHS 2022).

9. The estimate of -0.387 from Table 3, panel B, specification 1 of East et al (2023) divided by 100 and then multiplied by their baseline population of 173 million yields a low-education foreign-born employment loss of 670,000. In extrapolating this estimate to all immigrants, I assume that there are no high-education foreign-born employment losses.

10. East et al. 2023 report an effect size of -0.387 for the low-education foreign-born population in Table 3, panel B, specification 1, and an effect size of -0.300 for the U.S.-born population in Table 4, panel B, specification 1.

11. Based on the estimates in text and what is plotted in Figure 4 of Howard, Wang, and Zhang 2024, I assume the average construction employment change over three years per 100 people is about -0.164 for lower-education foreign-born workers and about -0.100 for U.S.-born workers. The analogous estimates from East et al. 2023 are, respectively, -0.387 and -0.300.

12. Table 6 of Ali, Brown, and Herbst 2024 reports child care employment-to-population ratio changes for females ages 20–55 of -0.0025, -0.0012, -0.0011, and -0.0014 for, respectively, the low-education foreign-born, high-education foreign-born, low-education U.S.-born, and high-education U.S.-born population. From the basic monthly Current Population Survey, I calculate the population levels for these groups during 2005–2007 to obtain foreign-born employment reductions of 17,700 and U.S.-born employment reductions of 75,140. Dividing these by the 454,000 deportations reported in East et al. 2023 implies about -0.04 foreign-born and -0.17 U.S.-born employment reductions per deportation.

13. Again, this is mechanically the same as allocating the national number of additional deportations by shares of noncitizen construction employment and multiplying these new state-level deportations by the same national employment reductions of 0.52 foreign-born construction jobs and 0.32 U.S.-born construction jobs per deportation.

14. The top left panel of Figure 11 of Howard, Wang, and Zhang 2024 shows a marginally statistically significant increase in construction wages after two years. The bottom two panels show that relative to wages in all industries, the wages of lower-educated foreign-born construction workers may have stayed flat, whereas the wages of U.S.-born construction workers may have increased.

15. To the extent that reduced or increased immigration causes some negative labor market effects, Costa et al. 2024 argue that policymakers can keep unemployment low by ensuring tight labor markets with stimulative fiscal and monetary policies.

References

Ali, Umair, Jessica H. Brown, and Chris M. Herbst. 2024. “Secure Communities as Immigration Enforcement: How Secure Is the Child Care Market?” Journal of Public Economics 233 (May).

Alsan, Marcella, and Crystal S. Yang. 2024. “Fear and the Safety Net: Evidence from Secure Communities.” Review of Economics and Statistics 106, no. 6: 1427–1441.

American Immigration Council. 2024. Mass Deportation: Devastating Costs to America, Its Budget and Economy, Special Report, October 2, 2024.

Azoulay, Pierre, Benjamin F. Jones, J. Daniel Kim, and Javier Miranda. 2022. “Immigration and Entrepreneurship in the United States.” American Economic Review: Insights 4, no. 1 (March 2022): 71–88.

Bureau of Economic Analysis (BEA). 2025. National Income and Product Accounts. Accessed June 1, 2025.

Chassamboulli, Andri, and Giovanni Peri. 2015. “The Labor Market Effects of Reducing the Number of Illegal Immigrants.” Review of Economic Dynamics 18, no. 4 (October 2015): 792–821.

Congressional Budget Office. 2025. Data Supplement to The Long-Term Budget Outlook: 2025 to 2055. Accessed June 23, 2023.

Clemens, Michael A., Ethan G. Lewis, and Hannah M. Postel. 2018. “Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion.” American Economic Review 108, no. 6 (June 2018): 1468–1487.

Costa, Daniel. 2025. “House Republican Budget Bill Gives Trump $185 Billion to Carry Out His Mass Deportation Agenda—While Doing Nothing for Workers: Immigration Enforcement Would Have 80 Times More Funding Than Labor Standards Enforcement.” Working Economics Blog (Economic Policy Institute), June 5, 2025.

Costa, Daniel, Josh Bivens, Ben Zipperer, and Monique Morrissey. 2024. The U.S. Benefits from Immigration but Policy Reforms Needed to Maximize Gains. Economic Policy Institute, October 4, 2024.

Department of Homeland Security (DHS). 2022. 2022 Yearbook of Immigration Statistics. Office of Homeland Security Statistics. Accessed May 29, 2025.

Department of Homeland Security (DHS). 2025a. Immigration Enforcement and Legal Processes Monthly Tables. Office of Homeland Security Statistics. Accessed May 29, 2025.

Department of Homeland Security (DHS). 2025b. U.S. Immigration and Customs Enforcement Budget Overview, Fiscal Year 2026 Congressional Justification. Accessed May 29, 2025.

East, Chloe N., Annie L. Hines, Philip Luck, Hani Mansour, and Andrea Velásquez. 2023. “The Labor Market Effects of Immigration Enforcement.” Journal of Labor Economics 41, no. 4: 957–996.

East, Chloe N., and Andrea Velásquez. 2024. “Unintended Consequences of Immigration Enforcement: Household Services and High‐Educated Mothers’ Work.” Journal of Human Resources 59, no. 5: 1458–1502.

Economic Policy Institute (EPI). 2025. Current Population Survey Extracts, Version 2025.6.11.

Fee, Kyle D. 2024. Using Worker Flows to Assess the Stability of the Early Childcare and Education Workforce, 2010–2022. Federal Reserve Bank of Cleveland, Community Development Report, January 19, 2024.

Grittner, Amanda, and Matthew S. Johnson. 2024. “Complaint-Driven Regulation and Working Conditions: Evidence from Immigration Enforcement.” Working Paper, March 29, 2024.

Howard, Troup, Mengqi Wang, and Dayin Zhang. 2024. “Cracking Down, Pricing Up: Housing Supply in the Wake of Mass Deportation.” Working Paper, October 2024.

Kallick, David Dyssegaard. 2015. Bringing Vitality to Main Street: How Immigrant Small Businesses Help Local Economies Grow, Fiscal Policy Institute and Americas Society/Council of The Americas, January 2015.

Lee, Jongkwan, Giovanni Peri, and Vasil Yasenov. 2022. “The Labor Market Effects of Mexican Repatriations: Longitudinal Evidence from the 1930s.” Journal of Public Economics 205 (January 2022): 104558.

Lynch, Robert G., and Michael Ettlinger. 2024. “Literature Review on the Economic Consequences of the Deportation of Unauthorized Immigrants.” Working Paper, July 2024.

McKibbin, Warwick J., Megan Hogan, and Marcus Noland. 2024. “The International Economic Implications of a Second Trump Presidency.” Peterson Institute for International Economics Working Paper 24-20, September 2024.

National Academies of Sciences, Engineering, and Medicine (National Academies). 2017. The Economic and Fiscal Consequences of Immigration. Washington, D.C.: The National Academies Press.

Sacchetti, Maria, and Jacob Bogage. 2025. “‘One Million.’ The Private Goal Driving Trump’s Push for Mass Deportations.” Washington Post, April 12, 2025.

Waslin, Michele. 2011. The Secure Communities Program: Unanswered Questions and Continuing Concerns. American Immigration Council Immigration Policy Center, November 2011.

The White House. 2025. “The One Big Beautiful Bill Will Crack Down On Illegal Immigration” (press release). May 17, 2025.

The ban on state regulation of artificial intelligence (AI) contained in both the House and Senate versions of the Republican megabill is overly broad, dangerous to workers, and out of step with public interest. This provision – a ten-year blanket ban on state and local governments’ ability to protect their residents from the harms of AI – is a reckless giveaway to Big Tech that will have far-reaching consequences for economic fairness, worker power, and public trust. 

Both the Senate and House versions of the provision use an extremely broad definition of AI—including automated decision-making systems – tying the hands of state lawmakers from taking any meaningful role in how AI technologies are being rapidly rolled out in many sectors of society. The Senate version ties the moratorium on regulating AI to federal funding for broadband internet infrastructure – a program on which all 50 states and territories rely to make critical progress to improve connectivity.  

The provision is opposed by a broad, bipartisan coalition – including unions, civil rights groups, state attorneys general, members of Congress across the political spectrum, and the public, who understand it as a rash giveaway to big tech. Banning state regulation of AI gives even more power to a handful of billionaires, while reducing the power of working people and communities. 

Congress can still act to remove this harmful provision and ensure that AI can expand in ways that are responsible, innovative, and grounded in public trust—while protecting the rights of workers, consumers, and communities.

Congress has a responsibility to develop and adopt federal standards that ensure new technologies lead to positive economic outcomes – and to ensure that workers have the power to control how AI and related digital tools are used in their workplaces, ideally  through collective bargaining agreements. 

However, in the absence of federal action, it is critical that states be permitted to step in and act – and those lessons can hopefully inform federal policymaking. All 50 states have been working to regulate uses of AI that harm communities and society. This ban would stop all of that progress in its tracks, blocking commonsense AI laws in development or already on the books.  

Here are a few key ways this unprecedented ban on state action to protect workers and consumers could harm workers and erode public trust:

Make it easier for employers to discriminate

The right to equal opportunity at work is already under threat from the Trump administration’s attacks on federal anti-discrimination protections and enforcement.  Unregulated AI systems could speed up and cement discrimination even further. 

Major employers increasingly rely on predictive AI software and algorithmic analysis to choose who they interview, hire, promote, discipline, or dismiss. We know these untested tools for “automated decision making” can fuel discriminatory outcomes, such as a preference for resumes with white- and male-associated names. 

With no federal guardrails in place, and with federal enforcement on anti-discrimination weakened, banning state action would allow discrimination to flourish unchecked. States must be able to step in to address algorithmic bias and enforce anti-discrimination protections so that everyone has a fair shot at a good job. 

Make it easier for employers to drive down wages

With a low federal minimum wage, rampant misclassification of contract workers, and no guardrails on how employers use AI and algorithms to make decisions about pay, the race to the bottom already experienced by gig workers could become the norm in all industries. 

Employers already use algorithms and automatic decision systems to dynamically determine the lowest possible pay for each task, location and individual, with little transparency for workers. If states are blocked from even investigating wage suppression by algorithm, these exploitative practices will spread across all industries.

Increase retaliation, union-busting, and surveillance

Automated surveillance systems and AI-powered monitoring can track everything from workers’ keystrokes and voices to their precise location in their workplace. These tools can be weaponized against workers who organize, speak up about unsafe conditions, or simply take too long in the bathroom. Workers already are vulnerable to unfair – and sometimes illegal – retaliatory discipline and firing. If workers don’t even know the extent to which they are being surveilled, they will struggle to exercise their legal rights or defend themselves from wrongful termination – especially the majority of workers who lack the protections of a collective bargaining agreement.

As one school bus driver told researchers from UC Berkeley Labor Center:

“The bus cameras are the worst— they were originally installed to protect the kids, but now three cameras are pointed directly at us and recording at all times, even when no kids are on the bus. We know now that they use this footage in personnel matters, they listen to us through the bus cameras, and that they use the cameras to read our text messages when we are parked and using our phones while the children are off the bus and we are on breaks from work.”

Preventing states from regulating this kind of surveillance will leave workers more vulnerable to unlawful retaliation and to employer wrongdoing, unsafe conditions, and unfair wages.

Worsen worker privacy

A decade of unregulated AI will allow the aggregation and sale of vast amounts of highly specific data on individual workers in ways that can never be truly erased. For instance: With the aid of AI, data collected from GPS systems and wearable technology could be used to identify an employee’s private medical conditions, even before the worker has the chance to invoke the protections of the ADA or FMLA. If this data is sold to other hiring managers or the open market without any regulations, that same individual will find it difficult to secure future employment. 

Workers and consumers need transparency and tools to  control how AI-powered systems use their personal data – not a decade-long ban on state oversight.

Steal creative work

Artists, writers, musicians, and performers are already seeing their work scraped and reused by AI systems without consent or compensation.  The ban would make it more difficult for creative workers to protect their work, including their own images and voices. Those whose work is stolen without compensation to fuel large language models may have no recourse, even as big tech companies continue to profit. 

Harm public safety and public services

In critical sectors like healthcare, education, and transportation, AI systems are already being used to override expert human judgment. The ban would restrict the ability of workers and their advocates to respond. For example, in healthcare, nurses are fighting to protect patients and provide the care they know is best – even when an algorithm advises otherwise. This is equally true in education, childcare, public safety and transportation – all fields with vulnerable lives and worker safety at risk. 

A better alternative is possible

Corporations do not need a blank check and a deregulated landscape to succeed in creating and selling artificial intelligence, automated decision systems, and related technologies.  The balance of power already tilts too far in favor of employers. Congress should remove this dangerous 10-year preemption of state action from the budget megabill, which already poses serious harm to low-income people in this country. Instead, policymakers should consider responsible AI policy frameworks  through the normal legislative process, where these critical issues can be debated and assessed fairly. 

These poor economic outcomes are both a consequence and an instrument of the Southern economic development model. By generating precarity, the Southern model weakens workers’ ability to reject low-quality jobs. Workers in poverty typically have few, if any, assets on which to rely in the event of a lost job. They have fewer resources with which to move to new areas and seek out better job options. They are more likely to face health challenges and will have a harder time fulfilling any care needs—either for themselves or a family member.

It should come as no surprise then that one component of the Southern model has been to do as little as possible to protect workers’ well-being on the job, in their lives outside of work, and the lives and well-being of their families. In this report, we describe how Southern state lawmakers have consistently made policy choices weakening enforcement of workplace wage, hour, and safety laws. They have sought to limit workers’ and families’ access to social safety net programs, leading to fewer families receiving the aid for which they are eligible, and providing notably ungenerous benefits to those who do receive benefits. Southern policymakers have also failed to invest in child care access, quality, and affordability; refused to protect renters and homeowners or provide those facing financial hardship with relief; and have deprioritized safe, reliable, and climate-friendly transportation policies while giving away public funds to corporate polluters.

Instead of investing in essential public goods and services that would allow communities to achieve a better standard of living, proponents of the Southern economic development model have sought to eliminate or block regulations that govern the private sector and protect workers, to reduce taxes on the wealthy and corporations, and to shrink the functions of the public sector—replacing them with private, for-profit services. The supports that Southern governments do provide are frequently geared toward businesses—large economic development packages, often with few strings attached—that have limited public benefits while reducing funding for essential services like public education.

This report highlights how Southern lawmakers have wielded the power of the state to protect and support businesses and the wealthy at the expense of working people and families. It covers many issue areas, including labor standards enforcement, environmental regulations, taxation and public spending, public education, and social safety net programs. As described throughout this series, these policy choices are often rooted in anti-Black racism and the desire to subjugate and control workers of color economically, politically, and socially.

Southern lawmakers have disinvested in labor standards enforcement, leaving workers at higher risk of abuse by employers

When it comes to protecting workers from having their wages stolen by employers, from being forced to choose between working while sick or going without pay, and from enduring other harms at work, Southern states have some of the weakest laws in the country and are less likely than other states to enforce those laws that do exist to protect workers.

According to 50-state analysis of state minimum wage law enforcement capacity, penalties for noncompliance, and the availability of additional legal remedies for victims of wage theft, Southern states have most of the lowest rankings. Seven of the 10 worst states for the enforcement of wage and hour laws are in the South: Louisiana, Mississippi, Alabama, Virginia, Florida, Tennessee are the six worst, and North Carolina is #10. Mississippi has no wage and hour laws at all, Alabama only regulates child labor, and Florida—which has the fifth weakest labor laws in the country—has no state Department of Labor to investigate labor violations and enforce laws protecting workers (Florida Policy Institute 2022; Galvin 2016).

A 2017 EPI analysis of wage theft in the 10 most populous states—including Florida, Georgia, North Carolina, and Texas—found that workers were cheated out of $8 billion annually due to minimum wage violations alone (Cooper and Kroeger 2017). In those four Southern states, over 800,000 workers lost nearly $3 billion annually due to minimum wage violations (see Table 1).2

Table 1

Florida had the highest rate of minimum wage violations across the 10 most populous states with one-quarter of low-wage, minimum wage-eligible workers in the state—over 400,000 workers—being underpaid. More than double this number of workers (835,000) experience wage theft across these four states collectively. Wage theft is rampant in these states in part because their governments fail to regulate businesses and enforce the minimal labor standards that do exist, whether local, state, or federal. States with weaker labor laws tend to have higher rates of wage theft and Southern states have some of the weakest labor laws in the country (Galvin 2016).

Though state Departments of Labor and Attorneys General play an important role in enforcement— their efforts accounted for around 19% of stolen wages recovered between 2017–2020—many Southern states do not recover stolen wages on behalf of workers (Mangundayao et al. 2021). Of the seven states that do not recover wages for employees, six are Southern states. In Alabama, Delaware, Florida, Georgia, Louisiana, Mississippi, and South Carolina, workers whose wages are stolen must seek redress either through the federal U.S. Department of Labor—which has just 611 wage and hour investigators responsible for protecting workers in all 50 states and territories or 1 investigator for roughly 270,000 workers3—or through class action litigation—which more than half of workers are barred from joining due to forced arbitration clauses in their employment contracts (Barnes et al. 2025; Poydock and Zhang 2024).

Southern states that do conduct wage theft enforcement are chronically understaffed. In Texas, for example, 80% of approved wage theft claims from an 11-year period still had not been paid out three years later (Galvin et al. 2023). Just as Southern lawmakers have vociferously blocked efforts to strengthen labor standards such as the minimum wage, paid sick leave, and workers’ organizing rights, they have chosen to not dedicate public resources to policing bad employers. They have prioritized businesses’ profit interests over workers’ right to be paid the wage they’ve earned and their ability to enforce that right.

Rampant wage theft is an unsurprising outcome of an economic agenda governed by low wages and anti-worker policies

Southerners are more likely than workers in other regions to be paid low wages, a result, in part, of relentless opposition to higher minimum wages by Southern lawmakers and their business allies. To take just one example, a bill to increase the minimum wage in Georgia has been repeatedly introduced since the federal minimum wage increased to $7.25 in 2009. Yet over the past 16 years, lawmakers have repeatedly failed to enact such legislation, leaving the statewide minimum stuck at its 2001 rate of $5.15 (GSU 2012). Since Georgia’s minimum wage remains $2.10 less than the federal minimum wage, most workers in Georgia earn at least $7.25 an hour (because federal law preempts lower state wage standards).

While the federal minimum wage is also far too low to support a basic living standard for workers in 2025, Southern states are even further behind. Only six Southern states and the District of Columbia have a higher state minimum wage than the federal minimum—Arkansas, Delaware, Florida, Maryland, West Virginia, and Virginia (EPI 2025b). Arkansas and Florida only have higher minimum wages because their residents voted to raise their statewide minimum wage through the ballot measure process, not because state politicians chose to raise wages for the lowest earners. This fact is not lost on Arkansas and Florida’s lawmakers, who have used various tactics to block the will of the voters. This year, Florida Republicans proposed a bill to let employers ask young workers to “opt out” of the constitutionally mandated minimum wage, and Arkansas lawmakers have passed a slate of bills to make it more difficult for citizen-led ballot initiatives to be considered (Rohrer 2025; Vrbin 2025).

When Southern localities have attempted to raise wages and workplace standards in response to weak standards statewide, state legislatures have frequently used harmful state preemption laws to block these ordinances from taking effect. In the South, preemption has been used as a means of entrenching white racial and economic supremacy against the will of majority-Black or majority-brown cities and counties and their elected officials. It is embedded in a long history of anti-Black racism, and it is more common in the South than anywhere else in the country (Blair et al. 2020). Additionally, in order to maintain an unbalanced labor market and block workers from unionizing to advocate for higher wages and better working conditions that unions afford, Southern policymakers have implemented right-to-work policies and bans on public-sector collective bargaining (Gould and Kimball 2015; Childers 2023; Morrissey and Sherer 2022).

Intentional disinvestment in public goods and services keeps workers and families economically insecure

Anti-poverty programs and the social safety net were structured to maintain racial hierarchy and economic precarity

Race is a social construct used to justify the subordination and enslavement of Black people. Negative stereotypes associated with Blackness—narratives of criminality, laziness, and immorality—were fabricated to maintain racial hierarchy and exclusion (DiTomaso 2024; Melson-Silimon, Spivey, and Skinner-Dorkenoo 2023). After slavery was abolished, Black Americans were forced into menial, dangerous, and low-paying jobs formerly dominated by enslaved labor: agricultural work, domestic work, and other manual labor. Then, the jobs they were segregated into were excluded from federal programs as a means of blocking Black people from accessing these benefits.

The 1935 Social Security Act (SSA), which created a social insurance program for workers after retirement and established Medicare, unemployment insurance, and cash assistance for low-income families (Aid to Dependent Children or ADC), excluded agricultural workers from eligibility for these benefits. Since Black workers were overrepresented in these jobs, the SSA served primarily to benefit white workers in its initial decades and excluded Black workers until key changes to the Act expanded its protections. To maintain racial oppression, Southern members of Congress lobbied to allow states to administer ADC themselves and to strip the SSA of a clause on ensuring “a reasonable subsistence with health and decency” (Black and Sprague 2017). Like SSA more broadly, the ADC program overwhelmingly benefited white families (despite high rates of poverty among Black families) and was structured to coerce Black families into accepting low wages in farm work (Black and Sprague 2017). A 1987 House bill proposed a national minimum benefit standard for AFDC, but the legislation died in the Senate because Southern lawmakers opposed it (Floyd and Pavetti 2022). 

Racist, anti-poor attitudes explain persistently low nutrition and cash assistance benefits for Southerners

The racist attitudes that inspired racially discriminatory social welfare programs 90 years ago persist today. For example, the public greatly overestimates the share of Black people that receive welfare benefits, and white people are less likely to support welfare programs if they believe that a large share of recipients are Black (Akesson et al. 2022). The intentionally stingy structure of public benefit programs, particularly in the South, also persists. Though racist attitudes are embedded in safety net programs across the U.S., Southern states have been particularly fervent in their disinvestment in social programs that benefit low-income families and families of color, reinforcing the harms of past policymaking. Of the 10 states that spend the least revenue per capita on public welfare expenditures, five are Southern: Alabama, Florida, Georgia, South Carolina, and Texas (Urban Institute 2022).

SNAP and Free School Lunch

The Supplemental Nutrition Assistance Program (SNAP) and Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) address food insecurity among low-income people and low-income pregnant women and young children, respectively. SNAP is the largest anti-hunger program nationwide, reaching 88% of eligible individuals in fiscal year 2022 and an estimated 41 million people in an average month in fiscal year 2024. However, participation rates are lower in the South, and four states in the region are ranked in the bottom 10 for participation rates: Arkansas (59%), Mississippi (74%), Texas (74%), and South Carolina (76%) (Cunnyngham 2025).

Despite already low participation in these programs amid considerable need, Southern lawmakers have moved to limit SNAP further. Amid the ongoing COVID-19 pandemic in 2022, six Southern states declined additional SNAP benefits for their residents that the federal government made available (Hernández 2022). Three of the four states that proposed limiting access to SNAP in 2024 are in the South (Kentucky, Maryland, Nebraska, and West Virginia) (Higham 2024). Many of the proposals by Southern lawmakers to weaken SNAP are now being copied by the Trump administration, which has threatened to make drastic cuts to the SNAP program to pay for tax cuts for the wealthy (Ross 2025). These cuts would have a devastating impact on millions of families across the South that would go hungry if not for SNAP (Bergh 2025).

The National School Lunch Program is another federal food assistance program, which provides free or reduced-cost meals to school children across the country. During the pandemic, the federal government reimbursed schools for the full price of school breakfast and lunch for all students, regardless of income. The program was set to expire at the end of June 2022 but was expanded through the summer months thanks to the bipartisan Keep Kids Fed Act (Pérez and Fitzsimons 2022). Over two-thirds (29) of the 42 House Republicans who voted against the budget-neutral bill to expand free school lunches represent Southern states (U.S. Clerk 2022). Since the expanded program ended in September 2022, school districts have struggled to fill the gap between what the federal government will pay for meals and the true cost of providing them to students. School nutrition directors in the Southeast cited food, labor, and equipment costs as a “significant challenge” at statistically significantly higher rates than the overall rates (the only region to do so) (School Nutrition Association 2025).

Cash assistance

Federal cash assistance programs date back to 1935, with the creation of Aid to Dependent Children, later renamed Aid to Families with Dependent Children (AFDC). From the very beginning, this program systematically excluded or discriminated against Black women and other women of color (Floyd et al. 2021). Racial discrimination in and exclusion from past programs endures today in the form of significant racial disparities in access to Temporary Assistance for Needy Families (TANF). TANF was the result of a bipartisan “welfare reform” effort that replaced AFDC in 1996. The new TANF program drastically restructured the funding, the generosity of benefits, and the requirements for families to receive them (ASPE n.d.). As a result, TANF reaches far fewer families in poverty than its predecessor. Over the last several decades, both the share of eligible families that receive TANF benefits and the maximum value of those benefits have declined across the country, but this decline is most severe in Southern states with large Black populations. Eligible Black children are less likely to receive TANF benefits than white children, and Black families are more likely to live in states where benefits are the lowest (Shrivastava and Thompson 2022). 

In 2021, only 20.7% of eligible families received TANF benefits, compared with 69.2% of families in 1997—the year TANF replaced AFDC (Crouse 2024). Recipiency rates of TANF benefits among eligible families in the South are often even lower. Among the 17 states where fewer than 10% of eligible families actually received TANF benefits in 2022 and 2023, 10 are in the South, and six Southern states provide TANF benefits to fewer than 5% of eligible families (see Figure A) (Bowden, Azevedo-McCaffrey, and Manansala 2025). These 17 states are home to 41% of the nation’s Black children, compared with only 28% of white children (Shrivastava and Thompson 2022).

Figure A

Southern states have also had the lowest maximum benefit levels throughout the history of AFDC and TANF (Floyd and Pavetti 2022). In recognition that benefit levels are far too low to keep up with the rising cost of living, 21 states and D.C. recently raised benefit levels, but only four of those states (plus D.C.) are in the South. As a result, Southern states, which already had the lowest benefits in the country, are now falling further behind. Among the 17 states where the maximum benefit remains less than 20% of the poverty line, 11 are in the South. And Southern states occupy seven of the 10 worst rankings for benefits as a share of the federal poverty level (see Figure B). In 2023, the maximum benefit for a family of three was $204 in Arkansas, compared with $1,243 in New Hampshire (Azevedo-McCaffrey and Aguas 2025).

Figure B

Additionally, because TANF is a block grant program, states can divert the funds to a broad range of uses beyond cash assistance for families with low incomes. TANF funds are misused in states across the country, but Southern states facing budget crises have shown a particular tendency to redirect TANF for other programs. For example, Louisiana spends much of its TANF grant on college scholarships, often for students whose families aren’t eligible for cash assistance. Georgia spends nearly half of its TANF funds on the child welfare system (Bergal 2020). And Mississippi illegally spent $77 million in TANF funds; $1.1 million went to former NFL player Brett Favre for speeches he never made and $5 million was used for a volleyball stadium at his alma mater (and where his daughter played volleyball) (Levenson and Gallagher 2022). In Arkansas, Alabama, Georgia, and Texas, the majority of TANF funds are neither spent on meeting families’ basic needs nor on connecting TANF recipients to work opportunities, the two main goals of the program (Azevedo-McCaffrey and Safawi 2022).

Lacking adequate public supports, Southern families face economic insecurity at high rates

Because the social safety net across the South was intentionally designed to be weak, families across the region face high poverty rates and struggle to reach and maintain a basic standard of economic security (Childers 2025). Economic insecurity can be measured across many dimensions, but this report focuses on food and housing insecurity since food and shelter are two of the most basic human needs.

The South has the highest rate of food insecurity

In 2023, 18 million households nationwide had limited or uncertain access to adequate food, and food insecurity was on the rise. Over a third (34.7%) of U.S. households with children headed by a single woman experienced food insecurity, and 7.2 million children lived in households where at least one child was food insecure (Rabbitt et al. 2024). Black households experienced food insecurity at three times the rate of white households, and Hispanic households experienced food insecurity at more than double the rate of white households (Coleman-Jensen et al. 2021).

The South has the highest rate of food insecurity of any U.S. region—in 2023, nearly 15% of Southern households were facing food insecurity. All U.S. states with food insecurity rates that are statistically significantly higher than the national average are in the South: Arkansas, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, and Texas. Nearly every state with a higher-than-average rate of food insecurity is in the South, both prior to and after the COVID-19 pandemic (Rabbitt et al. 2024).

Renters and homeowners alike struggle to afford housing

Southerners are burdened by high housing costs and face high rates of evictions and foreclosures. Yet Southern lawmakers have failed to invest in affordable housing policies and protections for renters and homeowners. High-cost states like New York and California are commonly cited for having unaffordable housing. However, low incomes in the South have led to significant housing instability for renters across the region as costs rise and demand outpaces supply. Over the past decade, the states that have experienced the largest losses in low-rent units include Southern states that were previously considered affordable but have experienced increased rental demand, such as Georgia, North Carolina, and Texas. In three Southern states (Florida, Louisiana, and Texas), over half of renters are cost-burdened, with metro areas most heavily impacted (JCHS 2024a). Of the 10 metro areas with the highest share of cost burdened renters, six are in the South (five are in Florida, and one is in Texas) (JCHS 2024b).

Southern states have fewer tenant protections than other states and implemented fewer emergency protections for renters amid the COVID-19 pandemic. Nine Southern states received a rating of one star or less on the Eviction Lab’s COVID-19 Housing Policy Scorecard, which evaluated states’ strategies for ensuring stable housing for their residents. Arkansas, Georgia, and Oklahoma did not implement any statewide eviction moratorium during the pandemic (Eviction Lab 2021). States with tenant protections have lower eviction filing rates and reduced racial disparities in evictions than states with few or none (Gartland 2022). Southern cities have the highest eviction filing rates of any cities tracked, with Richmond, Virginia; Greenville, South Carolina; and Memphis, Tennessee, at the top of the list (Eviction Lab 2025).

Housing assistance programs are woefully inadequate

Housing assistance programs—like the Housing Choice Voucher program (the nation’s largest)—are not entitlements, meaning they are not available to all who are eligible for them. As a result, three in four people who are eligible for housing vouchers never receive them, and those who do obtain them face long waiting periods before receiving assistance. Of the nine states plus D.C. where wait times to receive vouchers exceed three years, six are in the South: Alabama, D.C., Maryland, Florida, Georgia, and Virginia. Two-thirds of households on waiting lists for housing assistance at large housing agencies are Black (Acosta and Gartland 2021).

Homeownership, an important wealth-building tool, is out of reach

Homeownership is most families’ primary source of wealth, and this is particularly true for Black and brown families. Yet homeownership is becoming increasingly inaccessible, due to the legacies of exclusionary housing policy, limited housing stock, and—more recently—the influence of real estate investment. In recent years, these investment companies have significantly increased their presence in the housing market, targeting areas of the country with fast population growth and weak tenant protections.

According to a 2025 report, private equity firms now own about 10% of all apartment units in the U.S., and more than half of private equity-owned units are located in five states, four of which are in the South (California, Florida, Georgia, North Carolina, and Texas). Among the 10 metropolitan areas with the largest number of private equity-owned units, 8 are in the South (Ash 2025). Black neighborhoods have been heavily targeted; nearly a third of home purchases in 2021 were to investors, compared with 12% in non-Black majority neighborhoods (Schaul and O’Connell 2022). Institutional investors tend to either flip homes or rent them out, decreasing the housing supply available to individual would-be home buyers while increasing rental costs for would-be renters (NLIHC 2022). Nine states, including North Carolina and Tennessee, have joined a federal civil lawsuit accusing the Texas tech company RealPage of illegally fixing rent prices to reduce competition and boost landlord profits. Florida, Georgia, and Texas, which also have large shares of private equity-owned apartment units, have not joined the lawsuit (U.S. et al. v. RealPage 2024).

Even for Southerners for whom homeownership is within reach, their access is more precarious compared with other regions. Foreclosure rates are higher in the South than any other region and have remained high in the wake of the pandemic. In 2024, four of the 10 states with the highest foreclosure rates were Southern states: Florida (3), South Carolina (5), Maryland (7), and Delaware (8) (Von Pohlmann 2024). Yet Southern lawmakers have done little to provide relief that would allow homeowners to stay in their homes. There are five states with no income-based policies to provide property tax affordability and they all are in the South—Arkansas, Kentucky, Mississippi, South Carolina, and Texas (Davis and Samms 2023).

Underinvestment in health, child care, and transportation infrastructure block working families from full participation in the economy

Affordable and accessible health care, child care, and transportation infrastructure are essential public goods that support families’ well-being and workers’ ability to take and hold a job. Expanding health care access and affordability allows people to get necessary care to live and work. High-quality, accessible, and affordable child care enables parents to remain in the labor market while their children learn and grow. And transportation infrastructure—e.g., roads, bridges, and public transit systems—is critical to our physical and economic mobility, enabling people to get to work or school and buy goods and services that support the local economy. But just as they have opted to not invest in safety net programs, Southern lawmakers have similarly not prioritized investments in the region’s care and physical infrastructure—policy decisions that further exacerbate poverty and economic insecurity, deepen disparities by race/ethnicity and gender, and prevent Southern families from thriving.

Southern lawmakers have resisted opportunities to expand health care access through the Affordable Care Act

The 2010 federal Patient Protection and Affordable Care Act (ACA) is a comprehensive health care reform law designed to increase health insurance access and affordability, shift the focus of health care from treatment to prevention, and improve the efficiency of our health care system. Though the ACA is particularly beneficial to states with limited health care access and poor health conditions—as is the case across the South—Southern lawmakers led initial opposition to the ACA and have remained resistant to implementing the law.

In 2010, the state of Florida sued the federal government over the ACA, arguing that two key provisions in the law were unconstitutional. Among the 25 states across the country that joined Florida in the lawsuit, six were Southern states: Alabama, Georgia, Louisiana, Mississippi, South Carolina, and Texas. Virginia filed its own lawsuit in opposition to the law. The rest of the South, except for Delaware, Maryland, and the District of Columbia, took no position—they did not oppose the law, but they also did not support it (KFF 2012). In 2018, 18 state attorneys general and two governors—10 of them from Southern states—sued over the law’s constitutionality again (CBPP 2021). Despite years of vocal opposition from Southern lawmakers, particularly in Texas and Florida, as well as President Trump’s promises to dismantle it, the ACA is increasingly popular in these states (Sanger-Katz 2023). In 2025, an all-time record of 24.2 million people signed up for an ACA plan, and enrollment has tripled since 2020 in six Southern states won by Trump in 2024, five of which had sued to block the implementation of the law (Ortaliza, Lo, and Cox 2025).

Failure to expand Medicaid has led to premature death for Southerners and hurt the South’s economy

Under the Affordable Care Act, states can expand Medicaid health benefits eligibility to nonelderly people with incomes below 138% of the federal poverty level, and the federal government will cover 90% or more of associated costs. Over 3.5 million fewer people would be uninsured if all states adopted Medicaid expansion, gains that would primarily benefit Black people, young adults, and women (Buettgens and Ramchandani 2022).

Though expanding Medicaid eligibility enjoys widespread public support and provides substantial health and economic benefits to states at very little cost, many Southern lawmakers have repeatedly rejected efforts to expand Medicaid in their states. Of the 10 states that have refused to expand Medicaid eligibility, seven are in the South: Alabama, Florida, Georgia, Mississippi, South Carolina, Tennessee, and Texas (KFF 2025). Non-expansion states nationwide and in the South have some of the highest uninsured rates in the country. Six of the 10 states nationwide with the highest uninsured rates are Southern states, and four of those Southern states have not expanded Medicaid. The District of Columbia is the only Southern jurisdiction with one of the 10 lowest uninsured rates (see Figure C).

Figure C

By refusing to accept the ACA’s Medicaid expansion, Southern lawmakers are denying tremendous welfare and economic benefits to their states. Medicaid expansion improves access to care, health outcomes, and financial security. When low-income adults have access to insurance, they are more likely to get regular preventive screenings, treatment for chronic conditions, and mental health and substance use disorder care.

Medicaid expansion has saved tens of thousands of lives and has also reduced racial and ethnic disparities in health insurance coverage and access to care. In states that have expanded Medicaid, low-income adults have less medical debt and better access to credit, and are less likely to face eviction (Harker and Sharer 2024). Medicaid expansion also has implications for the broader economy of a state, including boosted federal revenues to the state and millions more in state and local taxes generated through increased economic activity (Ku and Brantley 2021). Despite arguments by critics that Medicaid expansion disincentivizes work, multiple studies have found little to no reduction in labor force participation because of expansion.4 Conversely, Medicaid is an important support for working people—particularly those with disabilities or chronic conditions—because it makes it easier for recipients to look for a job, work, and do a better job at work (Harker and Sharer 2024). Disabled adults are significantly more likely to be employed in expansion states versus non-expansion states and, as shown in Figure D, Southern states have some of the highest disability rates.

The health care sector is a major employer across the country and in the South. Twelve Southern states have a higher-than-average share of the population employed as health care practitioners and technicians,5 the majority of whom are employed in hospitals (BLS 2023). Hospitals in states that expanded Medicaid—especially those in rural areas—have fared better than those in non-expansion states, as increased insured rates lead to Medicaid covering care costs that would otherwise be uncompensated (Broaddus 2017).

The health and economic benefits of Medicaid expansion are numerous, but so are the costs of failure to expand. Between 2014 and 2017—just three years—an estimated nearly 12,000 older adults in the South died prematurely because of their states’ failure to expand Medicaid (Broaddus and Aron-Dine 2019). States that have not expanded Medicaid have experienced large increases in hospital closures, particularly in rural areas (Lindrooth et al. 2018). In the South, which is the most rural region of the country, a single rural hospital may be the only accessible point of health care for an entire community and its single largest employer. The closure of rural hospitals leads to increased transit times to access care—including for life-threatening emergencies—as well as losses in jobs and population that hinder the community’s ability to raise revenue and attract employers (Wishner et al. 2016). Of the 148 rural hospitals that have closed since 2011 (the year after the ACA was passed), just over half (76) of those closures occurred in the 10 states that have not expanded Medicaid, and 66 of those closures occurred in Southern non-expansion states. Nearly half of all Southern hospital closures occurred in just Tennessee and Texas (UNC Sheps 2023).

The failure to expand Medicaid has also led to worsening economic disparities. In states that have not expanded Medicaid, medical debt has become more concentrated in low-income communities in these states. While Southerners were more likely to have medical debt prior to the ACA, the failure to expand Medicaid widened debt disparities between the South and other regions. A recent nationwide analysis of credit scores found that the South had the lowest credit scores of any region, and that the share of residents with overdue medical debt was the strongest predictor of these scores (Van Dam 2023).

Refusal to invest in child care exacerbates economic insecurity for Southern families and providers alike

States in the South and across the country are facing a child care crisis, both for families who cannot afford the steep cost or for whom there are few available child care providers, as well as for early educators who are frequently paid poverty wages to provide this essential care. In most of the country, monthly child care is more expensive than housing, and in 38 states and D.C., child care costs more than public college tuition. Monthly infant care costs range from $572 in Mississippi to as high as $2,363 in D.C. Though costs are much lower in Mississippi than D.C., the impacts are felt similarly because household incomes are much lower in Mississippi. A median family with children in Mississippi would have to spend 10% of their income on child care, compared with 11.8% in D.C. (EPI 2025a).

During the pandemic, the federal government invested $24 billion into child care stabilization through the American Rescue Plan Act, an unprecedented lifeline to the child care sector that supported hundreds of thousands of providers and nearly 10 million children (ACF 2022). As these federal investments phased out, some states sought to fill the gap with state funding for child care (as in Vermont) or with tax credit expansions to pay for child care (as in Colorado, New York, and Utah) (Cohen 2023; Butkus 2024).

However, lawmakers in the South have deprioritized bills to address the child care crisis. In Florida, Kentucky, and West Virginia,6 bills to address child care affordability failed this legislative session— even though capping child care costs would boost labor forced participation, increasing these states’ economies by billions of dollars per year (EPI 2025a). And in Texas, despite a record state budget surplus of $32.7 billion in 2023 and advocacy by nearly three dozen child welfare organizations, state lawmakers declined to spend just $2.3 billion (less than a tenth of the surplus) to keep child care providers afloat amid the expiration of federal COVID-19 relief funds (Dey 2023). Instead, the state spent over a third of the surplus on new property tax cuts, which inherently benefit the wealthiest property owners.

Child care affordability is often measured based on the share of family income spent on a certain type of care—often infant care, since this is the expensive type of care. Though the share of families that can afford infant care is higher in the South than in other regions because infant care costs are generally lower, this affordability is based on median family income across all family types in aggregate, with most families with children comprising a two-parent married couple. This affordability calculation masks disparities in child care affordability between single- and two-parent households: As unaffordable as child care is for typical families, it is even more out of reach for single-parent households. In Southern states, an average of 38% of children live in a single-parent household—the highest nationwide (Annie E. Casey Foundation 2023). Single-parent households have a much higher cost burden, spending an average of three times as much for child care as married-couple families (35% of their income, compared with 10% for a married couple) (CCAoA 2025).

In the South, many states that pay the lowest minimum wages allowed by federal law, lag in workers’ rights, and refuse to expand Medicaid now also ban or severely limit abortion access (Banerjee 2022) while failing to take action to make child care affordable. For low-income women and women of color in states that have not prioritized health and economic security for children and families, forced childbirth and associated long-term, steep child-rearing costs will only exacerbate poor economic and health outcomes for both parents and their children, as well as racial and gender disparities in those outcomes.

Existing transportation infrastructure is inadequate for drivers, riders, and pedestrians

Safe, reliable, and affordable transportation is another huge factor affecting people’s access to good jobs (and the quality of their commute), access to essential goods and services, and overall well-being. It is also a major category of spending for U.S. households, accounting for 17% of annual household expenditures—more than every category except housing (BLS 2024a). At the same time, the U.S. transportation system faces major challenges, including high rates of injuries and fatalities, increasing roadway congestion, aging infrastructure, poor public transit access, and the need to reduce emissions in the face of climate change. These challenges have significant consequences for the U.S. population. Transportation incidents are the leading cause of death for U.S. workers, nearly 40% of major roads are in poor or mediocre conditions, transportation is the largest source of greenhouse gas emissions in the U.S., and 45% of people in the U.S. have no access to public transportation (BLS 2024b; TRIP 2022; EPA 2022; APTA n.d.).

One reason U.S. roads are in such disrepair is because of insufficient state spending on road maintenance. When states do invest in transportation infrastructure, they often use federal funding to build new roads or expand existing ones instead of prioritizing road repair, leaving existing roads in poor condition to worsen and creating new unfunded maintenance liabilities. After the Obama administration directed $47 billion for transportation projects in 2009, the share of U.S. roads in poor condition increased as states—especially Southern states—used the money for continued road expansion instead of road repair. Of the eight states that spent at least 45% of highway capital funds for roadway expansion (Arizona, Arkansas, Indiana, Mississippi, Nevada, North Carolina, Texas, Utah), four are in the Southeast (Bellis, Osborne, and Davis 2019). This pattern has continued with the latest batch of federal infrastructure funding. The Biden administration’s 2021 Infrastructure Investment and Jobs Act (IIJA) directed $643 billion for highways, roads, and bridges over five years—the largest ever federal infusion for transportation. Yet three years in, fully a quarter of the funds have been used to expand highways, which will create new emissions equivalent to the operation of 20 coal-fired power plants for a year. Of the 10 states spending the most IIJA funding on highway expansion, six are in the South. Meanwhile, of the 10 states spending the most IIJA funding on public transit and passenger rail per capita, only D.C. is in the South (Salerno 2024).

Public transit remains deprioritized in comparison with automobile transit, even as the need to reduce greenhouse gas emissions while expanding transit equity becomes more urgent. According to the National Resources Defense Council, of the 10 states doing the least to improve equity and climate outcomes in transportation, six are in the South, and the Southeast ranked lowest of any region on its commitments to these goals (Henningson 2025). In 2024, Georgia’s governor, acknowledging “record job and population growth” in the state, announced a $1.5 billion transportation funding plan to improve and expand roads, highways, bridges, and freight infrastructure, but did not dedicate any funding to public transit projects (Kemp 2024). In fact, Georgia’s MARTA system is the only transportation agency in operation that has never received any state funds (King 2023).

There are also substantial disparities in transportation access based on race, ethnicity, socioeconomic status, and ability across the country. Because of racial and ethnic income and wealth disparities, workers of color are less likely to own a car and be more dependent on public transit (Austin 2017). Yet due to legacies of segregation, white flight and suburbanization, and corresponding disinvestment in urban transit in favor of the federal highway system, Black workers, other workers of color, and low-income people face worse transit quality and longer commute times (Sánchez, Stolz, and Ma 2003; National Equity Atlas 2019). They are also more likely to be killed in traffic accidents while walking, cycling, or riding in a car (Raifman and Choma 2022).

The lack of affordable, accessible public transportation is also unevenly distributed across disability status and urbanicity. Across the country, disabled adults of all racial and ethnic groups are twice as likely as non-disabled adults to face inadequate transportation access, and over a half a million disabled people are unable to leave their homes as a result (Urban Institute 2020). Of the 10 states with the highest share of adults with a disability, eight are Southern states (see Figure D).

Figure D

Additionally, though public transportation is more commonly discussed in the context of cities, access to transportation in rural areas poses unique challenges that are becoming more urgent as the population ages and demand for accessible public transit grows. The East South Central Census division encompassing Alabama, Kentucky, Mississippi, and Tennessee is the least urban area in the country (U.S. Census 2022). And in nine Southern states, the share of rural residents with no access to intercity transportation—rail, bus, or airline—exceeded the national average (14.6%). While some Southern states have increased access to intercity transportation between 2006 and 2021, seven Southern states have seen declines in access over the same period, with double digit declines in Oklahoma (11.7 percentage points) and Arkansas (18.5 percentage points). Populations in rural areas without access to intercity transportation are more likely than those in more connected rural areas to be over the age of 65, low-income, in poverty, unemployed, and carless. With no car and no public transit, many rural residents in the South and around the country are effectively denied access to employment, education, and other pathways to greater economic security, and older adults are forced to rely on the kindness of others to meet their basic needs (BTS 2023). 

The failure to invest in affordable health care, accessible high-quality child care, and convenient climate-friendly transportation systems is shortsighted and has worsened quality of life across the South. When workers and families are not able to maintain their health and well-being and access services that enable them to fully participate in civic, social, and economic institutions, we all suffer.

Southern lawmakers weaponize the poor outcomes of their own public revenue failures to fuel a vicious cycle of bad policies

The Southern economic development model is characterized by regressive tax and budget systems, with revenue programs that extract a larger share of income from families with the least ability to pay and often deliver targeted benefits specifically to businesses and the wealthy. These policies weaken the labor market power and jobs options for low-income families, contribute to income and wealth inequality, and fail to raise adequate revenue for public goods and services. Southern lawmakers have then frequently responded to revenue shortfalls with additional regressive forms of revenue generation like fees and fines, while providing tax cuts and economic development subsidies to businesses with the claim that such benefits to businesses will “trickle down” to the public at large. They also use the failure of such policies as a pretext to shrink the public sector and outsource core government functions to private companies motivated by profit as opposed to effectiveness or equity.

Regressive tax and budget policies exacerbate inequality

Taxes are the primary means by which state and local governments raise revenue to pay for essential goods and services, such as education, health care, infrastructure, and public safety. However, the Southern model’s tax policies have resulted in chronic underfunding that exacerbates income and wealth disparities by race and class and keeps living standards inadequate for many residents.

Anti-tax sentiment in the South is a direct legacy of slavery. Because enslaved people were treated (and taxed) as property, enslavers saw property taxation as an existential threat and worried that non-enslaving majorities would use taxation to weaken—and eventually abolish—the institution of slavery. Enslavers went to great lengths to preserve their power through anti-democratic means, including manipulating the rules of the legislative process, ensuring weak government, and limiting the constitutionality of taxation (Einhorn 2006). During Reconstruction, racist former enslavers rebranded themselves as “concerned taxpayers” to forge an alliance with small white farmers, sow racial division, and justify racist violence (Das 2022). Through the mid-19th century, taxes levied on enslaved people and the wealth they created for white enslavers through their forced labor were the single largest revenue source for state governments (between 30–60%) and were paid mostly by large landowning enslavers. When slavery was abolished, white Southerners, particularly small non-enslaving landowners, vehemently opposed all efforts to replace “slave tax” revenue with other tax measures (Lyman 2017).

In the mid-1880s, Southern states relied heavily on corporate income taxes—a legacy of slavery-era opposition to property taxes that was nonetheless fairly progressive in the sense that corporations generally have a higher ability to pay. However, amid the economic expansion following WWII, Southern states slashed corporate tax rates to lure businesses to the region and enacted sales taxes to fill the revenue gap (Das 2022). This tax policy agenda is being reenacted in many Southern states under the modern Southern economic development model. Rather than being described as “anti-tax” this model is better characterized anti-tax for the wealthy and corporations. Since corporate taxes are paid primarily by wealthy shareholders and sales taxes are paid primarily by low- and middle-income households, this shift in the tax burden amounts to an upward redistribution of income that persists in the modern South and hinders the region from raising adequate revenue.

Today, state taxation structures in Southern states are some of the most regressive in the nation. A tax is “regressive” when it forces people with lower incomes to pay a higher share of their income in taxes than people with higher incomes. The states with the most regressive tax systems typically rely heavily on sales and excise taxes (extremely regressive) and property taxes (somewhat regressive). States with regressive tax systems also typically lack a graduated personal income tax or impose low corporate income taxes. Of the 10 states with the most regressive tax structures, half are Southern states: Arkansas, Florida, Louisiana, Tennessee, and Texas (ITEP 2024). In 11 Southern states, the poorest 20% of residents pay more in sales taxes alone than the top 1% of residents pay in all state and local taxes combined (see Figure E and Appendix Table 1).

Figure E

Regressive taxes are not only inequitable from an economic justice perspective but also as a matter of racial and gender justice. Since Black, Hispanic, and women workers are more likely to earn low wages, they disproportionately bear the brunt of tax structures that tax the lowest paid workers the most. Tennessee, a state that also lacks a personal income tax and relies heavily on sales and excise taxes, is a case in point. In Tennessee, Black and Hispanic families—whose median household incomes are 19% less than the statewide median of all families—are taxed at a rate higher than the statewide average, while white and Asian families—with median household incomes 22% above the statewide average—are taxed at a lower-than-average rate.7 Meanwhile, in the more progressive taxation state of Minnesota, Black, Hispanic, and Indigenous families are taxed at below-average rates, in line with their relatively lower family incomes. Regressive taxes exacerbate racial, ethnic, and gender income inequality while progressive taxes can counteract these disparities (Davis and Guzman 2021).

Yet instead of addressing their inequitable tax structures, the South has led the charge of further increasing tax regressivity in recent years. Of the eight states that have moved toward regressive state tax structures since 2018, five are in the South: Arkansas, Kentucky, Mississippi, North Carolina, Ohio, and West Virginia (ITEP 2024). In four of these states, lawmakers have expressed interest in fully eliminating the personal income tax (Davis and Trinidad 2023). In her inaugural address, Arkansas Governor Sarah Huckabee Sanders committed to “eventually wipe the income tax off the books” and an overall agenda of deregulation (Sanders 2023), declaring:

“We will no longer surrender our jobs, our talent, our businesses and our economic might to states like Tennessee and Texas that have no income tax. Arkansas is going to fight for every job – and let me be clear, Arkansas is going to win. … [A]s long as I am your governor, the meddling hand of big government creeping down from Washington DC will be stopped cold at the Mississippi River. We will get the over-regulating, micromanaging, bureaucratic tyrants off of your backs, out of your wallets and out of your lives.”

In 2024, Sanders signed into law a bill to reduce tax rates on the wealthy and corporations, which will cost the state hundreds of millions of dollars per year (DeMillo 2024). In 2025, Mississippi lawmakers passed a bill to reduce the state’s personal income tax from 4 to 3%, and eventually eliminate it entirely, replacing it with an increased regressive tax on gasoline (Vance, Goldberg, and Pender 2025). Also this year, Kentucky passed a similar income tax elimination bill (Sonka 2025) and Florida’s governor proposed eliminating all property taxes (Perry 2025). Florida already has the most regressive state tax system in the country, in part because it has no personal income tax and relies heavily on sales and excise taxes, the most regressive type of tax. But property taxes account for over 40% of the state’s total tax revenue (ITEP 2024), so unless that lost revenue is made up through progressive means—which the governor has ruled out—eliminating property taxes will be disastrous for the state’s budget and could lead to a complete dismantling of the public school system (which gets around half its funding from property taxes) (Sczesny 2025). Of course, for Florida’s governor—who has been on a years-long crusade against public schools (Strauss 2022) and recently applauded President Trump’s move to shutter the federal Department of Education (DeSantis 2025b)—dismantling the state’s education system may, in fact, be the goal.

Inadequate revenue generation leads to low public spending, exacerbates racial disparities

Due to their high poverty rates, regressive tax structures, and failure to tax corporate income, Southern states collect little revenue per capita compared with other states (TPC 2023a) and are highly dependent on federal government spending to meet their residents’ basic needs. Southern states receive more federal government spending than they contribute to the federal government income and business taxes. Because Southern states have lower-than-average income levels and higher poverty rates, these states receive higher-than-average federal contributions to social safety net programs like Medicaid, SNAP, and TANF. Of the 10 states that rely on federal government funding the most, seven are Southern states. In Florida, where the governor has boasted about saving taxpayers’ money by returning federal funds (DeSantis 2025a), the state accepted nearly $37 billion more in federal funds than it paid in the form of taxes, equivalent to about a third of the state’s budget for fiscal year 2026 (see Figure F).

Figure F

As a result of chronic revenue shortfalls, state governments in the South spend less per capita overall than other regions, as well as less per capita on primary and secondary education and public welfare (TPC 2023a; TPC 2023b). Lawmakers in these states justify low spending on public welfare and programs that benefit all low- and middle-income workers by weaponizing ideological narratives about deservedness that are steeped in racism and misogyny and sowing racial and class division (Black and Sprague 2017). In reality, public revenue shortfalls harm everyone because the goods and services provided by the public sector are used by everyone. And when states are unable to raise adequate revenue, rather than making up the shortfall by seeking additional revenue through progressive taxation or clawing back subsidies provided to private businesses, the first budget items to be defunded are frequently public-sector jobs and the services public-sector workers provide.

These dynamics were further exacerbated by the pandemic. Revenue-starved states received millions of dollars in federally provided fiscal recovery funds as part of the package of federal COVID-19 response bills. Yet instead of using those funds for necessary public services, nine Southern states exploited resulting temporary budget surpluses to enact costly permanent personal or corporate income tax cuts.8 In North Carolina and West Virginia, the cost of the cuts exceeds 10% of total general fund revenue (Tharpe 2023). In Texas, nearly half of the $15.8 billion in fiscal recovery funds the state received were used to shield businesses from future unemployment insurance tax increases (Villanueva 2022).

Southern states rely heavily on non-tax revenue sources like fees and fines, which exacerbate income and racial inequality

The failure of states and localities to raise adequate revenue equitably imposes a double penalty on low-income communities of color. Lawmakers impose regressive tax systems that prioritize the wealthy and corporations, raise insufficient revenue, and then use budget shortalls to justify deep cuts to the public sector and social programs. At the same time, lawmakers in many Southern states simultaneously impose regressive fines and fees on these same communities to offset budget gaps. States and localities across the country, particularly rural and low-income communities, are heavily dependent on fees and fines imposed for minor violations or as alternatives to incarceration. Of the 10 states that rely most heavily on non-tax revenue (including fees, fines, and other surcharges) to fund the public sector, five are Southern states. A third or more of these states’ revenue comes from non-tax sources (ITEP 2024).9

There are racial disparities in every aspect of the criminal legal system, and the assessment and collection of fines and fees is no exception. Black people are more likely to be subject to traffic stops (Pierson et al. 2020)—the most common way people encounter police in the U.S.—and Black communities are also targeted with higher rates of fine and fee enforcement (USCCR 2019). Cities with larger Black populations (most of which are in the South) rely more heavily on fine and fee revenue. Southern states—particularly states with a history of convict leasing10—impose more fees and more mandatory (as opposed to discretionary) fees than any other region (Zvonkovich, Haynes, and Ruback 2022). Though lawmakers in many Southern states have introduced proposals to curb regressive fines and fees, such proposals have made little progress in the states most reliant on them (FFJC 2024).

The expectation that public agencies—charged with serving the public good—seek revenue from fines and fees in order to fund the agencies that employ them represents a profound conflict of interest. Indeed, all six of the small cities across the country that rely on fines and fees for at least half their revenue (five of which are in the South) spent at least a third of their budgets on law enforcement activities in 2017 (TPC 2024). The use of fees and fines to fund government or even new law enforcement activities can undermine public trust in institutions and their perceived legitimacy as agents of the public good (Boddupalli and Mucciolo 2022).

On top of the enduring harms that fines and fees impose on adults and youth of color and their corrosive influence on democracy, fines and fees are an inefficient method of raising public revenue. A study of 10 counties across Texas, Florida, and New Mexico found that these jurisdictions spent an average of 41 cents for every dollar collected from in-court and jail costs alone, and billions of dollars go uncollected every year because individuals are unable to pay (Menendez et al. 2019).

Southern dependency on fine and fee revenue deepens poverty and racial inequality, encourages expansion of the criminal legal system, and limits localities’ ability to invest in public services that benefit everyone. While Southern states are structuring their public financing in regressive and harmful ways, they are simultaneously giving enormous tax breaks and public subsidies to corporations. As the next section explains, the one area where Southern governments are not stingy with public dollars is in providing supports to business.

Economic development incentives fail to produce community benefits and drain limited public revenue to the private sector

Modern urban governance in the United States is so dominated by entrepreneurialism—a stance that prioritizes economic development and public investment into projects that mainly benefit the private sector—that this mode of governance may feel natural or unassailable. However, entrepreneurialism is a relatively new advancement, one that emerged in the early 1970s in response to a combination of deindustrialization, fiscal austerity, and the rise of neoconservatism and privatization (Harvey 1989). Whereas “managerialism” (which primarily focused on the local provision of services for the benefit of residents) was once commonplace, state and local tax and budget policy today is increasingly tilted in favor of the private sector, while benefits to the public are second-order and, in some cases, nonexistent.

Entrepreneurialism often takes the form of corporate subsidies: economic development grants, reimbursements, loans, tax abatements, infrastructure development, and other forms of financial assistance to businesses by federal, state, or local governments. Although not unique to the South, the use of publicly funded corporate subsidies is particularly harmful to Southern states that have long faced revenue shortfalls. These tax abatements (which allow a selected business to pay lower taxes or eliminate its tax obligation entirely) and other subsidies (such as direct cash grants to companies) are taxpayer funded and directly reduce the state’s ability to fund public services.

Working families pay their fair share (or more) in state and local taxes, with the expectation of public investment in essential public goods and services like schools, health care, food assistance, transit, and affordable housing. Instead, this public revenue is given to corporations in the form of subsidies or tax breaks. In exchange for corporate tax benefits, firms that receive such awards often make vague promises about projects’ benefits for local communities. However, these promises are notoriously difficult to assess. Southern states have particularly low disclosure requirements—Alabama and Georgia have no meaningful disclosure at all. Nine Southern states have below-average disclosure scores according to public-spending watchdog group Good Jobs First (Tarczynska, Wen, and Furtado 2022). As a result, it is extremely difficult for researchers, advocates, and the taxpayers themselves to investigate whether corporate incentives serve the public good. 

In 2022, a banner year for corporate subsidy packages to individual companies exceeding $100 million, nearly half (14 out of 30) of these “megadeals” were awarded to businesses in Southern states (GJF 2022a). These megadeals—which include but are not limited to tax breaks—amounted to at least $10.7 billion dollars in taxpayer funds given by these state and local governments to large corporations (see Figure G). Of the nine companies that received megadeals worth $1 billion or more in 2022 (the costliest year on record for megadeals), four of those deals were provided by Southern states (Tarczynska 2022). And three of the four megadeals in the South went to the auto manufacturing industry, which has grown significantly in the South over the past two decades as businesses seek to take advantage of the South’s weak regulatory environment, anti-worker policies, and use of public revenue to attract private investment. But these incentives have not produced the family-sustaining, union jobs historically associated with the Midwestern auto industry. Instead, faced with low wages, unsafe workplaces, and the anti-union sentiment inherent to the Southern economic development model, Southern autoworkers must fight tirelessly just to achieve any benefits from the public subsidy afforded their employers (Childers 2024d).

Figure G

In recent years, Southern states have given away billions of dollars in public revenue in the form of direct subsidies and tax breaks to corporations. This is revenue the state would have raised if it taxed corporations regularly, as opposed to preferentially. For example, in Tennessee, forgone revenue between fiscal years 2017 and 2021 exceeded the state’s total budget for transportation in 2021 by over $100 million (GJF 2022c). In the city of Memphis, where public pensions are chronically underfunded, public dollars spent on tax abatements and subsidies could have fully funded the city’s pension obligations for every year between 2009 and 2012 (Cafcas et al. 2014). In Louisiana, the state lost more due to economic development tax breaks than it spent on transportation, corrections, youth development, and agriculture combined in 2021 (GJF 2022b).

The impact of tax abatements on public education is particularly extreme because property taxes (which are a common target of economic development tax breaks) are the single largest source of funding for public schools across the country. In 2019, of the 10 school districts that lost the most revenue to tax abatements, six were in Southern states—three in South Carolina, two in Louisiana, and one in Texas (Wen, Furtado, and LeRoy 2021).

Louisiana’s five most populous school districts lost nearly $40 million to economic development tax breaks in 2021. And Texas, which lost $1.23 billion to corporate subsidies in 2022, is home to 49 of the 52 school districts nationwide where per-pupil losses exceed $1000 per year. These revenue shortfalls disproportionately harm low-income, Hispanic, and Black students whose school districts are more likely to hand out costly tax abatements (Wen, Furtado, and LeRoy 2021).

To hold companies accountable to the expectation that publicly funded projects benefit the public, advocates for workers and communities have leveraged tools like Project Labor Agreements (PLAs) and Community Benefits Agreements (CBAs). A PLA is a pre-hire collective bargaining agreement negotiated among multiple contractors, unions, and project owners that establishes the terms and conditions of employment that will apply to a specific construction project, and CBAs are PLAs that also involve community stakeholders and may include community-focused benefits beyond any employment requirements.

Unfortunately, most Southern states have provisions in state law that block local governments from abiding by PLAs, resulting in economic development projects that often do not support local workers and communities. In the past two years, Alabama, Georgia, and Tennessee have signed measures into law that bar companies from receiving state economic development funds if they voluntarily recognize unions, and Tennessee enacted a bill that bars companies from receiving state economic development funds if they enter into a community benefits agreement. These policies reflect an economic model that seeks to enrich business interests at the expense of workers and communities, in this case using public money to disempower workers and block communities from benefiting from economic development (Sherer 2024; Tennessee General Assembly 2025).

Privatization is offered as the cure for hollowed-out public services

From public schools to the social safety net, Southern lawmakers have led the charge to privatize public services and replace them with for-profit alternatives that are often worse, more expensive, and unconcerned with values like equity and fairness. Privatization is a central tenet of the Southern economic development model because it prioritizes the interests of the wealthy (who are overwhelming white) and businesses at the expense of working people, low-income Black communities and communities of color, and public-sector workers. The public sector has historically been a source of good union jobs and a pathway to the middle class—particularly for Black workers (Morrissey 2020). Thus, privatization serves the Southern model both in its service of business interests at the expense of workers and in its agenda to limit the role of the public sector in regulating corporate power and serving the public good.

Private school vouchers are a modern-day effort to reinstitute segregation, whether by race, class, or religion

The privatization of public schools in the United States is rooted in anti-Black racism and efforts to resist desegregation. In the decade prior to the 1954 Brown v. Board of Education ruling mandating school segregation, private school enrollment increased 43% in the South. By the end of 1956, six Southern states had passed constitutional amendments permitting the state to divert public funds to private schools (Suitts 2019), and by 1965 there were nearly one million private school students in the South. While public schools desegregated slowly over the 1960s and 1970s, private school enrollment grew, particularly in the South. By the early 1980s, the South accounted for nearly a quarter of private school enrollment nationwide, and most students attended schools where 90% or more of students were white (SEF n.d.). 

Though voucher advocates have claimed that such programs improve educational outcomes for low-income Black and Hispanic children, an extensive body of research finds that vouchers do not improve educational outcomes and more likely worsen them (Mast 2023). Voucher programs divert public funds to private schools (predominantly religious schools) where white students are overrepresented—these margins are greatest in the South (Suitts 2019). Private school voucher programs allow primarily white wealthy families, many of whom are already sending their children to private schools, to offset these costs with public dollars that are intended for public schools. In many states with private school voucher programs, most voucher recipients attend religious schools, amounting to billions of taxpayer dollars being used to subsidize religious education.

This subsidization of religious education parallels a simultaneous effort—popular in Southern states—to implement government-sponsored, often conservative religious ideology in the public school system (Meckler and Boorstein 2024). Oklahoma approved an application for a publicly-funded Catholic charter school back in 2023 (Perez Jr. and Gerstein 2025). The case went all the way to the U.S. Supreme Court, which recently affirmed the decision of the Oklahoma Supreme Court blocking the use of public funds for the nation’s first religious public charter school. However, given an evenly split vote, the ruling lacks precedential force (Saiger 2025), leaving the door open for states to continue eroding the separation between church and state through the use of government funds for religious education. A decision approving of the direct use of government funds to pay for religious education would amount to a significant erosion of the separation between church and state.

Today, 31 states and D.C. have some sort of voucher program in place that diverts public funds to private schools (Wething 2024). Though only 13 of those states (plus D.C.) are in the South, the South has some of the most established and expensive programs, spending hundreds of millions—or, in the case of Florida, billions—of public dollars to subsidize private schools (Dollard and McKillip 2025). In 2025 alone, public education advocates tracked voucher expansion bills in at least 22 states (PFPS 2025). After years of opposition, Texas passed a private school voucher program that will cost the state billions over the next few years (Edison 2025), and South Carolina reinstated a private school tuition subsidy program that had been ruled unconstitutional (Kesler 2025).

Efforts to implement and expand voucher programs in states across the country—through private school vouchers, Education Savings Accounts, and tax credits—are key to the relentless and enduring campaign to defund and privatize public education, a movement that also includes manufacturing mistrust in public schools and targeting educators and their unions (Mast 2023). The result, by design, is the defunding of the public school system, which in turn strengthens the arguments in favor of privatization as a solution to an ailing public school system. The Trump administration’s move in early 2025 to shutter the Department of Education is the culmination of the decades-long campaign to abolish public education, a campaign that began in the South and has been spearheaded by Southern lawmakers and billionaire-backed right-wing groups (Sullivan 2025; Blake 2024; Gott 2018).

Southern lawmakers have long sought to privatize our most important and popular social programs

Republicans in Congress and at many levels of government have long sought to privatize even the most overwhelmingly popular federal social programs, particularly Medicare and Social Security. Social Security is the largest anti-poverty program in the country and is the most important source of income for seniors; without it, over 25 million more people would be in poverty (Banerjee and Zipperer 2022). More than 64 million people rely on Medicare coverage for their health insurance coverage (CMS 2022). From Texas President George W. Bush’s plan to privatize Social Security in 2005, to Florida Senator Rick Scott’s plan to phase out all federal social programs in 2022 (Everett 2022), Southern Republicans have consistently been among the most vocal supporters of privatization (Scott 2022).

Privatization is often touted as a solution to bureaucratic red tape or cutting “wasteful” government spending, but in practice, it can mean cutting the experienced public workforce who administer complicated government programs. This can result in prolonged delays, more people wrongly denied benefits, and ultimately worse outcomes for people who need the benefits most. For instance, when Texas outsourced its SNAP eligibility determinations to a for-profit company in 2006, thousands of people were unable to apply or were given incorrect information and many were wrongly denied benefits. Public-sector staff were then forced to fix mistakes, and eligible SNAP participants were subject to long delays to receive benefits (Sanders and Mast 2024).

Privatization across criminal legal system threatens progress to undo mass incarceration

Since the 1990s, the U.S. criminal legal system has become increasingly privatized as private, for-profit companies have taken over many aspects of correctional control. Private prisons—prisons owned and run by private companies—are the most visible form of privatization. The use of private, for-profit prisons to incarcerate people convicted of crimes and detain immigrants grew significantly in the first decade of the 21st century but has declined nationwide since 2010. Nevertheless, as of 2022, approximately 91,000 people nationwide are currently incarcerated in private prisons, representing 8% of the total prison population. Across the country, 27 states and the federal government incarcerate people in private prisons, and states vary significantly in their use of private prisons (Budd 2024). Southern states have historically incarcerated more people in private prisons than any other region (Geiger 2017) and have increased their usage of private prisons at a time when other states are moving in the other direction. In Florida, Georgia, and Tennessee, the use of private prisons has increased considerably (by an average of 131% across those three states since 2000), and these states confine 15% or more of their incarcerated population in prisons motivated by profit (Budd 2024).

The private sector’s quest to extract profits from the U.S. prison system and those under correctional control within and outside prison is not limited to the small share of privately run prisons. Instead, the entire carceral system, which spans public and privately run facilities and services, has become increasingly privatized over the past several decades. Though this phenomenon is nationwide, incarcerated people in the South may be most heavily impacted. Within public and private prisons, private companies are granted contracts to provide food, health services, telecommunications services, and commissary functions. In turn, the private company earns a profit by marking up the price of goods and services, and the prison receives millions of dollars in revenue in the form of commissions (Katzenstein, Bennett, and Swanson 2020).

This system of “prison retailing” is supposed to be reinvested into the prison to pay for programs that benefit the incarcerated population, but many times these funds are improperly diverted to other purposes (Nam-Sonenstein 2024). The prices of privately administered goods and services in prisons and jails vary widely by state, but Southern prisons charge some of the most exorbitant rates for basic food items like instant ramen noodles, fans to keep cool in prisons that lack air conditioning, and even water (Weill-Greenberg and Corey 2024). At the same time, as shown in Figure H, incarcerated people in the South who work for the benefit of their prisons and prison owners are paid the lowest wages of any region—if they are paid at all—putting these heavily marked-up items even further out of reach for incarcerated people in the South (Mast 2025).

Figure H

Privatization is also pervasive in alternative forms of correctional control. As the prison population declines modestly, both in private and public facilities, the corrections industry has shifted its focus to extracting profit from community supervision, which includes pre-trial supervision, probation, and parole. Of the 5.5 million people under some form of correctional control, over half are on probation (a million more than those incarcerated in correctional facilities) (Wang 2023). Privatized correctional control and supervision originated in the South—Florida implemented private probation in 1975, followed by Tennessee in 1989 and Georgia shortly thereafter (Zvonkovich, Haynes, and Ruback 2022)—and persists there more than any other region (Ramachandra and Darehshori 2018). Today, of the 12 states that rely on private, for-profit companies for misdemeanor probation services, seven are Southern states (Huebner and Shannon 2022). Georgia law prohibits the state from supervising misdemeanor probations and requires that these services be contracted to local or private entities. More people are on probation in Georgia than any other state, and 80% of the state’s courts use private probation (Khalfani 2022). As with other privatized services, there is little transparency around the bidding process for these contracts, and private probation companies are not required to make financial disclosures to the state. Research suggests that private probation companies charge higher fees than state-run probation (Shannon et al. 2020). Numerous lawsuits across several states allege private probation companies charge inappropriate fees, violate probationers’ 14th Amendment rights, and engage in racketeering.11 

Though the use of private prisons has declined, President Trump’s anti-immigrant agenda has reinvigorated the market for private prison operators, especially in border states in the South. Private prisons are slated to make billions from new contracts to detain undocumented immigrants while they await immigration proceedings or deportation. The companies plan to make use of vacant detention facilities, some of which had been closed after reports of unsanitary conditions, overcrowding, and detainee deaths (Hurwitz 2025). The CEO of CoreCivic (formerly Corrections Corporation of America), the second largest private corrections company in the U.S., called it “one of the most exciting periods in my career” (Berzon, McCann, and Aleaziz 2025). Most immigration detention facilities are run by private prison operators and are clustered along the Southwest border and the gulf coast (Louisiana, Mississippi, Alabama, and Florida).

Immigrant detention as a profit-seeking enterprise is not limited to privately owned prisons. For example, in Louisiana, which is now being dubbed “detention center alley” (a play on “cancer alley”12) because of its significant role in immigrant detention (Maschke 2025), a detention center may be publicly owned and then privately operated (Hefferman 2025). In small localities across the country, jail bed rentals for immigrant detainees provide a large—if perverse—source of revenue. In Louisiana, Immigrations and Customs Enforcement pays localities $74 per day to rent beds in their facilities, nearly three times what the state prison system pays local sheriffs. And in one economically distressed North Carolina county, a newly built jail earned $2 million in the first 18 months for holding immigrants for the federal government, which comprised two-thirds of its detainees (Eisen and Subramanian 2022).

Privatization masks the true costs of mass incarceration by shifting many of the system’s costs to those under correctional control while creating incentives for the public and private sector to expand the system, either as a source of private or public revenue. But the revenue produced through criminal legal system privatization exacts high costs on communities, particularly on low-income Black and brown people who are disproportionately ensnared in it. Given the racist roots of the Southern economic development model, it is not surprising that these dynamics have manifested so acutely in the South.

A thriving South requires a new economic development model

The South is home to the nation’s weakest social safety net, the lowest wages, the most anti-worker policies, and the most regressive systems for raising revenue to pay for essential goods and services. As a result, the region suffers from high rates of poverty and food insecurity and poor health outcomes, and workers and their families struggle to achieve a basic standard of living. These outcomes are by design, the consequences of an economic development model that prioritizes the wealthy and corporations at the expense of workers and their families, and fosters precarity as a means of maintaining racial and class-based hierarchies.

W.E.B. DuBois famously said “as the South goes, so goes the nation.” This adage very much applies to the Southern economic development model, as conservative state lawmakers across the country have sought to duplicate the Southern policy agenda in their states. Now, this model has found a home in the Trump administration, which has taken every opportunity to prioritize the interests of the wealthy and corporations at the expense of working people and their families.

The Rooted in Racism series has shown across a wide range of dimensions that the Southern economic model fundamentally does not serve workers and their families. It does not lead to stronger growth; it does not lead to greater or more widespread prosperity; it does not lead to better health or educational outcomes or greater economic mobility.

But it does not have to be this way. Because the South’s poverty, precarity, and economic underperformance are the consequences of intentional policy choices, they can be undone by different policy choices. The racism and anti-worker sentiments that have influenced economic policymaking in the South for generations must be uprooted and replaced by a new economic model centered on empowering and investing in workers, families, and communities. There are proven strategies that lawmakers can take—proposals for which advocates have been fighting for years—to build a South where workers are empowered and families are supported to not just survive but thrive. It is time to retire the Southern economic development model and replace it with a model that serves everyone.

Appendix

Appendix Table 1

Notes

1. See Economic Policy Institute, “Rooted in Racism and Economic Exploitation” (web page), https://www.epi.org/rooted-in-racism.

2. The author acknowledges that these data are now over a decade old. Estimating the incidence of wage theft is extremely challenging, especially because victims often don’t know they’ve been cheated and even when they do, they often don’t have a paper trail. Consequently, there are few studies that have attempted to quantify the incidence and value of wage theft. Because the minimum wage has risen in Florida since this study, it’s quite likely that the incidence of minimum wage violations and value of that theft is higher than it was when these data were produced.

3. As of May 2025, there were an estimated 810 Wage and Hour Division investigators for 165 million workers, roughly one investigator per every 270,000 workers (165 million / 611). This was prior to layoffs and mass resignations at DOL induced by the Trump administration’s attacks on civil servants. As a result, there are now likely even fewer than 611 wage and hour investigators at the department.

4. See Frisvold and Jung 2018; Lavender and Johnston 2024; and Leung and Mas 2016.

5. Author’s calculation using Bureau of Labor Statistics Occupational Employment and Wage Statistics and Local Area Unemployment Statistics, March 2024.

6. See Florida HB 47, Kentucky HB 460, and West Vest Virgina HB 2605, HB 2730, and HB 2731.

7. Author’s calculation using U.S. Census Bureau 2023 ACS 1-Year Median Household Income in the Past 12 Months in Tennessee, by race/ethnicity (tables B19013B, B19013D, B19013H, B19013I, S1903).

8. Although the federal money explicitly could not be used to finance tax cuts, the fungibility of the resources meant determined conservative state lawmakers were able to find ways to shift resources such that they could cut taxes and then use federal funds to fill the revenue gap.

9. The five states and their rank regarding their reliance on non-tax revenue are: Alabama (3), Florida (7), Mississippi (8), Oklahoma (10), and South Carolina (4).

10. Convict leasing was a system for preserving forced labor after the abolition of slavery in the U.S. Southern states criminalized Black people for trivial “offenses” (such as loitering, breaking curfew, or failing to show proof of employment) and then leased them to private employers to work without pay to do dangerous, sometimes deadly, work under threat of punishment.

11. See recent news from private probation lawsuits in Georgia, Tennessee, and Alabama.

12. ”Cancer Alley” refers to the communities along the banks of the Mississippi River between New Orleans and Baton Rouge, Louisiana, where residents suffer from high rates of cancer and other health issues because of air pollution caused by the fossil fuel and petrochemical industries. These harms disproportionately impact Black residents, whose communities are commonly targeted for industrial development.

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Trump has already announced the cancelation of status for roughly 2 million people with TPS and parole, and more are on the horizon. Some of these efforts are paused because of litigation, but there’s little hope that the programs and precarious statuses will survive Trump’s attacks in the long term. Trump is also now instructing immigration judges to deny asylum to applicants before they’ve had an opportunity to have their cases fully heard in court—which would leave asylum-seekers without work authorization and make them targets for deportation, too.

Altogether, nearly 5.6 million people in the U.S. held a temporary but precarious immigration status in 2024, accounting for roughly 40% of the total unauthorized immigrant population of 13.7 million (see Table 1). This includes over 2 million people who are asylum-seekers. (The migrants who qualified for protections like TPS and parole, as well as asylum-seekers, are formally considered and counted as part of the unauthorized immigrant population; see explanations from Pew and the Migration Policy Institute, for example.)

Table 1

While these statuses and protections are only a band-aid for a flawed immigration system that is deeply in need of reform, they have been shown to protect millions of workers from some of the worst forms of employer lawbreaking. In addition to allowing workers to report workplace violations to government officials without fear of retaliation that can lead to deportation, it also means that a migrant worker with a work permit can be employed just about anywhere and change jobs freely, allowing them to find jobs that fit their skills and offer better wages and working conditions. The economic benefits of these protections are significant: On average, recipients of Deferred Action for Childhood Arrivals (better known as DACA) more than doubled their wages after obtaining a work permit. Another study found that workers who were granted TPS and a work permit saw a 13% wage gain relative to workers without it.

Employers also greatly benefit from workers having a protective status and a work permit. While comprehensive data are limited, we know, for example, that in 2017 the top five industries for TPS beneficiaries from El Salvador, Honduras, and Haiti were construction, restaurants and food services, landscaping, child day care services, and grocery stores. Employers in these industries and many others are in danger of losing their current workforce and will be prohibited from legally recruiting millions of other workers. Just one example is the GE Appliance Park in Louisville, Kentucky, a unionized plant where nearly 200 employees received a letter from the Trump administration terminating their status and work authorization. Overnight, GE lost 200 employees.

An alternative path to terminating temporary statuses would be to provide these workers with a permanent immigration status like a green card—and the rights that accompany it—allowing them to have full, equal, and permanent workplace rights and to exercise them in practice. That, in turn, would lead to higher wages and improved labor standards for all workers, not just those who newly obtain green cards. However, green cards can only be granted by Congress, and so far, the Republicans who control all three branches of government have shown no appetite for creating even one new green card. Not for the people who assisted U.S. troops during the war in Afghanistan, not for the workers who—during the pandemic and at great risk to their health and safety—grew and cultivated the food for the nation and kept essential services functioning. Not for anyone.

But in the meantime, tools like TPS, parole, and DACA can mean the difference between having rights on the job or being extraordinarily vulnerable to the worst abuses by employers. While the Trump administration has claimed they want to help U.S. workers by detaining and deporting unauthorized immigrants and canceling protections like TPS, actions like these reveal they clearly don’t care about improving conditions for workers. There is convincing evidence that deportations will kill jobs and shrink the economy. And if Trump’s cancelation of temporary immigration protections is not stopped, all of these measures combined will result in millions of workers being exploited by their bosses and driven into the informal economy. That, in turn, will reduce their tax contributions that support the social safety net and lower their wages significantly—ultimately hurting U.S workers in low-wage industries and the U.S. economy writ large by driving down demand for goods and services. It will also leave employers without millions of reliable employees in industries like construction, hospitality, childcare, agriculture, food processing and production, and more.

Child care costs vary widely across the country, ranging from as low as $521 per month in Mississippi to as high as $1,893 per month in Washington, D.C., for a household with one 4-year-old child. This variation is even wider across counties and metro areas, as can be seen in our recently updated Family Budget Calculator.

In our fact sheets, we use state-level data from the Department of Labor and Child Care Aware of America on the cost of infant and 4-year-old care to determine child care costs for one- and two-child families. We incorporate the latest available data, in most cases for 2023, and adjust everything to 2024 dollars using the appropriate indexes.

Below, we use New Mexico as a case study to show the different data points offered in the fact sheets. As federal COVID-19 relief funding for child care stabilization grants came to an end in September 2023, New Mexico was the first of a number of states to step up and address the child care needs of working families. While these investments have already begun having positive effects, there is more work to be done.

In New Mexico, infant care remains more expensive than housing and college tuition (see Figure A). The average annual cost of infant care is more than $14,000, or nearly $1,200 a month. Child care for a four-year-old still totals nearly $10,000 per year, or more than $800 a month. We often consider housing or rental costs as the largest expense a family must face. But in New Mexico, infant care for one year exceeds rent by more than 10%.

One of the hallmarks of a middle-class lifestyle is the ability to invest in one’s children and send them to college. Families often save for years to afford public in-state tuition. Yet, infant care costs families 86% more than in-state tuition for a four-year public university.

Figure A

Infant care for one child takes up 21% of median family income in New Mexico.1 The Department of Health and Human Services considers child care affordable if it costs no more than 7% of a family’s income. This threshold would imply that only 10.8% of families in New Mexico can afford infant care. Care for two children—an infant and a 4-year-old—would take up a whopping 35.8% of median family income in New Mexico.

Minimum wage workers and early child care educators in New Mexico take on an even larger burden to cover child care costs. Figure B shows that minimum wage workers would need to spend 57% of their annual earnings just to pay for child care for one infant. Even in Santa Fe County—which has the highest local minimum wage in the state ($14.60)—it would take 46% of annual earnings to cover infant care. Further, a median child care worker would have to spend nearly half (47%) of their earnings to put their own child in infant care.

Figure B

Advocates and policymakers nationwide have been pushing for universal pre-K for decades as a way to provide dependable, free child care to families. After a decade-long campaign, New Mexico passed a constitutional amendment in 2022 guaranteeing a right to early childhood education. In doing so, they created a funding stream of about $150 million per year, most of which will help subsidize early childhood programs. Given that this amendment passed so recently, we do not expect to see the impacts of this legislation in our fact sheets yet.

This aid has helped parents and caregivers join or stay in the workforce, advance professionally, and reach financial stability. Despite significant gains for the children and families who rely upon child care, wages for the workers who administer this essential care remain insufficient at keeping them out of poverty. Policymakers should invest in this workforce by raising wages. A recent report commissioned by Organizers in the Land of Enchantment (OLÉ) estimates the first-year cost to the state of adopting and subsidizing wage and career ladders. Advocates and state policymakers can use EPIs child care fact sheets in tandem with this report to push for legislation that invests in New Mexico’s children.

Our fact sheets show that child care is unaffordable for working families everywhere in the country, and it’s even further out of reach for minimum wage workers and the very workers that administer child care. New Mexico’s investments mark an important step toward affordable child care, but investments like this are needed across the country. Further, to fully realize these investments, we must ensure that our child care workforce is well-paid, empowered to unionize and engage in collective bargaining, and able to afford the same quality of care for their own children.

Note

1. Median family income refers to families with at least one child under age 6.