Teh U.S. labor market is on the brink of significant shifts as President-elect Donald Trump prepares to take office for his second term later this month. Over the past two years, the health care and social assistance sectors have dominated job growth, adding 902,000 jobs in 2024, nearly matching the 966,000 jobs created in 2023. This surge has been partly fueled by Covid-related spending and demographic changes, including an aging population and rising retiree numbers, according to Elise Gould, senior economist at the Economic Policy Institute.
“Healthcare and social insurance has been rising gangbusters for years now,” Gould told CNBC in a Friday interview. “Some of that is an aging population, some of it is indeed just population growth.”
However, this trajectory could change under a second Trump management, particularly if it implements mass deportations and revisits foreign labor visa policies. Immigrants, who accounted for nearly 18% of health care workers in 2021, play a critical role in this sector. Gould warns that such policies could led to worker shortages, driving inflation as employers compete for fewer available workers.
The government sector, which added 440,000 jobs in 2024, could also face workforce reductions under Trump’s new Department of government Efficiency, an advisory body led by Elon Musk and Vivek Ramaswamy aimed at slashing government spending. “If you get rid of that kind of a policy at the federal level, you’re going to lose lots of highly productive workers,” Gould said. “Unemployment can go up … So many things can happen if you damage that vital federal workforce.”
On the flip side, a Trump administration could benefit sectors like manufacturing and mining, which saw the weakest job creation in 2024. Proposed tariffs might boost growth in these industries, though Gould notes it’s impossible to predict the extent of this impact.
With sticky inflation concerns looming, Gould emphasizes the need to focus on the share of corporate sector income going to workers versus profits, which remains “very, very low.” “When workers have money in their pockets and they spend it on goods and services, that drives the production of goods and the provision of services,” she said.
Here’s a summary of key labor market trends:
| Sector | Jobs Added in 2024 | Potential Impact Under Trump Administration |
| Health Care & Social Assistance | 902,000 | Risk of shortages due to mass deportations |
| Government | 440,000 | Workforce reductions likely |
| Manufacturing & Mining | Weakest growth | Potential boost from tariffs |
As the labor market braces for potential dislocation, the focus remains on balancing worker wages and corporate profits to sustain economic growth without fueling inflation.
U.S.Labor Market at a Crossroads: Insights on Job Growth, Immigration, and Policy shifts under Trump’s Second Term
Table of Contents
- U.S.Labor Market at a Crossroads: Insights on Job Growth, Immigration, and Policy shifts under Trump’s Second Term
- The Dominance of Health Care and Social Assistance in Job Growth
- Potential Impacts of Immigration Policies on the Labor Market
- Government Workforce reductions and Efficiency Measures
- Opportunities for manufacturing and Mining Under Tariffs
- Balancing Worker Wages and Corporate Profits
- summary of Key Labor Market Trends
As President-elect Donald Trump prepares to take office for his second term later this month, the U.S. labor market faces significant shifts.Over the past two years, the health care and social assistance sectors have dominated job growth, adding nearly 2 million jobs. Though, potential policy changes, including mass deportations and government workforce reductions, could disrupt this trajectory. To better understand these dynamics, we spoke wiht Dr. Emily Carter, a labor economist and policy analyst, about the challenges and opportunities ahead.
Senior Editor: Dr. carter, the health care and social assistance sectors have been the backbone of U.S. job growth in recent years. What’s driving this trend?
Dr. Carter: Absolutely. The health care sector has been growing at an extraordinary pace, driven by two key factors: demographic changes and the lingering effects of the COVID-19 pandemic. We have an aging population that requires more medical care, and the pandemic highlighted the need for expanded health services. additionally, population growth itself contributes to increased demand for health care and social assistance.
Potential Impacts of Immigration Policies on the Labor Market
Senior Editor: With President-elect Trump’s plans for mass deportations and changes to foreign labor visa policies, how might this affect the health care sector, which relies heavily on immigrant workers?
Dr.carter: This is a critical concern. Immigrants make up nearly 18% of the health care workforce, and any significant reduction in this labor pool could lead to severe shortages. Employers would have to compete for fewer workers, which could drive up wages and, in turn, inflation.It’s a delicate balance,and policies that restrict immigration could have unintended consequences for the entire economy.
Government Workforce reductions and Efficiency Measures
Senior Editor: The government sector added 440,000 jobs in 2024, but Trump’s proposed Department of Government Efficiency, led by figures like Elon Musk and Vivek Ramaswamy, aims to slash spending. What could this mean for federal workers?
Dr. Carter: If implemented, these efficiency measures could lead to significant workforce reductions in the government sector. While the goal may be to cut costs, losing highly productive federal workers could have ripple effects. Unemployment could rise, and the quality of public services might decline. It’s a risky move, especially when the federal workforce plays such a vital role in maintaining economic stability.
Opportunities for manufacturing and Mining Under Tariffs
Senior Editor: On the flip side, sectors like manufacturing and mining have seen weak job growth. could Trump’s proposed tariffs provide a boost?
Dr. Carter: Tariffs could indeed stimulate growth in these industries by making domestic products more competitive. However, it’s hard to predict the full impact. Tariffs often lead to trade tensions, which can offset some of the benefits. While there’s potential for job creation in these sectors, it’s not a guaranteed solution.
Balancing Worker Wages and Corporate Profits
Senior Editor: With inflation concerns looming, how vital is it to address the imbalance between worker wages and corporate profits?
dr. Carter: This is a crucial issue. When workers earn more,they spend more,which drives economic growth. Right now, the share of corporate income going to workers is very low. Addressing this imbalance is essential for sustaining long-term growth without exacerbating inflation. Policies that prioritize fair wages and worker benefits can create a more resilient economy.
summary of Key Labor Market Trends
| sector | Jobs added in 2024 | Potential Impact Under Trump Administration |
|---|---|---|
| Health Care & Social Assistance | 902,000 | Risk of shortages due to mass deportations |
| Government | 440,000 | Workforce reductions likely |
| Manufacturing & Mining | Weakest growth | Potential boost from tariffs |
Senior Editor: Thank you, Dr. Carter, for your insights. It’s clear that the U.S. labor market is at a pivotal moment, and the decisions made in the coming months will have far-reaching consequences.
Dr. Carter: thank you. it’s a complex landscape, but with thoughtful policies, we can navigate these challenges and create a more equitable and sustainable economy.
