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With President-elect Donald Trump set to take office for a second time later this month, the labor market could be thrown into turmoil.
Over the past two years, healthcare has outpaced all other industries in terms of growth, due in part to coronavirus-related spending. The health and social assistance sector added 902,000 jobs in 2024, about the same as the 966,000 jobs it created in 2023, according to an employment report released Friday by the Bureau of Labor Statistics.
The government sector came in a distant second place, creating around 440,000 jobs in 2024, down from 709,000 in 2023.
Elise Gould, senior economist at the Economic Policy Institute, said part of the increase in health-care jobs is also related to population growth and a sharp rise in the number of retirees.
“Medicare and Social Security have been seeing an increase in gangbusters for years,” Gould said in an interview with CNBC on Friday. “Part of it is an aging population and some of it is just population growth.”
impending change
But that could change if the second Trump administration brings new debate, particularly around mass deportations and foreign work visas. According to the Immigration Policy Institute, immigrants accounted for nearly 18% of health care workers in 2021.
“There’s already a very high demand there, and if we have mass deportations, it’s definitely going to put a cost on the services that we can provide in those areas,” Gould said. “This could create macroeconomic problems as employers reduce workers and compete with each other for workers, creating shortages that lead to further inflation.”
The government sector has been the second fastest growing sector over the past two years. Much of that growth happened at the state level, Gould said. While state-level government employees grew at a faster pace than local governments last year, the federal employee base grew at roughly the national rate.
But like health care, the government sector could see job cuts under President-elect Trump’s new Department of Government Efficiency. The Ministry for Government Efficiency is a rigorous advisory body led by Elon Musk and Vivek Ramaswamy that aims to reduce government spending.
“Removing such policies at the federal level would result in the loss of many highly productive workers, which could have a negative impact on the services they provide and obviously on the economy as a whole,” Gould said. he said. Said. “Unemployment could go up…If you damage a critical federal employee, a whole lot could happen, and if you reduce funding at the same local level, it could cause problems as well.” It’s sexual.”
Manufacturing growth — perhaps
Conversely, the Trump administration could be a boon for sectors that were among the slowest in creating jobs in 2024, such as manufacturing, mining, and forestry. Trump’s proposed tariffs could boost growth in these industries, but Gould said it’s impossible to predict how much. .
Amid concerns about rising inflation into the new year, Gould said the focus of the labor economy going forward should be on the share of income distributed to workers relative to corporate sector profits, which remains “very low.” “It’s low.”
“When workers have money in their pockets and spend it on goods and services, it facilitates the production of goods and the provision of services,” she says. “Even though productivity has improved and inflation has fallen, there is still much room for wages to rise without putting upward pressure on inflation.”
