In the lead-up to the 2024 presidential election, the potential impact on the United States job market looms large, hinging on whether Donald Trump or Kamala Harris emerges victorious.

The candidates present starkly contrasting ideologies that could shape economic policy and workforce dynamics significantly. Trump advocates for tax cuts and deregulation, promising to bolster job creation through protectionist measures like tariffs, while Harris aims to increase corporate taxes and implement more stringent regulations to support workers and reduce inequality. However, the effectiveness of either candidate’s agenda will largely depend on the makeup of Congress, which may complicate efforts to enact substantial changes.

Moreover, external factors such as ongoing conflicts in the Middle East and Ukraine could potentially further influence economic conditions and labor markets, adding layers of unpredictability. Both candidates also face the pressing issue of national debt, which stands at trillions of dollars, complicating fiscal policy decisions that could affect job growth and stability in the workforce.

As voters prepare to make their choice, the implications of this election extend beyond party lines, potentially reshaping the future of American employment for years to come.

A Second Term For Trump Could Be An Extension Of His First

A second Trump presidency would likely emphasize continuity with his previous term’s policies. The focus would be on further deregulation, particularly in sectors such as energy and manufacturing, with the intended goal of stimulating job growth.

In his terms as U.S. president, Trump’s administration significantly reduced the implementation of new regulations compared to previous administrations. Data from the American Action Forum indicates that Trump’s presidency imposed average annual net regulatory costs of $10 billion, a stark contrast to the $111 billion under President Barack Obama and $43 billion under President George W. Bush.

This approach to governance would likely remain a cornerstone of Trump’s policy agenda if he were to return to office, as he views this as a key achievement and would likely seek to build upon it.

In a 2020 speech, the former president said, “Before I came into office, American workers were smothered by a merciless avalanche of wasteful and expensive and intrusive federal regulation.” He continued, “These oppressive, burdensome mandates were a stealth tax on our people—slashing take-home pay, suppressing innovation, surging the cost of goods, and shipping millions of American jobs overseas—millions and millions and millions.”

Trump boasted about ending this “regulatory assault” on U.S. workers, stating that he “launched the most dramatic regulatory relief campaign in American history by far.” For every one new regulation issued, he pledged that two federal regulations would be permanently removed.

Trump has also proposed reducing the corporate tax rate from 21% to 15%, specifically for companies that manufacture their products domestically. This targeted reduction aims to incentivize U.S.-based production. Additionally, he intends to extend several business-friendly provisions from the 2017 Tax Cuts and Jobs Act that are set to expire. These include deductions for pass-through business entities, U.S.-based research activities and investments in machinery and equipment, which can help businesses modernize and expand their operations.

Upholding his “America First” trade principles, Trump is focused on prioritizing American interests in international trade by renegotiating trade agreements and implementing tariffs on imports. The goal is to enhance domestic manufacturing and reduce reliance on foreign products. His proposals include implementing a general tariff (up to 20%) on all imported goods, along with a specific tariff targeting imports from China (60%), which is one of the country’s major trading partners.

Trump announced that he would advocate for legislation to eliminate taxes on overtime pay if he secures a second term. He stated that this change would allow workers to keep more of their earnings when they work beyond 40 hours a week.

“The people who work overtime are among the hardest working citizens in our country and for too long, no one in Washington has been looking out for them. Those are the people, they really work. They’re police officers, nurses, factory workers, construction workers, truck drivers and machine operators,” Trump said.

However, the Harris campaign quickly responded by pointing out that during his presidency, Trump denied overtime pay to millions of workers and cautioned that if he were to win a second term, even fewer workers would qualify for overtime.

A spokesperson for the campaign stated, “Trump attempted to take away overtime pay from nearly 10 million workers, which harmed families,” emphasizing that a second term would exacerbate the situation, CNN reported.

During Trump’s presidency, his economic policies had varying effects on job creation. Prior to the Covid-19 pandemic, the economy showed positive signs, with continued job growth and unemployment reaching a 50-year low of 3.5% in September 2019. Excluding the pandemic period, the U.S. added 6.7 million jobs under Trump’s leadership.

However, when factoring in the pandemic-related job losses, the U.S. experienced a net loss of 2.7 million jobs over Trump’s entire four-year term. The unemployment rate had risen by 1.7 percentage points to 6.4% compared to when he took office. While Trump’s policies contributed to job growth and record-low unemployment before the pandemic, the severe economic downturn in 2020 negated many of these gains.

What Could Happen If Harris Wins

With her “New Way Forward for the Middle Class,” Harris envisions creating an “Opportunity Economy” that provides equal chances for all Americans to succeed. The vice president’s plan focuses on facilitating business creation and promoting wealth accumulation. She intends to achieve these goals by eliminating obstacles to economic advancement, rejuvenating local communities, stimulating job growth and driving overall economic expansion, according to her policy book.

An analysis by Goldman Sachs indicates that a victory for Harris would result in the creation of 10,000 to 30,000 more new jobs each month compared to a Trump presidency.

She has proposed a comprehensive plan to support small businesses and entrepreneurs, with the ambitious goal of generating 25 million new business applications. This initiative includes a significant increase in the tax deduction for start-up expenses, raising it tenfold from its current level—$5,000 to $50,000. Additionally, the plan aims to address and eliminate common barriers and bureaucratic red tape that often hinder small business growth.

Furthermore, Harris is looking to establish and support a network of business incubators and small business innovation hubs at various levels—federal, state, local and private—to help them and local suppliers capitalize on the broader economic benefits stemming from investments in semiconductor factories, tech hubs and other related industries.

Small businesses are responsible for employing about half of all private-sector workers, which amounts to over 60 million Americans. Since 2019, they have generated 70% of net new jobs, contributing trillions of dollars to the U.S. economy.

Harris also plans to expand the Earned Income Tax Credit (EITC) to benefit more low-to-moderate income workers. This expansion would specifically target individuals and couples without children at home, allowing them to receive a tax reduction of up to $1,500. The EITC is designed to increase take-home pay and reduce tax burdens for eligible workers.

She has expressed her support for eliminating taxes on tips, a proposal that mirrors one previously made by Trump.

According to estimates from Yale University’s Budget Lab, about 4 million Americans worked in tipped occupations last year, representing roughly 2.5% of the total workforce.

Eliminating taxes on tips could significantly benefit low-income service workers who rely heavily on gratuities. This change could reduce their tax burden, potentially improving their financial situations. It could also encourage customers to tip more generously, knowing that the full amount would go directly to the workers without being taxed.

In line with the Biden-Harris Administration’s initiatives to enhance energy security and independence in the U.S., Harris plans to continue investing in clean energy sources and technologies. This focus is expected to generate new green jobs within the sector.

Her strategy for American innovation and industrial strength aims to modernize traditional sectors like clean iron and steel production, while simultaneously investing in emerging technologies crucial for future competitiveness. These include biomanufacturing, artificial intelligence, aerospace, data centers and clean energy.

The America Forward tax credits are designed to incentivize manufacturing, farming and energy companies that actively engage with industry stakeholders, workers, unions and local communities to protect jobs, especially in the face of increasing automation. It plans to reward businesses that commit to hiring existing workers at comparable wage levels.

Moreover, Harris wants to expand opportunities by removing unnecessary four-year degree requirements for approximately half a million federal positions and promote skills-based hiring, as well as urge the business community to take action by creating clear pathways to employment that do not rely on excessive degree prerequisites.

The vice president’s commitment to raising the minimum wage and enhancing worker protections could lead to wage growth across multiple sectors, potentially stimulating consumer spending and economic expansion. However, this could also present challenges for employers, as this would mean increased labor costs for their businesses.

Harris has reaffirmed that she stands with union workers. If elected, she commits to signing significant pro-union legislation, including the Protecting the Right to Organize Act, which aims to support workers’ rights to organize and bargain collectively. She also pledges to enact the Public Service Freedom to Negotiate Act, ensuring public service workers’ right to form unions becomes federal law.

Harris also plans to implement measures to prevent employee misclassification and override “right-to-work” laws, which she believes hinder workers’ ability to freely organize. These actions collectively represent a strong pro-labor stance, aimed at strengthening workers’ rights and union power.