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With President-elect Donald Trump set to be inaugurated for a second time later this month, there could be disruption in the labor market.
Healthcare has dominated all other industries in terms of growth over the past two years, helped in part by coronavirus-related spending. According to statistics, the health care and social assistance sector will add 902,000 jobs by 2024 Friday jobs report That’s nearly as many as the 966,000 jobs that will be created in 2023, according to the Bureau of Labor Statistics.
The government sector is a distant second, creating about 440,000 jobs in 2024, down from 709,000 in 2023.
Elise Gould, senior economist at the Economic Policy Institute, said the growth in health care jobs also has to do in part with population growth and a surge in the number of retirees.
“Healthcare and Social Security have been growing strongly for years,” Gould told CNBC on Friday. “Some of that is an aging population, some of that is just population growth.”
Imminent changes
But a second Trump administration could change that, especially if it brings mass deportations and a new debate over guest worker visas. Immigrants account for Nearly 18% of medical staff by 2021, according to the Migration Policy Institute.
“The demand is already so high there that if we had mass evictions it would certainly be at the expense of what those sectors can provide,” Gould said. “Then there could be shortages that lead to higher inflation, Because employers will try to compete with each other to try to get fewer workers that may be available, it could cause macroeconomic problems.”
The government sector has been the second fastest growing sector over the past two years. Gould said most of the growth is happening at the state level. Last year, state government workforces grew faster than local ones, while the federal employee base grew at about the same rate nationally.
But, as with health care, the government workforce may be cut by President-elect Trump’s new Department of Government Effectiveness, a rigorous advisory body headed by Elon Musk and Vivek Ramaswamy , aimed at cutting government spending.
“If you eliminate this kind of policy at the federal level, you’re going to lose a lot of highly productive workers, which could hurt the services they provide and obviously hurt the overall economy,” Gould said. “Unemployment could rise … if the vital federal workforce is harmed, and there could also be problems if funding at the same local level is reduced.”
Manufacturing growth – maybe
Instead, a Trump administration is likely to have a positive impact on industries such as manufacturing, mining and logging, which will be the weakest in job creation in 2024. , but Gould said it was impossible to predict how much the increase would be.
Gould said that with concerns about sticky inflation heading into the new year, the focus of the future labor economy should be on the worker share of corporate sector income versus profits, which she said was still “very Very low.”
“When workers have money in their pockets and they spend it on goods and services, it drives the production of goods and the provision of services,” she said. “While we are seeing productivity gains and inflation falling, there is more room for wages to rise without putting upward pressure on inflation.”
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