The quadrennial presidential election of the United States of America is all set to take place in November. This election is particularly significant as it will observe an electoral rematch between the current president Joe Biden and the former president Donald Trump. It is going to be the electoral rematch in America after 1956.
Trump won the 45th presidential election in the United States. He was the President from 2017 to 2021. According to the Census Bureau, the average income of American households increased by 6.8% in 2019, during Trump’s presidential rule. Even though America saw a boost in its employment rates during his time, several policies affected the American job market in many ways.
Thus, the speculation of Trump taking office again has sparked observations amongst economists and political analysts. We took insights from various online reports and surveys on this matter. Here are the most important predictions about the job market if Donald Trump becomes president again.
Tax Cut and Its Effects
David Kass, an esteemed finance professor at the University of Maryland (Robert H. Smith School of Business) published a recent detailed report. In this report, he predicted how Trump’s election-winning can impact the job market.
According to Kass’ study, the job market in the USA can be largely influenced by whether Trump decides to follow through with his previous Tax Cut and Jobs Act (2017). The modified regulations implicated by this law reduced both corporate and personal tax rates. If this trend further intensifies, corporate businesses will have more cash influx. This could result in significant growth in businesses. On the other hand, there are concerns that only owners and executives would benefit from this move.
America First Policy
On 27th June 2024, Donald Trump made a shocking comment during the CNN-sponsored election debate. He alleged that immigrants are taking away ‘Black jobs and Hispanic jobs’. His choice of vocabulary startled many people as the phrase limited the employment situations for specific communities.
Digging deep, we can observe that Trump wants to implement the ‘America First’ policy he vouched for during his last presidency. We believe he is trying to advocate for reducing reliance on foreign labor and manufacturing. His main agendas might include renegotiating trade deals to favor U.S. workers and imposing import tariffs to protect domestic industries.
Employment Scopes
Trump’s presidency saw one of the biggest financial crises in America after the Covid-19 pandemic. Before that, he had been vocal about the consistently high employment records. In 2019, Around 157.54 million people had some kind of employment in the country. Moreover, America saw the lowest unemployment record in 2019 when only 3.5 % of citizens were without jobs. According to the Bureau of Labor Statistics, the unemployment record hit its lowest since 1969.
Probable Higher Inflation and Effects
In the post-pandemic era, President Joe Biden’s government had to witness the worst inflation in America. Economists and analysts are concerned that the situation might worsen if Trump wins the election. As Trump openly declared his anti-immigration stance, several immigrant labor-dependent sectors can face labor shortages. Plus the changes in trade policies could disrupt supply processes, making inflation a bigger risk for the country. If the rate of inflation increases, the Federal Reserve could put a hiring freeze across the nation or on certain sectors.
Regulatory Changes in Certain Sectors
Dennis Shirshikov, an experienced economist and professor at the City University of New York, has predicted some interesting insights about Trump’s potential acts as president. As per his expert opinions, Trump could make some significant regulatory changes. Sectors that might see the most changes are manufacturing, finance, and energy. Deregulation can pave the way for more profits, gradually leading to higher recruitment and increased salaries.
Job Sectors with the Most Impact
In his last presidency, Donald Trump promised to increase the number of factory jobs. As per reports, manufacturing jobs have gradually declined in the country since its last peak in 1979. Trump had worked towards changing that scenario before the Covid-19 pandemic thrashed the country’s economy. It can be assumed that Trump may want to resume his promise if he is back at the office.
Additionally, the regulatory changes may affect other sectors like energy, automobile, and finance. Reduced tax rates and relaxed norms can ease up profits for businesses.
Changes in Trade Policy
Donald Trump is known to have taken an aggressive approach regarding foreign trade policies. He was particularly rigid about the trade relationship with China. His adamant policies barred thousands of Chinese products from being exported to America. If he becomes president again, there is a high chance that America’s trade war with China might get more intense. By limiting foreign exports, Trump may aim to create more manufacturing jobs.
National Debt
Compared to Joe Biden, America was way more financially burdened during Trump’s presidency. Indeed, Trump is not entirely responsible for the outstanding debt, but he surely approved $8.4 trillion in federal spending during his tenure. This debt included the Covid-19 relief fund worth $3.6T. Plus, his TCJA move cost the federal budget an additional $1.9 trillion in debt. If Trump repeats such action after being re-elected, the country could go into a severe financial crisis, impacting jobs and livelihood.
Stock Prices
The S&P 500 stock index has seen significant growth during Trump’s rule. Considering how the pandemic affected stock prices at the beginning of 2020, Trump’s government saw a quick bounce back by the end of the year. Overall, the stock index recovered pretty well under his rule with an average growth of 33.6%. It can be assumed that America will see gains from healthy stock prices if Trump becomes president again.