Populist voters feel a sense of loss that is reshaping democracies around the world

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Overview

Across Europe, populist parties—once relegated to the political fringe—are now mainstays of national politics. Some are even winning power in the Netherlands, Sweden, Italy, Austria, and beyond. Whether left-wing or right-wing, populists share a message that resonates widely: The system has failed you, but we can take you back to something better.

What is it about this nostalgic promise that proves so powerful? In my recent research with Tyler Reny of Claremont Graduate University and Jeremy Ferwerda of Dartmouth College,1 we seek answers to exactly that question, surveying nearly 20,000 people across 19 European countries.2 We find that many of these voters support populist parties not just because of economic anxiety or ideological conviction, but also because they believe that people like them had it better in the past. This phenomenon—what we call nostalgic deprivation—captures a potent psychological undercurrent shaping European politics today.

This sentiment is not simply personal nostalgia for a golden youth. It also is the belief that one’s broader social group—defined by class, culture, geography, or political identity—has declined in wealth, respect, or influence over the past generation.3 In Hungary, Italy, Slovenia, and even parts of Western Europe, large portions of the public feel not only left behind but left out as well.

Consider the case of France, where Marine Le Pen’s right-wing populist party, National Rally, steadily increased its vote share over the past decade. Her messaging emphasized a return to traditional French values, national sovereignty, and protection from globalization. This appeal resonates strongly with voters in deindustrialized regions who feel abandoned by Paris-based elites. Similarly, in Germany, the Alternative for Germany, or AfD populist party has capitalized on eastern Germans’ sense of marginalization in the post-reunification era, painting a picture of cultural erosion and political neglect.

It is striking that this sense of loss doesn’t always align with objective reality. Certainly, many fringe party supporters experience measurable economic disadvantages.4 Yet social scientists have shown that voters’ subjective attitudes similarly predict their political preferences.5

In my own aforementioned research, we find that many people who report feeling worse-off politically or socially today are not necessarily facing personal hardship. And in countries where living standards have improved dramatically since the fall of communism, such as Poland or Slovakia, we find that nostalgic deprivation remains common. The perception—not necessarily the data or reality—is what drives political behavior.6

This helps explain the cross-cutting appeal of populism in Europe, but also in the United States under President Donald Trump. Left-wing populist parties emphasize economic injustice, while right-wing populists focus on cultural and national identity. But both speak to voters who feel that “people like me” were once more central to society—and are now dismissed by political elites.

This essay first delves into our research on nostalgic deprivation and its root causes before projecting future trends in populist support at the national level. We then turn to the implications of this political and psychological dynamic on the prospects for mainstream parties going forward.

Strong feelings of status loss drive populism’s rise

In our research, my co-authors and I find that these emotions of being left behind or worse off than they used to be are not just common, but politically potent, too. Across countries in Europe, those who feel deprived compared to the past—economically, socially, or politically—are significantly more likely to support populist parties.

We measure this sentiment by inquiring about respondents’ scaled sense of financial well-being, political power, and social status today and 25 years ago. This allows us to more precisely observe feelings of loss without querying people about it directly. Importantly, we find that these feelings vary by ideological camp: Voters on the right are more likely to feel politically deprived, believing that their group has lost voice or representation, while those on the left expressed more social deprivation—feeling less respected or valued in society.

In short, populist energy is not fueled by a single grievance. Rather, it is a shared feeling of collective decline, refracted through different lenses.

Take Spain’s left-wing populist Podemos party, which rose in prominence in response to the 2008 global financial crisis. Its leaders channeled the anger of a generation, those who felt not just economically stunted but also ignored in the corridors of power. These voters demanded redistribution of resources and restoration of dignity. At the same time, Spain’s far-right party, Vox, appealed to a very different kind of nostalgia—for a unified, Catholic Spain that many feel is disappearing amid secularization, regional devolution, and immigration. These diametrically opposed visions share a common root: a perceived loss of standing among certain voters.

Somewhat paradoxically, our research also reveals that nostalgic deprivation is most impactful where populist parties are not in power. In these countries, populists can make sweeping promises to restore what was lost. But once they hold office, their ability to fulfill these promises is constrained. Subsequently, their supporters, faced with present-day responsibilities rather than a symbolic mission of revival, tend to report less deprivation—and, sometimes, less enthusiasm.

Hungary offers a partial exception. Prime Minister Viktor Orbán has managed to retain a populist appeal despite being in power for more than a decade. He does this by continuously identifying new external enemies—EU bureaucrats in Brussels, George Soros, immigrants—and presenting himself as a defender of Hungary’s authentic identity. Yet even in Hungary, some signs suggest that the emotional force of nostalgic deprivation is gradually waning, as allegations of corruption accumulate and the image of Prime Minister Orbán transitions from insurgent to establishment.

This, however, does not mean populist movements will fade once in office. If anything, it shows how resilient and adaptable they are. As long as voters continue to feel overlooked or disrespected, there will be a market for political actors who promise recognition.

Nostalgic deprivation is widespread across European nations

Our research finds that a sense of lost wealth or economic stability is most prominent in EU countries with the highest overall reported levels of nostalgic deprivation. By contrast, among those countries with lower overall reported deprivation, we find that perceived loss of social status is more conspicuous. The sense of lost political power is, on average, the least common form of deprivation expressed.

Figure 1 below shows that a sense of nostalgic deprivation—be it economic, political, or social—is widespread among European citizens. Panel A plots the proportion of respondents expressing economic, political power, and social deprivation in each country studied, with each dimension of deprivation rescaled between 0 and 1. Panel B examines the demographic characteristics of those respondents reporting the highest levels of each type of deprivation (75th percentile or higher within each country). Each point in Panel B indicates how the demographic characteristics of economically, politically, or socially deprived individuals, respectively, deviate from the full sample of respondents. Values to the right of the red line indicate cases where a group experienced more deprivation than all survey respondents as a whole within countries, while values to the left of the red line indicate cases where a group experienced less deprivation. (See Figure 1.)

Figure 1

Respondents’ indication of type of nostalgic deprivation they feel, by EU country and demographic groups

As Panel A shows, the lowest rates of nostalgic deprivation are found in Denmark, where approximately a quarter of respondents indicated of deprivation to some extent, while the highest is in Slovenia, where roughly half of respondents do. Notably, the countries exhibiting the highest overall levels of deprivation—Slovenia, Italy, Hungary, and Bulgaria—were governed by populists during the survey fielding period. A clear exception to this pattern is Poland, which was governed by the right-wing populist Law and Justice party at the time of fielding our survey but displayed deprivation scores more consistent with its Baltic neighbors not governed by populist parties.

Still, when we aggregate the measure of deprivation, we find that respondents moving from the minimum to the maximum level of nostalgic deprivation would be 55 percentage points more likely to express populist attitudes in Western Europe and 29 percentage points more likely to do so in Eastern Europe. With respect to voting, the difference between locations is even sharper: We estimate that those citizens moving from the minimum to the maximum on the deprivation score would be 57 percentage points more likely to vote for a populist party in Western Europe and 17 percentage points more likely to support a populist party in Eastern Europe. The weaker results in Eastern Europe for this measure likely reflect that many populist parties in this region were incumbents at the time the survey was fielded.

Demographically, we find that those perceiving lost political clout are more likely to be men, while those perceiving lost economic stability are more likely to be women. We also see that socioeconomic indicators, such as people’s jobs, homeownership rates, education levels, and incomes are strongly correlated with economic deprivation and, to a lesser extent, with social deprivation. Perceived lost social status is notably correlated with age, with older respondents indicating elevated rates, and negatively correlated with living in a rural environment.

Despite these findings, however, the broader correlation between nostalgic deprivation and demographic characteristics remains relatively weak. In other words, on average, citizens who express high levels of deprivation are demographically similar to citizens who do not view their situation as pessimistically. High levels of nostalgic deprivation are evident in Western Europe, but also in Eastern Europe, where living conditions have improved more substantially over the past 25 years.

Potential for future support for populist parties

Which countries are most susceptible to far-right appeals in the future? Table 1 below lays out each country’s average score on the three separate attitudinal predispositions that, according to my research, are correlated to nostalgic deprivation and best predict far-right support: illiberal attitudes, or opposition to democratic principles; ethnocentrism, or the tendency to view one’s own culture as superior to others; and perceptions of demographic change, such as that caused by immigration.7 I add these scores together into a scale of far-right “vulnerability” (rescaled so that the highest vulnerability score is 1.00) to estimate how fertile each country’s public attitudes are toward far-right rhetoric and ideas.8

As Table 1 shows, we find much higher vulnerability to the far-right in Eastern Europe and much less in Western Europe, with the notable exceptions of Austria and France. (See Table 1.)

Table 1

Scale of citizens’ attitudinal predisposition to far-right populism based on three predictors of support, by EU country

To identify the unrealized potential of far-right and far-left parties in different EU countries, my colleagues and I created a model that uses demographic and attitudinal data to predict which current mainstream center-left and center-right party supporters would be most likely to defect to the fringe in the future. We examine the average demographic and attitudinal characteristics of far-left and far-right supporters, as well as those of current center-left and center-right supporters who our model predicts would support the far-left or far-right down the road.

Looking at the far-right, there remains a substantial share of the population—about 4 percent of our sample—who do not currently support the far-right but are more ethnocentric, ideologically conservative, authoritarian, and illiberal than current far-right supporters. With the far-left, we also find that there is a substantial share of people—about 10 percent of our sample—who are young, single, low-income, and are relatively illiberal, and who could be persuaded to back the far-left in the future.

As such, there is modest potential for growth in support for the far-right, and potentially even more growth for the far left, across most of Europe. These findings suggest that Europe’s fringe parties have not yet peaked and still have room to grow. (See Table 2.)

Table 2

Predicted unrealized support for far-left and far-right populist parties, by European country

A dilemma for mainstream political parties

For mainstream political parties, the power of subjective feelings associated with fear, loss, and exclusion—feelings that are often separate from the empirical realities of the voters who express these emotions—creates a dilemma. Technocratic solutions, policy proposals, and Gross Domestic Product growth alone will not restore trust among these voters for the “establishment.”

Instead, what is needed is a reengagement with the emotional fabric of democratic life—an understanding that people vote not just with their wallets or ideologies, but also with their sense of belonging. That task is harder than it sounds.

But even though recognition cannot be legislated, it can be modeled through inclusive rhetoric, genuine consultation, and policies that reflect more than just economic efficiency. Political elites must find ways to speak to the diverse sources of dignity and identity that citizens hold dear to reassure these voters about their place in an uncertain future. This means attending not just to material needs but also to symbolic ones: the desire to be seen, heard, and respected.

Center-right and center-left governments would do well to design and effectively communicate policies that seek to rein in globalization’s excesses without diminishing the benefits of connected open markets. They should manage the flows of migration with selective, strategic admissions systems that identify newcomers best positioned to contribute to national goals.

Ultimately, though, these policies must also be laden with meaning. They must recognize that identity, history, and belonging are not just cultural touchstones—they are political forces as well. A politics of recognition does not mean pandering to prejudice. It means acknowledging the ways that people define themselves and making sure that diverse identities can find affirmation within a shared democratic project and shared national goals.

In this sense, nostalgic deprivation is not just a warning sign. It also is an opportunity to reflect on how democratic systems can better include those who feel excluded so as to create a future that people feel is truly theirs—rather than something they simply endure.

Conclusion

Europe’s experience with populism holds lessons for the United States, where similar trends are evident. Nostalgic slogans, polarized media, and a growing divide between urban and rural identities all contribute to a familiar feeling: the sense that “my” group once mattered more and now matters less.

In the United States, President Donald Trump’s “Make America Great Again” movement explicitly invoked this narrative.9 Because the MAGA movement needed to navigate the U.S. two-party system, its populism is awkwardly married with the Republican Party’s religious conservativism and aversion to taxing wealth. But ultimately, Trumpism is essentially about restoring lost political, economic, and cultural status10—even though, as in Europe, the appeal of this message does not always correlate with objective deprivation.

Populist voting is ultimately a reflexive response to rapid societal change. And both in the United States and in Europe, the past two generations have experienced rapidly increasing ethnic and religious diversity,11 which has eroded the position of formerly dominant demographic groups, leading to fears of reduced social status—or, at the extreme, “replacement” by immigrant populations. Concurrently, the consolidation of corporate power and deunionization in Europe and the United States has produced widening economic inequality, greater economic insecurity, and diminished prospects for socioeconomic mobility.12

Grievances associated with these cultural and economic transformations are commonly connected to growing support for far-right and far-left political movements, respectively. Yet both sets of grievances are linked to globalization—the expansion and intensifying interconnectedness of human migration and markets. The research my co-authors and I have done shows that while right- and left-wing populist platforms may ultimately reach different targets and point to different scapegoats, they appeal to voters with similar feelings about their own place in society and the economy.

Understanding these emotions isn’t an endorsement of its political outcomes. But ignoring them is perilous. Democracies depend not only on participation, but also on a shared belief in a system that sees and values everyone. When that belief erodes, the ground becomes fertile for those who claim they can restore what was lost—even if they cannot.

About the authors

Justin Gest is a professor of policy and government at George Mason University. He previously was a postdoctoral fellow and lecturer in Harvard University’s Departments of Government and Sociology. Gest earned his bachelor’s degree in government at Harvard University and his Ph.D. in government from the London School of Economics.


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Threats to social status and support for far-right political parties

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Overview

Once on the political fringes, far-right parties have become established actors in many democracies. The European Parliament election in 2024, for example, resulted in far-right parties receiving more than 20 percent of the vote, and far-right parties are now represented in nearly all national parliaments in Europe. Outside of Europe, the far right has been in government in countries such as India, Israel, and Brazil. The current Trump administration in the United States also is dominated by far-right actors.

For a long time, one main research question on the political success of far-right parties was why is the far right successful in some countries but not in others? Some countries, such as Germany, were even considered immune to the contemporary far-right threat due to their particular national history.

It has now become clear that no country should be considered immune to the appeal of the far right. A mix of factors that is common to all post-industrial democracies has created a fertile ground for their political successes. Cases such as in Germany or Portugal show how quickly far-right parties can become established actors in national politics and receive a significant share of the vote.

It is thus not surprising that the rise of the far right has sparked considerable interest among researchers, commentators, and the broader public. Explanations for its success have often either focused on economic or cultural explanations. These explanations were often pitted against each other. But it is becoming increasingly clear that economic and cultural concerns are deeply intertwined among the supporters of far-right parties and across the broader electorate.

People do not necessarily separate these issues in their everyday lives—they see them as part of the same story about what is happening in the world around them. Rural resentment against urban elites has underpinnings of economic inequalities but, at the same time, is fueled by racial stereotypes and White identity politics.13 Competition in housing markets or underfunded schools can be regarded as the result of neoliberal economic policies, but they can be rhetorically connected to immigration, too.

A core idea for understanding how economic and cultural concerns are intertwined is as threats to social status.14 Social status as a concept dates back to the classic work of the early 20th century German sociologist Max Weber. It can be understood as peoples’ sense of value based on their position in society. While concepts such as class and socioeconomic status often refer to “objective” material values, such as levels of income and wealth, social status goes beyond material concerns and is based on a shared form of recognition across a society.15

Importantly, social status is not something that just exists in peoples’ heads: People experience tangible benefits or harms based on their social status. Social status determines how you are treated by others, how you can perform in certain contexts, and your access to different networks and social circles. 

Typical sources of social status include education and occupation.16 Education and occupation do not only matter because they generate more or less income. They also come with different levels of prestige and power in society. Gender, race, and sexual identity similarly come with different levels of social status in society.

A growing body of research now suggests that when people see their social status threatened, they become more likely to support the far right. Importantly, the core group of supporters for the far right are not necessarily those who see themselves at the bottom of social hierarchies already but are those that perceive that they have something to lose.

Threats to social status can be both economic and cultural. They include developments that challenge a position in society that people value. These can be material economic risks that make it more likely that one’s standard of living will become significantly worse.17 But they also include transformations of roles in society.

Gender (being a man) and race (being White) were historically important sources of status in society. These roles as a source of status have been challenged in recent decades, and White men see their social status as threatened. Research by Princeton University’s Noam Gidron and Peter Hall at Harvard University, for example, demonstrates that compared to the early 1990s, the subjective social-status perceptions of men without a college degree have strongly declined in many countries in Europe and in the United States.18

In this essay, my focus is on economic sources of threats to status, focusing not on the effects of material hardships leading to more support for the far right, but rather on how economic changes and risks can contribute to a sense of potential loss of roles and routines that provide people with value, meaning, and identity. I focus on two economic threats to status: unemployment risk and rental market risks. Both a higher risk of unemployment and rising local rents contain a threat to (disposable) income and wealth. But these threats go beyond that, because people potentially will have to give up things that create a sense of value in their lives: their job, the areas in which they live, and the social circles in which they interact.

This essay summarizes my research on how economic threats to social status in the form of unemployment risk and rental market risk affects support for the far right in Europe.19 My work with collaborators shows that when people face a higher risk of unemployment, they become more likely to support far-right political parties. Within a household, one member at a high risk of unemployment is enough to increase support for the far right among both members of the household. Similarly, when people face increasing local rent prices—independent of the rent that they actually pay—they also become more likely to support the far right.

A focus on threats to social status helps answer one central question in the current ascent of the far right: Why do people who face adverse economic conditions vote for a party of the far right instead of a party of the left? Put differently: Why do people in these circumstances not support parties that would arguably provide better policy solutions for them? Why do they not support parties that promise labor market and rental market protections, better unemployment benefits, and rental controls?

There are many answers to these questions, and some are certainly related to social democratic and other center-left parties losing credibility on actually providing solutions to these issues.20 But beyond this, social status as a concept allows us to understand why far-right appeals resonate so well with people facing economic risks.

How threats to social status in labor markets affect support for the far right

A major source of threats to economic status is the risk of unemployment. Crucially, the focus here is on risk. In my research, I find that it is not economic hardship but the latent threat to livelihoods that matter for far-right support. My co-authors and I argue that when people are afraid of losing their jobs, their social status is threatened, and they become more likely to support the far right.

But we do not regard unemployment risk as a factor that only affects individuals. We also take into consideration that households are crucial sites for the formation of political preferences. When someone has a partner at a higher risk of unemployment, this affects their perceptions of threats to their social status—even if they themselves are relatively well-protected against unemployment.

We combine two data sources to test how unemployment risk affects support for the far right. We follow a common research approach, measuring unemployment risk as the share of people in an occupation (of the same age group and gender) who are unemployed. We can estimate this share based on a large-scale labor market survey, the EU Statistics on Income and Living Conditions, or EU SILC.21 Research indeed shows that there is a link between this objective measure of unemployment risk and subjective perceptions of risk.

Based on a standard categorization of occupational groups, the International Labour Organization’s International Standard Classification of Occupations, we can combine the data on unemployment risk with survey data from the European Social Survey.22 These survey data include information on voting behavior, as well as on household composition and partner’s occupation. We analyze data for 11 European countries from 2002 until 2018,23 limiting our analysis to the working-age population between the ages of 18 and 65. We find that with increasing unemployment risk, people become significantly more likely to support a far-right party. (See Figure 1.)

Figure 1

Predicted probabilities of voting for a far-right political party, conditional on unemployment risk, among working-age population in 11 European countries

Holding a number of factors constant, when a person is at a higher risk of being unemployed, they show a higher propensity to vote for the radical right. Figure 1 shows that the predicted probability to vote for a radical right party increases from 0.06 to 0.15 with unemployment risk moving from low to high. Considering that the baseline probability to vote for the radical right is low in our sample—there are many countries that, before the 2010s, only saw very marginal radical right support—this is a substantive increase.

In our research, we are not only interested in how an individual’s unemployment risk affects their propensity to support the radical right but also how it interacts with a partner’s unemployment risk. We find that a partner’s risk also significantly affects someone’s likelihood to support the radical right. This is true for men and women. With the increasing risk of a partner being unemployed, people become more likely to support the far right. Even for people with relatively low unemployment risk themselves, if their partner has a high risk of unemployment, then they are more likely to support the far right.

In other words, one person at high unemployment risk in a household creates two radical-right voters.

How threats to social status in rental markets affect support for the far right

As a second threat to social status, we have investigated what we label rental market risk to social status linked to developments in local rental prices. Local rent increases constitute a significant risk to the economic and social foundations of people’s lives. When people see rents in their neighborhoods rising, they know that they potentially might not be able to continue to afford to live there in the future. This constitutes a threat to many aspects of a person’s life. Having to move can mean longer commutes to work, switching kids’ daycare or school, or being farther away from friends and family.

Consequently, local rent increases constitute a status threat independent of actual rent levels. Some rental markets, such as those in Germany, provide quite high protections for renters. Fixed-term contracts are rare, rent increases are regulated, and only under special circumstances (such as moving into a place themselves) can landlords terminate leases.

But even in these relatively protected circumstances, people are aware that changing life events (such as having kids) or landlord decisions to renovate a place or to move in themselves can quickly expose them to the new realities of a rental market. We thus expect rental market risk to increase support for the far right.

In our empirical analysis, we combine fine-grained data on rental price developments at the lowest ZIP code level with a long-running German household panel survey.24 If we just compare areas cross-sectionally, we find the patterns that we would expect. In high-rent inner-city areas, people are more likely to support left-progressive parties. This can largely be explained by highly educated professionals (a core electoral group of the progressive left) being more likely to move to areas with high rents. By contrast, far-right parties are strong in more rural areas and in eastern Germany, where rents are lower on average.

Our data, however, allow us to go beyond such comparisons. We can investigate how changing local rents affect people who already live in a neighborhood. We study people who have lived in the same neighborhood for at least 5 years and can thus analyze how changing local rents affect their party preferences. We focus on what researchers define as within-individual variation over time: We look at how the political preferences of the same person change when they are exposed to changing rent prices in their neighborhood.

We find that where local rents increase more, people with lower levels of income become significantly more likely to support the far-right Alternative für Deutschland. This is particularly pronounced in urban areas, where these changes can happen more rapidly and are easily observable through changing neighborhood compositions.

Importantly, we do not find that actual rent levels affect support for the AfD. Rather, it is rental market risk in the form of changes in local rent prices that matters for support of the far right.

Why these finding about the far right and social status matter

Our research shows that threats to social status in the form of unemployment risk and rental market risk significantly increase people’s propensity to support the far right. Crucially, we do not find actual economic hardship—unemployment status and rent levels—to matter in these contexts, but rather the latent risk of losing social status. This is in line with other work on the risk of losing jobs to automation.25 People become more likely to support the far right when they see their living conditions threatened, not necessarily when they have already experienced loss and hardship.

This means that the common narrative of populist far-right supporters as the “left behind” might create a wrong image of who these voters are. Far-right supporters are better understood as the people in the lower middle classes and the so-called petite bourgeoisie—the owners or managers of small businesses who are not struggling to provide the bare minimum for themselves but rather have accumulated material and cultural sources of status that they now see threatened.

Importantly, these people do not support the far right because of the its policy proposals. People who are at higher risk of unemployment do not support the far right because they think that the far right has the best labor market policies, nor do people facing increasing local rents embrace the far right for their housing policies. Far-right support in response to threats to the current social status of people should thus not be understood as an instrumental wish for better policies provided by these actors.

Instead, people seek out the far right to reinstate a social order that guarantees their privileged place in it. It constitutes a nostalgia for a time that maybe never existed. Far-right parties receive support among these voters not for their promises to change policy but for their promises to change politics and polity.

Left-wing and progressive parties do not currently provide any such appeals at scale. They have become parties of policy.26 They see and portray themselves as solving problems and providing incremental changes to small-scale questions. They value pragmatism over ideology. The answer to the question of why economic risk does not translate into support for the left lies—at least partially—in this discrepancy between demand and supply.

Conclusion

What can we learn from the relationship between threats to social status and far-right support for current developments in European and U.S. politics? In particular, what are the lessons for those who are interested in crafting economically and socially progressive policy agendas and who want to defend liberal democracy against the threat from the far right?

First, our findings show that the economy certainly matters for understanding support for the far right. But those findings also should caution against a reductionist and materialist understanding of far-right support. Economic hardship is not a necessary condition for someone to support the far right: Far-right support does not disappear in economically good times.

Indeed, racism, sexism, antisemitism, and anti-LGBTQ+ attitudes remain at the core of far-right support.27 We can find these sentiments across all class groups and across all levels of education. The far right as a political, cultural, and social project has successfully linked perceptions of threats to economic well-being with hostility toward minority groups. But this does not mean that if progressive policymakers reduce economic uncertainty, people will necessarily reduce their hostility toward these groups. Racism, sexism, and transphobia have become essential building blocks of some voters’ political identities and have become normalized as elements of political discourse.

Economic and social policies will not be enough to reverse these dynamics. Yet economic policies do matter. The erosion of a social safety net, the decline in public services, and the deterioration of government-provided health care that have resulted from austerity policies have significantly contributed to creating grievances that the far right can exploit.28 Continuing these policies means creating a steady or growing reservoir of far-right voters. Shifting away from these policies is a necessary part of a strategy to reduce far-right support.

At the same time, it should be clear that this is a long-term, not a short-term, strategy and that it is a necessary but not a sufficient condition to contain the far right. As Columbia University’s Alexander Hertel-Fernandez and Shayna Strom, the president and CEO of the Washington Center for Equitable Growth, have argued in this series, “thin deliverism” will not work.29 The sources of far-right support are too structural. Too many politicians still believe that solving problems will immediately reduce the appeal of the far right. This won’t happen.

The far right is here to stay for the foreseeable future. Politicians and activists need to embrace the long-term challenge. In the short term, questions of politics and polity will be more important to protect liberal democracy from the far right. But economic and social policies will play an important role in shaping the conditions for far-right party support in the long run.

About the author

Tarik Abou-Chadi is a professor in European Union and comparative European politics at the Department of Politics and International Relations at the University of Oxford’s Nuffield College.


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A place-based economic development strategy to foster rural U.S. prosperity

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Overview

Whether one lives in a city of 2 million people or a town of 2,000, we all want to live in healthy and thriving communities, to have the chance to move forward in life, and to be free from the worry about “just getting by.” That is why it is important for policymakers to have a strategy for investing in rural areas of the United States.

The prevailing myths that persist around rural America can distort policy choices, however, making it difficult to secure both public and private investments in rural places. Economic growth thus can elude these communities, even as the national economy grows. This, in turn, can lead to resentment among rural residents, which right-wing populists may exploit as they seek to vilify the people in power.

A place-based strategy for investing in rural America calls for using data and building capacity within rural communities to develop their existing assets so they can better plan and manage their future economic growth. This strategy would help federal policymakers center rural places when developing policies, while at the same time offering a counterweight to the rise of right-wing populism by giving the residents of rural communities voice and agency to determine their paths to prosperity.

This essay details how a three-pronged, place-based strategy to spur economic growth in rural communities across the country boasts proven success stories in recent years. But first, I will address the myths about rural America that get in the way of effective economic policymaking, then present the facts about local rural economies and the models for successful rural economic development. I close with two salient examples of public-private partnerships investing with success in distressed local economies in eastern Kentucky and northwestern Mississippi.

These are just two examples of viable roadmaps to support place-based rural economic development. These models can be used across the nation to bring the assets and aspirations of rural Americans into the economic policymaking process by giving them agency to lead economic development in their own communities.

Misplaced myths about rural America today

Rural areas, which exist in every state of the union, are vibrant and diverse.30 Not surprisingly, this description often runs counter to the prevailing view of rural America. Several myths about rural America dominate this narrative, painting a misleading and limiting picture.31 Let’s first highlight three prevailing facts about these communities.

Rural counties are racially diverse

While White people do make up a larger share of the population in rural counties, the myths that rural America is all White and that communities of color live only in urban areas do not hold up.32 African Americans represent 7 percent of the population in all rural U.S. areas, but they make up nearly 16 percent of the rural population in the South.33

Rural economies depend on jobs across a variety of sectors

Agriculture is important in rural counties, but other sectors—including government, manufacturing, retail trade, and accommodation and food services—employ many rural workers. Indeed, 41 percent of rural jobs are in the service sector, while just 7 percent are in the agriculture sector.34 The recreation-related and accommodation and food services sectors have experienced the most job growth relative to other sectors in rural areas since the end of the COVID-19 pandemic in May 2023.35

Many rural communities are thriving

This is particularly the case when it comes to entrepreneurship and the tech sector. Rural areas are worth investing in, contrary to beliefs that such investments do not pay off. There are many rural communities—among them Pine Bluff in Arkansas, Independence in Oregon, and Marquette in Michigan—where local communities are using existing technological infrastructure to build innovation hubs, strengthen entrepreneurship-support networks, and develop agriculture technology projects.36

Combating rural resentment through recognition of the value of place

For too long, both the public and private sectors have underinvested in rural communities because investing in these places was deemed inefficient and there is a belief that investments will not scale. This has led to these communities and their residents being unable to achieve their full potential.

This dearth of investment is one key reason for the rise of populism in rural communities because residents feel excluded from the policymaking process and believe their interests have been ignored by urban residents—and especially urban elites, who, by and large, misunderstand the economic realities and potential of rural America—creating a rural-urban divide. While this divide is not a recent phenomenon, the chasm that has developed has widened within the past decade in the United States.37

While rural areas have supported President Donald Trump at increasing levels in the past three presidential electoral cycles,38  this has not translated into policies that benefit these places. One of the current Trump administration’s first actions was to freeze funding that helps rural communities advance economic development initiatives, such as high-speed internet, clean energy investments, and climate-smart agriculture programs.39

While some of the funds were eventually released, the second Trump administration has continued its hostility specific to clean energy investments that benefit farmers and rural communities by cancelling application windows for the Rural Energy for America Program.40 This and other programs funded through the Inflation Reduction Act supported clean energy and energy efficiency upgrades that lowered costs for farmers, households, and rural small businesses.

In addition, the U.S. Department of Agriculture announced in July 2025 a reorganization plan that will cut staff in its Washington, DC offices by more than 50 percent and relocate them to five metropolitan cities throughout the country.41 During President Trump’s first term, the administration relocated two USDA research arms—the Economic Research Service and National Institutes of Food and Agriculture—which led to a significant exodus of employees and decimated those institutions.42 Combined with the existing cuts to the field offices in small towns throughout the country, this will further limit investments to rural U.S. communities.

To promote rural prosperity, policymakers need to embrace a comprehensive economic development strategy that relies on a proper accounting of rural America and the plethora of assets in these communities. This strategy can stem the rise of right-wing populism by affirming identities related to place through asset mapping and providing agency to communities through residents’ involvement in policy development and implementation.

This strategy recognizes that talent is geographically distributed, but opportunity is not. It targets the most distressed communities and helps policymakers recognize that all communities have assets. It gives voice to the residents of these communities, uses data and builds capacity to effectively target public- and private-sector investments, and provides a platform for philanthropic sectors to invest their dollars to partner with these communities.

Defining the economic well-being in rural America

Part of the lack of understanding of the realities about rural America is that there is no single definition of “rural.”43 In fact, various federal agencies use 12 different official definitions of rural areas. The two most common definitions, from the White House Office of Management and Budget and the U.S. Census Bureau, are based on whatever is not considered urban or metropolitan.

The Office of Management and Budget uses metropolitan status, while the Census Bureau uses population density within a specified geographic unit. Rural itself is undefined. This leads to significant struggles in rural communities often hidden from the larger picture of the national economy. Two telling statistics: 85 percent of counties with persistent poverty have entirely rural populations, and over the past 30 years, these counties have had a poverty rate of at least 20 percent.44 In many of these counties, the poverty rate has exceeded 20 percent for longer than that.

Rural communities score poorly on other measures of well-being as well. The Economic Innovation Group’s Distressed Communities Index relies on seven indicators to measure economic well-being, including:

  • Educational attainment: The share of the population ages 25 and older without a high school diploma
  • Housing availability: The share of habitable housing that is unoccupied
  • Labor market vibrancy: The share of the prime-age population that is not currently employed
  • Business creation: The percent change in the number of business establishments over the past five years
  • Income levels: The median household income as a share of metro-area median household income
  • Changes in employment: The percent change in the number of jobs over the past five years
  • Poverty rate: The share of the population below the poverty line45

Based on the results, U.S. counties are sorted into five categories or quintiles. The top category is defined as Prosperous, followed by Comfortable, Mid-tier, At-risk, and finally, Distressed. As of 2018, roughly one-quarter of all rural counties—the greatest share in any category—are considered distressed. (See Figure 1.)

Figure 1

Percent and number of rural counties within each category in the Distressed Communities Index, 2018

Why there are so many distressed communities in rural America

The early 20th century saw the rise of industrialization, which led to the migration of many rural workers and their families from rural agricultural towns to urban cities.46 Then, during the late 20th and early 21st centuries,47 many U.S. firms relocated overseas, where they were able to take advantage of cheaper labor, affecting both urban and rural areas.

Consolidation in various industries amid this massive corporate offshoring led to the extraction of value—of both natural resources and labor—from rural areas,48 while diminishing labor market opportunities for rural residents. This consolidation led to a rise in what economists define as monopsony power (where an employer sets wages below a competitive market wage), and this further diminished labor market opportunities in rural places.49 Urbanization, along with globalization, led to lower demand for rural labor as employers looked elsewhere for higher-skilled labor.50

In addition, private capital seldom reaches these communities. Rural businesses receive less than 1 percent of all venture capital, even though 20 percent of the U.S. population lives in rural areas.51 Similarly, philanthropies direct just 7 percent of their spending to rural areas.52 Readily available capital has been further limited by the drop in the number of rural community banks, often forcing rural businesses to rely on personal savings to grow.

Then there’s the steady decline in the federal workforce devoted to rural America. Reductions in the federal workforce is now a salient issue at the start of the second Trump administration and the launch of its White House-based Department of Government Efficiency. Yet reductions and reorganizations at federal institutions focused on rural populations, such as the U.S. Department of Agriculture, have been ongoing since the Clinton administration and its National Performance Review initiative.53 This policy significantly reduced and continues to reduce the number of field offices of federal agencies, many in rural areas.

Population declines in certain rural areas,54 especially those communities that are more remote and not near a major metropolitan area, also contribute to challenges as lower demand for hospitals,55 schools,56 and grocery stores results in residents’ difficulty accessing needed services and, in turn, make these communities less appealing to potential residents. For those residents who do not or cannot leave, there can be a feeling of abandonment that steers blame toward policymakers.57

Taking all these factors together shows how the national economy has left many of these communities behind, opening the door for political support of right-wing populist ideals. Now, let’s turn to proven strategies to reverse these trends.

Reversing disinvestment in rural America

While many rural communities are struggling, others are doing well and some are beginning to experience prosperity. Between 2000 and 2018, several rural counties experienced budding prosperity, as measured by the Economic Innovation Group’s most recent Distressed Communities Index.58

Many of these counties are in the Upper Midwest and Northern Plains regions, both of which tend to be heavily involved in natural resource extraction. One example is the fracking boom of the early 21st century, though this industry is susceptible to boom-bust cycles.59 Other prospering counties include rural places that are part of a collection of growing exurban counties around metro areas, buoyed by population growth.60

So, let’s now look at how other rural communities could create paths to their own economic prosperity.

Place-based policy strategy

To help combat the disconnection that many rural areas have from the national economy, it is important to recognize the assets that exist in all rural communities and to develop place-relevant programs to leverage these assets. While some rural communities are more prosperous than others, every rural community has assets that make it worthy of investment.

One such asset is the people in these places who are talented and have ingenuity but do not have the opportunity to showcase it. Building off the Community Capitals Framework, which measures quality of life in communities,61 the Urban Institute developed a taxonomy of rural community assets that highlight the diversity of rural places.62 These assets include energy-rich areas, high-employment agricultural areas, areas with high civic engagement, areas with strong institutions (such as institutions of higher education and community facilities), and areas with natural amenities (such as national and state parks).

Understanding the assets available in rural areas will foster effective investment that can unleash the potential of these communities and their residents. More specifically, highlighting the assets present in rural communities can show private investors how directing capital to places with relevant assets can provide necessary infrastructure or produce a robust return on their investments.

A three-part strategy can promote effective economic development for rural communities:

  • Pairing a data-driven approach to target investment efficiently with a community engagement approach so communities can determine their own paths to prosperity
  • Building rural towns’ administrative capacities to facilitate the disbursement of funds and development of projects in their communities
  • Creating a public-private partnership framework to foster investments from the private sector and philanthropy

Let’s now examine each part in turn, after which I will give two recent examples of these three strategies acting in tandem.

Pairing a data-driven approach with community engagement

The first part of the strategy starts with a data-driven approach that can help target the communities most in need of the resources that can facilitate either public or private investment. Several economic indicators, including persistent poverty and the seven components of the Distressed Communities Index, point to communities in need of resources. These indicators can be paired with data on any federal programs providing resources to these communities, such as basic water and wastewater infrastructure services and high-speed internet access, as well as economic development programs, such as clean energy investments and business technical assistance. 

Some of the rural communities with persistent poverty may qualify for specific additional resources. But sometimes these communities do not get any resources, which means that federal resources are not getting to the places with the greatest need. To avoid this result and prioritize the communities most in need, policymakers and stakeholders can use these indicators to identify communities and the resources they need to facilitate investment.

Resources such as workforce development initiatives, basic infrastructure, and technical assistance for local businesses can shift the outlook and put them in a position to prosper. As discussed by Upjohn Institute economist Tim Bartik in his recent paper for the Washington Center for Equitable Growth, one example is building business-specific infrastructure, such as high-tech research parks alongside industrial access roads that can facilitate the movement of supplies, workers, or output.63

Once communities are selected, engagement with the residents in these communities is vital so that they feel that policy development and execution is done “with them” and not “to them.” This is important so that residents can see that the federal government is centering their needs and honoring their lived experiences, rather than acting on behalf of economic elites alighting in their communities from elsewhere in the country.

Several federal agencies have regional and field offices where members of rural communities can work directly with agency officials to learn about available resources, point out the needs of their communities, and drive investments. Partnerships between federal and local officials can create a blueprint to drive investment and funding for projects in these communities.

Building administrative capacity in rural areas

The second part of the strategy recognizes that directing investment toward rural areas is not as simple as just sending money to these communities and their residents. A town must have the capacity to secure public investment, as well as receive and manage those resources. Many small towns do not have grant writers who know how to navigate 100-page federal applications or experts who can write feasibility studies. It also is difficult for private businesses and entrepreneurs to get loans or loan guarantees when they often live in a banking desert.64

Small towns in rural areas need a strategy to build their administrative capacities. It is therefore imperative to connect rural communities to institutions—whether federal, state, or local government entities or nongovernmental organizations—that have the resources to help these communities access investment dollars. Many large metropolitan areas have planning departments that guide cities when they apply for federal funding, for instance. Creating a similar structure supported by the federal government for small towns and rural areas would help foster investment and growth.

Fostering public-private partnerships

The third part of the strategy recognizes that it is not solely the role of the federal government to foster economic development in rural areas. The private and philanthropic sectors can play vital roles. Yet these groups often do not know where or in whom to invest. There is therefore a need to create a unique public-private platform that can connect these groups with projects in rural communities.

The first two parts of the strategy naturally lead into this third part, where collaboration between federal and local officials in determining the needs of their rural communities and developing projects for these communities can provide an avenue for the private and philanthropic sectors to bring their resources to bear.

This three-part strategy in action

Two federal programs launched by the Biden administration exemplify these three strategies in action together in rural America. One is the Recompete Pilot Program, with one telling initiative in eastern Kentucky. The other is the Rural Partners Network initiative, with a successful effort to highlight in Mississippi.

The Recompete Pilot Program

The Recompete Pilot Program is part of the CHIPS and Science Act of 2022, with a special focus on rural places.65 One of its projects is the Eastern Kentucky Runway Recompete Plan, led by the nonprofit Shaping Our Appalachian Region, or SOAR. Eastern Kentucky is a rural region that has experienced significant job losses due to the demise of the local coal industry. The community is located in a region with persistent poverty but also has two large health care employers that could foster job growth.

SOAR was awarded $40 million in August 2024 to establish two new health care training facilities for well-paying jobs in nursing that will support the area’s health care centers. This project also will support a business incubator for regional firms that will provide physical space, technical assistance, and capital through a revolving loan fund.

This is a telling example of this strategy in practice—where a community was targeted through data identifying it as a distressed community with valuable assets and then working with the community through SOAR. The funding of this community-driven project by the federal government will promote economic development, leading to a revitalization of eastern Kentucky.

So far, this program continues to be funded under the second Trump administration, though with reduced staff.

Rural Partners Network initiative

The Biden administration employed another version of this strategy, with a goal of facilitating greater investment in rural communities, particularly those considered “left behind” as a result of persistent poverty. Called the Rural Partners Network, or RPN,66 this initiative recognized that the lack of capacity is one of the biggest obstacles for rural areas to access resources from both the public and private sectors.

The Rural Partners Network was a collaboration between the federal government and local civic organizations to build capacity in a select set of communities and provide technical assistance through an online resource that offered a one-stop shop for communities to learn about available federal resources. Dedicated federal RPN staff, known as community liaisons, worked with a community to identify projects where help was needed. These community liaisons worked with rural desk officers—staff from nearly 20 federal agencies with deep knowledge of agency programs—to identify the program or set of programs that best served those needs.

Though the RPN initiative has largely been shuttered by the Trump administration, it is a model for delivering resources to places that lack the capacity and ability to take advantage of federal resources. This model has the added benefit of helping the private sector and philanthropy direct their funding and expertise to rural communities. The Rural Partners Network, between fiscal years 2023 and 2024, was responsible for $1.3 billion in public investments over nearly 6,000 investments in 10 states and Puerto Rico and created nearly 4,000 new partnerships. This shows the potential for much more significant investments to flow into rural communities.

One example of the RPN initiative in action is in Mississippi, where community networks in the northwestern Delta region of the state developed a plan to install photovoltaic solar systems that would generate nearly 1 million kilowatts hours of electricity per year. Other projects in Mississippi include funding for deployment of fiber-to-the-premises network that will connect households, farms, businesses, and public schools. These types of infrastructure investments will provide a foundation for these communities to support future economic development.

Conclusion

The disinvestment in rural areas under the current administration provides an opportunity for policymakers in the U.S. Congress to tout a proven place-based approach to boosting economic growth. This essay outlines a three-pronged, place-based strategy for economic development that recognizes that assets exist in all rural communities and partners with the community in employing these assets to advance rural prosperity. This strategy has been employed through the Rural Partners Network initiative that has brought funding and local and national partners to underserved communities across the United States. The strategy was also employed in the CHIPS and Science Act through the Recompete Pilot Program that directed funding to rural places.

While this strategy has been rolled back under the Trump administration, the opportunity is there for future policymakers. To take advantage of it, policymakers must recognize the value and assets in rural places, which are primarily the communities’ people. Recognizing these assets will go a long way to revitalizing these communities and garnering the support that has lagged for decades.

About the author

Gbenga Ajilore is the chief economist at the Center on Budget and Policy Priorities. Previously, he served as a senior advisor in the Office of the Undersecretary for Rural Development at the U.S. Department of Agriculture in the Biden administration, and was a senior economist at the Center for American Progress and a tenured associate professor of economics at the University of Toledo.


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How U.S. tax policies have fueled right-wing populism

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Overview

Among the many factors fueling support for right-wing populism in the United States is federal tax policies. The nation’s tax system confuses, frustrates, and angers many citizens in ways that leave them vulnerable to populist appeals from the right. A mismatch between how the federal tax system works in theory and how it works in practice fuels resentments, playing into the hands of right-wing populists.

In theory, the federal tax system comports with the desire of most nonrich Americans for the rich to pay more. Overall, the system is progressive, taking a larger share of the incomes of high earners. But it has become less progressive over time at the behest of the rich and in ways that complicate the system, especially through extensive tax expenditures—the array of preferential tax breaks in which the government subsidizes some activity by not collecting taxes—which especially advantage the rich. These complications, and the obscuring rhetoric from conservative politicians eager to cut taxes, make it harder for nonrich Americans to see their stakes clearly, fanning both the “right-wing” and “populist” aspects of right-wing populist appeals.    

This essay first presents the reasons why the federal income-tax system started out as progressive more than 100 years ago but has become less progressive as wealthy Americans bend the system in their favor. It examines how taxes across the country have become more regressive after factoring in state and local taxes and the aforementioned tax expenditures largely tailored to benefit the wealthy. The essay then details the nub of the problem with taxes and populism, particularly the racially polarizing appeal of right-wing rhetoric about taxes, before presenting some ideas about how to challenge such appeals amid the welter of new regressive tariffs now hitting workers and their families and small business owners.

Progressive taxation: Theory and practice

The story begins in 1913, when the federal income tax was created. Reflecting a desire to harness for the greater good the huge rewards that industrialization had heaped on the small but very privileged group of immensely wealthy Americans, the income tax was based on the ability-to-pay principle: Higher-income groups should pay not just more but progressively more, with tax rates that climb with income. The income tax fairly quickly replaced tariffs and excise taxes on alcohol and tobacco to become the main source of federal revenue, which it remains today,67 built on the idea that those with more income should pay more because they can more easily afford to do so.

The problem is that progressive taxes impose the greatest burdens on the most organized, well-resourced, and vocal individuals in U.S. society. The rich have spent the past 112 years since the creation of the federal income tax working to lower their effective rates of taxation—what they actually pay as a share of income. They have achieved both cuts to marginal tax rates and expansions of the tax expenditure system—the credits, deductions, exclusions, and preferential rates that litter the tax code and that reduce taxes paid by many taxpayers, but especially by the affluent and rich, who gain the most from them. 

The rich also have achieved reductions in other progressive taxes, among them capital gains taxes, estate taxes, and corporate taxes. As such, federal taxes are less progressive than they used to be.

Remember when billionaire investor Warren Buffet said he paid a lower tax rate than his secretary? “Everybody in our office is paying a higher tax rate than Warren,” his secretary added.68 State and local tax systems, which have always been regressive, burdening lower income groups more, also have become even more regressive. Considering local, state, federal, and other taxes together, today’s U.S. tax system is nearly flat, with each income group’s share of total taxes paid about equaling its share of total income.69 (See Figure 1.)

Figure 1

Share of total federal, state, and local taxes paid by income group, and share of overall U.S. income by income group

How the rich erode progressivity and fuel right-wing populism

The machinations of the rich to blunt tax progressivity have fueled right-wing populism for a variety of interlocking reasons. Consider first the “populism” part of right-wing populism. The majority of nonrich Americans like the idea of progressive taxation.70 They prefer a system in which high-income households pay more—not just absolutely more, but also more as a share of their income. In decades of surveys, from the late 1970s to the present, around three-quarters of Americans say “high-income families pay too little in taxes,” 3 in 5 people say “upper-income people pay too little in federal taxes,” and two-thirds say “people with high incomes should pay a larger share of their income in taxes than those with low incomes.”71

Many Americans are a bit fuzzy about the detailed workings of the tax system, but they believe in the ability-to-pay approach. Next, consider that Americans observe two things about the tax system that go against their own progressive tax principles. One is that when filling out their federal income tax forms, they see the many tax breaks from which they cannot benefit. They have a strong sense that the rich minimize their taxes in technically legal but morally dubious ways, pursuing tax planning and avoidance avenues unavailable to ordinary taxpayers, as Vanessa Williamson, a senior fellow at The Brookings Institution and the Urban-Brookings Tax Policy Center, found in her in-depth interviews with taxpayers.72 Second, a majority (60 percent) of Americans also know that since 1980, tax rates have fallen for high-income people.73

The tax system is difficult to comprehend, and levels of tax knowledge are pretty low,74 but people know the rich pay less than they used to, violating ordinary taxpayers’ preference for progressivity.75 Periodic revelations in the media that billionaire individuals, such as Warren Buffet, Jeff Bezos, Michael Bloomberg, and George Soros, have paid little to no income tax adds to the populist fury, fueling a keen sense that the little guy gets screwed while the rich can give the tax system the slip.76

Survey data that I collected show that the many complexities of the nation’s revenue system, largely driven by efforts of the rich to minimize their tax obligations, undercut Americans’ ability to put their abstract commitments to progressivity into practice in the voting booth. Americans say they want progressive taxation, but my surveys reveal that the individual taxes they most dislike and want to see decreased are the progressive ones—federal income taxes and the estate tax.77 Meanwhile, the taxes they mind less include regressive sales taxes, which burden them more. For the bottom 60 percent of U.S. households, sales taxes cost more than the federal income tax each year.78 

In short, most Americans’ attitudes toward taxes are upside down, given both their abstract principles and their own stakes. 

Part of the reason is the design of the tax system. Unless one assiduously saves receipts for an entire year, one never knows the annual toll of the sales tax. Another part of the reason is elite obfuscation. Politicians, especially on the right since the 1980s, rarely discuss sales-tax burdens but regularly lambaste the income tax. Keeping the focus on the income tax and estate tax plays into the hands of the rich, rendering the rest of the public unwitting allies in their long attack on these progressive taxes. 

The nonrich are perpetually on board with efforts to cut the reviled income tax, and clever tax policy architects throw them crumbs, such as the $300 rebate checks included in President George W. Bush’s tax cuts in the early 2000s and the new no-tax-on-tips provision in President Donald Trump’s just-enacted One Big Beautiful Bill Act. These tax cuts in this century are tiny compared to the really big cuts for those at the top of the income and wealth ladder. 

Or consider that 80 percent of the corporate tax cuts in the 2017 Tax Cut and Jobs Act went to the top 10 percent of the income distribution, with the top 1 percent capturing 24 percent and low-wage workers receiving none of these tax benefits.79 The One Big Beautiful Bill Act makes permanent the 2017 law’s deduction for pass-through companies taxed in the individual tax system rather than the corporate system. That tax break is slanted toward the rich as well, with 91 percent of pass-through income accrued by the top 20 percent of filers, and 57 percent going to the top 1 percent.80

The tax system also fans the ‘right-wing’ part of right-wing populism

Conservative politicians have long invoked racialized rhetoric in their attacks on the tax system, playing up the notion that taxation is illegitimate because the government spending it enables goes to undeserving “others.” President Ronald Reagan famously attracted working-class White voters with messaging that mixed taxes, spending, and race.81 That framing, however, predated President Reagan by more than a century: In the post-Civil War era, conservative politicians ran on anti-tax platforms, telling White southerners they should not have to pay for Black schoolchildren’s educations.82

An extensive social science record shows that attitudes toward federal spending are highly racialized, with White Americans who harbor more animus toward Black Americans, Hispanic Americans, and immigrants more likely to want federal spending decreased, especially for income-targeted programs such as Medicaid, the Supplemental Nutrition Assistance Program, and the Temporary Assistance for Needy Families program, as well as its predecessor, the Aid to Families with Dependent Children program.83 Tax attitudes display the same pattern: The racially resentful are more hostile to taxes, especially progressive taxes, than other White Americans.84 (See Figure 2.)

Figure 2

Support for or opposition to different forms of progressive, flat, or regressive taxation among White survey respondents with greater animus toward Black and Hispanic Americans and immigrants

Figure 2 shows that among White survey respondents, those who are more racially resentful are more opposed to progressive taxation in general, and specifically more opposed to a higher estate tax, increased income taxes for high earners, and greater taxation of capital gains. They are correspondingly more favorable toward regressive taxes and flat taxation as a general concept.85 Fanning racial resentment thus helps right-wing politicians gain office and helps the rich in their quest to get progressive taxes reduced.

Attitudes toward tax expenditures have the same opinion structure—a surprise given their supposedly “hidden” nature.86 Tax expenditures are the indirect spending that occurs when the government subsidizes some activity by not collecting taxes. Political scientists have long termed the tax expenditure system “hidden” and “submerged” because people are less likely to recognize a benefit delivered through a tax break than through a direct spending program.87 For instance, people taking the home mortgage interest deduction are less likely to say they benefit from a government program than those living in public housing.88

Survey data I collected for my book on Americans’ tax attitudes show that tax expenditures are not entirely hidden, however.89 Knowledge of the distribution of tax expenditures is not entirely accurate. People overestimate the share of the middle class getting various tax breaks and underestimate the share going to the affluent. Even so, most recognize that the Earned Income Tax Credit goes to lower-income groups and the deduction for charitable giving and the low capital gains rate mainly benefit the rich. 

Indeed, Americans know just enough for racial animus to be a factor in their attitudes. Racially resentful White Americans are more likely to want the Earned Income Tax Credit reduced—just like they want direct income support programs such as supplemental nutrition assistance and Medicaid reduced. What’s more, they are more supportive of tax breaks that help the rich, just as they are more supportive of decreasing progressive taxes. This pattern also helps the well-off and the truly rich, as the top 10 percent of U.S. households get nearly half of total tax expenditure benefits while the top 1 percent alone get one-quarter.90

Attitudes toward federal spending, indirect spending through the tax code, and taxes themselves all have the same pattern: The racially resentful dislike progressive measures, which are the very same provisions that the rich seek to erode. Right-wing politicians readily play on these racialized sentiments and use them to deliver tax cuts for their rich backers, while exploiting their mass base to deliver plutocracy.

What can be done? 

For decades, the rich have capitalized on the complexities of the U.S. tax system and right-wing politicians’ obfuscation of the realities of that system to get their taxes reduced. The result is that the burden of funding federal, state, and local governments has shifted toward middle- and upper-middle-income households, even as the incomes and wealth of the truly rich have soared.91

The combined tax and spending provisions of the One Big Beautiful Bill Act that President Trump signed into law in July 2025 literally redistribute from the poor to the rich, while leaving middle-income taxpayers barely better off than they were before.92 Once again, the rich get a lot out of a Republican tax law while everyone else gets little, stoking the perpetual dissatisfaction with the system that right-wing populists will be able to call on the next time they wish to cut taxes.

Beyond the redistributive issues, tax revenues in the United States are arguably too low, given the public’s spending preferences. Politicians on the right commonly claim that federal budget deficits and the ballooning national debt are due to a “spending problem.” But budget deficits also are due to a revenue problem. Total taxes as a share of Gross Domestic Product are roughly the same now as they were in the mid-1960s, even as the U.S. population has aged over time, medical technology has advanced, and infrastructure has crumbled.

Large majorities of Americans support the three big domestic social policy programs—Social Security, Medicare, and Medicaid—even if the Republican donor class does not.93 And an increasing share of Americans—58 percent as of mid-July 2025—say President Trump has “gone too far in cutting federal government programs.”94 And yet, right-wing politicians’ long-fanned hostility to taxes and appeals to racial animus have kept large shares of the U.S. public on board with both a low-tax regime and a decreasingly progressive one.

It is difficult to know what can be done. Politicians on the left certainly should speak more clearly about the distributional consequences of the full array of U.S. taxes and the decline of progressivity over time, even though politicians on the right will continue to obscure the true tax burdens in U.S. society. Left-wing politicians also should highlight the implications of low revenues for spending, especially on cherished social programs. 

In terms of reforms to tax policies, efforts should go toward identifying taxes that the rich can less easily avoid. One problem with the current revenue mix is that the rich have a great deal of latitude to shift their sources of income to those most lightly taxed, and they often do not face third-party reporting as wage earners do. The financial transaction tax that economists Emmanuel Saez and Gabriel Zucman at the University of California, Berkeley and Sens. Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) have proposed might help address the problem.95

Some states have made their systems more progressive by adopting so-called millionaires’ taxes that add new brackets and tax rates at the top end of the spectrum. Such heightened income taxes do not overcome the problem with source-shifting, but state lawmakers should know that the usual objection to heightened taxes—that rich people will move out of state because of increased taxes—is not backed by evidence.96 Most rich people do not move away because of high taxes because they are attracted by the amenities that particular states and cities offer, just like everyone else.

Peer nations in Europe pair progressive income taxes with regressive consumption taxes, mainly the value-added tax, which nearly every country has except the United States and a few other holdouts. Value-added taxes help fund the more expansive social policy benefits available in European countries, such as universal health insurance, paid sick leave, and paid family leave. To be sure, regressive payroll taxes play a role in the United States, funding Social Security and part of Medicare, but the array of social programs is far less expansive than in Europe and excludes entire categories of social protections.  

Imagine a universal “care” agenda in the United States funded by a value-added tax that helps provide paid sick and parental leave and long-term care and that alleviates the pressures associated with caregiving for the young and the old—pressures that are acute for the middle class. The difficulty in the United States is that achieving the European-style bargain—regressive taxes paired with progressive benefits—would be extremely difficult, given hostility to direct spending programs and the highly racialized concerns about who is deserving that have long dominated U.S. discourse and public opinion about social programs.

Conclusion

Perhaps the crises in federal spending and deficits that the One Big Beautiful Bill Act will exacerbate will force a reckoning with the level and form of U.S. taxation. Alternatively, its tax cuts for the rich may further enrage nonrich taxpayers and make them vulnerable to future anti-tax entreaties and the next round of tax cuts that favor the rich, even as they are hit with the Trump administration’s regressive new tariffs on consumers and businesses. Rinse and repeat.

The incentives for President Trump and Republican lawmakers in Congress to lean into the obfuscation of right-wing populism and yet again tap into Americans’ confusion and freeform tax anger will be strong indeed.   

About the author

Andrea Louise Campbell is the Arthur and Ruth Sloan Professor of Political Science at the Massachusetts Institute of Technology.


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To restore democracy, end shareholder primacy at U.S. corporations and on Wall Street

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Overview

Workers in the United States have no say over business decisions made in their workplaces by corporate America. Unions, of course, are important for workers’ ability to exercise power over their terms and conditions of employment, but they have no role in interrupting the laser focus of shareholder primacy on increasing share prices.97 And for the vast majority of U.S. workers who are not represented by unions, corporate governance dictates that profits distributed to shareholders reign supreme over workers’ wages, benefits, and the quality of their jobs.

So, what role does this corporate governance framework of shareholder primacy have in this political moment of rising right-wing populism in the United States? When people do not experience democracy at work, perhaps it is less likely that they will prioritize democratic participation in the political process.

But shareholder primacy is itself an economic policy choice. As economic inequality has worsened over the past half century, job quality has declined, union membership has fallen, and entire industries have decamped overseas in search of ever cheaper and less protected workers and workplace conditions. What’s more, U.S. workers and their families are still recovering from their losses in the 2007–2008 home mortgage financial crisis and the myriad aftershocks of the COVID-19 pandemic of 2020–2023. 

Voters are looking for who to blame. Right-wing populists are tapping into this widespread discontent with Wall Street and corporations’ adherence to shareholder primacy. Yet there is the irony of three-time presidential candidate and two-time President Donald Trump’s railing against the power of Wall Street and U.S. corporations that offshore their production then instating financial and corporate leaders at the top of his two administrations. Rather than direct the nation’s attention to the structural policy choices that could change how corporations operate and restrain the power big financial institutions, President Trump and his party have pointed the blame elsewhere while strengthening the hand of corporate America and Wall Street.

To root democratic perspectives in Americans’ daily lives, people need to experience economic democracy at work. Corporations are business entities granted public permission to operate with privileges that are not automatic, and the public has the right to set the rules that govern the “social control of business.”98 Indeed, “thinking about economic outcomes also requires thinking about democracy,” argue Shayna Strom, president and CEO of the Washington Center for Equitable Growth, and Alexander Hertel-Fernandez of Columbia University and a visiting fellow at Equitable Growth, in their lead essay for this series.99

I argue that this call to consider people’s democratic experience in our economic policymaking must include democracy at work. While it is, of course, essential to increase workers’ right to organize unions and collectively bargain, my focus here is on who is involved in corporate decision-making and how workers experience where the benefits of their efforts go. Shareholder primacy makes it clear that workers have no voice in corporate decisions and that shareholders are the main beneficiaries of corporate profits. This is a legal framework that can change. 

This essay will look first at the role of corporations and big financial institutions in the U.S. economy and how shareholder primacy shapes the American capitalist system, leading to widening economic inequality and the disempowerment of workers. It then turns to the role of public policy in the rise of shareholder primacy, before concluding with policy suggestions that can counter shareholder primacy and empower workers to be involved in corporate decision-making, among them:

  • Curbing extractive practices, such as stock buybacks and excessive executive compensation
  • Reshaping corporate leadership to bring in the voices of workers and support the establishment of workers’ organizations
  • Shifting the fiduciary duties of corporate boards to the productivity of the corporation itself
  • Establishing employee participation in corporate equity
  • Reorienting the financial services industry toward productivity and away from extraction

In these ways, U.S. policymakers can reform corporate governance so that workers have a voice in corporate decision-making and can improve their own and the American public’s experience of economic growth and democracy.

How corporations shape the U.S. economy

Corporations drive capitalism. They are the hot-blooded engines of production: Corporate decision-making determines what gets produced, by whom, and how firms collaborate and compete to innovate and market their products. They also are the economic institutions in which our largest social battles play out. As corporate management doyen Peter Drucker put it, corporations must “carry the burden of our dreams.”100 Most Americans spend so much of their life at work. If there is no role for worker participation in daily decisions—and if most workers feel like the benefits of their efforts go to a small economic elite—then why would they expect anything different in the political sphere?

Corporate and financial leaders in the United States function within a framework for corporate decision-making referred to as shareholder primacy, which has widened wealth and income inequality over the past five decades, as wages stagnated and shareholder payments went up and up. Shareholder primacy rose to dominance in the United States as mid-century managerialism gave way to a 1970s-era intellectual turn toward antitrust agency theory and profit maximization for shareholders. This shift converged in the 1980s era of hostile corporate takeovers and the accompanying rise of corporate mergers and acquisitions, more empowered institutional investors, and stock-based executive pay that disciplined corporate managers to prioritize short-term share prices over productive investments.⁠

A combination of the Chicago School intellectual movement, led by the late Milton Friedman, and the push for shareholder payments by leading corporate executives, such as Jack Welch at General Electric, and Wall Street corporate raiders, such as Carl Icahn and T. Boone Pickens, solidly entrenched shareholder primacy in the political economy.101 Policymakers and financial market structures then further expanded this regime. After the U.S. Securities and Exchange Commission enabled open‑market buybacks in the early 1980s, firms redirected vast cash flows to shareholders via repurchases and dividends, reinforcing financialized governance and weakening the claims of workers and investments in innovation on corporate resources.⁠

Changes in pension management policies around the same time enabled workers’ retirement savings to move from safe assets into being primary beneficiaries of shareholder primacy and actors in corporate governance.102 The rise of proxy advisors and asset managers removed shareholders from direct engagement with corporate boards. At the same time, retirement assets under management continued to grow, as defined-contribution employer retirement plans and Individual Retirement Plans intertwined workers even more closely with financial markets.

Shareholder primacy is at the root of growing wealth inequality and has driven a focus on ruthless cuts to employee costs by business leaders.103 This has led too many Americans to viscerally feel their exclusion from a chance to make a better life for themselves and their families—they can see the extreme wealth of their bosses and elite shareholders even as they struggle to get by.

This sense of losing out is—according to analyses, such as that of sociologist Arlie Russell Hochschild at the University of California, Berkeley—part of the root cause of the rise of right-wing populism, alongside the shocks of globalization and financial crises on perceptions of fairness and ideology.104 Piecemeal changes to how corporations operate are not enough. To rebuild the U.S. economy and society, policymakers need to end shareholder primacy and the dominant role of finance across the economy.

Today, it is financial institutions, such as asset managers—both those that manage large index funds, as well as the so-called activist investors—that primarily push companies to make large shareholder payments. They are the main shareholders voting at most corporations with publicly traded equity and are engaged in direct deal-making with companies that get funding in the private financial markets.105

The organization of work and production in the United States depend on the decisions made by these corporate and financial leaders. In the neoliberal era, power has shifted to institutional shareholders, including pension funds, university endowments, and Wall Street asset managers such as Blackrock, and their financial interests—and away from the workers and customers whose efforts and choices determine corporate outcomes. Production and innovation have moved away from goods and toward services and the knowledge economy, with the production of goods pushed outside corporate boundaries, along with associated workforces.

The social conditions for innovation are not met by what remains. Corporate executives prioritize raising stock prices and making shareholder payments at the expense of investing in their companies and their workforces. This favors the wealthy, as 1 percent of U.S. households own 50 percent of corporate stock in the United States, yet these decisions are usually accompanied by a narrative that the decisions benefit everyone.106 The intellectual justification is that no other choice could possibly be made—the corporation exists only to make shareholders wealthier and wealthier.

As these systems reinforcing shareholder primacy become more naturalized, social conditions within businesses grow around them and become further entrenched, too, continuing the shift in favor of the wealthy, reinforced by academic theories and retrofitted principles of financial economics.

The role of public policy in shareholder primacy’s rise

Public policy has enabled, and even encouraged, this relentless focus on raising share prices, resulting in an economy today where corporations spend increasing amounts on stock buybacks—$943 billion by companies in the S&P 500 in 2024, and projected to reach $1.1 trillion in 2025—buying their own stock to reduce the number of shares in circulation and thus increase the value of the remaining shares, while politicians bemoan the lack of corporate investment.107

But shareholder primacy was not always a feature of U.S. corporate practice in the postwar era. Companies such as GE and the Big Three Detroit-based auto companies (Ford Motor Co., General Motors Co., and Chrysler, now owned by Stellantis NV) once were emblematic of corporations that invested heavily in their productive capacities.108 Strong unions in the 1950s and 1960s also made sure that the benefits of corporate innovation benefitted the largely White and male industrial workforce.

The neoliberal turn in the 1980s entrenched shareholder primacy, and though there has been increased discussion of a turn toward a “stakeholder” orientation in the past few years, corporate practices have not changed.109 Yet shareholder primacy is neither a law of nature nor inevitable.

The rise in stock market trading volumes over the past several decades has not coincided with any substantial rise in corporate investments. Instead, there is a clear drop in the level of investment over corporate profits and a stagnation over Gross Domestic Income, or GDI, which measures the national economic production of goods and services, compared to previous decades. In the 1980s, investment shares averaged 76.2 percent of corporate profits and 9.63 percent of GDI. By the 2010s, however, these figures respectively dropped to 66.2 percent of corporate profits and held steady at 9.67 percent of GDI, with the investment share of GDI hitting its lowest level of 9.02 percent in the 2000s.110

The persistently incorrect conflating of shareholding and share-trading with real productive investment has led the U.S. public to think that shareholder primacy is necessary for corporations to innovate and produce, whereas, in fact, internal funds have been a positive net source of financing for investment every year since 1970 and are, in almost every period, the largest net source.111 Progressive policymakers need to dispense with the myth that shareholders are always investors so as to rebuild U.S. capacity for productive innovation and sustainable, equitable economic growth.

Much of the progressive efforts to deal with the ramifications of shareholder primacy have focused on increasing the kinds of shareholder power that push corporations to act in pro-social ways. The rise of so-called ESG investing—taking into account the economic, social, and governance impacts of corporations—was seen by some as a first step toward stakeholder capitalism, in which the interests of workers, customers, and the broader public would be balanced alongside shareholders. But ESG investing was never clearly defined, and a proliferation of standards left shareholders without clear ways to evaluate corporate behavior.112 Then came the right-wing pushback by the second Trump administration.

More promising at first was the push by unions and other social justice organizations to develop powerful campaigns using their pools of corporate equity held by their pension funds to hold companies accountable for human rights violations, union busting, and support of right-wing causes by corporate leaders.113 But while some campaigns have successfully prompted corporations to recognize unions or enforce minimum labor standards in their supply chains, restructuring corporate governance to end shareholder primacy has remained off the agenda.

Regardless of the shareholder activism taking place, what most Americans see is simply the rich getting richer. The Institute for Policy Studies’ Executive Excess report from 2024 examines the stark gap between CEO compensation and median worker wages at major U.S. corporations.114 The report reveals that companies with the lowest median wages pay their CEOs, on average, more than 500 times more than their typical employees. From 2019 through 2023, the Low-Wage 100 spent $522 billion on stock buybacks, and the 20 largest U.S. employers in the Low-Wage 100 have spent nine times as much on stock buybacks as on employee retirement plan contributions over the same time period.

Policies to reduce the importance of shareholder primacy

I propose a set of economic policy reforms that orient corporations toward operating as innovative enterprises, not as vehicles for shareholder value extraction for a small group of elites. Public policy must shape the rules of corporate decision-making to support innovation in the production process and ensure a balanced approach to the allocation of created value. While shareholder primacy contributes to economic inequality, and thus dissatisfaction with the outcomes of the political process, it is the specific exclusion of workers from having any voice at work that may well be behind rising right-wing populism.

A large body of evidence on employee ownership and profit sharing in the United States shows that when employees are authentically engaged and valued in their workplace, outcomes are better for workers and firms.115 In other advanced industrialized nations, such as Germany and Japan, the workforce has a direct voice on corporate boards, where major corporate decisions are made.116

In my 2021 article, “Economic Democracy at Work,”I describe how worker representation on corporate boards could function in the uniquely U.S. context of labor and corporate law.117 This kind of participation would not be a substitute for the importance of workers’ right to unionize and collectively bargain. In my experience as a union organizer, I found that even more important than improvements to the terms and conditions of employment was the experience workers had of winning dignity and respect in the workplace.

Having your voice heard matters, and there are various policy mechanisms that can improve this in the United States. But without the experience of democracy at work, where working people spend the majority of their time, their commitment to political democracy can decline because their daily life does not reflect any kind of democratic practice.

In my recent book, Good Company: Economic Policy after Shareholder Primacy, I propose several types of policies to reorient corporations away from shareholder primacy and toward innovation, including the proposals to make worker participation in corporate decision-making a common practice in the United States.118 I also propose other policies to curb extractive practices, such as stock buybacks and excessive executive compensation, alongside other corporate governance reforms to:

  • Reshape corporate leadership, and most importantly to bring in the voices of workers and support the establishment of workers’ organizations
  • Shift the fiduciary duties of corporate boards to the productivity of the corporation itself
  • Establish employee participation in corporate equity
  • Reorient finance toward productivity and away from extraction

These policies, even if enacted comprehensively, need to be accompanied by other political economy shifts, among them restoring the right to collectively bargain, grappling with the realities of structural racism in the United States, and removing the ability of corporations to dominate politics.

I do not argue that corporate governance policies can create a good society on their own. I do argue, though, that unless we shift away from shareholder primacy, “good companies” will remain largely out of reach, widening inequality and the disconnect of ordinary Americans from economic prosperity.

Above all, policy reforms are needed to shift U.S. corporations away from shareholder primacy and increase the democratic experience of the U.S. workforce by creating a structural role for workers in corporate decision-making about the business affairs of the corporations where they work. In the United States, there is an important legacy that keeps bargaining about the terms and conditions of employment out of the hands of “company unions,” in which management and labor supposedly collaborate but which has usually led to management dominance. Worker representation on corporate boards would engage workers in a different set of decisions than those governed by U.S. labor law.119

Perhaps even more important for improving the democratic experience would be building the kinds of structures necessary for worker-directors on these boards to truly represent the workforce. This would require a robust mechanism for the workforce to discuss business with their worker representatives. In my aforementioned 2021 article, I explore how worker representation on corporate boards could work in the unique U.S. legal context, with our state corporate law and federal labor law. The economic evidence from countries such as Germany that have co-determination structures in place is that labor representation on corporate boards is beneficial because it “brings first-hand operational knowledge to corporate board decision-making.”120

Regarding the call by Equitable Growth’s Strom and Hertel-Fernandez to consider the democratic impacts of economic policymaking, what I did not focus on in my 2021 article is how the experience of democratic engagement at work could strengthen the experience of democratic engagement in civic life. But it is clear that shareholder primacy, in which only shareholders and their representatives (large asset managers) engage in decision-making, keeps workers from having these kinds of democratic experiences.

Alongside corporate governance reform, structural financial regulatory reform is urgently needed so that U.S. financial markets support economic productivity, rather than being a place where financial elites make money by moving money around, with financial institutions focused on extracting fees for transactions and trades rather than directing finance toward supporting real productive activity. These days, the traditional boundaries between regulated banking, publicly traded stock markets, and restricted financial activities have blurred, and it is not just about the new deregulatory push by the second Trump administration to enable speculative cryptocurrency “assets” to enter mainstream U.S. financial markets, which is only just beginning.

Securities laws that allow “private” financial markets to operate with minimal oversight—based on the assumption that wealthy investors understood their risks—do not work now that most households with retirement savings participate in these markets through asset managers. And the growth of these private financial markets has been rapid. Private funds have nearly tripled in size over the past decade, reaching $26 trillion in gross assets, compared to $23 trillion in the U.S. commercial banking industry.121

Indeed, private financial markets now outpace public markets in equity raising. In 2021, new stock issuances for the first time totaled $434.7 billion, while private markets raised $1.73 trillion in committed funds—almost four times as much. There is a wide-ranging literature on the harms of private equity on corporations, workforces, and, in the case of health care, the quality of care that patients receive,122 with work by former U.S. Department of Justice antitrust enforcer Brendan Ballou documenting the “plunder” of sectors, from real estate to nursing homes, across the United States.123

Private credit funds are a segment of the financial market that is growing rapidly, free of any regulatory constraints. As the regulated banking sector becomes increasingly intertwined with private credit funds and other nonbank financial institutions, these risks are being acknowledged by organizations, including the International Monetary Fund.124 Pension funds are increasingly allocating larger amounts of their portfolio to private credit, despite their opacity. One Wyoming pension fund trustee stated that “public [pension] funds are going to continue in aggregate to allocate more to private markets until something bad happens. Nothing bad has happened yet.”125

Conclusion

The continuing financialization of the U.S. economy has a very “as long as the music is playing, you’ve got to get up and dance” feel to it—the statement by then-Citigroup CEO Charles Prince, speaking in July 2007 about the subprime mortgage markets. Of course, as he also said, “when the music stops, in terms of liquidity, things will be complicated.”126 This financial game of musical chairs is exponentially more intense today.

While right-wing populism has many sources, the reality is that wealth and income inequality have continued to grow with no sign of stopping, driven in large part by shareholder primacy. Companies are reporting record stock buybacks in mid-2025, even as economic insecurity deepens.127 Policymakers must end shareholder primacy and reorient corporate decision-making toward the pursuit of economic innovation and productivity.

While changing corporate and financial law and ending the myth that shareholding always equals investing is not, and will never be, an easy lift, it is hard to imagine how the economic prospects of most Americans turn around without such structural reforms. Workers do not feel that they are benefitting economically from a strengthening economy, nor do most employees at large corporations have any experience of democratic engagement at work. Both of these outcomes could be improved by ending shareholder primacy.

Reforming corporate policymaking so that workers have a voice in corporate decision-making can improve their own and the American public’s experience of economic growth and democracy, making it the type of policy that responds directly to Strom and Hertel-Fernandez’s call for changing how we imagine economic policymaking. In this moment, when it is clearer than ever that the agenda of the right wing is to enrich themselves at the expense of everyone else, we must press forward to rebalance our economy.

About the author

Lenore Palladino is an associate professor in the Department of Economics and the School of Public Policy at the University of Massachusetts Amherst. She also is a nonresident scholar at the Washington Center for Equitable Growth, a research associate at the UMass Amherst Political Economy Research Institute, and a senior fellow at the Roosevelt Institute. She holds a Ph.D. from the New School University in economics and a J.D. from Fordham Law School.


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The political implications of bad jobs and the decline of unions

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Overview

Bad jobs have become a distinctive feature of the U.S. economy over the past few decades. Globally, a lack of adequate demand, or what economists call “secular stagnation,” has meant there are too few jobs for too many people, leading to wage suppression and jobless recoveries.128 Poor job quality—where workers earn low wages, work unstable hours, and receive declining benefits—means that in addition to reduced earnings, workers also derive less social standing from their jobs.

This joint crisis of economic and social backsliding has contributed to increasing working-class support for far-right populism both in the United States and around the world. The combined effects of material deprivation and social marginalization has fueled a politics of resentment and right-wing resurgence among this group of workers who were, historically, reliable Democratic voters.129 The perceived status anxiety of many low-wage workers, including those who anticipate that their wages and status could decline soon, are strong predictors of right-wing beliefs.130

But job quality does not have to continue its decline in the United States, and right-wing populism does not need to continue to ascend. Indeed, both can be reversed. In fact, studies show that labor unions increase working-class support for democracy by ensuring that democracy delivers good jobs for workers.131 Unions are therefore essential to defend against authoritarian politics.

In this essay, we will review the effects and implications of declining job quality both for workers and for democracy in the United States. We then turn to how unions bolster workers’ well-being and why unions can counteract the rightward trend among working-class voters. We detail findings of our own research on the effects of unions in the health care industry on workplace conditions before offering closing thoughts on the importance of unions in combatting right-wing populism.

The consequences of declining job quality

The U.S. labor market has undergone a profound transformation over the past several decades, with high-quality, well-paying jobs becoming increasingly scarce, especially for less-educated workers.132 Between 1973 and 2015, the real wages of working-age men with only a high school diploma declined by almost 20 percent, and their labor market participation rate plummeted. Meanwhile, the earnings of their college-educated peers increased substantially.133

The 2008–2009 economic crisis exacerbated this trend, giving rise to an even more polarized “hourglass economy” that expanded the number of high- and low-skill jobs relative to middle-income occupations.134 The emphasis, however, has been on the creation of low-paying jobs. Indeed, the U.S. Private Sector Job Quality Index shows that since 1990, 63 percent of newly created jobs in the United States have been classified as low quality.135

Over the past four decades, this essentially has meant that most U.S. workers receive lower wages and fewer benefits and experience greater instability—even when accounting for an “unexpected compression”  in the wake of the COVID-19 pandemic, in which the wages of non-college-educated workers increased more rapidly and significantly than in recent decades.136 As a result of these changes to the labor market, working-class Americans—who, in previous decades, derived a decent standard of living and higher social status from their jobs—have been marginalized.137

The deterioration in U.S. job quality stems from a variety of factors, including the decline of labor unions, the erosion of workplace protections, the rise of precarious employment, deindustrialization, and shifts in employer strategies designed to place more economic risk onto workers. While U.S. workers today work more hours than they have in decades, with more volatile schedules, employer strategies to suppress wages ensure that their earnings don’t keep pace with the rising cost of living.138

By contrast, European workers generally enjoy shorter working hours, stronger labor protections, and greater union representation than their U.S. counterparts—though the ground is shifting there too, as economic instability contributes to broad conservative shifts among working-class voters across Europe.139

Another driver of poor job quality is the managerial and hiring practices that U.S. employers increasingly utilize. So-called fissuring of the workplace, a term coined by Brown University economist David Weil, occurs when major employers outsource key services, such as janitorial work, food services, and delivery, to third-party contractors. By doing so, companies absolve themselves of responsibility for these workers’ wages, benefits, and working conditions, allowing large corporations to evade labor laws and forcing employees into lower-paid, less stable jobs.

Fissuring not only affects outsourced workers, but it also drags down labor standards across entire industries. When some employers cut wages and benefits, competitors feel pressured to do the same to remain profitable, creating a race to the bottom. Workers across various sectors then end up with lower pay and fewer actionable rights.140

Like wages, workplace benefits have also increasingly come under attack. Unlike workers in all other peer nations, most U.S. workers get their health insurance and retirement benefits through their jobs rather than from the government. But the proportion of Americans covered by employer-sponsored health insurance has steadily declined in recent decades, with low-income workers experiencing the steepest drop.141

At the same time, health care costs have skyrocketed in the United States. Between 2008 and 2018, premiums for employer-sponsored health plans increased by 55 percent, while wages grew at less than half that rate.142 Employers have responded to these price increases by shifting the costs onto workers. Today, nearly half of working-age adults are underinsured, meaning they technically have health coverage but still cannot afford essential medical care.143

The combined effects of low wages, routine schedule instability,144 and weak social infrastructure have made life increasingly precarious for U.S. workers. Yet declining economic conditions alone cannot account for rising right-wing sentiment among so many workers. Indeed, hard times for workers in the past gave rise to broad public support for the New Deal.145

Today, however, workers often compare themselves to a time when many were doing better, not worse.146 The current right-wing surge therefore seems to be a reaction to a sense of nostalgia for better economic times that also provided for more stable social positions. Sociologist Arlie Hochschild at the University of California, Berkeley describes many disaffected right-wing working-class voters as “strangers in their own land,”147 adrift from their former lives as high-earning, high-status individuals and feeling betrayed by a social system that lifted up the fortunes of immigrants, people of color, and the unemployed before their own. Other research shows this general trend playing out in Europe and parts of the global South, too.148

Low-paid and precarious jobs are a direct threat to democracy because they can undermine both elite and popular support for democracy. For economic elites, the problem is that the proliferation of bad jobs threatens to increase demands for redistribution.149 Rather than watch as democracy delivers higher taxes, the wealthy respond to high levels of income inequality by welcoming nondemocratic alternatives.150 And for those with precarious employment, the problem is that bad working conditions convince people that the political status quo is unfair and decreases support for democracy.151 Unsurprisingly, recent research finds that economic precariousness has been a main driver of working-class support for radical, anti-democratic parties in Europe.152

The role of unions in improving job quality and bolstering democracy

Improving job quality would seem to benefit both workers and the democratic system in general. Labor unions play a crucial role. On average, unionized workers earn 11.2 percent more than their nonunion counterparts in the same industry. Black and Hispanic workers see even greater wage gains, with Black union members earning 13.7 percent more and Hispanic union members earning 20.1 percent more than their nonunionized peers.153 In addition to closing the racial wage gap, labor unions tend to decrease the politics of white racial resentment outside the workplace.154

Unions also secure better benefits.155 While only 68 percent of nonunion workers have access to employer-sponsored health insurance, 94 percent of union workers do. Union employers also contribute more to health premiums, ensuring that employees pay less out of pocket for their health care costs. In terms of retirement security, union workers are 22 percent more likely to have employer-sponsored pension plans, and those pensions provide 28 percent more in benefits, compared to nonunion plans. Additionally, union members receive more paid sick leave, vacation days, and job protections.

Perhaps most crucially, unions offer workers a voice to express their collective and individual grievances on the job. One concrete effect of this is that unionized workplaces tend to be safer than nonunion workplaces in the same industry. This is because unionized workers are more likely to report workplace hazards and injuries because they are protected from retaliation. Strong union representation has been linked to lower injury rates, better enforcement of safety regulations, and improved overall working conditions.156

Unions therefore play a dual role. They directly increase workers’ economic standing by improving working conditions, including wages and benefits. Such positive changes could help pull workers away from the populist appeal of right-wing politics and toward a progressive alternative that fosters unions and democracy. At the same time, unions are more than mere avenues to higher economic status. They are large political organizations that embed workers’ lives in a collective social fabric, which can buffer trends toward social alienation and the disappearance of social capital. In so doing, unions increase workers’ social status and guard against the social divisiveness that is at the heart of right-wing populism.

Unions’ effect on the health care industry: Lessons from our research

Our research specifically shows how labor unions improve working conditions for U.S. health care workers.157 Making these jobs better is crucial for four reasons. First, health care workers are essential for society. The COVID-19 pandemic highlighted their sacrifices and broader contributions to caring for the sick and elderly, and this work will remain crucial even as the pandemic recedes into the past. Second, low-wage health care workers are disproportionately women of color. Improving working conditions for health care workers therefore increases racial and gender equity. 

Third, health care workers’ working conditions also are our care conditions. Improving jobs for health care workers increases the quality of care that patients receive. And fourth, the health care workforce is expected to grow faster than any other part of the U.S. economy in the coming decades. If decreasing workers’ economic precariousness can buttress U.S. democracy, then improving the quality of health care jobs will only become more important for the sustainability of our democratic system and institutions.

The economic benefits of unionization in this industry are clear. As with to the benefits of unions more broadly, unionized health care workers have higher weekly earnings and are more likely to have retirement benefits and employer-sponsored, full-premium-covered health insurance.158 Unionized health care workers also report greater job satisfaction, and unionized workplaces see greater worker retention and less staff turnover.159

Our research shows that unionization also improves workplace safety for health care workers by compelling employers to comply with basic labor laws. One of our recent studies reveals that while all U.S. nursing homes are required to report workplace injury and illness data to the Occupational Safety and Health Administration (the federal agency tasked with regulating workplace safety), compliance is low, with only 40 percent of nursing homes meeting this requirement between 2016 and 2021.

Such low compliance is a major problem, as the tracking of injuries is a vital part of safety management, and injury-prevention programs need to be based on reliable, complete data. We found that unionization increases compliance by 78 percent, suggesting that higher unionization rates would improve workplace safety in a sector with one of the highest injury rates in the United States.160

The benefits of unionization were especially stark during the COVID-19 pandemic. In another study, we found that during the first year and a half of the pandemic, unionized nursing homes throughout the continental United States had 7 percent lower COVID-19 infection rates among workers.161 This union “safety premium” was especially large for Black workers, who are often exposed to the most dangerous workplace hazards, in nursing homes and writ large in U.S. workplaces. In nursing homes with higher percentages of Black workers, unions were associated with 14 percent lower COVID-19 infection rates for workers.162

We also found that the lower infection rates for workers meant lower mortality rates for nursing home residents. In unionized nursing homes, the COVID-19 mortality rate for residents was 11 percent lower than in nonunion nursing homes. As many health care workers succinctly explained, “If we get sick, you get sick.”163 Our research suggests that industry-wide unionization would have avoided 8,000 nursing home resident deaths in the United States from June 2020 through March 2021.

In short, increased unionization in health care could help to transform hazardous, low-wage jobs into safer jobs, and those workplace improvements would also boost the quality of care for millions of patients. Beyond workplace safety, unionization would increase wages for a vast and rapidly growing workforce of roughly 22 million workers. A recent study found that unionized health care workers earn an additional $123 per week.164 With only 7 percent of U.S. health care workers unionized, industry-wide unionization could transfer $130 billion a year to health care workers and significantly decrease the country’s run-away income inequality.

Moreover, as a way to elevate the social status of these workers, health care labor unions routinely frame workers as “caregivers” who work for the “greater good.” This is a purposeful critique of the commonly held designation of nursing, for example, as “women’s’ work,” which is deemed less socially valued. This conscious effort to improve the perception of these jobs is another way that unions can work to combat the trend toward right-wing populism, as they address both economic and social backsliding among lower-wage workers.

Conclusion

Changes in the U.S. health care workforce both during and after the COVID-19 pandemic illustrate the complex relationships between economic well-being, social status, and union strength. During the pandemic, nurses and other health care workers enjoyed a surge in social standing as they were declared essential workers and national heroes. At the same time, health care workers’ economic standing improved as the pandemic labor shortage drove up wages throughout the country. 

What did not happen, however, was an increase in health care union density that could have translated these positive developments into lasting gains. When the pandemic ended, so did the labor shortages and public appreciation that had driven up health care workers’ economic and social standing. Hospitals and nursing homes then quickly reduced the wages and benefits—and nonunionized workers were helpless to stop them.

There is a vital need for more research on how these dynamics influenced health care workers’ political views. These workers’ economic and social gains during the pandemic may have increased support for the political status quo and decreased their support for right-wing populism. Alternatively, the erosion of these gains after the pandemic may have created the kind of political resentment that fueled President Donald Trump’s 2024 re-election. To the extent that unions helped health care workers defend their pandemic-era gains, union membership has likely reduced such right-ward political shifts. 

As unions have come under attack and unionization rates have declined, conservative institutions—gun clubs, for example—have tended to replace them, promoting a particular brand of social conservatism.165 In 2024, we witnessed a majority of working-class voters throw their support behind President Trump and his right-wing populist message; exit polls show that Vice President Kamala Harris won only 47 percent of voters who earn less than $100,000 a year. Yet a closer look suggests that unions still help to inoculate workers from the appeals of right-wing populism: Vice President Harris won 57 percent of union members, a group of voters with a median annual income of $70,000.166

If union membership shifted support away from President Trump by anything close to 10 percentage points, then increased unionization would radically reshape future elections. Doubling overall U.S. union density from its current level of roughly 10 percent to 20 percent (the level of U.S. union density in 1983) would have shifted roughly 1.5 million votes from President Trump to Vice President Harris in 2024—likely enough for the vice president to have won the election.

The future of American democracy depends crucially on a growing labor movement to improve job quality, increase the social status of average workers, and regain unions’ standing as a progressive force for the broad public interest—a real alternative to right-wing populism.

About the authors

Adam Dean is an associate professor of political science at George Washington University. His research focuses on international trade and labor politics, as well as the socioeconomic determinants of public health. His second book, Opening Up by Cracking Down, was published by Cambridge University Press in 2022.

Jamie McCallum is a professor of sociology at Middlebury College. His research focuses on work and labor issues in the United States and the global South. His third book, Essential: How the Pandemic Transformed the Long Fight for Worker Justice, was published by Basic Books in November 2022.


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Federal and state governments can help solve the employment problems of people in distressed places to spur equitable growth

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Overview

Places in the United States differ greatly in their residents’ access to jobs, including access to good jobs. In economically distressed places, these job problems can be addressed by creating more jobs, particularly good jobs, and by improving residents’ access to those jobs. Effective policy solutions require customized public services for businesses to create jobs where they are needed alongside similarly customized public services for individuals seeking work to improve their access to good jobs.

The federal government and state governments already provide about $80 billion a year to help create jobs around the nation through a variety of longstanding programs that are detailed in my analysis below. These current job-creation programs are rarely targeted to distressed places, however, and instead spread job creation to all places. In addition, as I discuss below, most of the dollars devoted to these job-creation policies are business tax incentives, which are less cost-effective than some alternative job creation policies that emphasize various public services to businesses and individuals. Although the Biden administration did adopt some programs to spur job creation in distressed places, these programs were funded by Congress at a pilot scale compared to the need.167

Because distressed places lack the resources to provide such public services at a large enough scale, federal or state aid that is specifically adapted to places’ diverse needs is required. As I have proposed in the past—and again propose in this essay—this flexible federal or state aid should be targeted in its per-capita funding based on a local community’s prime-age employment rate. As I argue below, a place’s prime-age employment rate provides a good measure of the availability of labor market opportunities for local residents.    

In this essay, I will discuss how best to target distressed places with job creation programs and what job creation programs are most effective. First, I will map out how the prime-age employment measure gauges the job creation needs of local labor markets and neighborhoods across the country. Then, I will examine a number of different government programs at the federal and state levels that have tried to increase people’s access to jobs—and particularly good jobs—and, importantly, what types of programs are most successful at a reasonable cost per job opportunity created. I then close my essay with a set of principles and policy proposals to help guide federal and state aid to distressed places so that the scale is sufficient to significantly alleviate these distressed places’ problems and the aid’s design is targeted, cost-effective, and adaptable to each place’s needs.

The problem of distressed places and their sizes and distribution across the country

Distressed places include both local labor markets and neighborhoods. A local labor market is one or more counties that are sufficiently linked by commuting such that changes in labor market conditions can quickly spread throughout the area. A neighborhood is a portion of a county that has a defined identity and similar within-neighborhood amenities, such as the quality of schools and levels of crime. Examples of local labor market definitions include metropolitan areas, commuting zones, and a definition that I developed of “spillover-based” local labor markets.168 Neighborhoods are defined in an ad hoc way in different local communities and are typically based on what residents identify as distinct neighborhoods.

A useful measure for discerning whether a local labor market or neighborhood is experiencing labor market distress is its so-called prime-age employment rate, or the employment-to-population ratio for those ages 25 to 54. Prime-age persons generally both want to work and are expected by society to work. As a result, increases in employment for this prime-age group are widely perceived as enhancing social well-being, in contrast to increased employment for persons who might be closer to retirement or enrolled in college or graduate school.

In addition, a focus on the local prime-age employment rate roughly controls for a place’s age mix. It would be a mistake to classify a place as “distressed” simply because there is a high proportion of its population that is not working due to being in college or retired.

An increase in the local prime-age employment rate by itself signifies increased earnings per capita for residents, due to a higher proportion of the population having a job. A higher prime-age employment rate also indirectly increases earnings per capita by putting upward pressure on local real wages and making it easier for residents to get hired for better jobs.169 A reduced prime-age employment rate has the reverse effects.

The prime-age employment rate is not a perfect or comprehensive measure of local labor market distress.170 But it is a measure that is closely associated with how many of a place’s residents are experiencing problems in getting jobs or getting good jobs. Furthermore, the prime-age employment rate is one of the few reasonable measures of local labor market distress that can be consistently defined for all U.S. counties and census tracts.171

The most recent comprehensive data on the prime-age employment rate for all counties and census tracts comes from the 2019–2023 period.172 However, as discussed further below, the relative prime-age employment rate for places, compared to the national rate, is highly persistent over time. Therefore, places whose prime-age rate is far below the national average in 2019–2023 will typically be similarly far below the national average in 2025.

Based on 2019–2023 data, the prime-age employment rate varies widely across local labor markets in the United States. About 10 percent of the U.S. population lives in local labor markets that, as of 2019–2023, have a prime-age employment rate of 84.1 percent or higher. These places’ economies are not showing escalating wage and price inflation and thus, their labor market situation can be considered economically sustainable. Indeed, this 84.1 percent rate is a rough-and-ready approximation of full employment because the overwhelming majority of local residents who want a job can find a reasonable-quality job, and yet the economy is not experiencing excess inflationary pressures.

In contrast, 10 percent of the U.S. population lives in local labor markets where the prime-age employment rate, as of 2019–2023, was 73.8 percent or lower, indicating that local residents have much more difficulty finding jobs and, in particular, finding good jobs. These difficulties have large social costs: Low employment rates lead to poorer mental health, increased substance abuse, higher crime, more family break-ups, and poorer outcomes for children.173

The map below shows local U.S. labor markets that are “severely distressed” or “moderately distressed,” as well as those that are less distressed and not distressed, according to the 2019–2023 data. The former is defined as more than 10 percentage points below the “full employment” prime-age employment rate of 84.1 percent and the latter as between 5 percentage points and 10 percentage points below that rate. Under these definitions, 10.5 percent of the U.S. population lives in local labor markets that are severely distressed, and another 28 percent lives in moderately distressed areas. (See map.)

Map

More than one-third of the U.S population lives in local labor markets that are distressed

Severely distressed, moderately distressed, less distressed, or nondistressed local labor markets, 2019–2023

Severely distressed, moderately distressed, less distressed, or nondistressed local labor markets, 2019–2023

Distressed local labor markets include most of Appalachia and the rural South and Southwest. But many rural areas elsewhere in the country also are distressed, including in upstate New York, northern Maine, Michigan, and many rural areas in the western United States. Many urban areas are at least moderately distressed, among them Detroit and Flint, Michigan; Gary, Indiana; Fresno and Bakersfield in California; Memphis, Tennessee; and Spokane, Washington.

In both booming and distressed local labor markets, some neighborhoods have much lower prime-age employment rates. If we define a distressed neighborhood as at least 10 percentage points below this local labor market average, then 10.7 percent of the U.S. population lives in distressed neighborhoods, based on the 2019–2023 data.

Although distressed neighborhoods are widespread, the size of the problem differs. Among the 30 largest local labor markets, the three local labor markets with the highest percentage of their population in distressed neighborhoods are Detroit (16.2 percent), Philadelphia (14.3 percent), and Cleveland (14.3 percent). The three local labor markets with the lowest percentage of their population in distressed neighborhoods are Portland, Oregon (6.1 percent), Seattle (6.5 percent), and Minneapolis/St. Paul (6.5 percent).

The racial and ethnic composition of distressed local labor markets is similar across demographic groups. In contrast, Black and Hispanic people are more likely to reside in distressed neighborhoods: The national average percentages of the population living in distressed neighborhoods are 7.3 percent for White, non-Hispanic persons, 11.8 percent for Hispanic persons, and 21.7 percent for Black persons.174

The prime-age employment rate in different local labor markets goes up and down with the national economy’s rate, yet different places’ relative positions, compared to the nation, often persist. In 2000, for example, about 47 percent of the U.S. population lived in severely or moderately distressed local labor markets. Of this population living in distressed local labor markets as of 2000, 74 percent still lived in severely or moderately distressed local labor markets as of the 2014–2018 period.175

But, sometimes, places dramatically improve. The local labor market’s prime-age employment rate in the New York City area, for example, went from 6.9 percentage points below the national average in 2000 to slightly above the national rate in the 2014–2018 period.176

Solving places’ job distress: Effective programs are services to promote job creation and job access

The jobs problems of distressed places cannot be solved at scale by moving people from distressed places to better places, a strategy that local economic development specialist Jason Segedy has called the “U-Haul School of Urban Policy.”177 Why doesn’t the “U-Haul” strategy work? The arguments for this position are two-fold. First, people are hard to move. More than half of Americans spend most of their careers in their childhood local labor market.178 Even large local job losses increase out-migration over the next decade by less than 1 percentage point.179 Estimated moving costs, both financial and psychological, often exceed 100 percent of annual income.180

Second, moving some people out of distressed places does not help those left behind. In local labor markets, population loss leads to a similar percentage loss of employment, with no improvement in the local employment rate.181 Population loss lowers demand for local goods and services and disproportionately removes younger and more entrepreneurial workers. In neighborhoods, population loss leads to abandoned housing, higher crime, and loss of local retail outlets.182

In sum, places that are distressed cannot be helped simply by encouraging individual out-migration because people have valuable ties to places, and out-migration has spillover costs. Instead, policymakers need to enact place-based policies to help people in their home places.

Boosting employment rates in distressed places requires different strategies for local labor markets versus neighborhoods. For distressed local labor markets, local employment rates can be increased by creating jobs. In severely distressed places, local job creation can result in half the jobs boosting local employment rates and the other half going to in-migrants.183 In other words, if a distressed local labor market is able to add 100 jobs, 50 of those jobs could go to additional in-migrants to the local economy, while the other 50 jobs would then be reflected in the original local residents having a higher probability of having a job.

In contrast, in booming local labor markets with high employment rates, any added local job creation almost entirely boosts in-migration, with little effects on local employment rates.184 In booming local labor markets, newly created jobs will be filled mostly by in-migrants or already-employed local workers, as few readily employable, local, nonemployed workers are available.

The hiring of already-employed local workers results in job vacancies, filled in the same two ways. At the end of this job-vacancy chain, the initial job creation will be reflected close to 100 percent in in-migration.185 In booming places, job creation mostly increases property values for property owners rather than helping workers.186

How can local jobs be created? Most government job creation dollars come from state and local governments, and most of these job creation dollars are in the form of business tax incentives or cash grants to business to create jobs, which total more than $70 billion annually.187 Examples include property tax abatements, job creation tax credits, or cash grants tied to a firm’s job creation or investment.

But federal, state, and local governments together devote about $10 billion annually to various spending programs that promote job creation by what I describe as customized business services: providing business with better business sites, more productive labor, or business-relevant information.188 These services are customized in that they are typically designed to meet the needs of a particular industry, or even a particular firm. 

One type of customized business service is business-specific infrastructure. A regular part of the local economic developer’s toolkit is to create industrial parks or high-tech research parks, which provide land that is zoned for a particular industry type and has appropriate supportive infrastructure. State economic development agencies or state transportation agencies frequently pay for industrial access roads, which provide new roads in association with a major new firm location, to facilitate movement of supplies, workers, or output. Business incubators, of which there are about 1,400 in the United States, help provide affordable business space for new or small businesses, along with some support services.189

States also seek to create jobs through customized job training programs. Rather than targeting disadvantaged residents, these programs target firms that are either creating jobs or facing competitive threats, providing them with free or heavily subsidized job training. This training is customized in that it is designed around the particular firm’s skill needs. Training is typically provided by local community colleges. Around 42 states provide such customized training, at a cost of around $1 billion annually.190

Jobs also can be created by providing individual firms with business-specific information or advice. For example, the Manufacturing Extension Partnership in the U.S. Department of Commerce provides federal support that pays for part of the costs of manufacturing extension services in all 50 states.191 In manufacturing extension services, program staff or reliable consultants provide small- and medium-sized manufacturers with advice, typically paid for partly by fees and partly supported by government, on how to best adopt new technology or move into new markets. 

The federal Small Business Administration also provides funding that pays for part of the costs of Small Business Development Centers that exist in all 50 states and help new or small businesses develop and implement better business plans.192 In both manufacturing extension services and Small Business Development Centers, the information and advice is customized to the needs of the individual business.

Which of the above types of job creation is most cost-effective? While tax incentives can create jobs, the cost per job is high. The various customized business services are more cost-effective because they provide businesses with better access to inputs, such as real estate, labor, and information, which are difficult for many firms, particularly smaller firms, to access on their own.

Based on my research, Figure 1 below shows the cost in severely distressed local labor markets of increasing the overall employment rate by one job.193 To avoid possible misinterpretations, it is important to note that this figure is based on research that estimates the cost of government job-creation programs per job actually induced by the particular program. These induced jobs numbers will be lower than the number of jobs subsidized by the program. For example, only a minority of firms receiving tax incentives or customized services would have changed their location and job creation decisions due to being provided this incentive or service.194

The figure then takes these research findings on costs per job actually induced and translates these costs into costs in 2024 dollars. Furthermore, this figure translates research findings about costs per induced job into costs, divided by total jobs created, for jobs that actually boost the employment rate of local residents in distressed local labor markets. As mentioned above, in severely distressed local labor markets, about half of jobs created can go to increase the employment rate of local residents, and the other half go to in-migrants. This focus on jobs that boost the local employment rate actually doubles the cost per job.195

Figure 1

Cost per job created for local residents due to business tax incentives, industry-specific or firm-specific programs, and customized job training programs

Are these costs of increasing the employment rate outweighed by the benefits? In severely distressed local labor markets, benefits probably do outweigh the costs. Permanently increasing the employment rate has economic benefits whose present value in many cases will exceed $1 million per job.196 As a result, even business tax incentives can have benefits greater than costs. But the cost per job of these three types of customized business services is less than half the cost of business tax incentives, as presented in Figure 1. More cost-effective local job creation strategies would emphasize these services, as opposed to tax incentives.

One example of successful local use of these job creation strategies is Grand Rapids, Michigan.197 This medium-sized city in the west-central part of the state has experienced manufacturing job growth of more than 10 percent since 1990, while the United States as a whole has lost one-quarter of its manufacturing jobs. Grand Rapids’ economic development strategy included extensive use of both state and local incentives but also included supporting a local manufacturing extension office that helps some auto suppliers diversify their markets into health care, customized training programs to better meet the skill needs of different local manufacturing clusters, and support for a biotech research corridor.

For distressed neighborhoods, neighborhood job creation is ineffective in helping residents. Most Americans do not live and work in the same neighborhood, so adding more jobs to a distressed neighborhood will not significantly boost the employment rates of its residents. What residents need is better job access, including improving public transit or helping provide reliable used cars, helping residents find affordable, quality child care, and both classroom training and on-the-job training services for in-demand jobs in the local labor market, among others. Studies show that these neighborhood job access services can increase employment rates at a cost per job of $103,000.198

Job access services for distressed neighborhoods should be combined with investments in improving the neighborhood’s amenities, including by lowering crime rates, improving schools, and investing in public parks, neighborhood business districts, and other neighborhood infrastructure. If neighborhood amenities are improved without increasing neighborhood residents’ earnings, though, the result is excessive gentrification, with housing price increases outpacing residents’ ability to pay. At the same time, if neighborhood residents’ earnings are boosted without improving a distressed neighborhood’s amenities, the result is excessive out-migration, undermining neighborhood improvement. Simultaneously boosting both neighborhood amenities and residents’ earnings is more likely to lead to neighborhood improvements that actually help residents. 

A good example of job access services is the Employer Resource Network program. The ERN model started in west Michigan in 2007 and currently is a loose network of programs active in 25 local labor markets across eight states that all follow a similar model. The national network provides certification of local programs and some training support for programs, but programs are administered and funded locally.199

Under the ERN model, employers share in the cost, typically alongside a public subsidy, of providing what amounts to support for social work casework services for newly hired workers, particularly disadvantaged workers. The ERN “success coach” can provide counseling to both the worker and their supervisor to help overcome problems with attendance or personal relationships that might impede job retention.

The ERN model can be viewed as a form of on-the-job training in so-called soft skills. Success coaches also can help employees find new child care arrangements if needed. In some ERN programs, if an employee’s car breaks down, the success coach can work with a local credit union or bank to quickly obtain a loan to repair the car.200 For the local ERN program in the Kalamazoo, Michigan, area, for example, car repair loans of up to $1,000 can be provided, and about 3 percent annually of all ERN-served workers need such a loan.201

Job access services can be coordinated by Neighborhood Employment Hubs, as has been done in Battle Creek, Michigan.202 Such hubs move the workers in job training agencies out of impersonal downtown office buildings into trusted institutions in distressed neighborhoods, making services more accessible to residents, both physically and psychologically. In Battle Creek, these trusted neighborhood institutions include a neighborhood group, a subsidized housing project, and a neighborhood church.

Moving the training agencies’ workers into these local hubs makes these workers more aware of neighborhood weaknesses and assets and more in touch with neighborhood services and needs. For example, workers at the hubs may be more in touch with neighborhood businesses, which may increase awareness of job vacancies and facilitate more productive job placements.

What it takes: A federal government or state governments that can provide significant resources to target and empower distressed places

Based on these costs of around $100,000 per job added, significantly increasing distressed places’ employment rates requires providing these places with annual assistance of around $300 per capita203 for at least 10 years.204 The total national costs of significantly helping severely distressed places sum to around $20 billion per year for at least 10 years.205

This total amount is obviously just rounding error compared to total annual federal spending, which is more than $6 trillion. Yet such a commitment to local economic development would be large compared to recent federal commitments to local development. In fiscal year 2024, for example, federal appropriations for the Community Development Block Grant program, which supports various types of community and economic development activities in distressed urban neighborhoods and distressed rural communities, were about $3 billion.

As another example, the public perception that the Biden administration succeeded in getting large-scale appropriations for programs targeting distressed places is incorrect. Most of the programs targeting distressed places ended up receiving appropriations that were at a pilot scale.206

Yet the Biden administration did succeed in getting the U.S. Congress to appropriate significant dollars for industrial policies that targeted specific industries for job creation. For example, the CHIPS Act appropriated $53 billion to revitalize the U.S. semiconductor industry.207 But such a subsidy program for the semiconductor industry is not really a place-based program—it is certainly not targeted at distressed places.208 Other programs tried to geographically diversify the tech industry, but, in most cases, that is not the same as targeting distressed places.209

Consider one example of a program that did explicitly target distressed places. The Recompete program was originally proposed by former Rep. Derek Kilmer (D-WA) in 2022 as a program specifically targeting distressed places with low prime-age employment rates, offering flexible funding that could include many of the customized services advocated for earlier in this essay. The suggested funding level in Rep. Kilmer’s original bill averaged more than $17 billion per year for 10 years. In the CHIPS Act, the program was authorized as the Recompete Pilot Program, with a one-time authorization of $1 billion. Actual appropriations ended up at $200 million.210 Recompete may be a promising program, but it was not funded at scale. In fact, Recompete was not even funded at a sufficient scale to be readily evaluable, to simply see if this approach works.211

In sum, recent experience suggests that it is difficult politically for the federal government to target $20 billion annually in aid to distressed places. But $20 billion annually is comparable to what has sometimes been spent in the past. For example, just after it was created in 1974, Community Development Block Grant funding, which replaced urban renewal and other categorical community development programs as part of President Richard Nixon’s new federalism policies, peaked in the late 1970s at an annual funding level equivalent to more than $15 billion today.212 The question is whether the federal government for the foreseeable future can recover its ability to fund such targeted development aid at scale.

What, then, are the alternatives, if federal aid of the required scale is not forthcoming? Distressed places cannot realistically afford annual costs of $300 per capita, which is more than 10 percent of average local tax revenues.213

State governments, however, could afford to invest $300 per capita in their most distressed quintile of places, which would have a statewide cost of $60 per capita ($300 times 20 percent).214 As mentioned above, state governments in total invest more than $70 billion per year in business tax incentives for economic development, which typically do not do much to target distressed places. Simply cutting current incentive programs by less than one-third would free up the $20 billion per year needed to help the most severely distressed places.

Yet such federal or state aid requires targeting distressed places. And targeting is politically challenging and has rarely been sustained at scale for development aid from federal or state governments.

As I have argued before, perhaps federal or state targeting of development aid would be more feasible if it were “targeting within universalism,”215 which has usually been discussed as a political consideration in the design of social programs. The argument is that a social program to help the poor is more politically feasible if significant benefits also go to the middle class and other groups.216 Applying such a concept to development aid could mean providing some job creation aid to all places but tying per-capita aid to a place’s prime-age employment rate.217 The argument is that such an approach would be more politically feasible because all places would get some aid.

Such a targeting-within-universalism approach has sometimes been used for various large government programs.218 Social Security, for example, provides retirement income help for almost all workers, but the benefit formula provides higher benefit payments relative to payroll taxes for lower-wage workers. Perhaps the most relevant example is intergovernmental aid for public schools: Many states tie school aid for Kindergarten-through-12th grade school districts to the district’s number of low-income students.219 This extra state aid per low-income student is sometimes 40 percent to 50 percent greater than the general support per student. So-called federal Title I aid to school districts, funded annually at more than $18 billion, is even more targeted, with the funds mostly determined by a school district’s number of low-income students.220 

All of these are precedents for basing a government program’s aid on need while still recognizing that everyone may have some level of need. Doing so for place-based jobs policies simply requires conceptualizing this local economic development aid as a way to help, first of all, nonemployed or under-employed workers. Greater aid to local labor markets or neighborhoods with lower prime-age employment rates can then be viewed as fair. Funding would be proportionate to the number of local residents needing jobs.  

Aid for distressed places by the federal government or state governments also must recognize the need for local flexibility. When attempting to increase local employment rates, one size does not fit all. Whether a local labor market’s job creation strategy should emphasize manufacturing extension services, for example, depends upon the viability of local manufacturing. As another example, the specific business real estate or local skills that are needed will vary greatly across places.

At the neighborhood level, the transit or car options that are most needed will depend on the area’s size and the neighborhood’s proximity to job centers. The availability of child care also varies greatly by neighborhood. And the need for job training programs can depend on residents’ skills compared to the jobs in locally growing industries. Local leaders and residents should help design local strategies, as local investments will be needed to complement federal or state investments.

Conclusion

Helping distressed places requires a different philosophy of federal or state aid to local places. The federal or state aid must be generous and long term yet highly targeted, while also allowing for considerable local discretion. Such an aid strategy differs from usual intergovernmental aid, which comes in the form of categorical programs. These categorical programs provide short-term funds whose allowable uses are dictated from the top down to the localities.

This long-term, flexible, and targeted aid is needed to visibly help the residents of distressed places. The aforementioned Recompete Pilot Program, which used the prime-age employment rate as its investment metric, is a start, but these investments need to be made at scale in distressed communities across the country.221 Such aid would show respect for the worth of distressed local communities. It would honor the high value that many residents place on where they live because people care that their home community is doing well economically and socially.

Promoting employment via such aid would offer residents in distressed communities the dignity of work. A key part of personal identity and self-respect for many residents of distressed communities is the ability to find a good job in their home community, rather than being forced to move out. This flexible aid approach also shows respect for the unique characteristics of local places. Flexible aid empowers local leaders and institutions, rather than dictating to them from the top down.

Can federal or state governments say to the leaders and residents of distressed places: “I am from the federal or state government, and I am here to help,” and credibly deliver? The outlook is hazy. We need to try again with this new approach—and continue trying until we get it right.

About the author

Timothy J. Bartik is a senior economist at the W.E. Upjohn Institute for Employment Research, a nonprofit and nonpartisan research organization. He co-directs the Institute’s research initiative on policies for place. Bartik received his Ph.D. in economics from the University of Wisconsin-Madison.


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More accurately measuring economic sentiment will help build a U.S. economy—and democracy—that works for all

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Overview

When politicians and members of the media discuss the state of “the economy” in the United States, they often use a small handful of data points. Of all the indicators of economic performance, just four are relied on as the primary gauges of the U.S. fiscal direction: Gross Domestic Product, the Dow Jones Industrial Average index, the inflation rate, and the unemployment rate.

Economic measures such as these are seen as objective in their ability to capture how the U.S. economy is doing. These data are certainly prepared dispassionately, according to predefined formulas. But the choice of which metrics to use is highly subjective—and highly revealing of what a society values. As the old saying goes, “What gets measured, gets managed.”

Traditional metrics seek to offer a portrait of how an economy is doing. But the U.S. political and economic system should focus less on how the U.S. economy is doing and more on how Americans are doing. By adopting indicators that are more closely attuned to Americans’ economic and political lives—and by listening to the hopes, dreams, and concerns of those Americans—policymakers can steer toward an economy focused on the well-being of the greatest number of people.

This essay begins with a look at current indicators and their shortcomings in reflecting economic sentiment among the U.S. population. We then discuss how these shortcomings impact U.S. political institutions and civic life. Next, we offer a new method of measurement—what we call the CORE Score—and preview how transitioning to people-focused indicators could yield economic discourse that more accurately reflects how the economy is in fact performing for the majority of Americans.  

The need to reimagine U.S. economic measurements is readily apparent in the aftermath of the 2024 presidential election. For months leading up to Election Day, op-ed pages were roiled in debates (to which we contributed222) over the disconnect between traditional economic indicators, which looked positive, and responses to polls and surveys asking for people’s views on the economy, which were decidedly less positive. Democrats were understandably perplexed by the outcome of the election: By traditional measures, the Biden administration had shepherded the nation through the economic morass of the COVID-19 pandemic, especially in comparison to peer nations.223 Why didn’t voters reward them for this stewardship at the ballot box?

We can hardly claim to have the answer, but our past work provides some clarity. In 2022, as part of the Commission on Reimagining Our Economy at the American Academy of Arts and Sciences,224 we organized small-group conversations across the country, including with service, care, and airport workers, tribal leaders, teachers, small-business owners, and community college students, among others.

What we heard in these listening sessions reflected the consumer sentiment being captured in polling. Inflation was on people’s minds, and many participants expressed that they were living on a financial knife-edge.

But the people we talked to were not only upset because of short-term economic circumstances. They also felt the U.S. economy as a whole was not designed for them. “We really live in a world of abundance,” a woman in Chicago told us, “but the abundance is misdistributed.” Other people in other places were doing better and better, while their economic situation stayed the same or got worse. “Twenty years ago, you didn’t have to work two jobs to get by because we still had [factory jobs]. There’s no factories or anything around here [anymore],” one Morehead, Kentucky, resident explained. Many, including a tribal leader in Arizona, felt that ours is a “greed-based economic system.” And while services were available to help people through adversity, participants talked about the difficulty learning about or accessing these services.

The sentiments that we heard in our listening sessions were actually evident in nontraditional economic indicators—most of which were overlooked in the pre-election discourse about the supposedly robust economy. For example, in 8 of the 10 quarters since the start of 2022, total credit card debt increased, and the percentage of balances delinquent for more than 90 days climbed steadily since the middle of 2023.225 The percentage of auto loans that fell into delinquency by the end of 2023 was at its highest point since the Great Recession of 2007–2009, and rates of food insecurity have been increasing.226

Voters and lawmakers can be forgiven for not providing equal attention to these nontraditional economic proxies. Part of the problem stems from how the media covers the economy. Indeed, a 2021 study finds that, because of the news media’s focus on economic aggregates, “the tone of the economic news strongly and disproportionately tracks the fortunes of the richest households.”227

Additionally, GDP and the Dow Jones are reflective of well-being—but the well-being of those who are already rich, not of all participants in the U.S. economy. After all, about 40 percent of U.S. households do not own stock, including through retirement accounts.228 Yet fluctuations of the Dow frequently make front-page headlines. Of course, changes in the stock market affect the entire economy, even those not directly invested in it. But the reduction of the state of economy to the state of one stock market index obscures as much as it reveals.

Impacts on U.S. democracy and political institutions

Our push for a broader array of economic metrics is born not only of concern for Americans’ material well-being but also the well-being of U.S. democracy. Economic security and opportunity play an outsized role in shaping social trust. Studies show that when people feel economically unstable, are insecure in their jobs, or feel they are not getting what they deserve at work, they are less likely to place their trust in political institutions.229

People’s worries about their financial well-being generally foster support for government intervention to bolster their security, but a perception of government inaction might feed a sense that the system in place is not designed for them.230 Why should someone have faith in the economy if the economy is not working for them?

Such distrust is not confined to the economy but rather extends to a broad array of institutions, both private and public, that, to some, seem to conspire to damage their lives and communities. Take, for instance, the research that University of Wisconsin–Madison’s Katherine Cramer (one of the authors of this essay) did in Wisconsin from 2007 to 2012.231 She invited herself into small groups in dozens of communities across the state, particularly in rural areas, where residents often claimed they were not getting their fair share of resources, attention, and respect in comparison to those who lived in urban areas. In fact, an analysis of tax collections and per capita expenditures at the time showed that, if anything, people in rural counties were getting more than their fair share.232

Yet the cycle of trust in these communities had broken down. People generally tend to make assessments about whether the status quo is working based on both their absolute and relative well-being—in other words, both how their community and their racial/ethnic group is doing, and how they compare to other communities and to other groups.233 Levels of poverty and unemployment were higher in rural places, and household income was lower than in more urban counties.

These comparative disparities registered with many rural residents and fed resentment against urbanites and government actors. And the perception that the government was not working for rural people or rural communities turned out to be fertile ground for Republicans.

The so-called politics of resentment—these sentiments and the political use of them—is hardly confined to Wisconsin. It has taken over much of the national Republican Party and, through it, the White House and the U.S. Congress. In recent U.S. elections, people who perceive that their social group has declined from high to low status appear to be more willing to support candidates who pledge to restore old status hierarchies.234

In fact, the greatest supporters of resentment politics are not necessarily those who actually are experiencing the lowest levels of economic well-being but rather those who perceive that the place where they live is disadvantaged.235

Such a phenomenon is likewise hardly confined to the United States. One study from Europe finds that in EU member states, declining manufacturing and lower per-capita GDP bears a strong association with voting share for right-wing populist parties.236 As seen in Wisconsin during the Obama administration, the breakdown of the economic system fosters support for leaders willing to tear much of that system down.

Many of the uneven shifts in economic well-being that set the stage for the politics of resentment in the United States are not reflected in traditional measures of the U.S. economy. Before 2020, GDP and the Dow Jones had generally shown a steady recovery since the Great Recession. Someone following the economy just through the headlines of a national newspaper will be forgiven if they missed that the recovery in Washington, DC, did not quite reach Washington County, Pennsylvania.

The United States has always had rich and poor places. But while scholars have found a convergence in the fortunes of these places for much of the mid-20th century, this convergence decreased or disappeared entirely between 1980 and 2010.237 The result? Parts of the country are not progressing together—and are even moving in different directions.

Measuring what matters: Changing how we capture economic performance

Even some economic metrics themselves do not necessarily reflect what they purport to measure. Indicators such as the unemployment rate appear straightforward: They measure the percentage of the adult population that is unemployed, right? Not exactly.

As the former Comptroller of the U.S. Currency Eugene Ludwig argues, the traditional headline unemployment rate does not account for those who are without work and no longer actively looking for employment, counts underemployed people who are looking for more work as fully employed, and does not account for how well someone’s job pays.238 Similar issues plague other headline indicators—most obviously inflation, GDP, and the Dow Jones.

Between the problems underlying these metrics and the importance of observing geographic economic trends, policymakers and the media should shift their focus away from aggregate, national measures of economic performance toward more localized, people-centric indicators. We have just such a measure for them to consider.

The CORE Score

Because it became clear to us that traditional metrics do not reflect the well-being of many of the Americans with whom we spoke, we and our colleagues on the Commission on Reimagining our Economy created the a county-level economic index called the CORE Score.239 Crucially, this score’s north star is well-being: It traces not how well-off communities are but how well they are doing, as measured through an annual score. Since even county-level measurements can disguise disparities, the CORE Score provides visibility into disparities within counties along lines of race/ethnicity, age, sex, income, and education level.

This score takes into account indicators from four categories: economic security, economic opportunity, health, and political voice. (See sidebar below.) Many other factors determine well-being, of course—for example, the degree to which someone is free to spend their time how they wish. But many such measures are only available at the national level, without sufficient sample size for geographic disparities, particularly at the county level. For the Score, each U.S. county is scored along each category, with the average producing its CORE Score, and each category score is constructed using a scaled average of the metrics within each category.

We picked these categories because of how well they can capture elements of well-being. A community lacking security, for example, or the chance to pursue or achieve a better life, cannot be a thriving community. Neither can one where people have short lifespans or are unable to receive medical coverage. Measures along these categories are somewhat standard for alternative economic indices such as ours.

Our use of a measure of political voice is less common. We include it because we believe that in a democratic society, the civic health of a community contributes to and reflects its overall well-being. When people engage in activities with one another and when they voice their concerns to their government, they are toning muscles that can help them address community problems and redirect government toward the challenges they find most pressing.

To that end, the CORE Score includes data on voter turnout and civic participation, as well as a new measure of the quality of political representation developed by Commission member and Yale University political scientist Jacob Hacker. This latter data point captures political congruence, or the degree to which members of Congress vote in line with the preferences of their constituents, as expressed by those constituents in public opinion surveys. Being well-represented is hardly a predictor of economic well-being, but identifying who is getting what they want from the political system is important when comparing the well-being of different parts of the country.

Using population-weighted county Scores, we generate state-level CORE Scores. We find, for example, that between 2013 and 2023, the states with the highest average CORE Scores were Minnesota, North Dakota, Iowa, and Wisconsin. In fact, we find that the upper Midwest generally boasts strong results across a variety of measures, particularly economic security. These are many of the same states that, according to a widespread political narrative, turned to populism and President Donald Trump because of economic anxiety.

Yet we find that many of these places are thriving relative to the coastal elites of whom they seem so resentful. Well-being is rooted in perception as much as in reality. So, even if these places—at least at the state level—seem to offer some of the highest levels of well-being in the country, the perception that other places are doing even better, or are receiving unfair levels of help from the government, can breed distrust.

We hardly claim that the CORE Score can singularly explain the emergence of the politics of resentment. Still, this score tells stories that can help explain dissatisfaction with the current state of the U.S. political system. For instance, we see a modest negative correlation (-0.49) between a county’s political voice—the average of its voter turnout, civic participation, and political congruence score, scaled from 1 to 10—and vote share for Donald Trump in the 2024 presidential election.

In general, people living in counties with worse political voice, defined as lower turnout, worse rates of community political involvement, and worse quality of representation, were more likely to support the candidate who has long promised to disrupt the political system. (See Figure 1.)

Figure 1

People in counties with worse political voice tended to vote for President Donald Trump in 2024

Average voter turnout, civic participation, and political congruence scores in U.S. counties, 2023, and the share of each county’s vote that went to Donald Trump in 2024

Average voter turnout, civic participation, and political congruence scores in U.S. counties, 2023, and the share of each county’s vote that went to Donald Trump in 2024
Source: CORE Score metrics, compiled by data analyst Zach Broeren.

Some of the stories that emerge from the CORE Score contrast sharply with the dominant economic narratives of the past few years. Gross Domestic Product and the Dow Jones, for example, plummeted in early 2020 amid the onset of the COVID-19 pandemic, but both measures had recovered almost fully by the end of that year.240 In contrast, in 2023, the nation’s CORE Score (5.60) still had not recovered to its 2019 level of 5.87, the highest since 2011. (See Figure 2.)

Figure 2

Nominal per capita U.S. GDP and CORE Score, indexed to 2008

Such a change may appear marginal, but that is part of the problem: The Score shows a modest (7 percent) decline to national well-being since the start of our data in 2008. Between 2008 and 2023, Virginia and the District of Columbia were the only states (or state equivalents, in the case of Washington, DC) whose Score improved, while just 158 out of 3,143 total U.S. counties241 saw improvement.

Conclusion

Further research using data from the CORE Score and other nontraditional indicators is needed to explain geographic disparities and associated changes in U.S. politics. But the case for these metrics is clear: The fixation on aggregate economic measures has papered over the fact that the economy is made up of people, and that the U.S. economy should serve people, not the other way around.

Using geographically attenuated indicators more closely tied to people’s well-being would allow policymakers and economic storytellers alike to offer a more accurate picture of how the United States is doing. Properly capturing the true extent of economic insecurity represents a crucial step in reshaping public discourse—and, ultimately, public policy—in favor of economic policies that would address the needs of the Americans with whom we spoke. Doing so would also help identify places where normal politics are breaking down and where the politics of resentment may be emerging.

Adopting measures such as these can be as simple as including them in briefing materials for lawmakers or in standard-fare news coverage of the U.S. economy. After all, why shouldn’t the release of data on credit card delinquencies receive the same headline treatment as the latest unemployment figures?

Policymakers could also support the production of additional measures by providing greater support—financial, administrative, or both—to the nation’s statistical agencies. Doing so would help facilitate the timelier release of certain data points, which would allow measures with inherent lags—such as health data, which can take months or years to compile—to compete with the quarterly releases of inflation, GDP, or unemployment data or even the daily vicissitudes of the Dow Jones.

A continued focus on top line measures cultivates misperceptions of widespread economic growth, which abet ongoing anger toward a system that seems to not be working for those who could use its help. Such a trend helps explain why some of the places in the country that have the highest average levels of well-being according to the CORE Score are also some of the places where the politics of resentment has found its greatest purchase.

By listening to Americans, and by measuring what truly matters, the nation’s leaders can forge a path to rebuilding trust and building an economy that works for the people who make it work.

About the authors

Katherine J. Cramer is a political science professor at the University of Wisconsin–Madison. Jonathan D. Cohen is a senior program officer at the American Academy of Arts and Sciences.


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Understanding the role of immigration and economic factors in boosting support for far-right political parties

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Overview

Far-right and right-wing populist political parties differ in many respects, but nearly all share one common thread: strong opposition to immigration. These parties often push for stricter border controls and, in some cases, advocate for repatriating immigrant communities already in the country.

Research also shows that immigration consistently ranks among the top concerns for the voters and supporters of far-right parties.242 Yet studies examining the relationship between immigration levels and support for right-wing populist parties remain inconclusive. Some find that immigration fuels support for these parties, while others suggest no effect—or even the opposite.

This essay offers a new way to understand how concerns about immigration translate into political behavior. Below, I distinguish between two core concepts: triggers and channels. Triggers refer to changes or shocks to voters’ circumstances—such as the rising presence of immigrants or the increased risk of unemployment—while channels describe the mechanisms through which these shocks lead to greater support for right-wing populist parties.

This framework helps clarify how both cultural and economic factors can interact to generate increased support for right-wing populist parties. I also explore how a different kind of demographic shift—emigration, or the movement of people out of an area—can influence voter behavior in similar ways. Finally, I discuss how increased exposure to immigrants can, somewhat counterintuitively, lead to reduced opposition to immigration, particularly when contact is meaningful and cooperative.

Explaining increased support for anti-immigration parties

The rise of far-right and right-wing populist parties marks one of the most significant political developments across advanced democracies in recent decades. These parties have gained ground in national legislatures around the world, and in several countries, such as Italy and Sweden, they have entered governing coalitions.243 As a result, their influence on policy—especially immigration policy—has grown substantially.

Despite their differences, nearly all right-wing populist parties share a defining trait: firm resistance to immigration. Throughout this essay, I refer to them as anti-immigration parties, reflecting both their platforms and their rhetoric. These parties typically advocate for policies that restrict immigration, including hard limits on annual inflows and, in more extreme cases, calls for repatriation or denaturalization of foreign-born residents.

Research shows that the leaders of these parties overwhelmingly support such views.244 The same applies to their voters.245 Supporters of anti-immigration parties tend to rank immigration among their top political concerns and consistently favor tougher policies toward immigration. As a result, immigration is a unifying issue for both the leadership and the base of these parties.

Much of the academic and political debate around the rise of these far-right parties has focused on immigration as the key driver. The common assumption is that an increase in local immigrant populations directly fuels support for these parties, primarily through cultural concerns among the native-born population about perceived loss of status or identity as a result of increased diversity. Some research backs this up.246 But other studies complicate the picture, suggesting that economic insecurity—rising unemployment or growing inequality, for example—plays a more central role than immigration.247

This debate often pits cultural explanations of populism’s growing support against economic ones. But are these really opposing forces, or do they interact in more complex ways? Rather than viewing cultural and economic explanations as mutually exclusive, some scholars have suggested that these factors often operate in tandem.

One way to understand this interaction is by distinguishing between triggers—the immediate events or conditions that prompt political reactions—and channels—the interpretive or mediating frameworks through which these reactions are shaped. Both triggers and channels can reflect cultural or economic concerns, particularly when it comes to immigration.

How triggers and channels shape political behavior

Much of the existing research on support for anti-immigration parties focuses on identifying the conditions that drive changes in voting behavior. In many cases, these studies isolate specific shifts in local or national contexts that correlate with rising support for anti-immigration parties.

Political scientist Dominik Hangartner at ETH Zurich and co-authors, for example, examine the impact of refugee arrivals during the so-called European refugee crisis of 2015-2016.248 The study compares Greek islands that received refugees to those that did not, arguing that the only meaningful difference between the two was the presence of refugees. Since other economic and social conditions were largely similar, the presence—and particularly the visibility—of immigrants served as a clear triggerfor changes in political behaviors. In this case, immigration itself acts as the stimulus that pushes voters toward anti-immigration parties.

By contrast, economic triggers are at the heart of other explanations for populism’s rise. For instance, University of Bocconi scholars Italo Colantone and Piero Stanig link job losses from rising import competition in the United Kingdom with support for the 2016 Brexit referendum.249 Here, exposure to worsening economic conditions—rather than immigration itself—is believed to have shifted political preferences toward populist ideas.

These two examples are often used to illustrate a broader divide in the research. The first case highlights a cultural trigger, while the second focuses on an economic one. But to fully understand how these triggers lead to political change, we must also consider the channels through which they operate.

There are two main channels: an economic channel and a cultural or immigration-related channel. Both types of triggers—those related to immigration and those related to economic conditions—can influence voting behavior through either channel. Increased immigration, for example, might lead native-born voters to feel that their cultural identity is under threat, or it might raise concerns about labor market competition and the allocation of public resources. In both scenarios, the trigger—increased immigration—is the same, but the channel—threat to cultural identity or to economic security—differs.

The interaction can also work in reverse. Economic hardship can heighten awareness of immigration policies, leading voters to blame immigrants for declining services or limited job opportunities. Here, the economic trigger operates through a cultural channel, as economic stress is interpreted through the lens of increased immigration.

These interactions complicate the simple dichotomy between cultural and economic explanations. Rather than viewing them as competing theories, this framework helps us understand how they often work together through different channels to shape political behavior.

Immigration as a trigger shaping political behavior

Because immigration is a central policy concern for anti-immigration parties, it is no surprise that many demand-side explanations in the research focus on it. Numerous studies have shown that immigration consistently ranks among the most salient political issues for both voters and representatives of these parties.250

In most analyses, immigration is operationalized as either the level or the change in the share of foreign-born individuals within native-born populations’ local areas. These aggregate-level indicators are then linked to either individual-level survey data or election outcomes at the aggregate level.

Scholars generally identify two main reasons why increased immigration in a neighborhood might influence native-born voters’ propensity to support anti-immigration parties. The first is cultural: Immigrants—particularly those perceived as coming from “culturally distant” regions—are often viewed as a threat to the cultural and social status of native-born residents. As the presence of immigrants becomes more visible, some voters fear that their traditions, identity, and social position are at risk.251

The second is economic, with two separate but related mechanisms. First, there is concern over labor market competition. Native-born workers may fear that immigrants, especially from low-income countries, will accept lower wages or take jobs that would otherwise go to them.252  Second, there is concern over access to welfare services. Economically vulnerable voters might worry that increased immigration will lead to greater competition for unemployment benefits, public housing, or other forms of public assistance.253 The visibility of immigrants in these neighborhoods makes such concerns more immediate and politically salient.

Notably, these economic fears are expected to have the greatest impact on voters who are themselves economically insecure.254 Yet there is a related economic channel that can affect voters beyond those facing direct economic vulnerability: Increases in local immigrant populations may signal to native-born residents that the government will need to redirect public funds—for education, health care, or transportation—toward accommodating new arrivals.

Some voters might also worry that taxes will be raised to meet these demands. These concerns are not limited to lower-income groups. Indeed, even higher-income voters may perceive immigrants as a net burden on public finances, resulting in increased demand for restrictive immigration policies.255

While immigration serves as the trigger across these examples, the channel through which it affects political preferences varies—cultural for some, economic for others. These competing interpretations often lead to different conclusions about what drives support for anti-immigration parties: either immigration itself or the underlying economic conditions that shape how immigration is perceived.

Economic conditions as triggers shaping political behavior

An alternative category of triggers relates to economic factors. These can be broadly divided into two subtypes. The first concerns changes to voters’ personal economic circumstances, and particularly their labor market status, such as wage reductions, job losses, or heightened unemployment risks. The second involves shifts in broader neighborhood or regional economic conditions, such as long-term industrial decline or the erosion of both private and public goods and services, often as a consequence of austerity policies.256

These economic shocks can feed into anti-immigration sentiment through several channels. One common pathway connects economic hardship to immigration-related fears. For instance, a laid-off worker might attribute their displacement to labor market competition from immigrants.257 Others might worry that, in the wake of personal economic decline, they now face greater competition from immigrants over access to welfare services, such as unemployment benefits or social assistance. In these cases, economic hardship acts as the trigger, while immigration becomes the perceived threat—making anti-immigration policy more salient.258

Voters also can perceive declining neighborhood conditions as stemming from immigration. Government resources directed toward immigrant populations may be seen as coming at the expense of investment in struggling local economies. In this view, the state is seen as prioritizing immigrants over native-born citizens, reinforcing perceptions of neglect among these groups.259

Importantly, economic triggers can also operate through direct, nonimmigration channels. Although anti-immigration parties are primarily known for their positions on immigration, many also advocate for protectionist trade policies. They frequently oppose free trade and international agreements, arguing that these policies harm domestic industries.

In this context, economic distress—especially that caused by import competition—can drive voters toward anti-immigration parties not because of immigration, but due to dissatisfaction with global trade. Workers laid off due to competition from low-wage countries, for example, might demand more protectionist policies at home and find their views reflected in these parties’ platforms.260

Finally, most anti-immigration parties also adopt populist narratives that blame mainstream political elites for economic decline. These parties portray themselves as champions of “the people” in opposition to the interests of a distant political class, which is often aligned with economic, media, and cultural elites.261 Within this framework, established parties are blamed for rising inequality and regional economic stagnation.

Voters in these economically depressed areas may feel “left behind” as wealth and opportunity become concentrated in urban centers. While immigration can still factor into this narrative, the core grievance may focus more broadly on elite neglect, austerity, or perceived urban bias in public investment.262

Beyond immigration: Emigration and the effects of intergroup contact

So far, this essay has focused on how immigration is expected to increase support for anti-immigration parties. Yet two additional demographic dynamics merit attention: emigration from depopulating areas and the role of intergroup contact in shaping attitudes toward immigration.

First, let’s consider emigration as a trigger. When working-age residents leave depopulating areas in search of jobs or education, this lowers the local tax base and reduces demand for both public and private goods and services. When a former mill town loses its main employer, for example, its young residents might move away in search of opportunities elsewhere, leading to cuts in services, such as health care, education, and transportation. As demand shrinks and revenue declines, public infrastructure deteriorates. The remaining population faces reduced access to essential services and amenities.263

Beyond material consequences, emigration can also foster a psychological sense of abandonment. Residents might literally feel “left behind,” giving rise to a form of collective low self-esteem or resentment. These sentiments can be politically mobilized by populist parties and politicians, who blame the decline on neglect by established political elites. While regional decline can result from long-term structural changes beyond any government’s immediate control, populist narratives often frame it as a deliberate political failure.264

Second, while much research emphasizes how immigration can increase anti-immigration sentiment, a growing body of work challenges this assumption. Under certain conditions, the presence of immigrants might actually reduce support for anti-immigration parties. This insight draws on the so-called contact hypothesis, which posits that intergroup contact—especially when cooperative and repetitive—can reduce prejudice.265

Studies have shown that extensive, cooperative interactions between majority and minority group members can undermine negative stereotypes and foster more tolerant attitudes.266 When contact is brief, superficial, or perceived as competitive, however, it may instead heighten anxiety and reinforce negative attitudes.

One important social arena is the workplace, where cooperative interactions between co-workers are often facilitated and encouraged. In this context, intergroup contact has the potential to reduce opposition to immigration. At the same time, the increased visibility of immigrants in the workplace might reinforce native-born workers’ fears of labor market competition—potentially more so than visibility in other everyday settings, such as public squares or supermarkets. Workplace contact can therefore have both positive and negative effects on attitudes toward immigration.

Using Swedish administrative data, one recent study investigates how increased exposure to foreign-born co-workers affects political preferences.267 The results suggest that intergroup contact can indeed reduce support for anti-immigration parties—but only in smaller workplaces and among co-workers of similar skill levels. In such settings, interactions are more likely to be intimate and sustained, often centered around shared goals. These conditions appear to offset fears of labor market competition with similarly skilled immigrant co-workers.

Conversely, the study finds that same-skill intergroup contact in large workplaces tends to increase opposition to immigration. In these environments, workers can more easily opt out of social interactions, leading to more superficial or incidental contact. Without the benefits of meaningful engagement, the perception of competition remains unmitigated.

Most importantly, the study shows that vulnerabilities in the labor market influence the effects of contact. Specifically, when immigrant co-workers become more visible in occupations characterized by high insecurity, such as office and customer service clerks, then opposition to immigration increases. The reverse is true for secure occupations, such as managers and associate professionals, where contact leads to decreased opposition to immigration. In short, workers who face real risks of losing their jobs are more likely to interpret the presence of immigrants as a threat to their employment prospects.

The distinction between meaningful and superficial intergroup contact helps explain why some studies find that increased immigration boosts support for anti-immigration parties, while others show the opposite. The quality and context of intergroup contact matter significantly.268

Together, these two perspectives—on emigration and on the moderating effects of intergroup contact—complicate the assumption that more immigration automatically generates demand for more restrictive policies. They underscore the importance of local context, social dynamics, and psychological perceptions in shaping political behavior.

Conclusion

There are many demand-side explanations for increased support for right-wing populist parties and various reasons why voters turn to them. Although immigration remains the most salient political issue for these parties—and for most of their voters—the existing evidence on the relationship between immigration and native-born voters’ propensity to support them is mixed.

At the same time, there is growing scholarly consensus that economic factors also play a key role in rising support for right-wing populist parties. They are widely believed to benefit from periods of economic downturn.

This essay highlights that economic and immigration-related explanations for rising support for right-wing populism are often intertwined rather than mutually exclusive. For instance, both increased immigration in native-born voters’ neighborhoods and negative shocks to their economic circumstances can heighten perceptions of competition over economic resources.

While these trigger factors differ, they can lead to similar outcomes—namely, increased support for more restrictive immigration policies. Immigration, as a trigger, might then translate into opposition to immigration through economic concerns. Likewise, economic insecurity can fuel demand for stricter immigration policies due to fears of increased competition from immigrants.

Yet increased local immigration can have the opposite effect, depending on the nature of intergroup interactions. Meaningful, repeated contact—particularly when characterized by cooperation—tends to reduce prejudice and lower opposition to immigration. The mixed empirical findings in the research can, in part, reflect differences in the quality and character of contact between native-born and foreign-born individuals.

Lastly, a growing body of research highlights the importance of another major demographic shift: emigration. Increased support for right-wing populist parties has been observed in areas where large shares of working-age residents have moved away—either to urban centers or abroad—resulting in both material and psychological consequences for those who remain. This dynamic adds yet another dimension to the broader puzzle of how and why voters are drawn to populist movements.

As such, policymakers seeking to stem the growing support for right-wing populism must consider all of the above when determining how to use immigration policy to garner more support among voters.

About the author

Sirus H. Dehdari is an associate senior lecturer in political science at Stockholm University. His work has been published in both political science and economics journals, including the American Political Science Review, American Journal of Political Science, British Journal of Political Science, and American Economic Journal: Applied Economics.


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America’s job-quality crisis and how to revive workers’ pay, dignity, job advancement, and economic well-being

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Overview

The poor quality of jobs in the United States is a slow-burning crisis that has been underway for many decades and has eroded many workers’ quality of life. Too many U.S. workers—especially but not exclusively workers without college degrees—are working in jobs with lower pay, lack of opportunities, and challenging work conditions, such as unstable schedules, all of which are detrimental to these workers’ well-being. 

In contrast, a good job can bring not only a paycheck but also meaning and social standing because it allows us to care for ourselves, our families, and contribute to something larger in our communities and our nation. Beyond earnings, the conditions of our work can affirm our dignity and our sense that our worth is recognized.269

As other essays in this project explain, the crisis of poor job quality has encouraged right-wing populist leaders to pitch divisive rhetoric to struggling workers and their families, even if their proposed policies do little to resolve the underlying crisis. This essay focuses on the drivers of poor job quality and concrete policy responses to address those drivers.  

The slow-burning job-quality crisis and its consequences, explained

Poor-quality jobs are by no means a new phenomenon in U.S. history, but the modern variant reached different industries and populations at different times starting in the 1970s and 1980s. The steady loss of manufacturing jobs and a decline in union power eroded job quality for many workers.270 Globalization and increased automation then hit, with some workers facing acute declines in their economic situations, as well as threats to their social standing.271

Pressure from financial markets on employers to cut labor costs grew, too, and managers changed practices to reduce costs.272 The rapid growth of the low-paid service sector as manufacturing jobs declined added new twists to poor jobs—unstable schedules and limited opportunities for advancement.273

Some groups, including White men working in manufacturing, have experienced real declines in job quality and economic security over their lives. Others have faced limited opportunities throughout their working lives, including Black workers, who still face hiring biases in many firms and industries.274 Those who experienced a slide and those who have long felt stuck may feel similarly frustrated, but they often are not united in pushing for change and may not see plausible strategies for collective action.

In recent years, unusually tight labor markets have provided some relief, pushing up wages for those at the bottom and creating some short-term leverage for better working conditions.275 Still, the broad trends in wages, benefits, and many other dimensions of work experience, unfolding over decades, have left many people with a sense that their lot at work is unfair and also out of their control.

Poor job quality and a sense of limited opportunities prompts anger, fear, and sadness about being disrespected and discarded at work, which plausibly leads to a sense of being disrespected and discarded in society more broadly. And that can push many workers and their loved ones to respond eagerly to politicians who articulate emotions of anger and fear and promise change.276 This assessment builds on a very strong research base linking job quality to mental health,277 as well as compelling qualitative studies making the connections to right-wing populism.278

We need to develop—and communicate—a more holistic understanding of job quality and its impact on workers, considering psychological and social, as well as economic, implications. The economic and psychological impacts of losing one’s job are well-known, but, additionally and critically, the remaining jobs are often of poor quality, and many feel their future options for good work will be limited.  

What policymakers need to understand to address the job-quality crisis

To develop a positive, holistic vision for improving job quality, policymakers need to be aware of the specific ways in which many Americans’ quality of work has declined in the past several decades. Specifically, these job-quality issues fall into at least seven areas:279

  • Diminished purchasing power for low-wage workers
  • Unstable work schedules
  • Lack of paid leave
  • Limited advancement opportunities for low-wage workers
  • Lack of job security
  • Work design and autonomy
  • Gaps in worker voice

Diminished purchasing power for low-wage workers

Many federal laws regarding work and supporting workers have not been updated to reflect new economic realities. One obvious example is the U.S. federal minimum wage of $7.25 an hour, which has not increased since 2009 and has fallen, in real terms, by about 30 percent since then.280 The failure to update federal wage floors reinforces the sense that, while elite employees can negotiate what they need, large numbers of ordinary workers are stuck on the wrong side of growing income inequality.

In some areas, state and local ordinances have surpassed the federal minimum wage—often creating better conditions in progressive states and on the coasts.281 Currently, 22 states have a minimum wage at or above $12 an hour, including California, Oregon, Washington state, Colorado, Illinois, New Jersey, New York, and Massachusetts. But state minimum-wage laws seldom reach workers in regions that already feel “left behind.” The effective minimum wage is still $7.25 in 20 states, including Indiana, Kansas, Kentucky, Mississippi, Pennsylvania, Texas, and more.

Unstable work schedules

Earnings obviously depend on both wage rates and work schedules. Overall, workers value stable schedules and the flexibility to adjust hours as needed for personal reasons.282 Yet there has been a clear trend toward more “just-in-time” or unstable scheduling practices, driven by employers.

Scheduling software helps tightly link schedules to variations in demand, based on sales by the day or even by the hour, leading to cancelled or shortened shifts, last-minute shift extensions, little advance notice of schedules, volatility in the number of hours worked across weeks, and limited say in schedules.283 These scheduling practices have negative consequences for economic security, including income volatility and difficulties holding a second job.284

Workers with unstable schedules are more likely to face economic hardships, including hunger, housing insecurity, and difficulty paying bills.285 Unstable schedules increase the odds of workers’ quitting their jobs, prompting lost earnings for these workers in the short run.286

Unstable schedules convey that employees are expected to be at the beck and call of employers. This workplace practice harms employees’ mental health and family life, as indicated by work-family conflicts, complex and more varied child care arrangements, and worse mental health among children whose parents or single parent have unpredictable schedules.287

Salaried employees also may experience frustrations about their earnings in relation to their work hours. Under the Fair Labor Standards Act, salaried workers making more than $35,568 a year are not paid for overtime hours, which means some supervisors and lower-level managers work long hours without additional pay. In my own research, salaried IT professionals earning much more than that put in very long hours and responded to emails, text, and chat any time of day or night because they frantically hoped to hold on to their IT jobs threatened by offshoring and emerging technologies.288

Even with relatively high earnings and good benefits, then, some workers still felt “owned,” disrespected, and stressed. This adds further fuel to the poor-jobs crisis.

Lack of paid leave

The United States is the only rich, industrialized country with no paid leave policy for new parents, and we are among just a few countries without paid sick leave laws.289 A lack of leave can feel like a lack of respect, and workers resent feeling forced to choose between their job and taking care of their health and their families.

Federal policies have not kept up with increases in mothers’ labor force participation, men’s caregiving, and an aging population. The Family and Medical Leave Act, passed back in 1993, guarantees the job of a leave-taker but does not provide income replacement. Moreover, due to size, tenure, and hours requirements, only 56 percent of employees are covered by FMLA-guaranteed unpaid leave, and only 49 percent of workers with just a high school education are covered.290 The inequality is obvious, with higher-income workers much more likely to have access to job-protected or paid leaves.291

Paid leave laws have been adopted by 13 states and Washington, DC. Again, most of the middle of the country has no guarantee of paid family leave, with the exceptions of Colorado and soon Minnesota.292

Limited advancement opportunities for low-wage workers

The possibility for advancement is a critical part of a quality job. Workplaces that provide training are valuable for moving up and building transferable skills that can lead to a good job elsewhere. About 59 percent of U.S. employed adults received some formal employer-provided skills training in the past year, and about 50 percent had gained skills via informal training from other employees.293 These opportunities, however, are not evenly available; training is less common for workers without a college degree, Hispanic workers, Black workers, contracted employees, and freelancers.294

Moreover, there has been a trend toward flattened firms, reductions in management positions, and outsourcing of some work roles, leaving many front-line workers without a clear career ladder for them to move up.295 While internal promotion systems have not disappeared, workers starting in low-paying occupations are more likely to move into higher-paying ones by switching employers than by staying with the same employers.296

Lack of job security

Job quality involves both adequate earnings and confidence that you can keep the job or find a similar one if needed. While the archetypal story in the news may be manufacturing workers who lost jobs to China, people in many white-collar occupations have faced job loss tied to offshoring, automation, and related pressures from financial markets to cut costs.

Job loss is often felt acutely as disrespect and triggers shame, even if workers are caught up in much broader trends.297 About half of Americans do not experience continuous employment through their 50s, and those unemployment spells reduce the odds of working into your 60s and beyond.298

Job insecurity also impacts those who manage to keep their jobs, negatively affecting health and pressuring those who “survive” a downsizing to do more and more with minimal complaint.299 Algorithmic management can prompt terminations, and often, front-line workers in warehouses, fast-food restaurants, and retail feel these decisions are out of their control.300 Insecurity is normalized, with persistent anxiety even among those who are currently employed.301

Of course, job security is completely absent from nonstandard work, such as contracting, temp, and gig work. This built-in insecurity is not uniformly negative, however, as the appeal of this work is often the ability to set one’s own schedule. But this purported flexibility also creates pressure to always hustle, putting in long hours and lining up new options to weather possible decreased demand, increased competition, or changes in algorithms for those doing platform-based work.302

Work design and autonomy

The way that work is designed—the organization of tasks into jobs—matters to workers. To take one element of work design: Workers with more autonomy (discretion over how they do their work) and more variety in the tasks entailed in their work have better mental and physical health.303 The same job can be designed either to allow for autonomy or to narrowly specify every action, communicating to workers that they are interchangeable and not seen as capable of self-direction and judgment.

Some experimental studies find that changing work practices and policies to increase autonomy and variety can reduce psychological distress, perhaps because such changes signal respect.304 Yet in many workplace settings, new technologies have further reduced autonomy and opportunities to learn. Technological surveillance of individual productivity in production, logistics, and retail settings creates even greater pressure to speed through narrowly specified tasks.305

Gaps in worker voice

Voice at work—having a say and potentially influencing what happens in your organization—affirms workers’ dignity and worth, and can be conceptualized as a dimension of job quality.306 A workplace that welcomes and incorporates worker voice conveys that employees are valued for their ideas, not just the specific tasks they complete.

Yet today there is a sizable voice gap, captured by the difference workers report in the say or influence they believe they ought to have and the say they currently have. The largest gaps are on topics such as compensation, benefits, job security, and changes in technology.307

Working in an environment where you feel you can use your voice with confidence is associated with better well-being, higher job satisfaction, and less interest in quitting.308 What’s more, a field experiment in warehouses by me and my colleagues finds that a new voice channel—specifically, a committee of front-line workers and a few managers, who hear and respond to employees’ concerns and ideas—significantly reduces turnover and also improves mental health in the short term.309

Unions are a critical and classic channel for worker voice, providing a structured and collective process for elevating workers’ concerns and bargaining with management. General approval of unions has grown to 70 percent in 2024, a level not seen since the late 1970s, and younger workers are more supportive of unions than other workers.310

Nonetheless, the percentage of U.S. workers who are members of a labor union has dropped from 20.1 percent in 1983 to 9.9 percent in 2024.311 This decline has implications not only for worker voice, but also for the financial and physical well-being of these workers and their families over the long term. Recent studies estimate that being a union member throughout one’s career results in an average of $1.3 million in additional lifetime earnings312 and also supports physical health.313 Additionally, the racial wealth gap is narrower among union members.314

As noted by other authors in this series, unions improve job quality and also connect workers in a “collective social fabric” that helps “increase workers’ social status and guard against the social divisiveness that is at the heart of right-wing populism.”315

Directions for policy and practice to improve job quality

Policymakers need to pursue both familiar and new approaches for addressing the job-quality crisis and its implications for U.S. democracy. The focus is not on a novel approach but a coordinated vision for a fair future of work that takes into account the numerous ways in which job quality has declined. Specifically, policymakers need to take action to:

  • Improve economic security
  • Address the economic and care needs of working families
  • Facilitate opportunities for job advancement and autonomy
  • Support worker power and union organizing

Let’s delve into each in turn.

Improve economic security

While the federal minimum wage only applies to a small proportion of the workforce, updating it and ideally indexing it to inflation would improve job quality for a critical segment of low-wage workers and symbolize a renewed commitment to those earners across the entire nation. Many progressive states and cities have done more to set the minimum wage above the federal floor, but some movement also is evident in more conservative political contexts, with ballot measures passed in 2024 in Missouri and Alaska.316 More states need to take this step in lieu of changes at the federal level.

Importantly, the evidence is clear that increasing the minimum wage does not reduce jobs. A recent review concludes that “minimum wage policies have had limited direct employment effects while significantly increasing the earnings of low-wage workers.”317 Some research suggests, however, that injuries may rise in the wake of minimum-wage increases, perhaps because employers push workers harder to increase productivity.318

Wage theft—including minimum-wage violations, failure to pay for all hours worked, and violations of overtime pay requirements—occurs routinely and is patently unfair.319 The misclassification of workers as independent contractors when they should be counted as employees also robs them of minimum-wage protections and overtime pay, as well as Unemployment Insurance and coverage by other labor laws.320 Enforcement could certainly be increased, and the financial penalties for violations also should be adjusted to motivate compliance and level the playing field for firms that follow the law.321

Currently, most employers who are identified as violating the minimum-wage law only pay back wages; civil monetary penalties are assessed in less than half of cases, even for repeat and/or willful violators.322 Specifically, the Wages and Hours Division at the U.S. Department of Labor could levy back-pay damages and pursue civil monetary damages more aggressively. Additionally, some states have required violating employers to pay triple or quadruple back pay and have pursued criminal penalties for repeat offenders.323

Address the economic and care needs of working families

Earnings are critical to workers, but jobs also must work with employees’ personal and family responsibilities. Scheduling reforms and paid leave help people stay in decent or good jobs when they have them.

Scheduling laws, often referred to as fair workweek, fair scheduling, or predictive scheduling laws, aim to shift employers’ scheduling practices by requiring more stable schedules, advance notice of schedules, or commitments to minimum hours. These regulations are standard in many countries and could be expanded in the United States.

An evaluation of Seattle’s Secure Scheduling Ordinance, for example, finds that “eliminating schedule unpredictability would reduce the share of workers experiencing at least one material hardship by 45 percentage points (from 64% to 19%).”324 Additionally, that policy evaluation and a study of a stable-scheduling initiative at GAP Inc. stores find workers’ well-being and sleep improved with more schedule stability.325 The GAP study also demonstrates benefits to the firm via reduced turnover among experienced employees and increased productivity.326

Passing paid leave laws also is an important priority for improving job quality for working families. Laws enacted in 13 states and Washington, DC demonstrate feasibility.327 Paid leave recognizes workers’ legitimate needs and signals respect for workers and their families. Paid leave also supports economic security by keeping people employed and providing income replacement at a critical time.

California’s leave law, for example, nearly doubled access to pay during leaves, increasing benefits especially for low-income and less-educated workers and for men.328 New paid leave laws at the federal level would address these variations across states and help meet the needs of lower-income workers who are not as well-served by the federal unpaid family leave law and employer-provided benefits.

Facilitate opportunities for advancement and autonomy

Public policy can help expand collaborative training initiatives that engage multiple employers within a given industry. Such sectoral programs typically provide training for jobs in specific industries, such as health care, life sciences, and technology, that have both good starting wages and promotion opportunities.329

Rigorously evaluated programs, such as Project Quest and Year Up United, combine the training for these fields with soft-skills training, job-placement support, and a variety of services, including transportation support and child care. Successful sectoral programs increase employment in high-wage jobs, but public investments and long-term commitments are needed to scale these programs.330 For instance, the Economic Development Administration within the U.S. Department of Commerce recently supported new communities of practice focused on specific industries’ or regions’ workforce development initiatives.

Other strategies include encouraging employers to remove educational credentials from job listings when alternative training could prepare people for those jobs.331 Yet research is needed on the impact of those changes. A recent audit study finds employers are less likely to hire applicants with alternative training and related work experience than degree holders; this is still true for employers who have removed educational credentials from their job postings.332

Policymakers also can also champion and incentivize employers who design work with autonomy and learning in mind. A long tradition of “high-performance work systems” research finds that the combination of certain practices, such as building autonomy, cross-training and other skills development, and performance-based pay, can improve productivity, raise pay in some settings, and also support workers’ well-being.333

Public procurement policies that incorporate job-quality data could encourage employers to design work in these ways.334 Additionally, local policymakers and community leaders can establish community benefit agreements with developers and new employers, encouraging job-quality standards, the hiring of local workers, and more.335

Support worker power and union organizing

Worker power, including collective bargaining by unions, can advance all the elements of job quality discussed here. To protect workers’ rights to organize and pursue their own job-quality priorities, we need to strengthen the enforcement of existing laws and ideally update federal labor law as well.336

Given how few U.S. workers are currently represented by unions and the limitations of current federal law, though, it is also important to pursue organizing innovations and state and local changes.337 One such innovation is the industry standard board, also known as a workforce standard board or sectoral co-regulation. These boards involve employers, state officials, and worker representatives in certain industries. They give workers a formalized role in setting wage rates and benefits, often improving pay for those already above the minimum wage. Additionally, these boards can support the effective enforcement of labor laws, acting as partners to educate workers, employers, and the broader community.338

“Bargaining for the common good” is another strategic innovation in which unions and other local organizations develop integrated campaigns focused on community concerns, such as housing, climate, racial justice, schools, and also decent jobs.339 This approach may foster solidarity across people with different employment statuses, work experiences, and backgrounds and provide a path toward feeling respected and recognized both at work and in the larger community.

Conclusion

This may seem like a daunting set of policy challenges, but the time to begin articulating a better vision of work is now. Rebuilding a fair economy over the next decade is particularly critical because of expected disruptions in the U.S. labor market tied to AI technologies and transitions in energy production. As jobs are altered and many jobs are lost while others emerge, there is a clear risk of greater alienation and despair unless another model of quality work is on the horizon.

About the author

Erin L. Kelly is the Sloan Distinguished Professor of Work and Organization Studies at the Massachusetts Institute of Technology Sloan School of Management and co-director of the MIT Institute for Work and Employment Research.


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