Wisconsin’s economy and working families are facing dramatic changes in federal policy which define the state of working Wisconsin this year. In this section, we discuss the changes that are undermining economic growth, the anti-worker administrative moves, aspects of the new federal budget, and the deeply disturbing attacks on federal data infrastructure.
Economic Storm on the Horizon
Tariffs and anti-immigrant policy, hallmarks of the new administration, undermine economic growth.
Out of the chaos of tariff announcements and reversals starting in April, a new U.S. high tariff regime is emerging bringing tariffs to levels not seen in nearly 100 years. Tariffs, taxes on imports to the U.S., will raise the price of goods, and American consumers will pay the cost. As the Economic Policy Institute explains: “American households will bear most of the burden of higher tariffs. This will mostly come through higher prices for imported goods and, crucially, higher prices for domestic goods that compete with imports.” With increased costs already a concern, households will be hard pressed to cover the tariff-induced $2400 increase in prices that Yale’s Budget Lab estimates the average household will face.
The new administration’s aggressive anti-immigrant and deportation campaign also undermines economic strength. Economists and investors have observed that immigration changes may constrain economic growth even more than the high cost of tariffs. Employers are already complaining about the impact of the raids on their workforce and customers. In response to employer complaints, the Trump administration briefly directed ICE to end enforcement in farms, hotels, and restaurants (a directive that was quickly withdrawn).
As the chief analyst at Moody’s, Mark Zandi, wrote after the weak July jobs report was released: “It’s no mystery why the economy is struggling; blame increasing U.S. tariffs and highly restrictive immigration policy. The tariffs are cutting increasingly deeply into the profits of American companies and the purchasing power of American households. Fewer immigrant workers means a smaller economy.”
An Anti-Worker Agenda
Further, and contrary to its populist rhetoric, the Trump administration has pursued a broad and savage anti-worker agenda. The administration has unleashed an aggressive campaign against federal workers and their unions. In an unprecedented act of union busting, the administration has ended collective bargaining rights of 1 million federal workers. Not content with ending unionization just for federal workers, the administration is also tilting the make-up of the National Labor Relations Board, which oversees and protects union rights, to increase its responsiveness to employers. The administration gutted the federal workforce charged with protecting occupational health and safety (two-thirds of workers laid off) and nearly eliminated all capacity to enforce federal anti-discrimination laws by laying off 90% of the staff that carried that work. The administration also rescinded an existing executive order that established minimum wages for federal contractors and was estimated to have increased wages for some 400,000 workers on federal contracts.
The federal budget, enacted this summer, contains hundreds of provisions with disturbing implications for working people. It holds enormous tax breaks for the rich. By permanently extending the first-term Trump tax cuts for the very wealthy, the new budget delivers $1 trillion over the next 10 years to the nation’s richest 1% and increases the national budget deficit to unprecedented levels. Analysis from the Institute Taxation and Economic Policy Wisconsin shows that the annual tax break to Wisconsin’s richest 1% will be $67,000. And the tax break for the bottom fifth of households in the state? Just $70.
The federal budget will also take insurance away from some 70,000 Wisconsinites, according to estimates from KFF, with 54,000 Wisconsinites losing their medicaid coverage and 18,000 Wisconsinites losing coverage due to changes in the health care marketplaces created by the Affordable Care Act. Dramatic reductions in federal food assistance will likely strip 90,000 Wisconsinites of access to food. More than 70,000 low-income students in colleges and universities across Wisconsin will face substantial reductions in financial aid. All of this, and more, is coming and will hit lower wage working families across the state especially hard.
The Center on Budget and Policy Priorities offered this summary:
The House and Senate Republicans have now passed a bill that will raise families’ food and health care costs, increase poverty and hunger, take health coverage away from millions of people, and drive up deficits — all to give costly tax cuts to the wealthy and corporations….
Unfortunately, it is their constituents who will pay the price….
Will We Trust the Data Next Year?
We close with a final concern about the very data that has made this report possible for three decades.
In July, when the jobs report provided showed a weakening economy, Trump fired the respected commissioner of the Bureau of Labor Statistics (BLS) Erika McEntarfer. He baselessly asserted that the bad news was “concocted.” The economy is great, according to him, and he will find a commissioner to tell him so.
Trump’s approach is a disaster for economic decision making and for public trust. Good economic decisions require reliable data. As the American Economics Association wrote: “The BLS has long had a well-deserved reputation for professional excellence and nonpartisan integrity. Safeguarding this tradition is vital for the continued health of the U.S. economy and public trust in our institutions.”
The BLS monthly jobs report provides a timely snapshot of labor market dynamics which inform investing and hiring decisions as well as policy choices. BLS data also measures the rate of inflation through the consumer price index. The rising price of goods is not only a key economic indicator but also the scale by which Social Security payments are adjusted and a point of reference in private and union wage negotiations.
Federal data has also been the core source of this report for decades, allowing us to see what is going on in Wisconsin from a worker’s perspective. The independence of the BLS and integrity of its resources has been long supported and assumed. We might disagree about what the data mean, but we all draw from these same trusted sources.
Replacing the BLS commissioner sends a signal that the president will only accept data that confirms his narrative. The administration’s dismissal of expertise, data, and research (which includes economic statistics but reaches far beyond) undermines public trust in whatever data is released. Without reliable independent data, we cannot understand the economy nor, more narrowly, can the High Road Strategy Center continue confidently producing reports that draw on it. With hopes for continued national commitment to reliable data, and fears about the quality of what politically motivated “revisions” will do, we will anxiously monitor changes in leadership and data at the BLS.