Editor’s note: This year's election will impact companies in every industry. That’s why Harvard Business School’s Institute for Business in Global Society (BiGS) is launching its first-ever election guide for business leaders, offering insights from experts to help you navigate. In the coming weeks, we’ll publish a series showing how the Harris and Trump agendas will affect everything from trade and labor to diversity and environmental regulations. After the election, we’ll package these insights into a comprehensive guide showing what to expect in the months ahead. We hope you enjoy it.
BOSTON — The presidential candidates have been staking out clear differences on worker-related issues, while expressing some surprising agreement in a few key areas such as workforce education requirements and taxes on tips.
Yet what this means for management, labor, and the labor movement remains to be seen.
“The two candidates’ philosophies are certainly based on different principles,” said Joseph Fuller, a professor of management practice at Harvard Business School. “But the policy prescriptions both have surfaced are a grab bag of tactical and politically expedient proposals. Neither has outlined a systematic approach to addressing our most pressing problems — how to ensure our education and training systems can equip workers with the skills they’ll need in the future.”
If Vice President Kamala Harris is elected, experts say she will continue the Biden administration’s union-friendly policies on wages, federal civil service, labor appointments, and similar issues. “President Biden has been the most pro-union president of my lifetime,” said Ted Pappageorge, the secretary-treasurer of Culinary Workers Union Local 226, which covers 60,000 hospitality workers in Las Vegas and Reno. “Vice President Harris is going to continue those policies.”
If former President Donald Trump wins, experts say that labor policies will be less predictable. For example, Trump has made some nods to labor, having Teamsters President Sean O’Brien speak at the Republican National Convention and proposing an end to taxation on tips and overtime pay. But Trump also has signaled he would advance an agenda tilting toward business, saying in a conversation on X that striking workers should be fired. “Deregulation would be the theme under a second Trump administration,” said Brent Orrell, a senior fellow at the American Enterprise Institute.
David Deming, professor of political economy at the Harvard Kennedy School, commented: “The policy proposals that have come out of the Trump team don't stitch together in a coherent way that allows me to fill in the blanks.”
Wages, taxes, and tips
In a campaign with so many stark differences, one policy both candidates agree on is eliminating federal taxes on tips. But they do not necessarily agree on how to get it done.
Harris’s plan would only apply to people below a certain income level, which would be negotiated with Congress. Under her plan, tips would still be subject to payroll taxes. Trump has not specified whether he would eliminate both income and payroll taxes on tips or impose any income limits.
Harris also calls for raising the minimum wage and increasing the “subminimum wage,” which employers pay to tipped workers. Trump has not called for raising either minimum wage but has said, at times, that he is open to the idea.
Currently, the national minimum wage is $7.25 an hour, though 34 states have minimum wages considerably higher. The federal subminimum wage is $2.13 an hour. According to the U.S. Department of Labor, 28 states have higher subminimum wages and seven do not allow a subminimum wage for tipped workers, requiring them to be paid the normal minimum wage.
Pappageorge, whose union represents many workers who receive tips, is a strong supporter of Harris’s plan. “No taxes on tips combined with increasing the national minimum wage and the subminimum wage will help workers handle the cost of living,” he said.
Yet some experts warn that an increase in the federal minimum wage could put people out of work by providing incentives for employers to use less labor, perhaps through automation or artificial intelligence. A higher national minimum wage also would not account for significant regional variations in the cost of living.
Fuller said a call to raise the minimum wage is a “good sound bite, but it’s actually a dangerous thing.”
“If you want to get every part-time teenager employed in fast food in the state of Alabama fired, then say that they have to be paid $15 an hour,” Fuller said.
Costly proposals
Deming said both candidates’ plans to eliminate taxes on tips make little economic sense. Each would create administrative burdens to enact and access and the benefits would be spread unevenly. Furthermore, the plan would not assist all tipped workers, given that about 37% earn so little that they do not pay federal taxes. “Why not just lower payroll taxes by some smaller amount?” he said.
Furthermore, plans to eliminate taxes on tips and overtime pay would require federal legislation and that could be difficult, given that the proposals would reduce federal revenues and add complications to the tax code.
The Committee for a Responsible Federal Budget estimates that Harris’s plan to increase the minimum wage and eliminate taxes on most tips would reduce federal revenues by between $100 billion and $200 billion over 10 years.
Trump’s plan, assuming it would eliminate both income and payroll taxes on tips, would cost between $150 billion and $250 billion in that same time frame. Trump also has proposed eliminating taxes on overtime pay, which the committee estimates would reduce federal revenues by about $1.7 trillion over 10 years.
Federal civil service
The federal government is the largest employer in the United States, with about 2 million civilian workers, and far more when contract workers, grant recipients, and military personnel are considered. The two candidates take drastically different approaches to this workforce.
Trump in 2019 signed an executive order canceling a 2.1% pay raise for federal workers, though he restored most of it a few months later. Trump also signed an order creating a new civil service classification, Schedule F, that would take away many civil service protections for federal workers in policymaking roles. The order, which allowed those workers to be fired at the whim of the president, was rescinded by Biden.
A version of that policy also has been proposed by Project 2025, a document penned by the conservative Heritage Foundation, and could affect about 50,000 employees. While Trump has publicly disavowed Project 2025, it was written by many Trump allies and includes a glowing forward by GOP vice presidential nominee J.D. Vance.
In his own campaign materials, Trump pledges to “shatter the deep state” and sign an executive order allowing the president to fire federal employees. Proponents say these plans, by giving Trump more power to hire and fire employees, will provide the next president with the personnel he needs to effectively enact the policies he favors. Critics say it could turn a merit-based federal workforce with loads of expertise into a vast group of Trump loyalists who serve the interests of the former president and not the public.
“I don’t think it’s a credible proposal,” said Orrell, the American Enterprise Institute scholar. “We’ve got a large career civil service. There’s lots of expertise embedded in that.”
The Biden administration took a worker-friendly approach to the federal bureaucracy. For example, Biden raised the minimum wage for all federal workers to $15 an hour and his administration encouraged federal workers to join unions. Harris is expected to continue this approach.
The National Labor Relations Board roller coaster
Policies enacted by the National Labor Relations Board (NLRB), the federal agency that oversees union elections and activities, also illustrate the different priorities of Harris and Trump.
Unions have long complained that employers use stalling tactics, including legal objections, to delay and impede elections that determine whether their employees will be represented by a union. “They can appeal and appeal and outlast workers,” said Pappageorge of the Culinary Workers Union.
In his first term, Trump appointed business-oriented members to the NLRB. Those members overturned most of the rules adopted under the Obama administration, which made it easier to speed up labor union elections.
This year, the Biden-controlled board finalized a policy that again sped up union elections by requiring them to take place before the NLRB rules on complaints related to an election, rather than after an NLRB ruling. Harris, as chair of the White House Task Force on Worker Organizing and Empowerment, laid out an ambitious pro-union blueprint. Her plan includes passage of the proposed Protecting the Right to Organize Act, which would expand protections for employees' rights to organize and collectively bargain.
A good job without a degree
Regardless of who wins the election, the movement to eliminate college degree requirements for many jobs will have an advocate in the Oval Office. Both Harris and Trump are strong supporters of the idea.
The movement is intended to open job possibilities for people who have skills but lack a four-year college degree. About 62% of Americans older than 25 do not have a four-year degree, according to the 2023 U.S. Census.
During his last year in office, Trump signed an executive order that required the federal government to eliminate college degree requirements for certain jobs. That is in keeping with the 2024 Republican Party platform, which promises to reduce the cost of higher education by supporting “drastically more affordable alternatives” to a four-year degree.
The Democratic Party platform, meanwhile, advocates for free community college and additional apprenticeships. Harris expanded on this theme recently, pledging to eliminate college degree requirements for 500,000 federal jobs and to encourage the private sector to take similar action.