How the 2024 Election Could Impact Your Paycheck

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With the 2024 presidential election upon us, Americans are watching closely to see what the election result might mean for their paychecks. 

Presidential candidates Donald Trump and Kamala Harris propose very different approaches to tax policy, minimum wage and employment regulations — each with direct implications for the average paycheck and workers’ financial well-being. 

Here is what you might see if each candidate’s proposed policies become law.

Tax Policies and Your Take-Home Pay

Changes in tax policies are one of the most immediate ways the election might affect your paycheck. Adjustments affect how much disposable income workers bring home, which is to say taxes directly affect net earnings. 

“A government focused on business incentives might opt for tax cuts that improve corporate liquidity, potentially leading to raises or bonuses,” said David Brillant, a tax lawyer in Northern California.

Traditionally, Republican candidates like Trump have prioritized things such as tax cuts, lowering corporate taxes or making the tax burden easier on high earners. In this election, Harris, the Democratic candidate, has said she prefers tax policies that raise tax rates on the rich and offer tax breaks to middle and lower-income workers.

Financial experts suggest that these tax proposals have far-reaching implications for employees across industries. For instance, a cut in corporate taxes might encourage companies to either hire more people or raise wages. 

However, a recent study found that cuts don’t always pay off with higher wages in low-wage sectors. So, workers might see wage increases if their employers pass on benefits, but it isn’t guaranteed.

On the other hand, Harris’ proposal to shift taxes to higher earners and lower rates for middle-income people might directly help workers. For families living paycheck to paycheck, this can bring instant relief and create far greater disposable income. 

Minimum Wage Policies and Earning Potential

After the election, the minimum wage also might be a factor; each candidate has put forth different priorities on this issue. 

Harris has made clear she would like to raise the federal minimum wage to $15 an hour to combat income inequality and give millions of low-wage workers stability. This proposal aligns with more states seeking to increase minimum wages because of the increasing cost of living. 

If Harris’ pledge to increase the minimum wage to $15 gains traction, many lower-income Americans could benefit from a substantial annual salary increase. As such, this policy could help lift many workers, but it also could pose challenges. In particular, some economists say a rapid rise in the minimum wage could push employers to cut hours or reduce staff to keep businesses profitable in industries such as retail and hospitality.

Trump has been noncommittal about a federal minimum wage, saying states should be given the power to decide. Even with that state-centric approach, minimum wage increases might not rise evenly from state to state. But Trump also has advocated for removing the tax on tipped employees, which could offset lack of hourly pay for workers in states with the lowest minimum wages.

Labor Policy Changes and Employment Regulations

Another area where voters’ choices will directly impact paychecks is labor policies, specifically employee rights, benefits and job security. Stronger worker protections, particularly on things like paid family leave and healthcare benefits, are part of Harris’ platform. Better worker protections could create more financial stability for families needing reliable sick or parental leave.

Under either administration, the employment law landscape could entirely shift, as one approach would champion worker protections while the other would deregulate to spur business growth. 

The Gig Economy and Worker Classification

The election result could greatly affect gig workers and independent contractors. Harris also has backed reclassifying gig workers as employees, granting them minimum wage protections, overtime pay and healthcare benefits.

However, the changes might not sit well with many companies in the gig economy, such as ride-share and delivery platforms, who have warned that such rules could undermine the flexibility both workers and companies enjoy. 

The gig economy is a chance to redefine it, to reshape how millions of Americans earn a living and, by extension, how overall wages are affected as employers react to shifts in workforce cost.

This differs from Trump’s policies, which have typically supported the status quo. Some experts think Trump might favor keeping gig workers classified as independent contractors. Between employee reclassification and independent status, the decisions made could directly affect people working in the gig economy.

Workplace Equity and Anti-Discrimination Measures

Harris’ platform has focused on workplace equity — reducing the gender pay gap and increasing diversity — but it’s unclear what her priorities will be behind closed doors. Harris wants to increase the quality of workplace culture and create fair compensation by pushing policies aimed at equal pay and discrimination. 

These could be policies that help move wages outward so they are more equitable by gender, and in some industries, gender and wage discrepancies have been more dramatic.

Trump focuses on incentivizing businesses to pursue equity practices voluntarily. Those who favor this approach say it is flexible, while opponents suggest that voluntary initiatives will not bring about a major change. Both candidates of any approach understand that an inclusive workforce is essential, but they differ in that approach.

Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.

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