Where Is Economic Justice Policy Now—And Where Does It Need to Go?

For months, commentators have been interrogating why the public’s perception of the economy is so negative when, by standard measures, it is booming. This is an important question that may well decide the presidential election.

But looking beyond the election to the progressive policy agenda going forward requires asking something else: What is the relationship between a booming economy and economic justice? In other words, what does a workers’ labor market mean for rebalancing power away from corporations, repairing past and ongoing harms, and fostering material equity?

Over the last three years, we have seen legislation investing record amounts of public money, first in the recovery from the COVID-19 pandemic and then in infrastructure and mitigating the climate crisis. These investments constitute some of the biggest breaks in policy with past neoliberal practices that have dominated the last half-century and, in themselves, have the potential to help build a more just economy.

The results have been significant. In contrast to the stagnant economy that followed the Great Recession, the economy has surged back. The nation now has what is likely the strongest labor market in 50 years; unemployment is at record lows. 

Other important wins over the last four years include institutionalizing a new approach to antitrust enforcement that has begun to address corporate concentration and canceling $138 billion in student debt even after the US Supreme Court blocked a larger cancellation policy. But none of these wins has shifted the policy context toward justice as completely as the deliberate fostering of a full-employment economy.

Nevertheless, much work remains. A comprehensive agenda to build a more equitable structure that can foster lasting class, racial, and gender equity demands new policies that directly remedy concentrated corporate power, rebuild the labor movement, reform the tax code, and invest in public services and institutions from the care economy to higher education. 

As another election cycle is underway—always a moment for considering policy agendas—it is worth recognizing that the new economic justice agenda will be crafted under fundamentally different economic conditions than those we faced in 2020 or even 2016. To speak to policy in 2024 requires a deeper look at what changes in the economy over the last four years have meant and what needs to happen next.

Reviewing the Past Four Years

President Joe Biden took office during a pandemic that had shuttered the economy. Learning lessons from the slow recovery in 2009, Biden Administration officials prioritized employment in the March 2021 American Rescue Plan (ARP), which was more than twice the size of the stimulus bill passed at the beginning of Barack Obama’s presidency. 

Over the next year and a half, these investments were joined by further legislation that made considerable investments in the American economy—the Infrastructure Investment and Jobs Act, the CHIPS Act, and the Inflation Reduction Act (IRA)—and a clear break with the neoliberal orthodoxy of the past 50 years. For the first time in decades, the government was affirmatively trying to foster industries essential to public wellbeing while building worker power. 

These investments were also accompanied by a commitment to full employment, even amid inflation. For years, the Federal Reserve had prioritized price stability, even though it made up only half of its dual mandate to foster price stability and maximize employment. Since 2020, it has tried much more actively to pay attention to both sides.

Employers have created an average of 400,000 new jobs a month since Biden took office. The historically strong labor market, fueled by these investments and policy choices, has reduced unemployment and led to some progress on longstanding inequities in the US economy. Black women’s unemployment rates, as well as that of Latinx people, have hit all-time lows. Further, employer competition for workers has raised wages. We have begun to see the wage gap between Black and White men narrow. Likewise, income inequality between the wealthiest and least well-off has slightly narrowed.

The strong labor market and economic protections extended during the COVID recovery have helped reinvigorate the labor movement—a vital force for economic justice. Over the past three years, multiple waves of labor activism swept the country, from coffee houses to auto plants (where President Biden joined the picket lines) to Hollywood.

Even as the labor movement has surged, employers’ economic power has also grown and become more concentrated.

The administration’s decision to prioritize full employment is not the only reason workers have made gains. Other policy decisions have also played a significant role, from expanded unemployment insurance during the pandemic to a National Labor Relations Board (NLRB) reoriented in a pro-labor direction that has cracked down on worker intimidation. But the fact that in this economy workers can expect to find another job if they lose their current one should not be underestimated as a major factor in giving workers agency. 

That said, the limits of a full-employment economy are also visible. Unions from the United Auto Workers to the Screen Actors Guild have won historic contracts. But union membership rates continue to hover around 10 percent, a historic low. Starbucks workers won union drives but have been unable to win a contract, although a recent framework agreement by the company and union is promising.

In short, a tight labor market cannot fix how stacked against workers our labor laws have become. Likewise, even as the decrease in wage inequality demonstrates the importance of a strong labor market, the persistence of the Black-White wage gap across education levels shows that economic policy alone will not address inequality. 

Furthermore, a low-unemployment economy is unlikely to last forever. While recent prognosticators were consistently wrong about an imminent recession, another downturn will surely occur eventually. The gains achieved over the past few years are important. But far more remains to be done to ensure they last in a different economic context.

An Unfinished Agenda

The risk of industrial policy investments teetering into corporate welfare is real.

A booming labor market helps, but shifting power back to workers requires a more active set of policies. Public investments alone will not cut it—especially if they reinforce a deeply inequitable economic system. An economic justice agenda needs to address deep distortions in our economy, as outlined below:

• Reining in Corporate Power 

Even as the labor movement has surged, employers’ economic power has become more concentrated. This goes by the fancy name of employer monopsony—in other words, as fewer corporations become monopoly buyers of goods, services, and employees, workers have less ability to choose their employer and less ability to use their power to extract concessions. 

The good news is that antitrust enforcement agencies have begun to take on corporate concentration. The not-so-good news is that federal climate and infrastructure programs tend to favor larger corporate players. In short, the risk of industrial policy investments teetering into corporate welfare is real. Provisions such as those in the CHIPS Act banning the use of public funds for stock buybacks and requiring companies that get funds to ensure their employees have access to childcare are laudable but will not be sufficient to prevent this.

To rein in corporate power, Roosevelt Institute fellow Lenore Palladino has suggested mandating putting workers on company governing boards as a condition for car companies to qualify for federal electric vehicle subsidies. Further, we should consider a role for the public on these boards as well. 

Especially where the government invests in corporations, it should gain a voice through a board seat or an equity stake. In a recent report, Palladino writes, “A public equity stake would…enable the public to remain involved in the key choice points…when a public investment has been made.” 

It is also important to accompany federal investments with guardrails to ensure corporate recipients use the funds as intended. This requires increased funding for the Department of Justice’s Antitrust Division and the Federal Trade Commission. 

• Labor Law Reform

The surge in labor activism and the rise in labor’s popularity are incredibly hopeful signs. Over 70 percent of Americans support labor unions, the highest level in over 50 years. Nevertheless, despite this popularity and notable wins, reviving the labor movement as a counterweight to corporate power will require significant shifts in the law.

Legislation waiting in the wings, like the Protecting the Right to Organize (PRO) Act, would shift the terms of union elections to empower workers and the NLRB rather than employers and make it more difficult for employers to retaliate. 

But here, too, bolder thinking is needed. It is worth seriously considering building a sectoral bargaining system so unions no longer have to grind out wins employer by employer and can instead represent workers across an entire sector. Such a system can help counter some corporate concentration that has increased employers’ power over the past decades. It also can play a meaningful role in raising wages, especially in sectors where wages have eroded most in recent years. 

• Tax Reform

One certainty about 2025 is that there will be a tax fight in Congress. Many provisions in the 2017 Republican tax bill expire at the end of 2025. The tax code is a powerful tool that structures the economy. Taxes don’t just raise revenues—although that is crucial—but they also help determine how and when money is spent and invested. A progressive tax bill would need to not only redistribute money but shape how money is distributed in the first place.

Right now, the federal tax code favors the wealthy and concentrated corporate power. A progressive alternative would include measures like a progressive corporate income tax and a wealth tax to discourage resource hoarding and force the wealthy to pay their fair share.

A tax code that encourages fair play and raises enough money for significant government investments in priority sectors—from green technologies to childcare—can help build a more equitable economy. A progressive tax code can also encourage full employment, protect worker power, and fund additional measures required for true economic justice.

• Racial Equity

Just as federal climate and infrastructure investments risk increasing corporate power, so too are there risks that new investments will flow into systemically racist institutions. To its credit, the Biden administration has recognized this. The administration’s early executive order committing government to advancing racial equity attempted to ensure that racial justice was at the heart of every agency’s work. Its Justice40 initiative, which requires that 40 percent of climate investments go to historically disadvantaged communities, directly addressed concerns about how investments would enter an economy that is still structured to promote worse outcomes for Black, Latinx, and Native Americans. However, implementation of these commitments is ongoing and, unfortunately, slow.     

Moreover, racially just economic policy needs to adapt this insight far more broadly. This means not only continuing to highlight the need for reparations for slavery but also, for example, pushing for comprehensive student debt cancellation, which would disproportionately benefit Black families. For another example, a public banking system could address the pervasive racial discrimination that leaves Black, Indigenous, and people of color disproportionately underbanked and unbanked, limiting their access to credit. 

Yet another critical area is housing. As the National Low Income Housing Coalition noted in 2022, housing is not only a leading driver of inflation but also a leading contributor to the racial wealth gap. The Movement for Black Lives has identified housing policy—including support for rental assistance and support for community-based institutions like community land trusts and cooperatives—as a key component of its economic justice agenda.

These examples point to the vital role that the public sector can play in fostering a racially just economy. For instance, while canceling student debt is critical, free public higher education would be even more powerful. Public sector intervention in areas ranging from childcare to healthcare to a federal jobs guarantee could also significantly advance racial justice, provided that affected communities are directly involved in program design and implementation.

• Care Agenda

Efforts to support the care economy were left on the cutting room floor at the end of the fight over the Build Back Better Act. Despite being included in Biden’s initial proposals, provisions for affordable childcare and long-term healthcare and secure paid family leave were missing from the final IRA legislation. 

Public provisioning of care can raise the quality, stability, availability, and accessibility of care to those who need it while, ideally, raising wages in an incredibly underpaid sector in which Black and Latinx women hold a disproportionate number of jobs. Raising caregivers’ wages is essential to building a more equitable economy, and the services these caregivers offer also play a key role. Creating accessible and stable care options allows parents (especially women) to enter the economy more fully and on more equal footing. The American Rescue Plan included provisions that stabilized the childcare industry and allowed providers to raise wages; it also included an expanded child tax credit, cutting child poverty in half. Then, these incredibly important reforms were allowed to expire.

What Will It Take to Build a More Just Economy?

It is no secret that the United States is far from having a just economy. The top 10 percent of households in the United States hold 66 percent of the wealth. The racial wealth and wage gaps not only remain but are wide, as are the gender wealth and income gaps. 

While the above list is not a complete agenda, it is a starting point for building an equitable, healthy economy. Of course, this also involves a commitment to public investment and structural changes that fundamentally shift relations of power in a more democratic direction.

Moving the needle on persistent inequities is no small matter. To achieve this goal, it is vital to lay the groundwork for legislation that can swing the pendulum—and to push that swing in a direction to dismantle the many structural barriers that have impeded critically needed progress on economic and racial inequality.