President Trump, President Musk, and the Wedge Issue of Mass Layoffs

As the Trump-Musk administration takes an axe to the federal government’s budget and personnel, the Democrats have an opening to raise an issue that Musk will hate but Trump can’t ignore—private sector mass layoffs.

Right now, as Acting President Musk goes after agency after agency in the name of cost cutting, the Democrats are focused on public sector job cuts. As they should, tens of thousands of jobs are at risk.

But those numbers pale in comparison to the 1.8 million private sector workers who lost their jobs in December of 2024 due to involuntary layoffs. For the past several decades, more than 20 million jobs per year have been taken away from workers who did nothing wrong.

It won’t be easy to convince private sector workers that cutting federal government costs is a mistake. If you’re living paycheck to paycheck, you don’t want your tax dollars squandered, and USAID., to many, sounds like a money pit.

If the Democrats act forcefully to defend working-class jobs, they should have better chance to win back Congress from Trump in 2026.

But private sector workers do care about their own job insecurity, and Donald Trump knows it. He has spoken forcefully about keeping worker jobs from migrating to Mexico and elsewhere, and he could take actual action to make that happen with one simple Executive Order:

Corporations that receive taxpayer money via federal contracts and tax subsidies shall not lay off taxpayers involuntarily.

More than $750 billion in contracts for materials and services are made each year by the federal government. Many of the corporate recipients have had no qualms about laying off workers and using the savings to enrich their investors via stock buybacks, and there have been no effective rules to prevent this. (A stock buyback is when a corporation repurchases its own shares, thereby raising the price of the stock without improving the company in any material way.)

Taxpayers know there is a great deal of waste built into federal contracts, especially those massive purchases involving defense and advanced technologies.

It turns out that Musk’s companies, reportedly, have received $20 billion in federal contracts, with $15.4 billion coming to Tesla and Space X in the last decade. Last year, Tesla laid off more than 14,000 workers, and Space X has announced that this year it will lay off more than 10 percent of its workforce, about 6,000 jobs. Imagine if Musk were not allowed to stuff himself with taxpayer money unless he refrained from involuntary layoffs?

To get there the Democrats, for the first time in memory, would need to care about greed-driven private sector layoffs.

That will be difficult because the Democrats are more in tune with highly educated, upper middle-class federal workers. These are the kind of voters who have been trending Democratic while the party has shed the working class. And the Democrats see the federal agencies in which these voters work as part of their legacy, often created and enhanced by legislation they spear-headed. Federal workers are their people, doing the work that the Democrats care most about.

Not so much the private sector, where voters have been drifting away from the Democrats in large numbers for decades, especially in the swing states of Michigan, Pennsylvania, and Wisconsin. As I show in Wall Street’s War on Workers, since 1992, as a county’s mass layoff rate has gone up, the Democratic vote has gone down, even as these voters have grown more liberal on social issues.

The Democrats have been losing these working-class voters because they have failed to interfere in private sector layoff decisions, even when job destruction became a campaign issue.

For example, in the run up to the 2024 election, John Deere and Company announced they were shipping more than 1,000 jobs to Mexico while recording $10 billion in profits and conducting $12.2 billion in stock buybacks. Trump immediately called for a 200-percent tariff on all Deere imported goods if they didn’t rescind their layoffs.

The Democrats didn’t say a word about how to stop this needless job destruction and instead attacked the tariffs. Deere’s stock buybacks and profits proved the company had more than enough money to offer voluntary buyout packages for all their workers, not just the executives. But the Democrats did not speak up.

During the height of the COVID-19 pandemic, the Democrats also remained silent when the Mylan Pharmaceutical plant in Morgantown, WV, moved to India. Workers there begged the Democrats to use the Defense Production Act to keep open the facility, which made generic drugs. If Biden could do it for baby formula, why not for badly needed pharmaceuticals?

But not one Democrat came out in support of these workers, and 1,500 jobs with an average wage of $70,000 per year were tossed away.

Clearly, the Democrats have been pulling away from the working class. Why help these workers, some are saying, when they’re more than likely to vote for Republicans? And why challenge corporate power when you’re trying to win over highly educated executives and financial leaders?

Democratic Senate Minority Leader Chuck Schumer, who is up and arms these days about the attacks on federal workers, was very honest about this switch in 2016. I’ve quoted him again and again because he tells us precisely what the Democratic strategy has been all about:

"For every blue-collar Democrat we lose in western Pennsylvania, we will pick up two moderate Republicans in the suburbs in Philadelphia, and you can repeat that in Ohio & Illinois & Wisconsin."

At the launch of a second Trump presidency, Schumer’s political acumen has not aged well.

Nor has Ken Martin’s, the new chair of the Democratic National Committee, who has made it clear that billionaires are welcome.

“There are a lot of good billionaires out there that have been with Democrats, who share our values, and we will take their money, but we’re not taking money from those bad billionaires,” Martin said recently.

It is doubtful that Martin ever gave one second’s thought to the fact that most, if not all, of these “good” billionaires that “share our values” have grown wealthy from, to some significant extent, stock buybacks funded through mass layoffs.

The country needs the Democrats to go from defense to offense. If the only activity is mounting a resistance movement to Trump, the odds are slim that enough new voters will be gained to win back the House or the Senate in 2026.

Every elected Democrat should be demanding that no taxpayer dollars go to corporations that lay off taxpayers involuntarily. They should put that message on social media, old media, even billboards all over the swing states. They should challenge every Republican candidate to take a stand on it. It doesn’t cost the taxpayer one dime, but it can protect the livelihoods of millions of working people every year. Or, at least, give them leverage while working out their severance.

Every day Democrats should be asking Trump to sign the order. Does he really want to be seen giving our tax dollars to corporations that lay off taxpayers and funnel the savings to the rich?

And wouldn’t it be good for our weary souls to see Musk squirm because he wouldn’t be able to sup at the federal trough while casually laying off his employees?

You have to wonder if the Democrats are capable of such a move, or anything remotely close to it. Only if they truly are willing to take on Wall Street and the billionaire class. They need to believe, not just mouth the words, that they will fight the wealthy to protect the livelihoods of working people.

If the Democrats act forcefully to defend working-class jobs, they should have better chance to win back Congress from Trump in 2026. But in the short term, pushing Trump to defend his populist flank might help put a wedge between Trump and his billionaire bros, and get some relief for workers from financialized layoffs.

But don’t hold your breath. All those “good” Democratic billionaires might get upset.