Abundance: the Missing Piece

We at the Economic Innovation Group are big fans of the Abundance agenda. Its emphasis on the supply-side barriers to economic growth has brought renewed attention to the unforced errors and chronic underinvestment in housing, energy, and the development of new technologies.

To those areas we would add another, one that we think makes a perfect complement to the Abundance movement but has been under-discussed, at least until now: worker policy.

What we mean by worker policy is the set of ideas that would make it easier for people to look for work, actually get hired, earn raises, and match with jobs where they are at their most productive. It also means helping businesses to grow and hire.

Without reforms to expand labor supply and improve workforce matching, supply-side reforms and investments in other areas will merely slam into a new constraint. Policies aimed at building more housing will fail without enough construction workers. Investments in clean energy, technology, and science will not lead to big societal payoffs without enough highly trained and educated workers. And all of these workers need the kind of mobility that makes it possible for them to work in the places where their work is needed.

If the aim of Abundance is to pave the way for the economy to build more stuff, then surely it would benefit from policies that improve the prospects of the people who do the building.

Why worker policy matters

The simplest and perhaps best reason that worker policy should become a prominent part of the Abundance movement is that it will accelerate labor dynamism, a powerful engine of faster productivity growth and rising living standards.

The recent history of labor dynamism in America is instructive. Throughout the middle of the 20th century, American workers eagerly moved to growing regions, changed jobs regularly, and brought new skills to the firms and sectors where they were valued.¹^,²^,³

But this particular engine of progress has stalled.⁴

Geographic mobility has declined sharply in the last 50 years. Workers in many of our poorest communities remain stuck in stagnant local economies with limited access to good-paying jobs. Job to job transitions have slowed. Declining labor market dynamism has contributed to widening geographic disparities and entrenched economic disillusionment.⁵^,⁶^,⁷^,⁸^,⁹

While workers are better compensated today, average annual growth in compensation is far slower than it was from 1950 to 1980. Productivity growth has similarly (and relatedly) weakened over the past decades.¹⁰^,¹¹

There is some hope that the trend can reverse. In the immediate aftermath of the Covid pandemic, several measures of economic dynamism climbed impressively. But at least some of them, especially those related to labor dynamism, appear to have fallen again more recently. The quits rate, a measure of how frequently workers are leaving their jobs — signalling confidence that they can find another — peaked in early 2022 and has been falling ever since. A similar trend applies to the premium paid to workers who switch jobs — a reflection of how aggressively firms are competing to hire new workers — which also peaked more than two years ago.¹²^,¹³

But it is too early to know whether labor dynamism can recover all the way back to its post-war levels and remain there. Policymakers in any case should not wait to find out. They should be taking all possible steps to bring about exactly such a world.

Advancing worker policy

My goal in this post is not to definitively establish the worker policies that Abundance enthusiasts should pursue, but rather to start the conversation of what might be included in such a policy agenda.

A good place to begin is by asking what the overarching goals of the Abundance agenda should be in the context of labor policy. A few I’d recommend are:

• Increase the number of meaningful opportunities for work.

• Expand worker mobility and access to opportunity.

• Create a modern, administratively capable, and flexible safety net.

Above all, Abundance-minded policymakers should remove the bottlenecks that prevent labor from flowing to where it is most productive and needed, just as we would for housing, infrastructure, or energy.

Here are some policy ideas that would help, though the list is not meant to be comprehensive:

Ban Noncompete Agreements: Noncompetes reduce wage competition and restrict entrepreneurship. Evidence shows that they suppress wage growth and slow the diffusion of talent and knowledge. Prohibiting noncompetes would restore bargaining power to workers and improve labor allocation. It would also support the creation of the next generation of innovative firms, expanding both the demand for labor and the supply of talent.¹⁴^,¹⁵^,¹⁶

Develop Portable Benefits: Today’s benefit systems remain largely tied to traditional employment models, locking many workers into their current jobs. Policies like the Retirement Savings for Americans Act would lead to a more-flexible retirement system in which benefits follow workers across jobs, reducing the hesitancy to take a risk and pursue that next great work opportunity. We should be exploring broader ways to make non-wage benefits more portable so that the threatened loss of health coverage, retirement savings, and other such benefits does not limit the opportunities of workers. By improving access to non-wage benefits, we can reduce job lock and support a more dynamic labor market.¹⁷^,¹⁸^,¹⁹

Reform Occupational Licensing: More than 20 percent of American workers require a license to work. While some standards protect the public, excessive and inconsistent requirements block entry into viable careers and limit worker mobility across states. Streamlining licensing and reducing unnecessary barriers would expand employment opportunities, particularly in low- and middle-skill occupations like truck driver, pest control applicator, and cosmetologist.²⁰^,²¹^,²²

Design Smoother Benefit Cliffs: Sudden losses in public assistance from modest earnings increases create high effective marginal tax rates and disincentivize work. Gradually phasing out benefits rather than cutting them off sharply would eliminate penalties on advancement and support upward mobility. A worker should not fear a raise, promotion, or opportunity. Every job change avoided for fear of a benefit cliff is an economic hardship not only for the worker and their family, but for the economy as a whole.²³^,²⁴

Introduce a Wage Subsidy: A wage subsidy can enhance take-home pay for low-wage workers while preserving the incentives for employers to hire them. A well-designed subsidy mimics the dynamics of a tight labor market for workers, raising wages and productivity, without distorting employment incentives for firms. It also increases the options workers have for where they work. Many of the problems core to the reallocation of low-wage workers stem from how far behind some local labor markets have fallen. A wage subsidy that lifts the financial return to work can boost local economies and reintegrate workers into the labor force and the economy as a whole.²⁵^,²⁶

Modernize Unemployment Insurance: The Unemployment Insurance (UI) system is outdated, fragmented, and inconsistently administered across states. A range of reforms could improve it. A modernized UI system would provide more equitable coverage and reduce the negative impact of market fluctuations beyond workers’ control. Expansion of UI to cover sole proprietor employers, contractors, entrepreneurs, and gig workers would also encourage more risk-taking and faster reallocation across industries and worker typologies.²⁷^,²⁸^,²⁹

Improve Immigration Policy: The United States underutilizes skilled and entrepreneurial talent from abroad. Immigrants patent at higher rates and are more likely to start new firms. Reforming and expanding legal pathways for skilled immigrants would boost innovation and job creation, providing enormous benefits for native-born workers.³⁰^,³¹^,³²

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We’d love to hear more suggestions from readers.

Abundant labor is not a byproduct of economic growth, it is a prerequisite. Just as physical infrastructure creates the potential for fast growth and widespread prosperity, a talented and healthy labor force helps the economy reach that potential.

A comprehensive Abundance agenda must therefore demolish the self-imposed blockages to job creation, wage growth, and workforce mobility that continue to hold back workers.

Unlocking our labor market is essential to ensuring the benefits of our economy are broadly shared across people and places.

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2. Topel, Robert H., and Michael P. Ward. “Job Mobility and the Careers of Young Men.” The Quarterly Journal of Economics, vol. 107, no. 2, 1992, pp. 439–79. JSTOR, https://doi.org/10.2307/2118478. Accessed 9 Sept. 2025.

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12. U.S. Bureau of Labor Statistics. Job Openings and Labor Turnover Survey (JOLTS), Total Nonfarm Quit Rate (JTSQUR), Seasonally Adjusted, Monthly, 2000–2025. Peak of approximately 3.0 percent in November 2021; 1.9 percent as of August 2025.

13. Federal Reserve Bank of Atlanta. Wage Growth Tracker: Median Twelve-Month Wage Growth for Job Switchers and Job Stayers, 1997–2025. Job switchers grew 7.7 percent versus 5.5 percent for stayers in November 2022; by August 2025 both groups were approximately 4.3 percent and 4.2 percent, respectively.

14. Starr, Evan. “Consider this: Training, wages, and the enforceability of covenants not to compete.” ILR Review 72.4 (2019): 783-817.

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16. Johnson, Matthew S., Michael Lipsitz, and Alison Pei. Innovation and the enforceability of noncompete agreements. National Bureau of Economic Research, 2023.

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18. See “EIG Applauds Bipartisan Reintroduction of the Retirement Savings for Americans Act”

19. See “Chair Cassidy, Scott, Paul Release Legislative Package Empowering Independent Workers to Access Portable Benefits.” Also see Palagashvili, Liya. “Flexible Benefits for a Flexible Workforce: Unleashing Portable Benefits Solutions for Independent Workers and the Gig Economy.” George Mason University, Mercatus Center, February 3 (2023).

20. Boesch, Tyler, Mary Hogan, and Ryan Nunn. “Who Has an Occupational License in the United States? New Research Findings and Data Dashboard Illuminate the Occupational Licensing Landscape.” Federal Reserve Bank of Minneapolis, 22 Sept. 2023, minneapolisfed.org/article/2023/who-has-an-occupational-license-in-the-united-states. Accessed 9 Sept. 2025.

21. Hogan, Mary, Ben Horowitz, and Ryan Nunn. “Fixing Labor Market Rules That Limit Workers: Reforms Can Improve the Rules of the Labor Market, Helping Workers and Strengthening the Economy.” Federal Reserve Bank of Minneapolis, 18 Nov. 2022, https://www.minneapolisfed.org/article/2022/fixing-labor-market-rules-that-limit-workers. Accessed 9 Sept. 2025.

22. Mitchell, Matt. Occupational Licensing and the Poor and Disadvantaged. No. 08626. 2017.

23. Congressional Budget Office, “Effective Marginal Tax Rates for Low- and Moderate-Income Workers,” Report, November 2012.

24. Enache, Cristina. “Marginal Tax Rates and Economic Opportunity.” Tax Foundation, 30 June 2022, taxfoundation.org/research/all/global/marginal-tax-rates-economic-opportunity/. Accessed 9 Sept. 2025.

25. Phelps, Edmund S. “Low-wage employment subsidies versus the welfare state.” The American Economic Review 84.2 (1994): 54-58.

26. See Glasner, B., & Ozimek, A. (2025, September 22). How to end low-wage work forever: A policy that is direct, efficient, and life-changing. Agglomerations. Economic Innovation Group. Substack. https://agglomerations.substack.com/p/how-to-end-low-wage-work-forever

27. Kletzer, Lori G., and Howard Rosen. “Reforming unemployment insurance for the twenty-first century workforce.” Path to prosperity: Hamilton Project ideas on income security, education, and taxes (2006): 63-92.

28. See Von Wachter, Till. “Unemployment insurance reform.” The ANNALS of the American Academy of Political and Social Science 686.1 (2019): 121-146. Also see O’Leary, Christopher J. “Reforming unemployment insurance.” (2020). Also see Bivens, Josh, Melissa Boteach, Rachel Deutsch, Francisco Díez, Rebecca Dixon, Brian Galle, Alix Gould-Werth, Nicole Marquez, Lily Roberts, Heidi Shierholz, William Spriggs, and Andrew Stettner. Reforming Unemployment Insurance: Stabilizing a System in Crisis and Laying the Foundation for Equity. Economic Policy Institute, Nov. 2020, epi.org/publication/unemployment-insurance-reform. Accessed 9 Sept. 2025.

29. Darling, Matt. “Creating a More Dynamic Unemployment Insurance System: The Case for Eliminating Experience Rating.” Niskanen Center, 23 Apr. 2024, niskanencenter.org/creating-a-more-dynamic-unemployment-insurance-system-the-case-for-eliminating-experience-rating/. Accessed 9 Sept. 2025.

30. Ozimek, Adam, Connor O’Brien, and John Lettieri. “Reforming High-Skilled Immigration to Maximize American Interests.” (2025).

31. Kerr, William R. The gift of global talent: How migration shapes business, economy & society. Stanford University Press, 2020.

32. Azoulay, Pierre, et al. “Immigration and entrepreneurship in the United States.” American Economic Review: Insights 4.1 (2022): 71-88.