On May 22, 2025, the U.S. House of Representatives passed the “One Big Beautiful Bill Act” (H.R. 1), a sweeping tax and spending package championed by President Donald Trump. This 1,116-page legislation extends the 2017 Tax Cuts and Jobs Act (TCJA), introduces new tax incentives, and imposes significant cuts to social programs. With projections of a $3.8 trillion deficit increase over a decade, the bill has sparked heated debate over its economic and employment impacts. This article dives into the big winners and big losers of the bill, focusing on how it reshapes the job market and economic landscape.
Big Winners of the One Big Beautiful Bill
1. Middle-Class and Tipped Workers
The bill offers significant tax relief for middle-class families and workers in tip-heavy industries like hospitality and retail. Key provisions include:
- No Tax on Tips: Tipped workers, such as servers and bartenders, could save approximately $1,100 annually on $5,000 in tips (based on a 22% tax rate). This provision, set to expire in 2028, directly boosts take-home pay for millions in service industries.
- No Tax on Overtime: Overtime wages, previously taxed as regular income, are now tax-free for non-highly compensated employees, potentially saving workers $1,760 on $8,000 in overtime pay. This could incentivize increased overtime work, boosting employment in sectors like healthcare and manufacturing.
- Increased Child Tax Credit: The Child Tax Credit rises from $2,000 to $2,500 per child, with up to $5,000 refundable for adoption credits, providing relief to families. This temporary boost (expiring in 2029) could increase disposable income, stimulating local economies and supporting job retention in retail and service sectors.
Employment Impact: By increasing take-home pay, these tax breaks could stimulate consumer spending, potentially creating or sustaining 794,000 to 7.4 million jobs over four years, according to various estimates. Industries reliant on consumer demand, such as retail and hospitality, may see hiring surges due to increased economic activity.
2. Small Businesses and Entrepreneurs
Small businesses are poised to benefit significantly from the bill’s provisions:
- Permanent Small Business Deduction: The Section 199A deduction for qualified business income is increased to 23% and made permanent, reducing the effective tax rate to 28.49% for pass-through entities. This encourages small business growth and hiring.
- Expanded Childcare and Family Leave Credits: Employer-provided childcare credits rise from 25% to 40% (50% for small businesses), with a maximum credit of $500,000 ($600,000 for small businesses). Expanded family and medical leave credits also incentivize businesses to offer better benefits, potentially attracting and retaining talent.
Employment Impact: The National Federation of Independent Business highlights that these measures could support over 33 million small business owners, fostering job creation by encouraging capital investment and employee benefits. Small businesses, which employ nearly half of U.S. workers, may expand hiring to meet growing demand.
3. High Earners and Corporations
The bill disproportionately benefits high earners and corporations through:
- Permanent TCJA Tax Cuts: The 37% top individual tax rate and estate tax exemptions (up to $15 million) are made permanent, providing substantial savings for the top 1% of earners, who could see a 4.3% income boost by 2027.
- Corporate Tax Benefits: Provisions like expensing for domestic R&D and less restrictive interest limitations could increase long-run GDP by 1.6%, fostering corporate investment and job growth in high-skill sectors like technology and manufacturing.
Employment Impact: Corporate tax benefits could drive investment in capital-intensive industries, creating high-paying jobs. However, the benefits are skewed toward upper management and shareholders, with less direct impact on low- and middle-wage workers.
4. Border Security and Defense Sectors
The bill allocates $46.5 billion for border wall construction, $4.1 billion for hiring Border Patrol agents, and $2 billion for agent bonuses, boosting employment in security and defense-related industries.
Employment Impact: These investments could create thousands of jobs in construction, security, and related fields, particularly in border states. The hiring of additional Border Patrol agents directly increases federal employment.
Big Losers of the One Big Beautiful Bill
1. Low-Income Households
Low-income Americans face significant challenges due to cuts in social safety net programs:
- Medicaid Cuts: The bill slashes $698 billion from Medicaid, potentially leaving 7.6 million Americans uninsured by 2034. Work requirements for those aged 55–64 further restrict access, disproportionately affecting low-income workers in physically demanding jobs.
- SNAP Reductions: A $267 billion cut to the Supplemental Nutrition Assistance Program (SNAP), combined with enhanced work requirements and reduced state flexibility, could reduce or eliminate benefits for millions. This may force low-income families to prioritize food over other expenses, reducing economic stability.
Employment Impact: Cuts to Medicaid and SNAP could destabilize low-income households, reducing their ability to maintain employment due to health issues or food insecurity. The Center for American Progress estimates job losses due to reduced economic stability, particularly in communities reliant on these programs.
2. Nonprofits and Charitable Organizations
Nonprofits face increased financial burdens:
- Excise Tax on High Salaries: A 21% excise tax on salaries over $1 million for nonprofit employees (including former employees) could strain budgets, limiting program funding.
- Increased UBIT: Modifications to Unrelated Business Taxable Income (UBTI), such as taxing transportation fringe benefits and limiting research income exemptions, increase taxable income for nonprofits, diverting funds from charitable missions.
Employment Impact: Nonprofits may reduce hiring or cut programs to offset new taxes, potentially leading to job losses in the charitable sector, which employs millions in education, healthcare, and community services.
3. Clean Energy Sector
The bill eliminates clean energy tax credits, putting 686,003 operational and construction jobs at risk.
Employment Impact: The loss of credits could halt growth in renewable energy sectors like wind, solar, and electric vehicles, leading to layoffs and reduced investment in green jobs, particularly in states with strong clean energy industries.
4. Federal Employees
Federal workers face changes to retirement and healthcare benefits:
- Increased Contributions and Reduced Pensions: Federal employees may contribute more to retirement plans, with adjusted pension calculations potentially lowering payouts. Changes to Cost-of-Living Adjustments (COLA) could further reduce retirement income.
Employment Impact: These changes may discourage retention and recruitment in the federal workforce, potentially leading to staffing shortages in critical government roles.
Employment Impact: A Double-Edged Sword
The bill’s employment effects are complex. Proponents argue it could boost GDP by 0.6% to 5.2% and create 794,000 to 7.4 million jobs over four years, driven by tax cuts and increased consumer spending. Small businesses and service industries may see hiring surges due to increased deductions and disposable income. However, cuts to Medicaid, SNAP, and clean energy credits could lead to job losses in healthcare, nonprofit, and renewable energy sectors. Low-income workers may face reduced economic stability, impacting their ability to stay employed.
The Congressional Budget Office (CBO) estimates a $3.8 trillion deficit increase over a decade, which could trigger inflation or future tax hikes, potentially offsetting short-term job gains. Critics warn that the bill’s regressive nature—favoring high earners over low-income households—may exacerbate income inequality, limiting broad-based job growth.
Final Thoughts
The One Big Beautiful Bill Act is a transformative piece of legislation with clear winners and losers. Middle-class workers, small businesses, and high earners stand to gain through tax breaks and economic growth, potentially driving job creation in retail, hospitality, and corporate sectors. However, low-income households, nonprofits, clean energy industries, and federal employees face significant challenges, with potential job losses in healthcare, charitable, and renewable energy sectors. As the bill moves to the Senate, its final form will determine the extent of its impact on employment and the economy. Stay informed to understand how these changes affect your finances and job prospects.