Economy and Work: who decides

Economic decisions in the United States are divided among several authorities. The Federal Reserve sets monetary policy under a legal mandate for maximum employment and stable prices, Congress holds the taxing and trade powers and has delegated parts of them to the president, states set most wage floors, union security rules, occupational licensing and unemployment benefits, and cities act only where state law permits. Matching an economic priority to the body that holds the relevant power is the first step in doing anything with it.

In plain words: no single office runs “the economy.” Interest rates, which affect loans and inflation, are set by the Federal Reserve. Tariffs depend on laws Congress passed and on how the president uses them, and courts can strike down a use that goes too far. The minimum wage you are owed depends on federal, state and sometimes city law. Whether you can be required to pay union fees depends on your state. This page maps those powers. Why people rank the economy so highly is on Economy and Work; data and research are on Economy and Work: evidence.

Defined terms

Economic governance uses several terms in specific legal senses.

Monetary policy. Decisions about interest rates and the money supply, made in the United States by the Federal Reserve.

Fiscal policy. Decisions about taxes and spending, made by Congress and the president, and by state and local governments within their own budgets.

Dual mandate. The statutory goals of the Federal Reserve: maximum employment and stable prices, along with moderate long-term interest rates.

Delegated authority. Power that Congress grants by statute to the executive branch, which can be used only within the statute’s terms.

Preemption. A higher level of government’s law displacing a lower level’s law on the same subject, as when a state bars cities from setting their own minimum wage.

Right-to-work law. A state law prohibiting agreements that require union membership or fees as a condition of employment.

Initiative. A process in some states by which voters can place a law or constitutional amendment on the ballot by petition.

The powers at a glance

Economic authority in the United States, by subject, is summarized below. The sections that follow give the legal sources. Arrangements vary by state.

Evidence: federal authority over economy and work

Federal economic authority in the United States rests on the Constitution’s grants to Congress and on statutes that delegate some of those powers.

The Constitution. Article I, Section 8 gives Congress the power “to lay and collect taxes, duties, imposts and excises” and “to regulate commerce with foreign nations, and among the several states”.⁠¹ Tariffs are duties, so the starting point for trade policy is Congress.

The Federal Reserve. By statute, the Board of Governors and the Federal Open Market Committee “shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates”.⁠² The FOMC “consists of twelve members,” the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four other Reserve Bank presidents who rotate in one-year terms, and it “holds eight regularly scheduled meetings per year”.⁠³ The Fed is designed so that its rate decisions are not made by elected officials; supporters say this protects price stability from short-term politics, and critics say it places major economic choices beyond voters’ reach.

Delegated trade powers. Congress has passed statutes that let the president act on imports within limits. Under Section 232 of the Trade Expansion Act, the Secretary of Commerce investigates “the effects on the national security of imports,” and if imports “threaten to impair the national security,” the President, “if the President concurs,” determines “the nature and duration of the action”.⁠⁴ Under Section 122 of the Trade Act of 1974, the president may impose a temporary import surcharge “not to exceed 15 percent ad valorem,” for “a period not exceeding 150 days (unless such period is extended by Act of Congress),” to deal with “large and serious United States balance-of-payments deficits”.⁠⁵

The 2026 tariff ruling. On February 20, 2026, in Learning Resources, Inc. v. Trump, the U.S. Supreme Court ruled 6 to 3 that the International Emergency Economic Powers Act (IEEPA) “does not grant the president the authority to impose tariffs,” as summarized by the law firm Jones Day.⁠⁶ According to the same summary, the Chief Justice concluded that IEEPA “lacks the clear statement required to authorize a delegation of Congress’s tariff power,” and a proclamation then imposed a temporary surcharge under Section 122, effective February 24, 2026.⁠⁶ The case shows that the line between congressional and presidential trade power is itself decided by courts. Readers should check the current status of any tariff, which can change quickly.

The federal minimum wage. The Fair Labor Standards Act sets the federal minimum at “$7.25 an hour”,⁠⁷ a rate that took effect in 2009 under the statute’s schedule. Only Congress can change it.

Unions. Federal labor law states that nothing in it authorizes union membership agreements in any state or territory where such agreements are prohibited by state law.⁠⁸ That provision, which dates to the 1935 labor act codified in this chapter, is what allows states to adopt right-to-work laws.

State authority

State economic authority in the United States covers much of what workers experience directly.

Minimum wages. As of July 1, 2026, the U.S. Department of Labor listed 30 states and the District of Columbia with minimum wages above the federal $7.25, with some applying only to larger employers.⁠⁹ Five states (Alabama, Louisiana, Mississippi, South Carolina and Tennessee) have no state minimum wage law, and employers there covered by federal law must pay $7.25.⁠⁹ The highest rates listed were $18.40 in the District of Columbia and $17.13 in Washington State.⁠⁹

Voters as lawmakers. In some states, voters set the wage floor directly. Missouri’s minimum wage statute records amendments “by initiative” in 2006 (Proposition B), 2018 (Proposition B) and 2024 (Proposition A), with the rate set at $13.75 in 2025 and $15.00 in 2026.⁠¹⁰ The same statute was then amended by the legislature in 2025 (H.B. 567), and its cost-of-living adjustment now runs only through December 31, 2024.⁠¹⁰ Missouri shows both direct democracy and its limits: a statute passed by initiative was later amended by the legislature.

Right-to-work. The National Conference of State Legislatures reported, in a page last updated December 19, 2023, that “26 states and Guam have enacted right-to-work laws,” and that Michigan repealed its law when Gov. Gretchen Whitmer signed Senate Bill 34 on March 24, 2023.⁠¹¹

Unemployment insurance. “Unemployment insurance is a joint state-federal program that provides cash benefits to eligible workers,” and “Each state administers a separate unemployment insurance program,” within federal guidelines, with each state setting its own eligibility rules.⁠¹² So benefit levels and rules differ by state.

Occupational licensing. In 2025, 21.6% of employed people held a license and 24.0% held a certification or license, according to Bureau of Labor Statistics annual averages.⁠¹³ Which jobs require a license, and what it takes to get one, is generally set by state law and state licensing boards, though this page has not compiled those rules state by state.

Job training. Under the Workforce Innovation and Opportunity Act, each local area must have “a local workforce development board” certified by the governor, and “a majority of the members of each local board shall be representatives of business in the local area”.⁠¹⁴

Local authority and its limits

Local economic authority in the United States depends on state permission.

Local minimum wages. The UC Berkeley Labor Center reports that “Before 2012, only five localities had minimum wage laws; currently, 67 counties and cities do,” in an inventory last modified September 30, 2026.⁠¹⁵ It also notes that “several minimum wage ordinances have been overturned, including Birmingham, AL,” after state action.⁠¹⁵ Whether a city can set its own wage floor is therefore a state question first.

The scale of local government. The Census Bureau counted 3,031 county governments, 19,489 municipal governments, 16,184 township governments and 40,199 special district governments in 2025.⁠¹⁶ Many economic decisions, such as local business permits, zoning and local development incentives, are made by these local bodies within state law, so an economic priority often has a local address. Zoning and land use are covered on Housing and Communities.

Competing interpretations

Economic governance raises enduring arguments about who should decide.

Central bank independence. Supporters argue an independent Fed is better able to keep inflation low because it is insulated from election cycles. Critics from different directions argue it is unaccountable, that it weighs inflation over employment or the reverse, or that its decisions favor some groups over others.

Executive trade power. Supporters of broad presidential trade authority argue that trade negotiations and national security require speed. Critics argue that tariffs are taxes and belong with Congress, a view the Supreme Court’s 2026 IEEPA ruling reflected for that statute.⁠⁶

State versus local. Supporters of state preemption argue that a patchwork of local wage and labor rules burdens employers who operate across city lines. Supporters of local authority argue that costs of living differ widely within states and that local voters should be able to set local rules.

Direct democracy. Supporters of wage initiatives argue that voters should be able to act when legislatures do not. Critics argue that complex economic policy is better handled by legislatures that can adjust it, which Missouri’s 2025 amendment illustrates from the other side.⁠¹⁰

Application to this framework

Economy and Work priorities in My Vote Forward are pointed at the authority that actually holds the relevant power. A proposal must name its authority. See Proposals and Jurisdictions.

Hypothetical example. Participants in a city rank Economy and Work first and then express opinions on two proposals: a local minimum wage ordinance and a call for lower interest rates. The first is addressed to the city council, but only if state law allows local wage ordinances. The second is addressed to no local body at all, because interest rates are set by the Federal Reserve. The framework should label the second as outside any local authority rather than present it as a local option.

Unresolved questions

Economic governance leaves open questions for the framework:

• How should a priority tool treat powers deliberately insulated from public pressure, such as monetary policy?
• When state law preempts local action, should a local proposal be shown at all, or redirected to the state?
• How should results handle powers in active litigation, where the deciding authority itself is uncertain?
• Should the framework distinguish statutes passed by initiative, which voters may expect to stand, from ordinary statutes?