Economic Policy Reforms 2023

United States

See more data for the United States on the related dashboard.

Product and labour markets functioning

Performance gaps

• Competition in labour markets is impeded by the frequent use of non-compete agreements and occupational licenses in areas other than those requiring licensing for public health and safety reasons. In addition, there is inconsistent treatment of occupational licenses across states. Some population groups are particularly exposed to excessive licensing requirements, such as individuals with a criminal record, and immigrants.

Recommendations

• Further encourage states to delicense occupations raising very limited concerns for public health and safety, and act against anticompetitive behaviour.

• Address excessive employment barriers that create obstacles for ethnic minorities and foreign nationals.

• Outlaw the use of non-competes except where employers can prove benefit to workers.

Digital transition

Performance gaps

• Public investment in broadband infrastructure is increasing, closing large coverage gaps in certain parts of the country. Digital infrastructure has important linkages to other sectors of the economy, but the United States does not make use of national cross-sectoral infrastructure plans.

Recommendations

• Continue to update and improve public digital infrastructure.

• Establish a dedicated federal institution tasked with ongoing cross-sectoral and cross-state advisory about infrastructure priorities and best practices.

Inclusiveness, social protection, and ageing

Performance gaps

• The ratio of the minimum wage to the median wage is substantially lower than in other OECD countries.

• For those not working, expenditure on active labour market policies per unemployed is also relatively low. In addition, benefit recipients in many states experience significant delays in the processing of their unemployment claims.

Recommendations

• Increase the Federal minimum wage.

• Continue to modernise and streamline unemployment insurance systems, strengthening integration with job search assistance and training schemes.

• Raise public expenditure on active labour market policies, with a focus on job placement and cost-effective retraining policies.

Climate transition

Performance gaps

• Total greenhouse gas emissions have steadily fallen since 2004, driven by a shift in the energy mix. Nevertheless, emissions intensity remains one of the highest in the OECD and needs to decline significantly to achieve emission reduction targets. The transportation and residential sectors collectively account for around 42% of total greenhouse gas emissions.

Recommendations

• Further expand existing weatherisation and retrofitting programmes.

• Provide fiscal incentives for states to update their building energy codes.

• Accelerate the tightening of fuel efficiency and tailpipe CO2 standards.

Overall performance