Trump’s War On Iran Will Add to American Workers’ Economic Woes
American workers, already whipsawed by the effects of Trump’s capricious tariffs and other uncertainties of the economy, are likely to be the group most adversely impacted by the war against Iran according to labor economists and other economic analysts.
Such effects include:
1. Jobs, Hiring, and Economic Stability
While direct job losses are hard to predict, the indirect effects are clearer and concerning. If the conflict drags on, consumer spending may fall, businesses may slow hiring, and layoffs could follow.
A major disruption is already underway: the near shutdown of oil tankers through the Strait of Hormuz, a critical passage for roughly 20% of global petroleum shipments. Oil prices jumped nearly 10% after the conflict began, raising costs across industries from shipping to manufacturing.
This threatens a fragile recovery in U.S. manufacturing. Rising input costs for energy, materials, and transportation are already surging at their fastest pace in years. As production becomes more expensive, companies may scale back operations, cut hours, or reduce their workforce.
Supply chain vulnerabilities extend beyond oil. For example, a prolonged closure of the Strait could choke off a significant portion of the world’s helium supply—critical for semiconductors, medical equipment like MRI machines, and defense technologies—putting additional jobs at risk.
At the same time, the growing reliance on digital infrastructure leaves businesses exposed to cyberattacks. Iran and its allies have historically used cyber warfare in response to military conflict, and disruptions could halt business operations, threatening jobs across sectors.
2. Rising Costs for Everyday Life
Workers will also feel the impact at home, especially through rising energy and food costs.
Gasoline and diesel prices are expected to climb, along with electricity costs driven by higher natural gas prices. These increases hit lower-income workers hardest, particularly those with long commutes, as more of their income is diverted to basic transportation.
Food prices (already a strain) could rise further. Higher fuel costs increase the price of transporting goods, while disruptions to fertilizer supplies (much of which originates from the Persian Gulf) could reduce agricultural output. The result: higher grocery bills and tighter household budgets.
3. Long-Term Outlook for Workers
Unlike past wars, this conflict may not produce a significant boost in employment. Advances in technology like drones and automation reduce the need for human labor even during wartime production.
History offers a cautionary note: labor shortages can sometimes strengthen workers’ bargaining power, but they can also accelerate automation, ultimately reducing jobs.
Meanwhile, financial markets are already reacting. Rising energy prices and uncertainty have triggered declines in major stock indexes. If the conflict continues, economists warn of a broader slowdown. Businesses may pull back on hiring or cut jobs altogether, raising the risk of a recession.
As one economist put it, without a clear exit strategy, the economic effects of this conflict could be long-lasting, leaving American workers to bear much of the burden.
Written By Paul Merry, SU4W Board Member
