In the middle of last century you saw the opposite where the lower you went on the income distribution the faster your income was increasing, relativy speaking.
The middle of last century saw a labour shortage and much weaker monopsony labor makret ibfluence so that makes sense. The title of this article should be "in a surprise to noone, jobs that can be done by the widest percentage of the population are highly competitive and least responsive to wage pressure"
Including tariffs. (Blanket) tariffs are almost like a special tax on poor people.
Explanation: to a well off person, 25% higher gas or food prices is just an annoyance. Nothing in their day to day life will change because of that. To a poor person it's brutal.
Not a great example since energy and food are overwhelming domestically produced in the US. That doesnt mean there is no effect of tariffs in those categories, but it is much more muted than the headline numbers might suggest.
And, importantly, tariffs are payed by the importing party. This means they affect the base price of the product and cannot be made progressive.
You could set up a deduction system... But that's retroactive (poor people still don't have that money for a whole year) and dramatically complicates their tax filing burden and financial record keeping requirements.
The rich can afford lawyers and accountants, so the IRS has been going after lower and lower income folk for their slip-ups more often. So yet more punishing the poor.
> And, importantly, tariffs are payed by the importing party. This means they affect the base price of the product and cannot be made progressive.
This is not correct. The cost of tariffs are shared by the distributor and customer. The proportion is determined by the elasticity of demand. By this I mean that for goods and services which people rely on, like gas, they will pay almost all of the cost of the tariff because they need the gas to survive. For luxury goods and services, like Louboutin shoes, most of the cost of tariffs is paid by the distributor. This is because customers are willing to substitute for other options, or simply not buy that item. They don't need it.
The downstream effects are quite complex to calculate. For this reason, neoliberals prefer to avoid any tariffs at all. For example, the U.S. is a net gas exporter, meaning that total net local consumption can be satisfied without imports. In a perfect market, there would be no change to the cost of gas. However gas is a commodity, and there is the risk that cartels abuse their market positions to exploit the fact that locals must buy gas from them if they wish to avoid the tariff. For other goods like imported food, locals can substitute. They don't have to buy imported avocados. There are plenty of other affordable and nutritious foods available locally. However, the loss of avocados is, by some metric, a loss of quality of life. This isn't generally captured in economic data. Further still, some of these additional costs are offset by the fact that local businesses become more profitable thanks to said tariffs, and this ends up in the pockets of consumers. Because so much menial labour is currently offshored, the primary benefactor of tariffs is expected to be the poor and working classes.
Why the poor and working class? Increasing benefits on local products maybe will, maybe not, move to salaries. But first necessity goods are not very elastic making that products more expensive.
Because by and large, most of the jobs offshored by the U.S. have been lower skilled. As these jobs return, it is the lower skilled workers who will primarily benefit.
I agree that there are likely examples of necessities which cannot be produced cost effectively locally which will become more expensive.
These jobs are not going to return. 'The system' is too profitable in its current form. What will happen is tariffs will cause prices to rise as companies pass on this tax to consumers (which is inflationary). In fact, they may go up more than that, same way as they did during covid. Even if say two years from now a new congress and senate remove these tariffs. The prices will not go down. Companies will not build new factories here because it is easier, after they get the new higher prices locked in, to just lobby to get the tariffs removed and then keep the difference as sweet sweet margin.
> These jobs are not going to return. 'The system' is too profitable in its current form.
The system is set up to ensure efficient allocation of capital. If it's more profitable for manufacturers to produce goods in-country, that is exactly what they will do. It's a bold claim that tariffs will have no impact whatsoever on investment and spending, because it's clear that they absolutely will.
At best there are going to be a bunch of new bonded warehouses built, so that distributors don't have to front the cost (and uncertainty) of the new import taxes until they have customer cash in hand. Appropriately-implemented tariffs could have kept American industry here if implemented 2-3 decades ago. At this point it's closing the barn door after the horse left, started a new life, and watched his foals grow up and have their own families. The horse is not coming back.
Far too many people think of markets as some kind of magical supercomputational system. They're really just a heuristic that does avoid some spectacular failure modes, but easily gets stuck in local maximums. China did the work over decades to prime the pump so that industry picked up and moved, while our "leaders" facilitated the looting. One pathetic man throwing policy tantrums for spectacle isn't going to reverse these now-entrenched dynamics.
There is also the glaring issue that Chinese companies can just as easily set up factories in other countries with low US tariffs. They won't be paying import taxes on the equipment they bring there to do so (like setting up a factory in the US would require), and in fact they will probably receive favors from those countries' governments for the investment. So these ham-fisted import taxes actually encourage the expansion of Chinese influence into other countries.
> Because so much menial labour is currently offshored, the primary benefactor of tariffs is expected to be the poor and working classes.
See, I was with you until this (OK, mostly with you, luxury goods are price inelastic so the buyer definitely pays).
The primary beneficiary of a carefully designed tariff policy might be some working class people in some industries (and some wealthy owners, natch), at the expense of direct and indirect customers of those industries who may or may not be poor themselves. But an idiot imposing blanket unpredictable tariffs with promises to negotiate "great deals" that lift them in future costs far more of those manufacturing jobs than it protects, because on the one hand it creates enormous supply chain risk to US manufacturing, and on the other hand overseas companies aren't investing in building new facilities in the US because of a 40% tariff levied until the POTUS changes his mind in a few months time...
That's certainly a possibility, so I agree. If the uncertainty leads to significantly lower investment over a prolonged period of time, the benefits could be offset.
Strictly speaking luxury goods are income elastic (by definition) but can be either price elastic or inelastic at different points on the pricing curve, with profit-maximising suppliers attempting to set prices at the level where it reaches unitary elasticity. But when we're talking about designer brands (as opposed to the strict economic definition of a 'luxury good' which encompasses most of the shoe market), they typically price above that level anyway to maintain "exclusivity". Hermes made a point of publicly stating that it would pass on 100% of tariffs costs to consumers, and whilst I haven't tracked Louboutin shoe prices I doubt their customer base for shoes costing 10x their less fashionable equivalent is going to permanently refuse to pay a 15% price increase. Particularly not when it also applies to the brand's closest competitor in the form of other trendy European designer shoe brands. I suspect the tariff-eating that occurs in the US fashion market will tend to be US-based retailers cutting their margins rather than the foreign brand cutting its wholesale prices too...
I don't think I agree. Luxury goods are typically defined as both income and price elastic in economics textbooks. I agree that brands can and do employ various marketing strategies like exclusivity, as you describe. This is also true of low elasticity goods like Liquid Death selling expensive water. Still, in a competitive market where the wealthy can choose other designer brands with similar class projection and quality, theory tells us that customers can and do switch, and the market finds a price equilibrium close to the pre-tariff price.
And, importantly, tariffs are payed by the importing party. This means they affect the base price of the product and cannot be made progressive
Yes. But that cost can be absorbed across the board. The manufacturer can lower their margins. The importer / distributor / wholesaler can do the same. The B2B / B2C seller can do the same.
It doesn’t all necessarily get directly passed to the buyer.
Another question that few are asking is: what has the off shoring of so much manufacturing cost the USA? Looking at the resident of the WH, it appears to be quite a bit.
They wouldn't on purpose but I can tell you from experience that what happens in practice is that you don't re-quote everything or instantly change your quoted pricing based on a small fluctuations in inputs. So most companies will eat a couple percent (gross) margin here and there. So when an input cost rises margins my go to X-1, and then X-2 as it it rises more, then someone notices and changes quoted pricing to say Y+1, 2 or 3 depending on whether you're trying to get ahead of future hikes, how bad you're being squeezed, how bad you want more work, etc. But no matter what the "area under the curve" of all this change is almost always going to be negative. Sure, there's the occasional winner but in total the entire industry and economy loses.
Price elasticity of demand (=sensitivity to price changes). If the seller is afraid that higher prices will significantly impact sales (people won't buy the product or buy alternatives), it might accept a lower margin in order to maintain the volume.
Also market competition can be a factor: if competitors are not raising prices (or by smaller amounts), you might lose market share.
The drop in demand for staples you're talking about is quite literally the poorest people eating less, using fewer basics, lowering their quality of life further.
As of 2016 (first search result) 90% of food/beverage is domestically produced = no tariffs. [1] The big goal with the tariffs, outside of gaining leverage on other countries, is to motivate domestic production and alternatives. Without tariffs it simply isn't realistically possible to compete in many industries because other countries have cheaper labor and less costly regulations.
Of course the practical problem with this playing out in increased domestic production is that it's reasonably likely that in 2028 the tariffs will get rolled back, and any company that was depending on them to survive will die. That's a large amount of uncertainty for any industry where there's a significant income investment required to get going.
>90% of food/beverage is domestically produced = no tariffs
That's not true, even for items which undergo relatively little processing like milk:
1. Cows need feed, and in the US this is mostly corn. This corn is mechanically harvested, shucked, and transported.
2. Cows are milked by machine.
3. This milk is then transported to a larger processing facility where it gets filtered, clarified (fat removal for 2%, skim, etc), pasteurized, homogenized (fat is evenly dispersed), and bottled in a blown plastic jug.
4. After bottling, the milk gets palletized and trucked to grocery distribution centers, which will re-palletize it for shipment to individual stores.
At every step of the way, we use machines that require frequent maintenance and whose supply chains rely extensively on imported parts. On-shoring all of this would be expensive and risky both because Trump flip-flops so often and because our next administration may just reverse the tariffs.
Domestic food supply is still subject to tariffs because many of the inputs are. Agricultural machinery, parts, chemical feedstocks.
Not to mention that tariffs on directly imported goods reduce the lowest earners' ability to pay for domestic products.
If the goal was onshoring too benefit the population, it would be coupled with a strong wealth redistribution to the least wealthy to allow them to buy domestic goods. But that's not the goal.
In the short term: fear of reprisals from Trump, as he clearly warned them not to raise prices. In the long term markets find a new equilibrium, as they always do when a new tax is imposed, and that is probably going to be a combination of lower margins, higher prices for the consumer and lower prices for foreign suppliers.
"higher prices for the consumer" can include lower value at the same price. Size reduction seems a common method for certain commodities. This may result in reduced consumption (e.g., a consumer buying one package of ice cream every other week), as well as increase customer dissatisfaction when the change is noticed, and it can increase packaging cost per unit weight/volume.
Other ways of reducing value are possible such as reducing quality control effort, reducing quality of inputs, and reducing manufacturing costs in ways that are known to reduce product quality.
Pushing costs to effectively underregulated externalities can also avoid price increases.
It is also sometimes possible to increase efficiency. Even a long term commodity can have potential for efficiency improvements that were considered not worth exploring under stable pricing pressures. (I suspect value reduction is easier and much faster than efficiency improvement.)
Sadly, reducing value can have a disproportionate cost to consumers. Reducing manufacturing costs for a Watchman's boots by 20% may reduce the lifetime of such by 30% and reduce the quality of use by 50% (which may be related to Samuel Vimes' theory: https://en.m.wikipedia.org/wiki/Boots_theory ).
For starters, he could do what he did with CBS: threaten a potential merger. Or he could do what he did with Musk: threaten to revoke citizenship of the CEO or anyone on the board if they're foreign. Or do what he did with Harvard and Columbia: threaten to pull grants and revoke foreign visas of workers. Or do what he did with big law firms: threaten to pull security clearances.
> Another question that few are asking is: what has the off shoring of so much manufacturing cost the USA? Looking at the resident of the WH, it appears to be quite a bit.
A question that I see ignored by people who ask your question, is 'what has off-shoring brought the US?' The answer is massive economic growth and improvements in quality of live.
Off-shoring allows you to make stuff cheaper by keeping the economic circumstances of the creator worse than your own. We can get cheap stuff from China because they work many more hours than people in the west do and they live in conditions that are much worse. Because we can get cheap stuff (like pocket computers, clothing, shoes, couches, cars and more) and off-shore most of the downsides (pollution, long working hours, dangerous workplaces), we improve our quality of life significantly.
So unless you prefer working in mines or working 80 hours a week in a dirty, dangerous factory, I think you're probably better off with globalization than you would've been without.
> True, since they own all the beachfront property
Climate change does not mean just rising sea levels, but more extreme weather as well, which can include more flooding: warmer air holds more moisture, so when it eventually gets released it can be in downpours. See recent flooding in Texas.
Poor people tend to live in the highest risk areas because the safer areas are desired most and so the people with money bid up prices there.
When you hear headlines like "Trailer Park Destroyed by Tornado", and people ask "Who would live in 'Tornado Alley'?", the answer is "Poor people.".
Regarding people living in Tornado Alley because they can't afford to live anywhere else, insurance costs are much higher there, so not exactly a bargain. And plenty of wealthy people love high risk areas. Pretty much anything by a sea is high risk. And again, they pay for it with higher insurance rates.
It's hard to get a good measure of damage caused by climate change. There are much touted statistics that say billion dollar weather events are more common than ever, but that's mainly due to things being more expensive and increased development (i.e. beach front properties)
A more objective measure, although no perfect, is deaths caused by climate events. If climate events were more catastrophic over time, you would expect deaths to go up somewhat proportionally. To my knowledge, there haven't been major advances in rescue technology in the last 50 years or so.
But we see this number has come down pretty drastically over the last 150 years. In the US it has also come down or stayed about the same
Not if you own your trailer without a mortgage. If you have a mortgage you're pretty much required to have insurance. Not getting insurance doesn't make this cheaper really as you'll just lose your property completely every few years. Besides insurance rates are often highly subsidized by federal government and actually a really good bargain
I've also heard anecdotes of people draining all their savings/retirement accounts to buy property in uninsurable areas of Florida because they can't get a mortgage. I don't see that working out well long term.
Even in the most facile analysis: Reduced labor availability either (a) decreases supply due to failure to harvest or (b) increases prices due to increased labor costs and therefore drives inflation higher faster than bottom-tier wages can accommodate.
It increases automation and therefore productivity. It increases the demand for legal unskilled labor. Money earned is spent in America rather than sent to foreign countries as remittances
Right now, cleaning rooms cannot be fully automated at any price. The AI to control the robots just isn't good enough for how broad a term "unclean" can be.
I don't want to comment about picking crops, that's rapidly changing and I don't expect to be up-to-date with this. I've seen people being confidently wrong about "cows won't milk themselves" decades after there were machines cows could operate by themselves to get milked.
When you get into the “ at any price ” range, then you should be up for engineering the room to support fully automated cleaning, and so I’d contend this is possible today. For certain situations. For example, automatic cleaning of a capsule hotel. I’ve just checked into one myself, nearly everything is self-service with an rfid band for access. How about automatic cleaning of a clean room?
Sure, but "For certain situations" is a strong barrier here.
So, the example with most saliency for me (which may not be the hardest to deal with) is:
Imagine a hotel that is hosting a convention, and is fully occupied for five days. On day one, a norovirus infection event gets everyone, on day four everyone's digestive tracts are voided from both ends with about 40 seconds' warning. How well do the automation systems cope?
This example is probably quite close to the top of the list of things I expect cleaning staff to be hoping someone can automate/has already automated, because noro is hella infectious like that and who on earth would actually want to be the one who has to clean up after such incidents, but has this kind of cleanup actually been fully automated yet?
I had to clean up after a relative (which is why it's salient for me), and I think I caught it from them because I'd missed the inside of a cupboard door handle before removing my gloves.
Would be one of the easier cases, given they are work environments and by extension there's an expectation of reduced scope of things for the automation to be doing, though even then I'd expect some unplanned incidents require human intervention.
Brexit is so funny because it is literally a real world example of how isolation reduces economic growth and causes poverty - and yet, America goes ahead with similar isolation.
Still, none of that outweighs the inflationary pressure.
Increasing automation and therefore productivity means an increase in profits to the owners, not a drop in prices, except in the most competitive industries.
Unemployment is already extremely low. There aren't tons of Americans waiting to step into these jobs. If unemployment were 10% that would be a different story, but we're close to full employment. So instead of the jobs going to Americans, the produce rots in the fields, and prices go up.
Except, of course, that this is completely backwards. Low unemployment shifts the balance of negociating power towards workers as companies have to compete to get them. See the massive growth in AI engineers’ wages for a nice illustration of this.
High unemployment helps employers because they can put pressure on the workers, who are less likely to find a job with better conditions or at all.
The fact that low unemployment is associated with stagnating wages these days is a massive failure of the capitalist system. It means that the situation is deteriorating and some of the levers cannot be used. There is no way out without pain.
This is my bad. For some reason I got "unemployment rate" twisted in my head and thought it was related to the number of unfilled jobs
So my reasoning was "if there are not many unfilled jobs, it makes it tougher for people to find work, meaning the unemployment rate is low" which of course does not logically follow
What? That makes no sense, did you mix up your high/low words? Or could you elaborate on your opinion that is perfectly opposite all accepted economic understanding?
The lower your income is, the bigger the % you spend on necessities like food. So when those go up, the lower incomes are again hit the hardest as they spend a higher percentage of their total income on it. And these are necessities not nice to haves
I am not. You are confusing transient effects with the equilibrium state.
Btw, for low wage employees everything is a significant % of their wage. The only meaningful way to increase their wages is to decrease the supply of cheap labor. This is exactly what happened during Covid where no one was willing to work for $8/hr and the wages went up.
When people realize that their wage doesn’t guarantee good living they will look for a better job or demand a raise.
Supply and demand aren't always in the same place...
If a lot of the farm workers in California are gone how does that help the people in Nevada or Michigan that are unemployed... You think they're going to fill those positions?
> When people realize that their wage doesn’t guarantee good living they will look for a better job or demand a raise
Wow... When your job requires no education or training? I guess everyone who works 2 or more jobs in the us needs to talk to you. They're all missing this obvious point.
Yes, countries that go through population declines without new immigration have often seen strong wage growth. Famously after the Irish great famine agricultural wages rose ~30%, and lower-skill jobs saw strong wage growth
Technically most of the Irish population emigrated Ireland, and I'm not sure I'd blame the brits for a famine but ok. Really what I'm looking at is the economic effect of decreasing population when it's not replaced by immigrants
Still killed a million. It is clearly the fault of Britain as Ireland produced much more food than it needed itself but peasants mostly only got to eat potatoes as most of all good food was exported because Brits owned most of the land so peasants didn't own what they produced. When they didn't have acces to potatoes anymore they had no food, and free market advocates in Britain argued that they shouldn't even try to help them.
No, for two reasons. The first is that Americans often refuse to work those jobs (and for good reason, they pay incredibly poorly, have no benefits etc. It is generally a financial loss to do said jobs). We've tried multiple times to try and get Americans to work in the fields: it never works [1]. The second is that a large amount of our economy is heavily subsidized by said cheap immigrant labor and if you just straight up remove that labor, then the costs of everything goes up as many farms go out of business and die. That's just assuming that you somehow got Americans to go out and replace said jobs; suddenly removing 1+ million people from any labor pool would have drastic effects on the rest of the economy.
> The first is that Americans often refuse to work those jobs (and for good reason, they pay incredibly poorly, have no benefits etc. It is generally a financial loss to do said jobs).
Would Americans work those jobs if those jobs paid well?
Those jobs can not pay well, because the basic living goods have to be artificially price dumped to remain affordable for the working poor. Otherwise all prices would have to be raised to include this, which will never happen.
That seems to be inconsistent with the continued negligence with respect to housing prices. Maybe it would be fine if food cost more because agricultural workers got paid better but housing cost less because we stopped artificially constraining supply.
> Rising salaries will lead to inflation. Expecting anything else is fantasy
No. Riding salaries do not lead to inflation by themselves. What leads to inflation is the increase in money circulating on the market. In other words: printing money leads to inflation.
> Riding salaries do not lead to inflation by themselves. What leads to inflation is the increase in money circulating on the market
Not necessarily, if price of product A goes up and I have to buy that it means I have less money to spend on product B. Meaning demand on product B goes down so its price goes down.
If we go back to the point that we're talking about, being how it affects the lowest incomes, then you can see how an ever increasing % of their income is locked up in food/housing etc.
By your logic
"What leads to inflation is the increase in money circulating on the market."
Why is the rate of inflation even a value that isn't known beforehand? Surely we control our own printers, no?
> Riding salaries do not lead to inflation by themselves. What leads to inflation is the increase in money circulating on the market
This is nonsense. If an economy doubles and the money supply grows 10%, you get deflation. If the money supply is stable and half the country gets bombed, you get inflation.
Price levels are a function of both money demand and money supply. Ignoring the demand side of the equation doesn’t work.
How do you read “price levels are a function of both money demand and money supply” and get that?
Going back to the top, you claimed “riding [sic] salaries do not lead to inflation.” That is nonsense. Even if we ignore that rising salaries cause the money supply to increase through increased velocity, wealth effect and credit creation. (This is why when the economy is strong central banks raise rates to keep price levels stable. You have to destroy money to make up for the money being created by the private sector.)
> to keep inflation at bay, one of the things you do, you restrict money supply
Again, nobody said money supply doesn’t affect price levels. But in this example, rising wages caused the inflationary impetus without any money printing. To correct for that, the money supply must be reduced.
If you’re piloting a plane, deflecting the control surfaces will move the plane. But so will winds. If winds buffet your plane you have to deflect control surfaces to get back to where you were. That doesn’t mean the wind doesn’t exist.
Rising salaries can cause inflation all on their own. Even in an economy with a fixed money supply. (So can printing money, but nobody was debating that.)
> hard for me to imagine how deporting a million illegal immigrants working under the table, or stealing a social security number, would hurt the minimum wage workers
Immigration is a distraction. Trump is deporting fewer folks than Obama did [1], he’s just doing it while pumping tens of billions to his buddies via ICE contracts.
Tariffs are a regressive tax. If food and metal is more expensive, service and manufacturing workers will be pinches.
> love the argument that deporting illegals is meaningless
Red herring. Nobody said this.
My point is Trump isn’t deporting that many people. His numbers are not economically meaningful compared to tariffs. To the extent there are labour pools that would benefit from deportation, they’re geographically concentrated along the border.
If Trump wanted to remove illegals from the American labour pool, he’d target employers. He can’t [1].
The administration seems to be deliberately making the deportations as cruel and scary as possible (CECOT, Alligator Alcatraz, etc) as a means of deterring future illegal immigration and encouraging self deportation. I haven’t looked into the numbers to see how well that’s working or not, but focusing on deportations alone is missing two thirds of the picture.
> sounds like you support deporting illegals, as long as we also eliminate tariffs
I’m saying irrespective of what you and I believe, the current administration isn’t meaningfully deporting anyone.
(To the extent I have policy views on this, it’s for coherence. You can’t do disruptive deportations while ignoring criminals all while launching on again off again tariffs which preclude both long-term domestic investment and trade-barrier reductions.)
No one blames anyone. The more low skilled workers you have, the lower wage they get. the only group that benefits from illegal immigrants is the employers: they can get away with paying less. (Consumers benefit too, ofc).
Curiously in the Netherlands poverty has gone down. But that's because the government has a pretty solid Robin Hood system going on: take from the rich give to the poor.
The amount of wealth that is redistributed is frankly insane.
I'm generally in favor. My taxes provide an amazing experience here. I have never seen the abject poverty that I've seen in other places (such as the US) here in NL. Great infrastructure, labor laws, culture and arts, etc. I worry less about break-ins and theft. All-in-all, the least worst place to live, by far.
You got it, that huge army is not free, that militarized police is not free, the CIA is not free, FBI, NSA, and all that huge security related organizations that nobody else in the world has except maybe Israel and not at the same scale.
That too. We need our security organizations, there are lots of unpatriotic profiteers in there, we could get a lot more value for our moeny on those. (Littoral battleships? F-35s? Let's just get actual spent-uranium-tipped unicorns.) The way we do infrastructure and social services leaves a lot of room for improvement. I'd pay 50% tax gladly if I got half my income in value back.
Hell looking at the state of international conflict today I can't even be that upset about defense spending on principle, it's just that what we spend on is stupid and immoral. Instead of domestic oppression and foreign genocide we could be helping Europe and Taiwan fend off threats from rival great powers.
> The amount of wealth that is redistributed is frankly insane.
I would change that to: the amount of income tax quickly reaches idiotic heights.
Capital taxes are generally low, and income taxes are for the 95% losers.
There is no plan to make the pie larger. The problem is the same as everywhere: a public brainwashed by neo-liberal nonsense voting against their own interests. Private gains and public losses.
> The error people make all the time is assuming these groups are static and always have the same people in them over time.
Here is something I posted only a few days ago. It is Germany, but that point is certainly not much different from Anglo-Saxon countries.
It is a podcast, and in German too, but it is high quality and on one of the best stations in Germany (Deutschlandfunk's culture channel -https://en.wikipedia.org/wiki/Deutschlandfunk)
> Despite political upheavals over the past 150 years, Germany's elites have remained the same. Sociologist Michael Hartmann criticizes the fact that only four percent of the population shapes the country. He calls for a quota of working-class children for executive boards.
Yes individuals can rise and fall. For example, near the big turning points in German history the people in politics were renewed, after WWII people from the working class made it to the top posts. However, with increasing stability, over the last two decades even that group has become more and more of an insider club, and people from "lower classes" have a very low chance of rising to the tops. In the economy and when it comes to real wealth it is even worse. Connections and pre-existing wealth are a good predictor of where you will end up. You may have better luck with high-paying jobs, but they rarely lead to the top of the wealth pyramid and influence.
> […] It’s wild that everyone is using “merit” and “meritocracy” as though it somehow avoids elitism, when in reality it’s a sneaky way to cement biases without the appearance of bias. Of course people should be judged on their skills and not their wealth. But, how’d they acquire those skills, and why would anyone assume the money didn’t help? Of course it’s a self-reinforcing system. […]
> In his 2019 book The Meritocracy Trap, Daniel Markovits poses that meritocracy is responsible for the exacerbation of social stratification, to the detriment of much of the general population. He introduces the idea of "snowball inequality", a perpetually widening gap between elite workers and members of the middle class. While the elite obtain exclusive positions thanks to their wealth of demonstrated merit, they occupy jobs and oust middle class workers from the core of economic events. The elites use their high earnings to secure the best education for their own children, so that they may enter the world of work with a competitive advantage over those who did not have the same opportunities. Thus, the cycle continues with each generation.
> In his book The Tyranny of Merit: What's Become of the Common Good?, the American political philosopher Michael Sandel argues that the meritocratic ideal has become a moral and political problem for contemporary Western societies. He contends that the meritocratic belief that personal success is solely based on individual merit and effort has led to a neglection of the common good, the erosion of solidarity, and the rise of inequality. Sandel's criticism concerns the widespread notion that those who achieve success deserve it because of their intelligence, talent and effort. Instead, he argues that this belief is flawed since it ignores the role of luck and external circumstances, such as social and external factors, which are beyond an individual's control.[91]
> Everything in life involves hefty doses of luck. The alternative (i.e. without merit) seems obviously worse as it would be completely luck, no?
There is some level of luck / chance, but one can tilt the odds: more tutoring that allows for more practice to get better in the skill(s) that are 'merited', getting into schools with good alumni networks so one can 'luckily' bump into the right people with the resources you need.
Initially good luck can breed good luck in the second iteration/generation.
The meta-criticism (if you will) is that the initial batch of merited people can lock-in things for their (grand-)kids in future batches. There needs to be a way allow opportunities for future batches if their (grand-)parents from earlier batches were not 'merited' initially. Otherwise you basically get the ball rolling on an aristocracy.
> The error people make all the time is assuming these groups are static and always have the same people in them over time.
I believe people actually involved in being active against top percentiles understand the difference between ongoing millions of annual income and one off inheritance. Have you got a some reason to think otherwise? I mean it was "occupy wall street", not "occupy people visiting retirement homes".
That’s my point - the tax data says that people making millions each year are incredibly rare. Most people earning that kind of income get it in a once in a lifetime.
Someone who inherits a couple million from a dead relative is not in the same league as Bezos who is rich enough to buy entire countries. Bezos is not coming down to the median any time soon. There are different leagues to this game.
Sorry but I don't understand your comment. Are you sure you are responding to the right message?
The OP specifically called out trickle-down economics. Which is a myth, a false belief that somehow not taxing rich companies and not redistributing a country's wealth through taxes and other means, companies will do the right thing eventually, and they will raise the wages instead by their own incentives.
Which they never do, and only raise wages as a very last resort. They do instead coordinated wage suppression, lobbying governments to take away labor rights from the labor force, outsource their operations, set up new offshore offices to escape paying taxes, etc
So what does your comment to do with that? I think your message doesn't address any of that
That’s not what “trickle down economics” is. It’s basically the Laffer curve which argues that tax receipts can actually go down with higher taxes rates as tax’s can discourage growth if high enough.
Thus if you lower taxes, economics growth increases (overall tax receipts go up, not down).
The Laffer curve simply shows the relationship between taxation and government revenue. It has nothing to do with the policies and the economic theories. In fact, there are two points on both sides of the Laffer curve's maxima where tax revenues are the same in theory. That's just a simple didactical tool, nothing more.
Saying that the Laffer curve is the trickle down economics is as bad as saying that visualizations of a binary tree are what we call algorithms and data structures.
The Laffer curve is the basis for what was called "trickle down economics".
The Reagan administration argued the US was the right side of the curve, and that lowering taxes would result in economic growth ("a rising tide raises all boats"). Economic growth benefits every worker.
OK. Thank you for the explanation. But then again, I think you are confusig things. So I am not convinced at all. But at least now I understand where you are coming from.
> It’s basically the Laffer curve which argues that tax receipts can actually go down with higher taxes rates as tax’s can discourage growth if high enough.
What you are describing is if we are on the right side of the curve. But is there any evidence that this is true?
When I read Sowell, someone who I imagine would be a champion for this cause, he cites the 1920s as his evidence that trickle-down works which doesn’t inspire confidence. If there is no modern evidence, why are we even entertaining this theory today?
The immigration crackdown and the tariffs will also mean effective reduced supply of foreign labor, and since their labor is what poor people sell, it will cause upward pressure on their earnings.
What slowing wage growth? For the poorest the wages have essentially not increased for a long time right? It hasn’t even kept up with inflation. The recent bill actually makes it much worse.
As far as I can tell, over the last few years at least, that's mostly not true: wages outpaced inflation, and it outpaced inflation more for lower-income workers than higher.
> In stark contrast to prior decades, low-wage workers experienced dramatically fast real wage growth between 2019 and 2023
The problem with comparing wages by cohort and average inflation is that inflation doesn't affect each cohort evenly. By and large, necessities continue to outpace top line inflation, and they have done so for decades. These include food, healthcare, housing, daycare, and education. Lower income people spend more of their income as a proportion on necessities, so they are impacted more than average by inflation. In order to tell if these lower income people have indeed received wage increases in line with inflation, we would need a model which uses a lower income basket of goods and services.
If I had to put on my tinfoil hat, I presume we don't do this because it would illustrate how badly the poorest are affected by inflation, and validate the frustrations they feel and which are clearly reflected in economic sentiment surveys.
One thing is that 10th percentile wages did barely keep up with inflation from 1979-2019 (0.1% growth annualized), it's only since then that it showed an increase (3.1% annualized).
So it seems to me that any effects along those lines strong enough to exactly negate the apparent real wage growth in recent years must have either 1) been basically constant, so effective wages in this group actually declined 3.1% every year on average for forty years, making 2019 10th-percentile workers reduced to 28.4% of their forbears' wages, or 2) the inflation numbers were about representative for the 10th percentile worker from 1979-2019 and then suddenly and abruptly weren't, or 3) some combination of the two.
(or of course 4), the effect is real, nonzero, but not big enough to wipe out 3.1% apparent wage growth)
I'm obviously not an expert, but assumed the same thing. I watched a fast food joint near me go from 9/hr to 21/hr in just a few years. Maybe that was just pandemic pricing, I don't know.
But getting >2x salary in such short order is outpacing pretty much everyone else, percentage wise.
You're probably right, but it ultimately leads to wage compression which is for most of the middle class a disaster.
You don't have to look far to see everyday people complaining about the price of a burger or movie ticket.
IMHO, it doesn't "lift all boats", it pulls down the middle and upper middle classes. Yeah, the lower wage jobs made more money, but they didn't gain much if anything in affordability, since all of the necessities are produced by people also demanding more money.
Today, I'd agree. It felt like a dirty thing to even write.
Historically, the lower wage jobs were for kids or bored folk, who'd eventually move onto something better and higher wages.
Recently, the economy isn't great and people take what they can find. There's absolutely no shame in that. I know people in tech who were making low to mid 6 figures now doing retail. The jobs just aren't there, and I constantly fear I'll be in the same boat soon.
But that inevitably does lead to wage compression, which to be clear isn't the fault of the lower wage earners.
> All arguments against lower class people getting higher wages are IMHO wildly inappropriate.
This kind of emotional reasoning is wildly inappropriate IMHO.
The commenter is not making an argument against lifting lower class wages. They’re making an observation of how economic theory may apply to this scenario.
In this context of wage compression it is fairly easy as it is just ensuring that they are paid comparatively more than the more junior employees that apparently are getting the same or close to the same salary.
If I make the observation that some vaccines can have anaphylaxis as a side effect, am I making an argument against vaccinations? Obviously not. In that case, you’d take precautions at vaccination sites: have EpiPens available, make people wait 15min after taking the shot before leaving.
In this case, I’m sure you can apply yourself and think of ways we can counter the effects of wage compression now that we’ve unemotionally identified the fact that it occurs.
To stay in your vaccine narrative: if I say that you expose other people to a health risk for not getting vaccinated - then yes this is an argument for getting vaccinated.
The observation is not that vaccines have (side)-effects, but how these effects affect other people.
The analogous argument would be that vaccines cause anaphylaxis and don’t prevent disease. If you made those statements then that’s clearly an argument against using them.
>IMHO, it doesn't "lift all boats", it pulls down the middle and upper middle classes.
It's hard to feel particularly bad for the them when the CurrentShitshow(TM) has largely been a result of the top-ish of the middle being comfortable enough that they're happy to peddle (sometimes at the behest of the most wealthy, sometimes organically) all sorts of bad ideas both economic and social that have kneecapped our economies and torn our societies apart. Like it wasn't the Uber Drivers who thought it would be a good idea to sell out the industrial portions of our economy and make race baiting a cornerstone of national politics.
I feel much greater sympathy for the cohort that currently works $15-25hr jobs and could have perhaps moved to $30-40 roles over time, bought a house and raised some kids in general economic stability if not for fairly self imposed costs and instability.
Somehow Europe can pay fast food workers above poverty, including 5 week paid vacation, healthcare and many other benefits without the middle class not being able to afford a burger. America's obsession with forcing people that work full time to live in squalor is insane.
If these reports say that things are better for low income people, why do people living that reality overwhelmingly disagree? Any statistics derived from inflation figures are doomed to be wrong when the inflation data was wrong to begin with.
I'm not in the US, but our inflation data was just as wrong as I've heard the US data was. Official numbers were 10% but literally everything went up at least 20%. Everyone I spoke to had their cost of living increase by significantly more than the official inflation figures.
And when "real wage growth" over 4 years is deemed to be just 13%, it's essentially guaranteed that real wage growth was in fact negative when you consider the disparity between real and official inflation figures. Statistics such as food insecurity rate, personal savings rate, and credit card delinquency rate would certainly support that.
> why do people living that reality overwhelmingly disagree
Because a hard life feels harder when prices rise. If you're at the bottom of the wage statistics, even a large increase in salary (eg. 20%) will still leave you struggling day to day, before inflation in your costs.
> Official numbers were 10% but literally everything went up at least 20%
Inflation numbers consider a wide variety of things. It's probably at least partially the reality that the necessities are rising faster than discretionary purchases. As an example, iPhones are "cheaper" today accounting for inflation since Apple hasn't raised prices much, especially on the high end. Obviously the poorest X% of people aren't buying new iPhones, so they don't get those savings.
Anecdotally, my grocery bill for packaged goods has risen dramatically, while my produce costs are flat. I'm a vegetarian so IDK about meat costs. My utilities have risen, my housing costs have risen, and my subscription prices have risen. Meanwhile, most of my other non-travel spending (eg. home goods like towels, electronics, etc) is pretty flat for years.
Ingredients household here. My grocery bill doubled in 7 years without any packages of anything.
Largest increase has been on every fresh food item grown in our many greenhouses. Such as lettuce (increased 200% from ~1 to ~3 for iceberg lettuce) and tomatoes.
I keep a decent memory of pricing at multiple stores and can agree with part of your comment, packaged food got it worse.
the reports are written by people who are not in the same wage category. that is why they don't reflect the lived experiences of these people.
facts and experiences are two very different things. Despite wages going up, poor people can still experience hardship and the feeling of always missing out / having less. it's a matter of contrast, not numbers. And that contrast, that's formed by lived experiences, not some report numbers or percentages thrown around here n there.
Policies should aim to elevate lived experiences of people, not change some numbers here and there to make the facts more confortable morally -_-.
> If these reports say that things are better for low income people, why do people living that reality overwhelmingly disagree?
I'll give an example. In 2019, a 1bd apartment near me cost $800 per month. The McDonalds paid $7.50 per hour. Today the same 1bd costs $2000 per month, and the McDonalds pays $15 per hour.
So both can be true. Wages have gone up 100% for the low income worker, which is good news. But it's not enough to offset the cost of living increases, so they are actually worse off than they were before their wages went up.
>I'm not in the US, but our inflation data was just as wrong as I've heard the US data was. Official numbers were 10% but literally everything went up at least 20%. Everyone I spoke to had their cost of living increase by significantly more than the official inflation figures.
All the math that underpins the usual idiots screeching about "muh compounding gains/interest" applies to the divergence between real inflation and official inflation as well. You can hide a lot of divergence between the real value of the currency and the official value by "simply" having the official number be low by a couple percent over time.
I imagine how cost of living/inflation is calculated became a lot more complex in the past few years which skews the comparison. Especially because of cost of buying homes and cost of renting and greater disparity between rural and urban in the context of increasingly higher urban populations.
Also, predatory debt trapping, in part due to social media exposure and student loans, is way bigger thing now.
That's a study that underestimates growth in cost of living, i.e. gouging by rent seekers and businesses, and ignores changes in status, i.e. people leaving the job market or moving down to something worse. It's not surprising that the lowest income earners got a substantial boost in that period, since life is getting substantially more expensive. Importantly, I don't think their "real wage" inflation adjusted values are fair. People being told inflation was one amount when their actual CoL was vastly outpacing that was part of what fueled the anger that got Trump elected again, not that he has helped (or will help) anything since '23 where that analysis ends.
Anecdotally, many people I know would be in dire straits if they didn't own appreciating real property, because their cost of living adjustments at work aren't coming close to matching inflation. Others I know are actually in dire straits. Some are doing fine and getting the benefit of profitable work. Overall things have been awful economically post-COVID, and there are a lot of causal factors, from the policy decisions of the last decade, to the surprises of COVID, natural disasters and geopolitics, to the AI investment bubble and the changing zeitgeist. (Oh and let's not forget simple demographics, birth rate, etc...)
Activists love to use the Federal Minimum Wage, which has not increased in a long time (16 years), as their basis for that claim, ignoring how few workers are actually paid the Federal Minimum Wage. It's become a worthless metric for anything other than misleading arguments.
In addition to state and local governments setting their own minimums, the decline in young people and competition for workers in that sector from food delivery companies, has put wage pressure on fast food companies. Most wouldn't be able to open their doors if they tried to pay the Federal Minimum Wage. Had it been pegged to inflation, it would be $10.90/hour, which is less than what fast food workers are paid almost anywhere.
> Decades of worsening conditions for the commoner is Ron Wyden's idea of a booming economy. Democrats are useful idiots.
I can't anymore, folks. Republicans passed the largest tax cuts for billionaires, increased the deficit by trillions, and kicked millions of people of medicaid. Meanwhile, Trump is out there creating the most regressive tax system via tariffs we've ever seen which affect the poorest the most.
> Trump is out there creating the most regressive tax system via tariffs
Tariffs incentivize domestic production. See the case of chicken tax and pickup trucks. While we do pay for tariffs now, later down the road we should not as more things would be made domestically. If you don’t do tariffs, there is no way to force producers to onshore.
The chicken tax encourages creative workarounds more than domestic production. Importing all the parts and putting them together in the US is production work, so fine. Importing chassis cab and putting a bed on in the US is silly, importing with seats discarded in the US is wasteful (Ford got dinged, but I don't think others did?)
Who's making small cargo vans domestically? Nobody. So they're all 25% more expensive, so you might as well buy a big cargo van when a small one would do.
Honestly, governments buy enough light trucks, that 'buy american' requirements would likely keep at least one company making them here.
Chicken tax was introduced earlier than all the “relaxation” of what is considered “American”. The definition of “made in USA” became more flexible for products to be considered domestic while de facto being made somewhere else, hurting domestic manufacturing.
So, it’s not that the tax doesn’t work, the issue is all the things around it that made it less effective.
Chicken tax was enacted in 1964; Ford and Chevy were tariff engineering in 1972, importing trucks without beds and putting beds on in the US.
Finding loopholes and driving trucks through them is what's considered American. It's not a relaxation.
At the end of the day, the chicken tax reduces our options in the vehicle market as it was designed to do, and it's one thing if we want to exclude WV vans and trucks when we have plenty of nice options at home, but now that we don't have nice options at home, it would be nice to be able to import them without a punative tariff.
There has been no start. You don’t build a factory because the President announced a tariff that he is also negotiating a trade deal around.
> what is this reason?
I’m remodelling my deck. I had orders into a steel mill in Utah. Tariffs mean their steel inputs are pricer than competitors in Vietnam. So I switched the order. And I paid with a cheque—if I paid cash I could skip taxes altogether. That wasn’t a thing six months ago.
Meanwhile, software and services aren’t tariffed. Just goods. Guess whose cost of capital has sunk.
> There has been no start. You don’t build a factory because the President announced a tariff that he is also negotiating a trade deal around.
You absolutely do once the math of tariffs makes your manufacturing abroad not competitive with onshored one. Will it apply for all categories of products? Probably not. However, it will definitely apply for many.
I am not sure I understood your reply about the reasons.
> absolutely do once the math of tariffs makes your manufacturing abroad not competitive with onshored one
If someone bet on e.g. our Japan tariffs three months ago, they lost money. (Nobody did. The types that take Trump at his word on tariffs aren’t making economically significant decisions.)
I do not know why anyone would bet that the executive order defined tariffs would stay. It was and still clear as a day that Trump uses them to force people to the negotiation table. Obviously, negotiated deal may look different.
Regardless, tariffs as an instrument have their merit with Trump or without Trump. Strategically, US has to bring manufacturing (and as much of a supply chains) back, there is no way around it.
> …we are currently in the future of the previous tariffs.
Which ones?
> Also, come on, you’re yourself arguing these tariffs aren’t worth betting on. What do you think investing in a factory is?
I can’t bet on negotiation tactic, only on the outcomes and formal agreements. As soon as those would be finalized we would know. Now we do not know how the trade policy would look like. I would assume that investment banker knows the difference.
"From four months ago? That's way too short a time for any tariff impacts to show up."
vs
"From four months ago? That's ancient history, it doesn't matter."
If it's the first, the link the other person provided shows a dip in manufacturing facility investment over the last 2 quarters. Maybe there will come a future point of stability where investors can feel confident, maybe not. Trump seems willing to use tariffs as a weapon for any disagreement with other countries, not just trade imbalances. There's little guarantee any trade agreement will be honored by the administration.
If it's the second, well, that's the problem. The tariff landscape has been in constant flux over the last several months [0,1,2]. You don't build a factory overnight. You want to understand what your supply chains and costs look like and have some confidence in what they'll look like by the time the factory is ready to start producing. There remains little guarantee that the landscape won't continue to change, and Trump's weaponizing of tariffs is part of that.
> Strategically, US has to bring manufacturing (and as much of a supply chains) back, there is no way around it.
Strategically, it needed to keep manufacturing. It is too late now. Its labor and capital is already fully deployed towards innovation. Innovation that is now realizing that it is being stifled without a local manufacturing base, granted, but at this point pulling labor and capital away from innovation in order to build a manufacturing base again will only stifle it further as the rest of the world, which is quickly closing the innovation gap, keeps moving forward.
The US cannot afford to see that happen. So, in order to save face, what the tariffs will end up doing is open the doors for foreign capital and labor to flood into the US instead. While that will put factories in eye's view, it does not "bring back manufacturing" or resolve the strategic need. It merely lets what was strategically trying to be defended against inside the house, which is an even worse position.
>>Regardless, tariffs as an instrument have their merit with Trump or without Trump. Strategically, US has to bring manufacturing (and as much of a supply chains) back, there is no way around it.
Well no. Not really. Not for everything anyway. Some things like electronics - sure, but it's a matter of national security not economy - it doesn't have to make financial sense, it just has to exist so that the country can have that ability no matter what happens.
As a simple(and really oversimplified) example - let's say that tariffs force clothes manufacturers to bring tshirt making back to the States. The $5 T-Shirt now costs $30 due to tarrifs. So ok, someone makes a factory in US because now it makes sense, employs american workers, pays them good wage - ok, now they make t-shirts cost $20 because they are made domestically.
Cool - that's great, but now the rest of the world still buys $5 tshirts, while Americans buy $20 ones that can't even be exported anywhere because why would anyone buy them if they have cheaper alternatives. All you've done is you increased the cost of your products to the american consumers.
Some can argue - ok, that doesn't matter, what matters is that manufacturing is now back in the states and american people have employment. And sure, there is merit to that argument - but it reminds me of how my own country used to work under communist rule, people would go "comrade party leader, people have no jobs", "ok, we'll build a factory here so you can have jobs".
Can the factory make anything that is actually worth making? Doesn't matter, what matters is that people got jobs and "manufacturing is happening here" - for an economy based on capitalist principles, that sounds like a disaster for US.
But hey, what do I know. Just an external observer.
Trump uses wild % amounts as a negotiation tactic. Is it the best way to do it? I don’t know. You can’t argue though that it does force the other side to come quickly to negotiation table to talk about the deal. So, if the goal is to get the deal now, then it’s effective. If the goal is something else, then it’s not a good tactic.
I do not have enough information to definitely say whether it’s good or bad. Most of the things in life are neither because they have good side effects, and bad side effects to them. So, I think looking for a “good only” solution is a loosing strategy.
I'm confused. Is the goal the get manufacturing back in the US, or to make new trade deals? I've heard both things. Oh, and something about fentanyl coming in from Canada? Alright I'm not sure how tariffs would stop that.
> I do not have enough information to definitely say whether it’s good or bad.
Usually when I don't have enough information on an issue, I take it upon myself to learn more about it before stating an opinion.
> Most of the things in life are neither because they have good side effects, and bad side effects to them.
You don't have to be a doctor to understand that the downside of cancer probably outweighs the upside of not having to save for retirement. Economic instability is the cancer in this metaphor, and the cause of it is Trump changing his mind on tariff rates every other day. Economists, like doctors, are trained on how to treat this illness, and all of them are saying "stop doing that". Trump can either listen to the experts or continue on his path, destroying the American economy in the process.
You say we need tariffs to bring manufacturing back. Then you turn around and say the tariffs aren't the point, it's the deal. You even said it was silly to bet on announced tariffs elsewhere.
If the tariffs are necessary to bring manufacturing back full stop, then you don't need to "make a deal". If it's just a tool to make a deal, then they're not necessary!
When tariffs are imposed by the other side, they’re called “sanctions” and are considered one step short of declaring war. If they’re so great then they wouldn’t be used as punishment.
Economists pretty much universally agree that tariffs are bad for both sides. It can make sense to use them to preserve strategic industries even if it’s less efficient economically. For example, tariffs on food could make sense to ensure an enemy can’t starve you with a blockade. But as a blanket policy it’s just bad.
That particular outcome is possible when you make tariffs in a smart and predictable way. Trumps tariffs are unpredictable and also make local producers pay more for raw material they need.
> That particular outcome is possible when you make tariffs in a smart and predictable way.
You would have to prove that claim. There is more than one way to achieve a specific goal.
> Trumps tariffs are unpredictable and also make local producers pay more for raw material they need.
It’s one of the consequences. There are other ones. Is your only objective is to ensure that local manufacturers pay the least amount possible for their raw materials? This is very simplistic view of things.
This isn't rocket science. If you want somebody to spend a lot of money and time setting up production in the US, tariffs have to be stable and predictable. If that doesn't make sense to you, I didn't know what to say.
A lot of deals got ripped up on "Liberation Day", including some Trump was extremely proud of when he announced them in his last term. He's changed his mind several times in six months already, dropping deadlines and tariffs when the market gets itchy feet, imposing higher tariffs due to disputes with governments completely unrelated to trade. He loves to make grand gestures to distract from domestic issues, and his administration showed so little basic competency they actually publicly announced tariffs on uninhabited territories full of penguins. Why would anybody assume stability?
To echo a comment made in a parallel thread, decisions made to invest in US manufacturing don't get made by people dumb enough to take Trump at his word.
And even if he wasn't tariffs are unlikely to persist at those levels under the next President, regardless of who that is, and that's the sort of timeline you pay back your investment in US manufacturing over...
You are the one who is making the claim that goes both against what historical data show and against what economists say.
So, yeah, predictability matter. Institution do not want to invest based on something that goes up and down randomly.
> Is your only objective is to ensure that local manufacturers pay the least amount possible for their raw materials? This is very simplistic view of things.
Well, yeah, them paying more is rather massive obstacle. You know what is simplistic view of things? Belief that Trump will make economy better, because you like his fraudster personality and would like to be like him.
It absolutely is when the status quo would have increased taxes. That may not be a cut of current taxes, but in the longer timeframe it is absolutely a tax cut.
Bills are not due in advance. The analogy is inapt.
The taxes were cut 8 years ago. There aren't further "cuts". Billionare tax rates have been the same for the last 8 years, and will continue at the same rate at least into next year.
Yes. They were temporary cuts so that they could claim they didn't raise the deficit. Now they are claiming that everybody knew they were going to be permanent. So they either raised the deficit in that cut, or the current one. It's the same party, claiming they didn't raise the deficit either time. And Americans put up with this shit.
No. The total tax bill over the next five years was X, given the current laws. Then a bill was passed that reduced that total tax bill over the next five years. This is a tax cut. It's a little absurd to try to claim otherwise.
"people earning roughly less than $806 a week — slowed to an annual rate of 3.7 per cent in June, down from a peak of 7.5 per cent in late 2022"
With inflation dropping from 9.1% in June 2022 to 2.7% in June 2025, real wages for these low earners are now growing for the first time in years. The Financial Times failure to mention this context makes me question their motives.
"The wage growth trend means the lowest paid are now more likely to find themselves among the 40 per cent of US workers whose salaries are not keeping pace with inflation…"
They are not more likely to find themselves among the 40% of workers who's salaries are lagging inflation, they are more likely to be among the 60% who's salaries are outpacing inflation.
It doesn't change the "Poorest US workers hit hardest by slowing wage growth" premise of the article, I don't see any hidden motive needed to explain this.
Wage 'growth' after 2+ years of real wage decline (vs stagnation) is the coldest comfort to folks categorized as 'low earner'. Anyone ignoring that make me question their motives
Isn’t this fundamental down to landlords being able to extract all excess pay from the lowest paid workers? Minimum wage increases, simply get passed on to the landlord on higher rents.
The prevailing HN wisdom from, IDK 2010 or before, to 2020something was that inflation was good for the poors because their debt went away (laughable when considering interest rates on a lot of that debt but still).
Where are those people now? Why are they not all over these comments posting links rebutting the article?
Or if they no longer exist what made them change their minds?
Yeah, firing the labor statistics head because Trump say she's been faking the numbers to make him look bad actually makes it seem both obviously politically motivated and casts whatever comes after into doubt. Now their credibility is degraded.
That's different from just saying the numbers are obviously being faked under Biden or whatever with no real evidence because you just feel like the economy is bad and assume corruption. Now there actually does seem to be corruption!
On this topic- last year it was somewhat common for R politicians to criticize the D regime for the “report high, revise low” strategy - if anything, I guess, this firing has been telegraphed. Anyway, those people were also called conspiracy theorists and politically motivated. There’s clearly a conflict of interest between the facts and what is politically expedient on all sides of the political system in the USA.
I personally would prefer that the jobs numbers apparatus was extremely conservative in the sense that it didn’t overstate the strength of the USA economy. I doubt Trump has that goal in mind necessarily, laudable as it might be.
> I personally would prefer that the jobs numbers apparatus was extremely conservative in the sense that it didn’t overstate the strength of the USA economy.
This sounds like a call for it to be biased low? I'd prefer zero net bias - overstate and understate equally often - and as little error as possible. (Also, I'd like a pet unicorn for the munchkin.)
The problem seems to be around the preliminary numbers and how widely they get reported. Maybe this is a case where excessive transparency and reporting partial data that's known to be inaccurate is negatively useful?
Or maybe there could be some way to get people to accept that it's known to be wrong, and only useful if you have the chops to account for that wrongness in whatever you're using it for? But humans in general seem to mostly be allergic to not knowing things, so...
Maybe the wrongness is predictable enough to model and account for, but publishing "expected correction" numbers along with the preliminary numbers would be extremely un-conservative in that doing that is speaking with your own voice rather than just collecting and reporting data.
Biased low if it must be - a more down-home way of phrasing that is “don’t count your chickens before they hatch,” which, in any case seems like better labor-statistical common sense than the other way around.
Such an organization cannot exist. These agencies are always balancing two opposing forces, timeliness and accuracy. Data collection is inherently delayed (e.g. a lot of it is from surveys that businesses complete at their own speed, or from reports that each state/agency submits on their own timeline.) So collection for a given quarter typically completes long after the quarter is over, and then it takes some time to crunch those numbers.
So if you want early data it will inherently be of limited accuracy because that involves a lot of extrapolation with whatever incomplete data has been collected by that time. If you want accurate data you will have to wait for it because that data takes longer to be collected. You do want both because you need to make timely decisions, since most times the early numbers don't get revised by much, but you also want to course-correct when later, better data gives a different signal.
Agencies like the BLS publish their methodologies in great detail. Big revisions have always been happening, only they are getting more attention these days because of the heavy politicization.
That's where the timeliness versus accuracy trade-off comes in. There is significant value in having an early signal to act on, especially as long as there is awareness of its limitations. And as I mentioned, this data does come with very clearly documented caveats and methodologies so that users can make informed decisions.
Normally they're accurate enough, and the revisions/refinements are small.
The initial estimates haven't been accurate recently, because many workers have been completely dropping out of the economy because they're afraid of immigration raids. Information about these workers is just harder to gather and takes longer to verify.
Actually the major complaint was from last year when Biden was president (I'm not sure about this year). Every month, prior months were adjusted downward, often 100,000's thousands and wiping out the previous months positive figure.
If this is an understood part of the process, why is it such a problem now?
Name some organizations that have "fire employees until we get success". Does that create a culture that prizes success, or just encourage employees to hide failure?
It’s never settled as the data is never perfectly accurate or exhaustive. We just have to do with the caveats and understand that perfection does not exist, even if you have more data than you can handle. That’s what error bars, uncertainty analysis, and confidence intervals are for.
Welcome to modern slavery. You wanted rights and strive for legal orgnization to improve your working conditions and pay? So we'll replace you with people that have no rights, have ruthless gangs supply and control them, and maybe, we will get you some handouts if you do not upset the new applecart.
This article ignores the delta between wage growth and inflation.
Yes, wage growth was higher in 2022. But inflation was raging then. Today’s environment is actually better for low wage earners ( but far from ideal ).
That's a good way of turning the poorest US workers into the poorest US unemployed. If you raise the minimum wage above the actual value of an employee, then they're just going to get fired. Even if they still provide more value than their being paid, it makes automating away their job more competitive.
California tried this with a $20/hr minimum wage in fast food restaurants: the next time you go into a McDonalds, count the number of empty cash registers and number of shiny new ordering kiosks: https://www.nber.org/papers/w34033
Good question - it has a partial answer: minimum wage is to provide a living to a single young person for a shortish period.
Not a family. Especially not families with - for other reasons- only one breadwinner.
The problems of poverty (to the extent the US even experiences it) are broader than demanding someone make uneconomic decisions with their investors capital.
> Good question - it has a partial answer: minimum wage is to provide a living to a single young person for a shortish period.
This is false and not at all the reason why the minimum wage exists. It was created to bust sweatshops. You are making the same argument as the people that were defending sweatshops. It may be the argument proponents make now to argue against raising it, but it was not why it was created. Roosevelt literally said that the intent was that any business unable to provide a basic living wage for their workers was one that should not exist.
This is actually the policy argued for by the Catholic Church in various documents; but it results in an obvious inequality that makes many angry - two people doing the exact same job, and the single man is paid less than the married family man.
(The reality is we pretend we don’t have that, then rebuild it badly with bandaids - child tax credit, earned income tax credit, daycare credits, MFJ deductions, healthcare, etc).
>People deserve to live with dignity, earning a living wage.
Look, I get where that is coming from. But no one deserves anything, even clean air. Instead, you pay for things with other things (e.g. clean air in exhchange for slightly more expensive cars).
A (shitty) job is better than no job. Minimum wage should be lowered. You gotta help people with something else. For instance by allowing to build higher density housing.
But is anyone _actually_ getting paid the minimum wage these days? Might want to check what the grocery store you worked at in 2010 is really paying these days. I’d bet good money it’s significantly more than $7.25/hour.
Doesn't the fact that 98.9% of all workers earn more than the minimum wage kinda highlight that it's really not necessary for the federal government to increase it? Clearly it's nearly impossible except in limited circumstance to actually _find_ workers who'll accept the minimum wage, hence the fact that hardly anyone is paying it.
A federal-level minimum wage doesn't make sense, precisely because what is considered minimum wage in LA isn't the same as what's considered minimum wage in rural Louisiana, and vice-versa. The fact that 98.9% of workers manage to receive more than the minimum wage strongly suggests the market forces have done a pretty good job of determining what a viable minimum wage for various parts of the US is (including apparently parts where $7.25/hour works).
> But is anyone _actually_ getting paid the minimum wage these days?
Yes.
> Clearly it's nearly impossible except in limited circumstance
No, you exaggerate. It’s a large number of people. I wouldn’t say it’s nearly impossible to find someone from Indianapolis (pop. 879k, 2024 est.), and the number of Americans is much larger than the number of working Americans.
> No, you exaggerate. It’s a large number of people.
It's 1.1%, an incredibly small portion of the entire working population. There's never any follow up like "where in the country does this occur?" which may reveal that it's actually a livable wage. Or other follow up questions like, "does this number include illegal aliens who are happy with being paid $7.25/hour tax free?"
You're also ignoring _how_ it came to be that 98.9% of all workers manage to get paid higher than the minimum wage without it being mandated. Are the companies doing this out of the goodness of their hearts or have market forces instead found what the _actual_ viable minimum wage for various localities truly is?
Table 3. Their methodology is addressed in the technical notes.
> You're also ignoring _how_ it came to be. . .
No. You asked a specific question and I was bored enough to help you look up a result. I’m not here to engage with whatever ideological problems you have going on in the subtext.
Pretty sure the data of the past few years has shown we don’t really need a minimum wage apart from ensuring people aren’t absolutely taken advantage of. Nobody is paying just minimum wage anymore, apart from servers and the like that make most of their income from tips. The local McDonalds pays at least 50% more, for instance.
You view this as zero sum. How many new business owners would be created if people had enough to save? How many new businesses would exist if more money was flowing in the economy? Should businesses exist if they can't pay livable wages?
These aren't hypothetical questions. We have an answer for them all over the country where state minimum wages are rising in Democratic states.
yeah, actually. If the worst thing you can find when paying living wages for workers is a small drop of 2.7% employment among fast food chains, that sounds like a great trade off.
Perhaps if we taxed the billionaires more we could subsidize increased wages for small business owners or even do something actually good like provide universal basic income so that they cannot be so easily exploited for wildly undervalued labor
... what people are willing to pay for it... when the corporations already achieved regulatory capture and can force a partly state subsidized work force to take shit underpaid jobs. It's like a handout to corporations.
Deliberately underpaying people and then telling them their work has low value is one of the most disgusting aspects of capitalists. There's lots of CEOs who are not especially productive, they just have leverage.
The government tries hard to repeal the Law of Supply and Demand, but so far has failed 100% of the time. The government can implement wage and price controls, but those still do not set the actual value.
For example, in the USSR, the price of bread was fixed by the state. But the real price of bread was how long you were willing to wait in line for it.
BTW, in the US, you are free to set up a company and then pay your workers whatever you want to. Workers can choose to work for you, or not.
Governments are on both sides of supply and demand: their powers to tax and spend mean they can put their metaphorical foot on the metaphorical scales to tip the balances whichever way they want, to a large degree, with rapid effect.
Central planning is only one of many ways to do this, it can also be managed more locally; and Soviet-style central planning is only one many ways to do central planning, most large businesses even in capitalist nations are also somewhat-centrally planned by the C-suite.
Corporations do do central planning, but they do so at the high risk of becoming unmanageable and then they fall, and a competitor replaces them. Government central planning just raises taxes to cover the inefficiencies, until eventually the economy collapses.
Even regarding the scale of the organisation, there is lots of overlap between governments — at all levels, from countries, through states, to incorporated municipal governments — and businesses. You could reasonably compare Foxconn to Iceland or Wyoming (I would also list a US city, but https://en.wikipedia.org/wiki/List_of_cities_by_GDP gives me a lot of US Metropolitan Statistical Areas rather than cities, that seems like it would extend beyond the bit with the tax collection rules?)
Labor rights have been a raging success. 40 hour work weeks, minimum wage, sick leave, vacation leave (in non-shithole countries).
>BTW, in the US, you are free to set up a company and then pay your workers whatever you want to.
What happens when competition with deeper pockets price dumps you into oblivion? Free market is a free market only when there is competition based on the product, not how rich your investors are.
There is evidence the workers are being exploited everywhere if you bother to spend a second looking. Like the parent said, your apologism of capitalists is disgusting.
so much success that now you need two working adults to support a family of 4 while 60 years ago a working man could support a much larger family with a single income.
> What happens when competition with deeper pockets price dumps you into oblivion?
Funny you should ask. There was a famous case from the beginning of the last century where German bromide producers price-dumped it the U.S. in an effort to undermine Dow's efforts in the same direction. The result? They failed miserably.
Free market capitalism is the only system proven to work, over and over again. It brought billions out of poverty and it still does to this very day, when allowed to work, of course.
If you find that disgusting - I am guessing you are a big fan of poverty. I would prefer a world in which everyone is rather rich (or at least well off), a world that no system other than capitalism is even close to providing.
> Free market capitalism is the only system proven to work, over and over again. It brought billions out of poverty and it still does to this very day, when allowed to work, of course.
Capitalism? Yes.
"Free market capitalism"? No.
While regulated capitalism is very effective at aligning everyone's interests, a free market operates without the intervention of government or any other external authority, and rapidly decays into a market for lemons[0] — or worse, arbitrarily negative contractual obligations, which is how serfdom functioned.
Even when the governments start off by only intervening to prevent those two issues, with minimum quality requirements and prohibitions against unfair contracts, they often find themselves having to also intervene directly in the markets, everything from the US ban on trading onion futures[1] to printing and destroying currency to keep inflation in a particular range designed to encourage the spending of money rather than its hoarding on the one hand without also preventing people from saving on the other, and even to intervene in the employment market because 100% employment drives a spiral of wage inflation that the system as a whole would not be able to cope with etc. etc.
Same deal as the Laffer curve: zero regulation is bad, micromanagement is bad, people argue about where the peak in the middle is.
It's not an on/off switch, of course, but rather a sliding scale. The free-er your markets are, the better the results. Till recently, USA was in top with both, in sharp contrast to, say, the EU who pro-regulation and anti-business.
But the tariffs are an interesting experiment, with some non-economical geopolitical goals thrown in, so we'll see how it goes.
Not as it is usually defined. Many places take inspiration from free market capitalism, like Javascript takes inspiration from C, but have developed their own systems. The US model is usually referred to as mixed-market capitalism and the EU model is generally thought of as a social market economy.
Of course, that's just semantics. While there is value in using shared terminology, you can make up any definition you want on the spot. You could call the old Soviet system "free market capitalism" if you really want to. The world is your oyster.
Ofcourse. That's what unions do.
It's also why inflation is so damn nefarious because unions ALWAYS negotiate a pay rise to match it. Which as you can imagine gets very ugly fast.
We could have a billion Americans and keep employing them productively. Immigration has been America’s superpower for 150 years. The real problem is monopoly firms that suppress wages of workers and innovation at the same time. The same monopolies that outsourced our manufacturing. All of which started with deregulation and tightening of immigration controls.
Yes, the simplistic "immigrants are competion" narratives always disregard the fact that immigrants also contribute to the economy and uplift it. For instance, there is a credible theory that the "immigration crisis" was instrumental in managing the inflation crisis: https://fortune.com/2024/04/12/immigration-inflation-economy...
20 million? You think the US population had an additional 20 million population growth? And that we just absorbed that? That’s probably breaking a record or two.
Presumably you might want to give the poor a systemic advantage over the rich in order to balance the system and make it more democratic. Otherwise the rich will have more influence.
...because if there isn't then your democracy will turn into an oligarchy. The advantage needs to be somewhat against the richest and for the poorest if you're going to protect that.
http://archive.today/BxREt
Poorest workers are hit hardest by pretty much anything related to money.
In the middle of last century you saw the opposite where the lower you went on the income distribution the faster your income was increasing, relativy speaking.
The middle of last century saw a labour shortage and much weaker monopsony labor makret ibfluence so that makes sense. The title of this article should be "in a surprise to noone, jobs that can be done by the widest percentage of the population are highly competitive and least responsive to wage pressure"
Yup. And then:
https://wtfhappenedin1971.com/
Including tariffs. (Blanket) tariffs are almost like a special tax on poor people.
Explanation: to a well off person, 25% higher gas or food prices is just an annoyance. Nothing in their day to day life will change because of that. To a poor person it's brutal.
> 25% higher gas or food prices [due to tariffs]
Not a great example since energy and food are overwhelming domestically produced in the US. That doesnt mean there is no effect of tariffs in those categories, but it is much more muted than the headline numbers might suggest.
Do you assume future Iran- and Russia style price controls on gas for the domestic market?
You also have little nuggets like https://www.npr.org/2025/08/04/nx-s1-5453731/nasa-carbon-dio...
The Cultural Revolution marches on. Carbon Dioxide is woke.
And, importantly, tariffs are payed by the importing party. This means they affect the base price of the product and cannot be made progressive.
You could set up a deduction system... But that's retroactive (poor people still don't have that money for a whole year) and dramatically complicates their tax filing burden and financial record keeping requirements.
The rich can afford lawyers and accountants, so the IRS has been going after lower and lower income folk for their slip-ups more often. So yet more punishing the poor.
> And, importantly, tariffs are payed by the importing party. This means they affect the base price of the product and cannot be made progressive.
This is not correct. The cost of tariffs are shared by the distributor and customer. The proportion is determined by the elasticity of demand. By this I mean that for goods and services which people rely on, like gas, they will pay almost all of the cost of the tariff because they need the gas to survive. For luxury goods and services, like Louboutin shoes, most of the cost of tariffs is paid by the distributor. This is because customers are willing to substitute for other options, or simply not buy that item. They don't need it.
The downstream effects are quite complex to calculate. For this reason, neoliberals prefer to avoid any tariffs at all. For example, the U.S. is a net gas exporter, meaning that total net local consumption can be satisfied without imports. In a perfect market, there would be no change to the cost of gas. However gas is a commodity, and there is the risk that cartels abuse their market positions to exploit the fact that locals must buy gas from them if they wish to avoid the tariff. For other goods like imported food, locals can substitute. They don't have to buy imported avocados. There are plenty of other affordable and nutritious foods available locally. However, the loss of avocados is, by some metric, a loss of quality of life. This isn't generally captured in economic data. Further still, some of these additional costs are offset by the fact that local businesses become more profitable thanks to said tariffs, and this ends up in the pockets of consumers. Because so much menial labour is currently offshored, the primary benefactor of tariffs is expected to be the poor and working classes.
Why the poor and working class? Increasing benefits on local products maybe will, maybe not, move to salaries. But first necessity goods are not very elastic making that products more expensive.
> Why the poor and working class?
Because by and large, most of the jobs offshored by the U.S. have been lower skilled. As these jobs return, it is the lower skilled workers who will primarily benefit.
I agree that there are likely examples of necessities which cannot be produced cost effectively locally which will become more expensive.
These jobs are not going to return. 'The system' is too profitable in its current form. What will happen is tariffs will cause prices to rise as companies pass on this tax to consumers (which is inflationary). In fact, they may go up more than that, same way as they did during covid. Even if say two years from now a new congress and senate remove these tariffs. The prices will not go down. Companies will not build new factories here because it is easier, after they get the new higher prices locked in, to just lobby to get the tariffs removed and then keep the difference as sweet sweet margin.
> These jobs are not going to return. 'The system' is too profitable in its current form.
The system is set up to ensure efficient allocation of capital. If it's more profitable for manufacturers to produce goods in-country, that is exactly what they will do. It's a bold claim that tariffs will have no impact whatsoever on investment and spending, because it's clear that they absolutely will.
At best there are going to be a bunch of new bonded warehouses built, so that distributors don't have to front the cost (and uncertainty) of the new import taxes until they have customer cash in hand. Appropriately-implemented tariffs could have kept American industry here if implemented 2-3 decades ago. At this point it's closing the barn door after the horse left, started a new life, and watched his foals grow up and have their own families. The horse is not coming back.
Far too many people think of markets as some kind of magical supercomputational system. They're really just a heuristic that does avoid some spectacular failure modes, but easily gets stuck in local maximums. China did the work over decades to prime the pump so that industry picked up and moved, while our "leaders" facilitated the looting. One pathetic man throwing policy tantrums for spectacle isn't going to reverse these now-entrenched dynamics.
There is also the glaring issue that Chinese companies can just as easily set up factories in other countries with low US tariffs. They won't be paying import taxes on the equipment they bring there to do so (like setting up a factory in the US would require), and in fact they will probably receive favors from those countries' governments for the investment. So these ham-fisted import taxes actually encourage the expansion of Chinese influence into other countries.
> Because so much menial labour is currently offshored, the primary benefactor of tariffs is expected to be the poor and working classes.
See, I was with you until this (OK, mostly with you, luxury goods are price inelastic so the buyer definitely pays).
The primary beneficiary of a carefully designed tariff policy might be some working class people in some industries (and some wealthy owners, natch), at the expense of direct and indirect customers of those industries who may or may not be poor themselves. But an idiot imposing blanket unpredictable tariffs with promises to negotiate "great deals" that lift them in future costs far more of those manufacturing jobs than it protects, because on the one hand it creates enormous supply chain risk to US manufacturing, and on the other hand overseas companies aren't investing in building new facilities in the US because of a 40% tariff levied until the POTUS changes his mind in a few months time...
That's certainly a possibility, so I agree. If the uncertainty leads to significantly lower investment over a prolonged period of time, the benefits could be offset.
Luxury items are price elastic. https://www.investopedia.com/ask/answers/040715/which-factor...
Strictly speaking luxury goods are income elastic (by definition) but can be either price elastic or inelastic at different points on the pricing curve, with profit-maximising suppliers attempting to set prices at the level where it reaches unitary elasticity. But when we're talking about designer brands (as opposed to the strict economic definition of a 'luxury good' which encompasses most of the shoe market), they typically price above that level anyway to maintain "exclusivity". Hermes made a point of publicly stating that it would pass on 100% of tariffs costs to consumers, and whilst I haven't tracked Louboutin shoe prices I doubt their customer base for shoes costing 10x their less fashionable equivalent is going to permanently refuse to pay a 15% price increase. Particularly not when it also applies to the brand's closest competitor in the form of other trendy European designer shoe brands. I suspect the tariff-eating that occurs in the US fashion market will tend to be US-based retailers cutting their margins rather than the foreign brand cutting its wholesale prices too...
see also: https://www.investopedia.com/ask/answers/012915/what-effect-...
I don't think I agree. Luxury goods are typically defined as both income and price elastic in economics textbooks. I agree that brands can and do employ various marketing strategies like exclusivity, as you describe. This is also true of low elasticity goods like Liquid Death selling expensive water. Still, in a competitive market where the wealthy can choose other designer brands with similar class projection and quality, theory tells us that customers can and do switch, and the market finds a price equilibrium close to the pre-tariff price.
And, importantly, tariffs are payed by the importing party. This means they affect the base price of the product and cannot be made progressive
Yes. But that cost can be absorbed across the board. The manufacturer can lower their margins. The importer / distributor / wholesaler can do the same. The B2B / B2C seller can do the same.
It doesn’t all necessarily get directly passed to the buyer.
Another question that few are asking is: what has the off shoring of so much manufacturing cost the USA? Looking at the resident of the WH, it appears to be quite a bit.
But why would the manufacturer or distributor lower their margins? Charity?
They wouldn't on purpose but I can tell you from experience that what happens in practice is that you don't re-quote everything or instantly change your quoted pricing based on a small fluctuations in inputs. So most companies will eat a couple percent (gross) margin here and there. So when an input cost rises margins my go to X-1, and then X-2 as it it rises more, then someone notices and changes quoted pricing to say Y+1, 2 or 3 depending on whether you're trying to get ahead of future hikes, how bad you're being squeezed, how bad you want more work, etc. But no matter what the "area under the curve" of all this change is almost always going to be negative. Sure, there's the occasional winner but in total the entire industry and economy loses.
Price elasticity of demand (=sensitivity to price changes). If the seller is afraid that higher prices will significantly impact sales (people won't buy the product or buy alternatives), it might accept a lower margin in order to maintain the volume.
Also market competition can be a factor: if competitors are not raising prices (or by smaller amounts), you might lose market share.
The drop in demand for staples you're talking about is quite literally the poorest people eating less, using fewer basics, lowering their quality of life further.
As of 2016 (first search result) 90% of food/beverage is domestically produced = no tariffs. [1] The big goal with the tariffs, outside of gaining leverage on other countries, is to motivate domestic production and alternatives. Without tariffs it simply isn't realistically possible to compete in many industries because other countries have cheaper labor and less costly regulations.
Of course the practical problem with this playing out in increased domestic production is that it's reasonably likely that in 2028 the tariffs will get rolled back, and any company that was depending on them to survive will die. That's a large amount of uncertainty for any industry where there's a significant income investment required to get going.
[1] - https://www.ers.usda.gov/data-products/charts-of-note/chart-...
>90% of food/beverage is domestically produced = no tariffs
That's not true, even for items which undergo relatively little processing like milk:
1. Cows need feed, and in the US this is mostly corn. This corn is mechanically harvested, shucked, and transported.
2. Cows are milked by machine.
3. This milk is then transported to a larger processing facility where it gets filtered, clarified (fat removal for 2%, skim, etc), pasteurized, homogenized (fat is evenly dispersed), and bottled in a blown plastic jug.
4. After bottling, the milk gets palletized and trucked to grocery distribution centers, which will re-palletize it for shipment to individual stores.
At every step of the way, we use machines that require frequent maintenance and whose supply chains rely extensively on imported parts. On-shoring all of this would be expensive and risky both because Trump flip-flops so often and because our next administration may just reverse the tariffs.
Domestic food supply is still subject to tariffs because many of the inputs are. Agricultural machinery, parts, chemical feedstocks.
Not to mention that tariffs on directly imported goods reduce the lowest earners' ability to pay for domestic products.
If the goal was onshoring too benefit the population, it would be coupled with a strong wealth redistribution to the least wealthy to allow them to buy domestic goods. But that's not the goal.
In the short term: fear of reprisals from Trump, as he clearly warned them not to raise prices. In the long term markets find a new equilibrium, as they always do when a new tax is imposed, and that is probably going to be a combination of lower margins, higher prices for the consumer and lower prices for foreign suppliers.
"higher prices for the consumer" can include lower value at the same price. Size reduction seems a common method for certain commodities. This may result in reduced consumption (e.g., a consumer buying one package of ice cream every other week), as well as increase customer dissatisfaction when the change is noticed, and it can increase packaging cost per unit weight/volume.
Other ways of reducing value are possible such as reducing quality control effort, reducing quality of inputs, and reducing manufacturing costs in ways that are known to reduce product quality.
Pushing costs to effectively underregulated externalities can also avoid price increases.
It is also sometimes possible to increase efficiency. Even a long term commodity can have potential for efficiency improvements that were considered not worth exploring under stable pricing pressures. (I suspect value reduction is easier and much faster than efficiency improvement.)
Sadly, reducing value can have a disproportionate cost to consumers. Reducing manufacturing costs for a Watchman's boots by 20% may reduce the lifetime of such by 30% and reduce the quality of use by 50% (which may be related to Samuel Vimes' theory: https://en.m.wikipedia.org/wiki/Boots_theory ).
> fear of reprisals from Trump
Realistically, what's he gonna do? Shut down the company, which he oh so desperatly wants in the US? Tax them more, driving their cost up more?
Realistically, many companies are going to shut themselves down because their margins will be gone.
For starters, he could do what he did with CBS: threaten a potential merger. Or he could do what he did with Musk: threaten to revoke citizenship of the CEO or anyone on the board if they're foreign. Or do what he did with Harvard and Columbia: threaten to pull grants and revoke foreign visas of workers. Or do what he did with big law firms: threaten to pull security clearances.
Lots of options.
He's already weaponized the IRS, DOJ, and FTC, so there are a lot of ways he can fuck you for not bending the knee.
US != The World.
This analysis fails to realise that there are simply other countries with which to trade with.
> Another question that few are asking is: what has the off shoring of so much manufacturing cost the USA? Looking at the resident of the WH, it appears to be quite a bit.
A question that I see ignored by people who ask your question, is 'what has off-shoring brought the US?' The answer is massive economic growth and improvements in quality of live.
Off-shoring allows you to make stuff cheaper by keeping the economic circumstances of the creator worse than your own. We can get cheap stuff from China because they work many more hours than people in the west do and they live in conditions that are much worse. Because we can get cheap stuff (like pocket computers, clothing, shoes, couches, cars and more) and off-shore most of the downsides (pollution, long working hours, dangerous workplaces), we improve our quality of life significantly.
So unless you prefer working in mines or working 80 hours a week in a dirty, dangerous factory, I think you're probably better off with globalization than you would've been without.
Or related to capital, politics, etc.
And climate change…
True, since they own all the beachfront property
> True, since they own all the beachfront property
Climate change does not mean just rising sea levels, but more extreme weather as well, which can include more flooding: warmer air holds more moisture, so when it eventually gets released it can be in downpours. See recent flooding in Texas.
Poor people tend to live in the highest risk areas because the safer areas are desired most and so the people with money bid up prices there.
When you hear headlines like "Trailer Park Destroyed by Tornado", and people ask "Who would live in 'Tornado Alley'?", the answer is "Poor people.".
Regarding people living in Tornado Alley because they can't afford to live anywhere else, insurance costs are much higher there, so not exactly a bargain. And plenty of wealthy people love high risk areas. Pretty much anything by a sea is high risk. And again, they pay for it with higher insurance rates.
It's hard to get a good measure of damage caused by climate change. There are much touted statistics that say billion dollar weather events are more common than ever, but that's mainly due to things being more expensive and increased development (i.e. beach front properties)
A more objective measure, although no perfect, is deaths caused by climate events. If climate events were more catastrophic over time, you would expect deaths to go up somewhat proportionally. To my knowledge, there haven't been major advances in rescue technology in the last 50 years or so.
But we see this number has come down pretty drastically over the last 150 years. In the US it has also come down or stayed about the same
https://www.statista.com/statistics/1269715/global-reported-...
https://ourworldindata.org/grapher/fatality-rates-in-the-us-...
> It's hard to get a good measure of damage caused by climate change.
The Insurance Bureau of Canada (IBC), for one, may disagree:
* https://thepointer.com/article/2025-08-02/ontarians-are-payi...
* https://www.insurancebusinessmag.com/ca/news/catastrophe/can...
* https://www.lexpert.ca/news/finance-law/insurance-bureau-of-...
* https://www.ibc.ca/news-insights/in-focus/canadian-governmen...
Is insurance a legal requirement for a trailer in Tornado Alley?
Not if you own your trailer without a mortgage. If you have a mortgage you're pretty much required to have insurance. Not getting insurance doesn't make this cheaper really as you'll just lose your property completely every few years. Besides insurance rates are often highly subsidized by federal government and actually a really good bargain
> Not getting insurance doesn't make this cheaper really as you'll just lose your property completely every few years
It sounds a bit like the "Boots theory" of Discworld [0].
> insurance rates are often highly subsidized by federal government and actually a really good bargain
This feels a bit inconsistent with your previous comment about living in Tornado Alley being "not exactly a bargain".
What do you think about studies like this [1] which find a correlation between economic disparity and tornado risk?
[0] https://en.wikipedia.org/wiki/Boots_theory
[1] https://www.sciencedirect.com/science/article/abs/pii/S01660...
I've also heard anecdotes of people draining all their savings/retirement accounts to buy property in uninsurable areas of Florida because they can't get a mortgage. I don't see that working out well long term.
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Even in the most facile analysis: Reduced labor availability either (a) decreases supply due to failure to harvest or (b) increases prices due to increased labor costs and therefore drives inflation higher faster than bottom-tier wages can accommodate.
It increases automation and therefore productivity. It increases the demand for legal unskilled labor. Money earned is spent in America rather than sent to foreign countries as remittances
Not every job can be automated. Picking crops for example or cleaning hotel rooms.
The US will find out the hard way how much of their undesirable work is done by people that "steal their jobs". Jobs that no American wants to do.
The UK already has seen this with Brexit https://www.bbc.com/news/business-44230865
Picking crops or cleaning hotels rooms cannot be automated… for less than it costs to hire seasonal/migrant workers, today.
Both farms and hotels have an increasing number of jobs being automated where it makes economic sense, or for pure novelty’s sake.
https://www.farmprogress.com/technology/tethered-drones-can-...
Right now, cleaning rooms cannot be fully automated at any price. The AI to control the robots just isn't good enough for how broad a term "unclean" can be.
I don't want to comment about picking crops, that's rapidly changing and I don't expect to be up-to-date with this. I've seen people being confidently wrong about "cows won't milk themselves" decades after there were machines cows could operate by themselves to get milked.
When you get into the “ at any price ” range, then you should be up for engineering the room to support fully automated cleaning, and so I’d contend this is possible today. For certain situations. For example, automatic cleaning of a capsule hotel. I’ve just checked into one myself, nearly everything is self-service with an rfid band for access. How about automatic cleaning of a clean room?
Sure, but "For certain situations" is a strong barrier here.
So, the example with most saliency for me (which may not be the hardest to deal with) is:
Imagine a hotel that is hosting a convention, and is fully occupied for five days. On day one, a norovirus infection event gets everyone, on day four everyone's digestive tracts are voided from both ends with about 40 seconds' warning. How well do the automation systems cope?
This example is probably quite close to the top of the list of things I expect cleaning staff to be hoping someone can automate/has already automated, because noro is hella infectious like that and who on earth would actually want to be the one who has to clean up after such incidents, but has this kind of cleanup actually been fully automated yet?
I had to clean up after a relative (which is why it's salient for me), and I think I caught it from them because I'd missed the inside of a cupboard door handle before removing my gloves.
> How about automatic cleaning of a clean room?
Positive air pressure, air filters, and requiring occupants to wear stuff like this: https://en.wikipedia.org/wiki/Cleanroom#/media/File:Cleanroo...
Would be one of the easier cases, given they are work environments and by extension there's an expectation of reduced scope of things for the automation to be doing, though even then I'd expect some unplanned incidents require human intervention.
Brexit is so funny because it is literally a real world example of how isolation reduces economic growth and causes poverty - and yet, America goes ahead with similar isolation.
Reduced labor by executive power doesn't increase automation, it introduces a labor shortage.
https://en.wikipedia.org/wiki/Shortage
Increased capacity utilizing automation would introduce automation
https://en.wikipedia.org/wiki/Productive_capacity
Increasing demand doesn't magically necessitate that technological resources sprout from nothing to replace human resources.
An introductory macroeconomics source instructs one on this
https://www.khanacademy.org/economics-finance-domain/core-fi...
Still, none of that outweighs the inflationary pressure.
Increasing automation and therefore productivity means an increase in profits to the owners, not a drop in prices, except in the most competitive industries.
Unemployment is already extremely low. There aren't tons of Americans waiting to step into these jobs. If unemployment were 10% that would be a different story, but we're close to full employment. So instead of the jobs going to Americans, the produce rots in the fields, and prices go up.
High unemployment would mean companies would have to offer more money to attract people
They want unemployment to be low so they can keep wages and salaries suppressed
Except, of course, that this is completely backwards. Low unemployment shifts the balance of negociating power towards workers as companies have to compete to get them. See the massive growth in AI engineers’ wages for a nice illustration of this.
High unemployment helps employers because they can put pressure on the workers, who are less likely to find a job with better conditions or at all.
The fact that low unemployment is associated with stagnating wages these days is a massive failure of the capitalist system. It means that the situation is deteriorating and some of the levers cannot be used. There is no way out without pain.
This is my bad. For some reason I got "unemployment rate" twisted in my head and thought it was related to the number of unfilled jobs
So my reasoning was "if there are not many unfilled jobs, it makes it tougher for people to find work, meaning the unemployment rate is low" which of course does not logically follow
My mistake
Then we agree :)
There are signs of upwards wage pressure in the last couple of years, we’ll see how sustainable that is.
What? That makes no sense, did you mix up your high/low words? Or could you elaborate on your opinion that is perfectly opposite all accepted economic understanding?
Wouldn’t the deportations increase the demand for low-paying jobs resulting in increasing salaries?
Which would mean food gets more expensive, right?
Regardless of the fact that a lot of poor people don't live in the areas where most of those jobs are but they do get their produce from there..
The top 4 counties in the US for agriculture production are all in the central valley in California.
> Which would mean food gets more expensive, right?
Which in turn will create more pressure to increase the salaries until it reaches the equilibrium that satisfies everyone.
The alternative is to use de-facto slave labor just for the sake of cheap food?
You're missing an important piece here.
The lower your income is, the bigger the % you spend on necessities like food. So when those go up, the lower incomes are again hit the hardest as they spend a higher percentage of their total income on it. And these are necessities not nice to haves
> You're missing an important piece here.
I am not. You are confusing transient effects with the equilibrium state.
Btw, for low wage employees everything is a significant % of their wage. The only meaningful way to increase their wages is to decrease the supply of cheap labor. This is exactly what happened during Covid where no one was willing to work for $8/hr and the wages went up.
When people realize that their wage doesn’t guarantee good living they will look for a better job or demand a raise.
Supply and demand aren't always in the same place...
If a lot of the farm workers in California are gone how does that help the people in Nevada or Michigan that are unemployed... You think they're going to fill those positions?
> When people realize that their wage doesn’t guarantee good living they will look for a better job or demand a raise
Wow... When your job requires no education or training? I guess everyone who works 2 or more jobs in the us needs to talk to you. They're all missing this obvious point.
Yes, countries that go through population declines without new immigration have often seen strong wage growth. Famously after the Irish great famine agricultural wages rose ~30%, and lower-skill jobs saw strong wage growth
Serfs got slightly more after the Brits killed most of them? Sounds great.
Technically most of the Irish population emigrated Ireland, and I'm not sure I'd blame the brits for a famine but ok. Really what I'm looking at is the economic effect of decreasing population when it's not replaced by immigrants
Still killed a million. It is clearly the fault of Britain as Ireland produced much more food than it needed itself but peasants mostly only got to eat potatoes as most of all good food was exported because Brits owned most of the land so peasants didn't own what they produced. When they didn't have acces to potatoes anymore they had no food, and free market advocates in Britain argued that they shouldn't even try to help them.
No, for two reasons. The first is that Americans often refuse to work those jobs (and for good reason, they pay incredibly poorly, have no benefits etc. It is generally a financial loss to do said jobs). We've tried multiple times to try and get Americans to work in the fields: it never works [1]. The second is that a large amount of our economy is heavily subsidized by said cheap immigrant labor and if you just straight up remove that labor, then the costs of everything goes up as many farms go out of business and die. That's just assuming that you somehow got Americans to go out and replace said jobs; suddenly removing 1+ million people from any labor pool would have drastic effects on the rest of the economy.
[1] https://www.npr.org/sections/thesalt/2018/07/31/634442195/wh...
> The first is that Americans often refuse to work those jobs (and for good reason, they pay incredibly poorly, have no benefits etc. It is generally a financial loss to do said jobs).
Would Americans work those jobs if those jobs paid well?
You should define what 'paid well' means if you're going to ask that question, and then compare it to the current cost of labor.
Those jobs can not pay well, because the basic living goods have to be artificially price dumped to remain affordable for the working poor. Otherwise all prices would have to be raised to include this, which will never happen.
That seems to be inconsistent with the continued negligence with respect to housing prices. Maybe it would be fine if food cost more because agricultural workers got paid better but housing cost less because we stopped artificially constraining supply.
Uhhh yes precisely. That helps the poor and hurts Wall Street
I genuinely wonder what you've done over the last few years.
Rising salaries will lead to inflation. Expecting anything else is fantasy
> Rising salaries will lead to inflation. Expecting anything else is fantasy
No. Riding salaries do not lead to inflation by themselves. What leads to inflation is the increase in money circulating on the market. In other words: printing money leads to inflation.
> Riding salaries do not lead to inflation by themselves. What leads to inflation is the increase in money circulating on the market
Not necessarily, if price of product A goes up and I have to buy that it means I have less money to spend on product B. Meaning demand on product B goes down so its price goes down.
If we go back to the point that we're talking about, being how it affects the lowest incomes, then you can see how an ever increasing % of their income is locked up in food/housing etc.
By your logic "What leads to inflation is the increase in money circulating on the market." Why is the rate of inflation even a value that isn't known beforehand? Surely we control our own printers, no?
> Riding salaries do not lead to inflation by themselves. What leads to inflation is the increase in money circulating on the market
This is nonsense. If an economy doubles and the money supply grows 10%, you get deflation. If the money supply is stable and half the country gets bombed, you get inflation.
Price levels are a function of both money demand and money supply. Ignoring the demand side of the equation doesn’t work.
> This is nonsense.
Nope. This is one of the reasons we had insane inflation after Covid: we printed too much.
For example, here: https://www.investopedia.com/ask/answers/042015/how-does-mon...
Nobody said printing money can’t cause inflation. Just that it’s not the only factor at play.
You can have an economy with zero money printing that experiences inflation or deflation.
> Nobody said printing money can’t cause inflation.
You said in the comment above.
> You said in the comment above
How do you read “price levels are a function of both money demand and money supply” and get that?
Going back to the top, you claimed “riding [sic] salaries do not lead to inflation.” That is nonsense. Even if we ignore that rising salaries cause the money supply to increase through increased velocity, wealth effect and credit creation. (This is why when the economy is strong central banks raise rates to keep price levels stable. You have to destroy money to make up for the money being created by the private sector.)
> You have to destroy money to make up for the money being created by the private sector.
In other words, to keep inflation at bay, one of the things you do, you restrict money supply.
> to keep inflation at bay, one of the things you do, you restrict money supply
Again, nobody said money supply doesn’t affect price levels. But in this example, rising wages caused the inflationary impetus without any money printing. To correct for that, the money supply must be reduced.
If you’re piloting a plane, deflecting the control surfaces will move the plane. But so will winds. If winds buffet your plane you have to deflect control surfaces to get back to where you were. That doesn’t mean the wind doesn’t exist.
Rising salaries can cause inflation all on their own. Even in an economy with a fixed money supply. (So can printing money, but nobody was debating that.)
Tfa mentions immigrant deportation as a reason exactly zero times.
> hard for me to imagine how deporting a million illegal immigrants working under the table, or stealing a social security number, would hurt the minimum wage workers
Immigration is a distraction. Trump is deporting fewer folks than Obama did [1], he’s just doing it while pumping tens of billions to his buddies via ICE contracts.
Tariffs are a regressive tax. If food and metal is more expensive, service and manufacturing workers will be pinches.
[1] https://www.cbsnews.com/news/ice-deportations-trump-six-mont...
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> love the argument that deporting illegals is meaningless
Red herring. Nobody said this.
My point is Trump isn’t deporting that many people. His numbers are not economically meaningful compared to tariffs. To the extent there are labour pools that would benefit from deportation, they’re geographically concentrated along the border.
If Trump wanted to remove illegals from the American labour pool, he’d target employers. He can’t [1].
[1] https://www.npr.org/2025/06/16/nx-s1-5430846/farming-industr...
The administration seems to be deliberately making the deportations as cruel and scary as possible (CECOT, Alligator Alcatraz, etc) as a means of deterring future illegal immigration and encouraging self deportation. I haven’t looked into the numbers to see how well that’s working or not, but focusing on deportations alone is missing two thirds of the picture.
I’m not sure if this is accurate, but for example: https://www.dhs.gov/news/2025/07/31/migrant-crossings-darien...
I expect the numbers will go the way they want. Perhaps because of the cruelty. Perhaps because tariff games make the economy uncertain.
Having a recession is a proven way to reduce illegal immigration, and we're at least starting to see recessionary signals.
If you come here we'll torture you, how very American.
It sounds like you support deporting illegals, as long as we also eliminate tariffs (?)
> sounds like you support deporting illegals, as long as we also eliminate tariffs
I’m saying irrespective of what you and I believe, the current administration isn’t meaningfully deporting anyone.
(To the extent I have policy views on this, it’s for coherence. You can’t do disruptive deportations while ignoring criminals all while launching on again off again tariffs which preclude both long-term domestic investment and trade-barrier reductions.)
They are however meaningfully creating fear. The public cruelty and lawlessness will reduce immigration.
Ah yes, blame a different group of poorly-paid workers - that always works so well!
No one blames anyone. The more low skilled workers you have, the lower wage they get. the only group that benefits from illegal immigrants is the employers: they can get away with paying less. (Consumers benefit too, ofc).
Thank you for saying this.
That's the myth of Trickle-down economics in action.
The same thing happens in other countries too BTW. Prime example is Japan, where prime minister Abe promoted this nice lie for many long years
Curiously in the Netherlands poverty has gone down. But that's because the government has a pretty solid Robin Hood system going on: take from the rich give to the poor.
The amount of wealth that is redistributed is frankly insane.
I'm generally in favor. My taxes provide an amazing experience here. I have never seen the abject poverty that I've seen in other places (such as the US) here in NL. Great infrastructure, labor laws, culture and arts, etc. I worry less about break-ins and theft. All-in-all, the least worst place to live, by far.
If we in the USA got our money's worth from taxes, we feel rich. But we truly don't.
You got it, that huge army is not free, that militarized police is not free, the CIA is not free, FBI, NSA, and all that huge security related organizations that nobody else in the world has except maybe Israel and not at the same scale.
That too. We need our security organizations, there are lots of unpatriotic profiteers in there, we could get a lot more value for our moeny on those. (Littoral battleships? F-35s? Let's just get actual spent-uranium-tipped unicorns.) The way we do infrastructure and social services leaves a lot of room for improvement. I'd pay 50% tax gladly if I got half my income in value back.
Hell looking at the state of international conflict today I can't even be that upset about defense spending on principle, it's just that what we spend on is stupid and immoral. Instead of domestic oppression and foreign genocide we could be helping Europe and Taiwan fend off threats from rival great powers.
There is no plan to make the pie larger. The problem is the same as everywhere: a public brainwashed by neo-liberal nonsense voting against their own interests. Private gains and public losses.
But it’s not.
The error people make all the time is assuming these groups are static and always have the same people in them over time.
They don’t.
A great example were the people in the 0.1% percentile of income. Evil rich people!
Turns out people who end up in that group, only do so for a single year in their entire life.
Things like selling a company or getting a large windfall propels them into the 0.1%, then after that they fall back towards the median.
Same with the lowest income group. People move in and out that group each year.
> The error people make all the time is assuming these groups are static and always have the same people in them over time.
Here is something I posted only a few days ago. It is Germany, but that point is certainly not much different from Anglo-Saxon countries.
It is a podcast, and in German too, but it is high quality and on one of the best stations in Germany (Deutschlandfunk's culture channel -https://en.wikipedia.org/wiki/Deutschlandfunk)
https://www.deutschlandfunkkultur.de/eliten-seit-dem-kaiserr...
> Despite political upheavals over the past 150 years, Germany's elites have remained the same. Sociologist Michael Hartmann criticizes the fact that only four percent of the population shapes the country. He calls for a quota of working-class children for executive boards.
Yes individuals can rise and fall. For example, near the big turning points in German history the people in politics were renewed, after WWII people from the working class made it to the top posts. However, with increasing stability, over the last two decades even that group has become more and more of an insider club, and people from "lower classes" have a very low chance of rising to the tops. In the economy and when it comes to real wealth it is even worse. Connections and pre-existing wealth are a good predictor of where you will end up. You may have better luck with high-paying jobs, but they rarely lead to the top of the wealth pyramid and influence.
> Yes individuals can rise and fall.
One of the critiques of meritocracy:
> […] It’s wild that everyone is using “merit” and “meritocracy” as though it somehow avoids elitism, when in reality it’s a sneaky way to cement biases without the appearance of bias. Of course people should be judged on their skills and not their wealth. But, how’d they acquire those skills, and why would anyone assume the money didn’t help? Of course it’s a self-reinforcing system. […]
* https://news.ycombinator.com/item?id=44571491
From the Wikipedia § Criticisms page:
> In his 2019 book The Meritocracy Trap, Daniel Markovits poses that meritocracy is responsible for the exacerbation of social stratification, to the detriment of much of the general population. He introduces the idea of "snowball inequality", a perpetually widening gap between elite workers and members of the middle class. While the elite obtain exclusive positions thanks to their wealth of demonstrated merit, they occupy jobs and oust middle class workers from the core of economic events. The elites use their high earnings to secure the best education for their own children, so that they may enter the world of work with a competitive advantage over those who did not have the same opportunities. Thus, the cycle continues with each generation.
* https://en.wikipedia.org/wiki/Meritocracy#Books
> In his book The Tyranny of Merit: What's Become of the Common Good?, the American political philosopher Michael Sandel argues that the meritocratic ideal has become a moral and political problem for contemporary Western societies. He contends that the meritocratic belief that personal success is solely based on individual merit and effort has led to a neglection of the common good, the erosion of solidarity, and the rise of inequality. Sandel's criticism concerns the widespread notion that those who achieve success deserve it because of their intelligence, talent and effort. Instead, he argues that this belief is flawed since it ignores the role of luck and external circumstances, such as social and external factors, which are beyond an individual's control.[91]
* Ibid
I do not see how this is criticism.
Everything in life involves hefty doses of luck. The alternative (i.e. without merit) seems obviously worse as it would be completely luck, no?
The complaint seems to want to lower the ceiling rather than raise the floor.
> Everything in life involves hefty doses of luck. The alternative (i.e. without merit) seems obviously worse as it would be completely luck, no?
There is some level of luck / chance, but one can tilt the odds: more tutoring that allows for more practice to get better in the skill(s) that are 'merited', getting into schools with good alumni networks so one can 'luckily' bump into the right people with the resources you need.
Initially good luck can breed good luck in the second iteration/generation.
The meta-criticism (if you will) is that the initial batch of merited people can lock-in things for their (grand-)kids in future batches. There needs to be a way allow opportunities for future batches if their (grand-)parents from earlier batches were not 'merited' initially. Otherwise you basically get the ball rolling on an aristocracy.
Not necessarily, patronage systems tend to result in more stable, albeit conservative turnover of leaders.
> The error people make all the time is assuming these groups are static and always have the same people in them over time.
I believe people actually involved in being active against top percentiles understand the difference between ongoing millions of annual income and one off inheritance. Have you got a some reason to think otherwise? I mean it was "occupy wall street", not "occupy people visiting retirement homes".
That’s my point - the tax data says that people making millions each year are incredibly rare. Most people earning that kind of income get it in a once in a lifetime.
Ok. And the criticism is not about them.
The criticism applies just as much to the bottom 0.1%. It’s not a static group.
Income sure but wealth is what matters and the wealthiest make their money from capital gains, not income
Someone who inherits a couple million from a dead relative is not in the same league as Bezos who is rich enough to buy entire countries. Bezos is not coming down to the median any time soon. There are different leagues to this game.
Sorry but I don't understand your comment. Are you sure you are responding to the right message?
The OP specifically called out trickle-down economics. Which is a myth, a false belief that somehow not taxing rich companies and not redistributing a country's wealth through taxes and other means, companies will do the right thing eventually, and they will raise the wages instead by their own incentives.
Which they never do, and only raise wages as a very last resort. They do instead coordinated wage suppression, lobbying governments to take away labor rights from the labor force, outsource their operations, set up new offshore offices to escape paying taxes, etc
So what does your comment to do with that? I think your message doesn't address any of that
That’s not what “trickle down economics” is. It’s basically the Laffer curve which argues that tax receipts can actually go down with higher taxes rates as tax’s can discourage growth if high enough.
Thus if you lower taxes, economics growth increases (overall tax receipts go up, not down).
I don't understand. Can you elaborate?
The Laffer curve simply shows the relationship between taxation and government revenue. It has nothing to do with the policies and the economic theories. In fact, there are two points on both sides of the Laffer curve's maxima where tax revenues are the same in theory. That's just a simple didactical tool, nothing more.
Saying that the Laffer curve is the trickle down economics is as bad as saying that visualizations of a binary tree are what we call algorithms and data structures.
The Laffer curve is the basis for what was called "trickle down economics".
The Reagan administration argued the US was the right side of the curve, and that lowering taxes would result in economic growth ("a rising tide raises all boats"). Economic growth benefits every worker.
OK. Thank you for the explanation. But then again, I think you are confusig things. So I am not convinced at all. But at least now I understand where you are coming from.
> It’s basically the Laffer curve which argues that tax receipts can actually go down with higher taxes rates as tax’s can discourage growth if high enough.
What you are describing is if we are on the right side of the curve. But is there any evidence that this is true?
When I read Sowell, someone who I imagine would be a champion for this cause, he cites the 1920s as his evidence that trickle-down works which doesn’t inspire confidence. If there is no modern evidence, why are we even entertaining this theory today?
I suspect when people think of evil rich people, they are thinking if wealth, not annual income.
Why pick the top and bottom 0.1%? The top 3% and the bottom 40 are probably a less frothy cohort. What cited data would yoh find for those?
It's a myth that people support something called trinkle-down economics.
The tax cuts for the rich will also probably mean that a lot of this money is going to buy real state as an investment rising the house prices.
The immigration crackdown and the tariffs will also mean effective reduced supply of foreign labor, and since their labor is what poor people sell, it will cause upward pressure on their earnings.
The tariff will cause, is causing in fact, increased prices. This will have a negative effect on their earnings.
In the hospitality sector, tariffs (and harassment of tourists at the border) are reducing earnings by reducing tourism.
Could you please define what you mean by “earnings” in this context?
I meant the buying power of their wages.
What slowing wage growth? For the poorest the wages have essentially not increased for a long time right? It hasn’t even kept up with inflation. The recent bill actually makes it much worse.
As far as I can tell, over the last few years at least, that's mostly not true: wages outpaced inflation, and it outpaced inflation more for lower-income workers than higher.
> In stark contrast to prior decades, low-wage workers experienced dramatically fast real wage growth between 2019 and 2023
https://www.epi.org/publication/swa-wages-2023/
("real wages" are wages adjusted for inflation)
The problem with comparing wages by cohort and average inflation is that inflation doesn't affect each cohort evenly. By and large, necessities continue to outpace top line inflation, and they have done so for decades. These include food, healthcare, housing, daycare, and education. Lower income people spend more of their income as a proportion on necessities, so they are impacted more than average by inflation. In order to tell if these lower income people have indeed received wage increases in line with inflation, we would need a model which uses a lower income basket of goods and services.
If I had to put on my tinfoil hat, I presume we don't do this because it would illustrate how badly the poorest are affected by inflation, and validate the frustrations they feel and which are clearly reflected in economic sentiment surveys.
One thing is that 10th percentile wages did barely keep up with inflation from 1979-2019 (0.1% growth annualized), it's only since then that it showed an increase (3.1% annualized).
So it seems to me that any effects along those lines strong enough to exactly negate the apparent real wage growth in recent years must have either 1) been basically constant, so effective wages in this group actually declined 3.1% every year on average for forty years, making 2019 10th-percentile workers reduced to 28.4% of their forbears' wages, or 2) the inflation numbers were about representative for the 10th percentile worker from 1979-2019 and then suddenly and abruptly weren't, or 3) some combination of the two.
(or of course 4), the effect is real, nonzero, but not big enough to wipe out 3.1% apparent wage growth)
I'm obviously not an expert, but assumed the same thing. I watched a fast food joint near me go from 9/hr to 21/hr in just a few years. Maybe that was just pandemic pricing, I don't know.
But getting >2x salary in such short order is outpacing pretty much everyone else, percentage wise.
This probably means that those wages were being suppressed hard for years and they finally weren't able to hire people at that wage anymore
You're probably right, but it ultimately leads to wage compression which is for most of the middle class a disaster.
You don't have to look far to see everyday people complaining about the price of a burger or movie ticket.
IMHO, it doesn't "lift all boats", it pulls down the middle and upper middle classes. Yeah, the lower wage jobs made more money, but they didn't gain much if anything in affordability, since all of the necessities are produced by people also demanding more money.
All arguments against lower class people getting higher wages are IMHO wildly inappropriate.
"you need lower wages to avoid wage compression", "you need lower wage so we can have more employed people"...
If wage compression occurs, then companies have to deal with Theo senior employees seeking elsewhere - or pay them fairly.
Today, I'd agree. It felt like a dirty thing to even write.
Historically, the lower wage jobs were for kids or bored folk, who'd eventually move onto something better and higher wages.
Recently, the economy isn't great and people take what they can find. There's absolutely no shame in that. I know people in tech who were making low to mid 6 figures now doing retail. The jobs just aren't there, and I constantly fear I'll be in the same boat soon.
But that inevitably does lead to wage compression, which to be clear isn't the fault of the lower wage earners.
>I know people in tech who were making low to mid 6 figures now doing retail.
But in other threads, people on HN said they don't even get out of bed for a 140k remote job. What gives?
> All arguments against lower class people getting higher wages are IMHO wildly inappropriate.
This kind of emotional reasoning is wildly inappropriate IMHO.
The commenter is not making an argument against lifting lower class wages. They’re making an observation of how economic theory may apply to this scenario.
> pay them fairly
Define “fairly”?
> Define “fairly”?
In this context of wage compression it is fairly easy as it is just ensuring that they are paid comparatively more than the more junior employees that apparently are getting the same or close to the same salary.
They said it’s bad for one group and neutral for another. How is that not an argument against it?
If I make the observation that some vaccines can have anaphylaxis as a side effect, am I making an argument against vaccinations? Obviously not. In that case, you’d take precautions at vaccination sites: have EpiPens available, make people wait 15min after taking the shot before leaving.
In this case, I’m sure you can apply yourself and think of ways we can counter the effects of wage compression now that we’ve unemotionally identified the fact that it occurs.
To stay in your vaccine narrative: if I say that you expose other people to a health risk for not getting vaccinated - then yes this is an argument for getting vaccinated.
The observation is not that vaccines have (side)-effects, but how these effects affect other people.
And that is what loads the argument.
The analogous argument would be that vaccines cause anaphylaxis and don’t prevent disease. If you made those statements then that’s clearly an argument against using them.
>IMHO, it doesn't "lift all boats", it pulls down the middle and upper middle classes.
It's hard to feel particularly bad for the them when the CurrentShitshow(TM) has largely been a result of the top-ish of the middle being comfortable enough that they're happy to peddle (sometimes at the behest of the most wealthy, sometimes organically) all sorts of bad ideas both economic and social that have kneecapped our economies and torn our societies apart. Like it wasn't the Uber Drivers who thought it would be a good idea to sell out the industrial portions of our economy and make race baiting a cornerstone of national politics.
I feel much greater sympathy for the cohort that currently works $15-25hr jobs and could have perhaps moved to $30-40 roles over time, bought a house and raised some kids in general economic stability if not for fairly self imposed costs and instability.
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Somehow Europe can pay fast food workers above poverty, including 5 week paid vacation, healthcare and many other benefits without the middle class not being able to afford a burger. America's obsession with forcing people that work full time to live in squalor is insane.
If these reports say that things are better for low income people, why do people living that reality overwhelmingly disagree? Any statistics derived from inflation figures are doomed to be wrong when the inflation data was wrong to begin with.
I'm not in the US, but our inflation data was just as wrong as I've heard the US data was. Official numbers were 10% but literally everything went up at least 20%. Everyone I spoke to had their cost of living increase by significantly more than the official inflation figures.
And when "real wage growth" over 4 years is deemed to be just 13%, it's essentially guaranteed that real wage growth was in fact negative when you consider the disparity between real and official inflation figures. Statistics such as food insecurity rate, personal savings rate, and credit card delinquency rate would certainly support that.
> why do people living that reality overwhelmingly disagree
Because a hard life feels harder when prices rise. If you're at the bottom of the wage statistics, even a large increase in salary (eg. 20%) will still leave you struggling day to day, before inflation in your costs.
> Official numbers were 10% but literally everything went up at least 20%
Inflation numbers consider a wide variety of things. It's probably at least partially the reality that the necessities are rising faster than discretionary purchases. As an example, iPhones are "cheaper" today accounting for inflation since Apple hasn't raised prices much, especially on the high end. Obviously the poorest X% of people aren't buying new iPhones, so they don't get those savings.
Anecdotally, my grocery bill for packaged goods has risen dramatically, while my produce costs are flat. I'm a vegetarian so IDK about meat costs. My utilities have risen, my housing costs have risen, and my subscription prices have risen. Meanwhile, most of my other non-travel spending (eg. home goods like towels, electronics, etc) is pretty flat for years.
Ingredients household here. My grocery bill doubled in 7 years without any packages of anything.
Largest increase has been on every fresh food item grown in our many greenhouses. Such as lettuce (increased 200% from ~1 to ~3 for iceberg lettuce) and tomatoes.
I keep a decent memory of pricing at multiple stores and can agree with part of your comment, packaged food got it worse.
Edit: Ontario Canada
the reports are written by people who are not in the same wage category. that is why they don't reflect the lived experiences of these people.
facts and experiences are two very different things. Despite wages going up, poor people can still experience hardship and the feeling of always missing out / having less. it's a matter of contrast, not numbers. And that contrast, that's formed by lived experiences, not some report numbers or percentages thrown around here n there.
Policies should aim to elevate lived experiences of people, not change some numbers here and there to make the facts more confortable morally -_-.
> If these reports say that things are better for low income people, why do people living that reality overwhelmingly disagree?
I'll give an example. In 2019, a 1bd apartment near me cost $800 per month. The McDonalds paid $7.50 per hour. Today the same 1bd costs $2000 per month, and the McDonalds pays $15 per hour.
So both can be true. Wages have gone up 100% for the low income worker, which is good news. But it's not enough to offset the cost of living increases, so they are actually worse off than they were before their wages went up.
>I'm not in the US, but our inflation data was just as wrong as I've heard the US data was. Official numbers were 10% but literally everything went up at least 20%. Everyone I spoke to had their cost of living increase by significantly more than the official inflation figures.
All the math that underpins the usual idiots screeching about "muh compounding gains/interest" applies to the divergence between real inflation and official inflation as well. You can hide a lot of divergence between the real value of the currency and the official value by "simply" having the official number be low by a couple percent over time.
I imagine how cost of living/inflation is calculated became a lot more complex in the past few years which skews the comparison. Especially because of cost of buying homes and cost of renting and greater disparity between rural and urban in the context of increasingly higher urban populations.
Also, predatory debt trapping, in part due to social media exposure and student loans, is way bigger thing now.
That's a study that underestimates growth in cost of living, i.e. gouging by rent seekers and businesses, and ignores changes in status, i.e. people leaving the job market or moving down to something worse. It's not surprising that the lowest income earners got a substantial boost in that period, since life is getting substantially more expensive. Importantly, I don't think their "real wage" inflation adjusted values are fair. People being told inflation was one amount when their actual CoL was vastly outpacing that was part of what fueled the anger that got Trump elected again, not that he has helped (or will help) anything since '23 where that analysis ends.
Anecdotally, many people I know would be in dire straits if they didn't own appreciating real property, because their cost of living adjustments at work aren't coming close to matching inflation. Others I know are actually in dire straits. Some are doing fine and getting the benefit of profitable work. Overall things have been awful economically post-COVID, and there are a lot of causal factors, from the policy decisions of the last decade, to the surprises of COVID, natural disasters and geopolitics, to the AI investment bubble and the changing zeitgeist. (Oh and let's not forget simple demographics, birth rate, etc...)
Activists love to use the Federal Minimum Wage, which has not increased in a long time (16 years), as their basis for that claim, ignoring how few workers are actually paid the Federal Minimum Wage. It's become a worthless metric for anything other than misleading arguments.
In addition to state and local governments setting their own minimums, the decline in young people and competition for workers in that sector from food delivery companies, has put wage pressure on fast food companies. Most wouldn't be able to open their doors if they tried to pay the Federal Minimum Wage. Had it been pegged to inflation, it would be $10.90/hour, which is less than what fast food workers are paid almost anywhere.
> For the poorest the wages have essentially not increased for a long time right?
No. Nominal wages grew from ‘21 to ‘23, hitting all-time highs in ‘24 [1].
> It hasn’t even kept up with inflation
It did [2].
[1] https://fred.stlouisfed.org/series/CXU900000LB0102M
[2] https://www.epi.org/publication/swa-wages-2023/
Good data! Looking at the objective figure on the chart is sobering tho - $4k in income!(I think it may go up after taxes given tax credits?)
Maybe dramatically increasing the supply of something lowers its price.
Lots of contrarians or simply wealthy people think increasing supply of housing does not cause this.
That hasn't been true for a decade but nobody updated their mental models
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Median real wages are up since the 80s by quite a bit:
https://fred.stlouisfed.org/series/LES1252881600Q
> Decades of worsening conditions for the commoner is Ron Wyden's idea of a booming economy. Democrats are useful idiots.
I can't anymore, folks. Republicans passed the largest tax cuts for billionaires, increased the deficit by trillions, and kicked millions of people of medicaid. Meanwhile, Trump is out there creating the most regressive tax system via tariffs we've ever seen which affect the poorest the most.
Yet Democrats are the useful idiots. Incredible.
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> Trump is out there creating the most regressive tax system via tariffs
Tariffs incentivize domestic production. See the case of chicken tax and pickup trucks. While we do pay for tariffs now, later down the road we should not as more things would be made domestically. If you don’t do tariffs, there is no way to force producers to onshore.
The chicken tax encourages creative workarounds more than domestic production. Importing all the parts and putting them together in the US is production work, so fine. Importing chassis cab and putting a bed on in the US is silly, importing with seats discarded in the US is wasteful (Ford got dinged, but I don't think others did?)
Who's making small cargo vans domestically? Nobody. So they're all 25% more expensive, so you might as well buy a big cargo van when a small one would do.
Honestly, governments buy enough light trucks, that 'buy american' requirements would likely keep at least one company making them here.
Chicken tax was introduced earlier than all the “relaxation” of what is considered “American”. The definition of “made in USA” became more flexible for products to be considered domestic while de facto being made somewhere else, hurting domestic manufacturing.
So, it’s not that the tax doesn’t work, the issue is all the things around it that made it less effective.
Chicken tax was enacted in 1964; Ford and Chevy were tariff engineering in 1972, importing trucks without beds and putting beds on in the US.
Finding loopholes and driving trucks through them is what's considered American. It's not a relaxation.
At the end of the day, the chicken tax reduces our options in the vehicle market as it was designed to do, and it's one thing if we want to exclude WV vans and trucks when we have plenty of nice options at home, but now that we don't have nice options at home, it would be nice to be able to import them without a punative tariff.
> Tariffs incentivize domestic production
Stable, long term tariffs. We’re seeing historic falls in manufacturing employment for a reason.
> Stable, long term tariffs.
Well, you have to start somewhere.
> We’re seeing historic falls in manufacturing employment for a reason.
In your opinion, what is this reason?
> you have to start somewhere
There has been no start. You don’t build a factory because the President announced a tariff that he is also negotiating a trade deal around.
> what is this reason?
I’m remodelling my deck. I had orders into a steel mill in Utah. Tariffs mean their steel inputs are pricer than competitors in Vietnam. So I switched the order. And I paid with a cheque—if I paid cash I could skip taxes altogether. That wasn’t a thing six months ago.
Meanwhile, software and services aren’t tariffed. Just goods. Guess whose cost of capital has sunk.
> There has been no start. You don’t build a factory because the President announced a tariff that he is also negotiating a trade deal around.
You absolutely do once the math of tariffs makes your manufacturing abroad not competitive with onshored one. Will it apply for all categories of products? Probably not. However, it will definitely apply for many.
I am not sure I understood your reply about the reasons.
> absolutely do once the math of tariffs makes your manufacturing abroad not competitive with onshored one
If someone bet on e.g. our Japan tariffs three months ago, they lost money. (Nobody did. The types that take Trump at his word on tariffs aren’t making economically significant decisions.)
I do not know why anyone would bet that the executive order defined tariffs would stay. It was and still clear as a day that Trump uses them to force people to the negotiation table. Obviously, negotiated deal may look different.
Regardless, tariffs as an instrument have their merit with Trump or without Trump. Strategically, US has to bring manufacturing (and as much of a supply chains) back, there is no way around it.
> do not know why anyone would bet that the executive order defined tariffs would stay
If nobody bets on the tariffs staying then manufacturing doesn’t come back. The restoring of manufacturing is the bet.
> US has to bring manufacturing (and as much of a supply chains) back
Sure. These tariffs don’t do that.
> Sure. These tariffs don’t do that.
How do you know? Are you from the future?
> Are you from the future?
…we are currently in the future of the previous tariffs.
Also, come on, you’re yourself arguing these tariffs aren’t worth betting on. What do you think investing in a factory is?
> …we are currently in the future of the previous tariffs.
Which ones?
> Also, come on, you’re yourself arguing these tariffs aren’t worth betting on. What do you think investing in a factory is?
I can’t bet on negotiation tactic, only on the outcomes and formal agreements. As soon as those would be finalized we would know. Now we do not know how the trade policy would look like. I would assume that investment banker knows the difference.
> Which ones?
Liberation Day.
> can’t bet on negotiation tactic, only on the outcomes and formal agreements
How about money actually invested [1][2].
[1] https://fred.stlouisfed.org/series/C307RX1Q020SBEA
[2] https://fred.stlouisfed.org/series/C307RX1Q020SBEA
> Liberation Day.
From four months ago?
> From four months ago?
That is when that was.
Also the ones from six months ago.
I can't tell which of these you meant -
"From four months ago? That's way too short a time for any tariff impacts to show up."
vs
"From four months ago? That's ancient history, it doesn't matter."
If it's the first, the link the other person provided shows a dip in manufacturing facility investment over the last 2 quarters. Maybe there will come a future point of stability where investors can feel confident, maybe not. Trump seems willing to use tariffs as a weapon for any disagreement with other countries, not just trade imbalances. There's little guarantee any trade agreement will be honored by the administration.
If it's the second, well, that's the problem. The tariff landscape has been in constant flux over the last several months [0,1,2]. You don't build a factory overnight. You want to understand what your supply chains and costs look like and have some confidence in what they'll look like by the time the factory is ready to start producing. There remains little guarantee that the landscape won't continue to change, and Trump's weaponizing of tariffs is part of that.
[0] https://e3.365dm.com/25/04/1600x900/skynews-trump-tariffs_68...
[1] https://news.ucr.edu/sites/default/files/styles/scale_825/pu...
[2] https://www.crugroup.com/globalassets/campaigns/commodity-ma...
> Strategically, US has to bring manufacturing (and as much of a supply chains) back, there is no way around it.
Strategically, it needed to keep manufacturing. It is too late now. Its labor and capital is already fully deployed towards innovation. Innovation that is now realizing that it is being stifled without a local manufacturing base, granted, but at this point pulling labor and capital away from innovation in order to build a manufacturing base again will only stifle it further as the rest of the world, which is quickly closing the innovation gap, keeps moving forward.
The US cannot afford to see that happen. So, in order to save face, what the tariffs will end up doing is open the doors for foreign capital and labor to flood into the US instead. While that will put factories in eye's view, it does not "bring back manufacturing" or resolve the strategic need. It merely lets what was strategically trying to be defended against inside the house, which is an even worse position.
>>Regardless, tariffs as an instrument have their merit with Trump or without Trump. Strategically, US has to bring manufacturing (and as much of a supply chains) back, there is no way around it.
Well no. Not really. Not for everything anyway. Some things like electronics - sure, but it's a matter of national security not economy - it doesn't have to make financial sense, it just has to exist so that the country can have that ability no matter what happens.
As a simple(and really oversimplified) example - let's say that tariffs force clothes manufacturers to bring tshirt making back to the States. The $5 T-Shirt now costs $30 due to tarrifs. So ok, someone makes a factory in US because now it makes sense, employs american workers, pays them good wage - ok, now they make t-shirts cost $20 because they are made domestically.
Cool - that's great, but now the rest of the world still buys $5 tshirts, while Americans buy $20 ones that can't even be exported anywhere because why would anyone buy them if they have cheaper alternatives. All you've done is you increased the cost of your products to the american consumers.
Some can argue - ok, that doesn't matter, what matters is that manufacturing is now back in the states and american people have employment. And sure, there is merit to that argument - but it reminds me of how my own country used to work under communist rule, people would go "comrade party leader, people have no jobs", "ok, we'll build a factory here so you can have jobs".
Can the factory make anything that is actually worth making? Doesn't matter, what matters is that people got jobs and "manufacturing is happening here" - for an economy based on capitalist principles, that sounds like a disaster for US.
But hey, what do I know. Just an external observer.
> Well no. Not really. Not for everything anyway.
So, you and I are in agreement that for some things it makes sense, right? Both strategically, and economically.
For some things, it might make sense. Across the board tarrifs like this current administration is doing them is just idiocy.
Nearly every economist agrees with targeted and strategic tariffs.
Nearly every economist disagrees with blanket tariffs.
They think this for reasons. Historic ones. Logical ones. Modeled ones. Do some basic research. Talk to an AI. This is not advanced material.
Only sector targeted tariffs paired with long term investment and commitment do that.
Long term stable tariffs yes. But you can't pretend like trumps tariffs were not done in the worst way possible?
Trump uses wild % amounts as a negotiation tactic. Is it the best way to do it? I don’t know. You can’t argue though that it does force the other side to come quickly to negotiation table to talk about the deal. So, if the goal is to get the deal now, then it’s effective. If the goal is something else, then it’s not a good tactic.
I do not have enough information to definitely say whether it’s good or bad. Most of the things in life are neither because they have good side effects, and bad side effects to them. So, I think looking for a “good only” solution is a loosing strategy.
I'm confused. Is the goal the get manufacturing back in the US, or to make new trade deals? I've heard both things. Oh, and something about fentanyl coming in from Canada? Alright I'm not sure how tariffs would stop that.
> I do not have enough information to definitely say whether it’s good or bad.
Usually when I don't have enough information on an issue, I take it upon myself to learn more about it before stating an opinion.
> Most of the things in life are neither because they have good side effects, and bad side effects to them.
You don't have to be a doctor to understand that the downside of cancer probably outweighs the upside of not having to save for retirement. Economic instability is the cancer in this metaphor, and the cause of it is Trump changing his mind on tariff rates every other day. Economists, like doctors, are trained on how to treat this illness, and all of them are saying "stop doing that". Trump can either listen to the experts or continue on his path, destroying the American economy in the process.
You're talking out of both sides of your mouth.
You say we need tariffs to bring manufacturing back. Then you turn around and say the tariffs aren't the point, it's the deal. You even said it was silly to bet on announced tariffs elsewhere.
If the tariffs are necessary to bring manufacturing back full stop, then you don't need to "make a deal". If it's just a tool to make a deal, then they're not necessary!
You just keep moving those goalposts.
Negotiate what? You realize they can just set it right?
If it was a long term strategy they would just set a fixed % and leave it at that, otherwise companies cannot make any plans.
When tariffs are imposed by the other side, they’re called “sanctions” and are considered one step short of declaring war. If they’re so great then they wouldn’t be used as punishment.
Economists pretty much universally agree that tariffs are bad for both sides. It can make sense to use them to preserve strategic industries even if it’s less efficient economically. For example, tariffs on food could make sense to ensure an enemy can’t starve you with a blockade. But as a blanket policy it’s just bad.
That particular outcome is possible when you make tariffs in a smart and predictable way. Trumps tariffs are unpredictable and also make local producers pay more for raw material they need.
> That particular outcome is possible when you make tariffs in a smart and predictable way.
You would have to prove that claim. There is more than one way to achieve a specific goal.
> Trumps tariffs are unpredictable and also make local producers pay more for raw material they need.
It’s one of the consequences. There are other ones. Is your only objective is to ensure that local manufacturers pay the least amount possible for their raw materials? This is very simplistic view of things.
This isn't rocket science. If you want somebody to spend a lot of money and time setting up production in the US, tariffs have to be stable and predictable. If that doesn't make sense to you, I didn't know what to say.
And they are after the deals are signed, no?
A lot of deals got ripped up on "Liberation Day", including some Trump was extremely proud of when he announced them in his last term. He's changed his mind several times in six months already, dropping deadlines and tariffs when the market gets itchy feet, imposing higher tariffs due to disputes with governments completely unrelated to trade. He loves to make grand gestures to distract from domestic issues, and his administration showed so little basic competency they actually publicly announced tariffs on uninhabited territories full of penguins. Why would anybody assume stability?
To echo a comment made in a parallel thread, decisions made to invest in US manufacturing don't get made by people dumb enough to take Trump at his word.
And even if he wasn't tariffs are unlikely to persist at those levels under the next President, regardless of who that is, and that's the sort of timeline you pay back your investment in US manufacturing over...
You are the one who is making the claim that goes both against what historical data show and against what economists say.
So, yeah, predictability matter. Institution do not want to invest based on something that goes up and down randomly.
> Is your only objective is to ensure that local manufacturers pay the least amount possible for their raw materials? This is very simplistic view of things.
Well, yeah, them paying more is rather massive obstacle. You know what is simplistic view of things? Belief that Trump will make economy better, because you like his fraudster personality and would like to be like him.
> Republicans passed the largest tax cuts for billionaires
There were no tax cuts for billionaires in the BBB.
(Not increasing the tax is not a "cut".)
It absolutely is when the status quo would have increased taxes. That may not be a cut of current taxes, but in the longer timeframe it is absolutely a tax cut.
Framing it as not increasing taxes being a cut is misleading.
It's just as disingenuous as scaling back a proposed budget increase and calling it a "cut".
The FTC wouldn't let businesses get away with such language, why should the government get a pass?
If a bill due at the end of the month is forgiven on the 25th, were expenses cut? What if the debt is forgiven on the 2nd of the next month?
I’d wager most people would consider those scenario cuts. However, in your framework, the verbiage is different despite a shared outcome.
Bills are not due in advance. The analogy is inapt.
The taxes were cut 8 years ago. There aren't further "cuts". Billionare tax rates have been the same for the last 8 years, and will continue at the same rate at least into next year.
Weren’t those cuts set to expire?
Yes. They were temporary cuts so that they could claim they didn't raise the deficit. Now they are claiming that everybody knew they were going to be permanent. So they either raised the deficit in that cut, or the current one. It's the same party, claiming they didn't raise the deficit either time. And Americans put up with this shit.
No. The total tax bill over the next five years was X, given the current laws. Then a bill was passed that reduced that total tax bill over the next five years. This is a tax cut. It's a little absurd to try to claim otherwise.
Failing to increase taxes is not a tax cut.
They made a temporary cut permanent. Come on, you already know this. And you know why.
I understand why some people try to frame not raising taxes as a tax cut.
Great example in how humans do this thing called “hallucination” where they just make up facts. I wouldn’t trust them to write code.
"people earning roughly less than $806 a week — slowed to an annual rate of 3.7 per cent in June, down from a peak of 7.5 per cent in late 2022"
With inflation dropping from 9.1% in June 2022 to 2.7% in June 2025, real wages for these low earners are now growing for the first time in years. The Financial Times failure to mention this context makes me question their motives.
"The wage growth trend means the lowest paid are now more likely to find themselves among the 40 per cent of US workers whose salaries are not keeping pace with inflation…"
They do talk about inflation in the article.
They are not more likely to find themselves among the 40% of workers who's salaries are lagging inflation, they are more likely to be among the 60% who's salaries are outpacing inflation.
The FT is being disingenuous.
It doesn't change the "Poorest US workers hit hardest by slowing wage growth" premise of the article, I don't see any hidden motive needed to explain this.
This is probably cold comfort to a population looking at housing prices rising at 3.7% in 2025 per realtor.com.
It’s how journalism works today.
Do actual research to make sure you understand a topic? Nah!
Come up with a conclusion, then go looking for evidence to support it, cherry picking if needed? Absolutely.
Gotta get those clicks
> real wages for these low earners are now growing for the first time in years
This is total crap [1][2].
[1] https://fred.stlouisfed.org/series/CXU900000LB0102M
[2] https://www.epi.org/publication/swa-wages-2023/
> now growing for the first time in years
This is a lie. Low earners had strong real term wage growth under the previous administration.
Wage 'growth' after 2+ years of real wage decline (vs stagnation) is the coldest comfort to folks categorized as 'low earner'. Anyone ignoring that make me question their motives
Works if/when archive.today is blocked
No Javascript required
Why does this work for the FT site?
simply disabling JS seems to do it
Isn’t this fundamental down to landlords being able to extract all excess pay from the lowest paid workers? Minimum wage increases, simply get passed on to the landlord on higher rents.
The prevailing HN wisdom from, IDK 2010 or before, to 2020something was that inflation was good for the poors because their debt went away (laughable when considering interest rates on a lot of that debt but still).
Where are those people now? Why are they not all over these comments posting links rebutting the article?
Or if they no longer exist what made them change their minds?
How do you measure prevailing wisdom? Is there some sort of data we can look at?
> The president wants his own people there so that, when we see the numbers, they’re more transparent and more reliable
He wants people there to be his version of Minitrue, providing the numbers he wants to see, not the real ones:
Reporting unworkers doubleplusun-good, rewrite fullwise upsub antefiling.
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The President just fired the person in charge of reporting jobs numbers because he didn’t like the report.
Logically what do you think is about to happen?
Yeah, firing the labor statistics head because Trump say she's been faking the numbers to make him look bad actually makes it seem both obviously politically motivated and casts whatever comes after into doubt. Now their credibility is degraded.
That's different from just saying the numbers are obviously being faked under Biden or whatever with no real evidence because you just feel like the economy is bad and assume corruption. Now there actually does seem to be corruption!
It IS THE GOVERNMENT
Yeah, tin party soldier never questions anything.
Also, whataboutery.
On this topic- last year it was somewhat common for R politicians to criticize the D regime for the “report high, revise low” strategy - if anything, I guess, this firing has been telegraphed. Anyway, those people were also called conspiracy theorists and politically motivated. There’s clearly a conflict of interest between the facts and what is politically expedient on all sides of the political system in the USA.
I personally would prefer that the jobs numbers apparatus was extremely conservative in the sense that it didn’t overstate the strength of the USA economy. I doubt Trump has that goal in mind necessarily, laudable as it might be.
> I personally would prefer that the jobs numbers apparatus was extremely conservative in the sense that it didn’t overstate the strength of the USA economy.
This sounds like a call for it to be biased low? I'd prefer zero net bias - overstate and understate equally often - and as little error as possible. (Also, I'd like a pet unicorn for the munchkin.)
The problem seems to be around the preliminary numbers and how widely they get reported. Maybe this is a case where excessive transparency and reporting partial data that's known to be inaccurate is negatively useful?
Or maybe there could be some way to get people to accept that it's known to be wrong, and only useful if you have the chops to account for that wrongness in whatever you're using it for? But humans in general seem to mostly be allergic to not knowing things, so...
Maybe the wrongness is predictable enough to model and account for, but publishing "expected correction" numbers along with the preliminary numbers would be extremely un-conservative in that doing that is speaking with your own voice rather than just collecting and reporting data.
Biased low if it must be - a more down-home way of phrasing that is “don’t count your chickens before they hatch,” which, in any case seems like better labor-statistical common sense than the other way around.
Alternatively, he wants someone at the top who will create an organization that does not have to repeatedly restate massively incorrect numbers.
Such an organization cannot exist. These agencies are always balancing two opposing forces, timeliness and accuracy. Data collection is inherently delayed (e.g. a lot of it is from surveys that businesses complete at their own speed, or from reports that each state/agency submits on their own timeline.) So collection for a given quarter typically completes long after the quarter is over, and then it takes some time to crunch those numbers.
So if you want early data it will inherently be of limited accuracy because that involves a lot of extrapolation with whatever incomplete data has been collected by that time. If you want accurate data you will have to wait for it because that data takes longer to be collected. You do want both because you need to make timely decisions, since most times the early numbers don't get revised by much, but you also want to course-correct when later, better data gives a different signal.
Agencies like the BLS publish their methodologies in great detail. Big revisions have always been happening, only they are getting more attention these days because of the heavy politicization.
They shouldn’t announce until it’s accurate then?
That's where the timeliness versus accuracy trade-off comes in. There is significant value in having an early signal to act on, especially as long as there is awareness of its limitations. And as I mentioned, this data does come with very clearly documented caveats and methodologies so that users can make informed decisions.
Normally they're accurate enough, and the revisions/refinements are small.
The initial estimates haven't been accurate recently, because many workers have been completely dropping out of the economy because they're afraid of immigration raids. Information about these workers is just harder to gather and takes longer to verify.
Actually the major complaint was from last year when Biden was president (I'm not sure about this year). Every month, prior months were adjusted downward, often 100,000's thousands and wiping out the previous months positive figure.
Unless they are accurate most of the time, I would agree with this.
How massively incorrect are the numbers in comparison to previous years? Was it anything unusual?
Here, take a look for yourself: https://www.bls.gov/web/empsit/cesnaicsrev.htm#2024
If this is an understood part of the process, why is it such a problem now?
Name some organizations that have "fire employees until we get success". Does that create a culture that prizes success, or just encourage employees to hide failure?
The numbers get better as they get more data.
Why not wait to release them until enough data has come in that it's settled? Serious question, what's the downside?
Because the market values the early results and has an adult understanding of what the numbers mean.
Because the law requires them to release reports on certain dates, so they do so and then make corrections as more data comes in.
Thanks.
It’s never settled as the data is never perfectly accurate or exhaustive. We just have to do with the caveats and understand that perfection does not exist, even if you have more data than you can handle. That’s what error bars, uncertainty analysis, and confidence intervals are for.
Or rather not mention them at all. He'd rather not bring attention to the topic to begin with.
Nah, if the numbers make him look great he'd be all over it.
I think you understand how labor statistics work about as well as Trump.
Welcome to modern slavery. You wanted rights and strive for legal orgnization to improve your working conditions and pay? So we'll replace you with people that have no rights, have ruthless gangs supply and control them, and maybe, we will get you some handouts if you do not upset the new applecart.
This article ignores the delta between wage growth and inflation.
Yes, wage growth was higher in 2022. But inflation was raging then. Today’s environment is actually better for low wage earners ( but far from ideal ).
the min wage is long overdue, its should be somewhere near $25/hr this is how you 'tax' billionaires
That's a good way of turning the poorest US workers into the poorest US unemployed. If you raise the minimum wage above the actual value of an employee, then they're just going to get fired. Even if they still provide more value than their being paid, it makes automating away their job more competitive.
California tried this with a $20/hr minimum wage in fast food restaurants: the next time you go into a McDonalds, count the number of empty cash registers and number of shiny new ordering kiosks: https://www.nber.org/papers/w34033
McDonalds were going to do that anyway.
And what's the point of a minimum wage of it doesn't provide a living? That's just letting private enterprise piggyback off the welfare system.
Good question - it has a partial answer: minimum wage is to provide a living to a single young person for a shortish period.
Not a family. Especially not families with - for other reasons- only one breadwinner.
The problems of poverty (to the extent the US even experiences it) are broader than demanding someone make uneconomic decisions with their investors capital.
Why not?
I know several people supporting families on minimum wage.
Do they not deserve to be paid more?
> Good question - it has a partial answer: minimum wage is to provide a living to a single young person for a shortish period.
This is false and not at all the reason why the minimum wage exists. It was created to bust sweatshops. You are making the same argument as the people that were defending sweatshops. It may be the argument proponents make now to argue against raising it, but it was not why it was created. Roosevelt literally said that the intent was that any business unable to provide a basic living wage for their workers was one that should not exist.
I may make a similar argument, but you go too far sir to imply I am aligned with evil people defending sweatshops.
I agree with Roosevelt that businesses should provide a living wage for their workers. Mine does.
I'm happy to have both: "minimum single-income with extended-family obligations wage" and "young, single individual minimum wage".
You just won't find a lot of the former.
This is actually the policy argued for by the Catholic Church in various documents; but it results in an obvious inequality that makes many angry - two people doing the exact same job, and the single man is paid less than the married family man.
(The reality is we pretend we don’t have that, then rebuild it badly with bandaids - child tax credit, earned income tax credit, daycare credits, MFJ deductions, healthcare, etc).
So by your logic we should consider lowering the minimum wage in order to ensure employment.
Employment is not a means in itself, the point of being employed is to "make a living". If a job cannot sustain a person then it should not exist.
People deserve to live with dignity, earning a living wage.
>People deserve to live with dignity, earning a living wage.
Look, I get where that is coming from. But no one deserves anything, even clean air. Instead, you pay for things with other things (e.g. clean air in exhchange for slightly more expensive cars).
A (shitty) job is better than no job. Minimum wage should be lowered. You gotta help people with something else. For instance by allowing to build higher density housing.
> But no one deserves anything, even clean air. People 100% deserve clean air?
> no one deserves anything
https://www.un.org/sites/un2.un.org/files/2021/03/udhr.pdf
Pure japes.
Ordering kiosks mean we can meet volume because more time is spent in production. Same with mobile ordering.
The employee count doesn't need to change up or down.
I got my first job as a grocer in 2010 which paid a minimum wage of $7.25/hr. That was 15 years ago and the minimum wage is still $7.25/hr.
But is anyone _actually_ getting paid the minimum wage these days? Might want to check what the grocery store you worked at in 2010 is really paying these days. I’d bet good money it’s significantly more than $7.25/hour.
https://usafacts.org/articles/minimum-wage-america-how-many-...
869k workers. The size of a country larger than Luxembourg.
Doesn't the fact that 98.9% of all workers earn more than the minimum wage kinda highlight that it's really not necessary for the federal government to increase it? Clearly it's nearly impossible except in limited circumstance to actually _find_ workers who'll accept the minimum wage, hence the fact that hardly anyone is paying it.
7.26 is technically more than 7.25. Further, a low floor acts as a weight, depressing wages generally.
"Raising the federal minimum wage to $15 by 2025 would lift wages for over 33 million workers": https://www.epi.org/publication/minimum-wage-15-by-2025/
(For the record, 33 million is ~6 million more than the population of Australia)
A federal-level minimum wage doesn't make sense, precisely because what is considered minimum wage in LA isn't the same as what's considered minimum wage in rural Louisiana, and vice-versa. The fact that 98.9% of workers manage to receive more than the minimum wage strongly suggests the market forces have done a pretty good job of determining what a viable minimum wage for various parts of the US is (including apparently parts where $7.25/hour works).
> But is anyone _actually_ getting paid the minimum wage these days?
Yes.
> Clearly it's nearly impossible except in limited circumstance
No, you exaggerate. It’s a large number of people. I wouldn’t say it’s nearly impossible to find someone from Indianapolis (pop. 879k, 2024 est.), and the number of Americans is much larger than the number of working Americans.
> No, you exaggerate. It’s a large number of people.
It's 1.1%, an incredibly small portion of the entire working population. There's never any follow up like "where in the country does this occur?" which may reveal that it's actually a livable wage. Or other follow up questions like, "does this number include illegal aliens who are happy with being paid $7.25/hour tax free?"
You're also ignoring _how_ it came to be that 98.9% of all workers manage to get paid higher than the minimum wage without it being mandated. Are the companies doing this out of the goodness of their hearts or have market forces instead found what the _actual_ viable minimum wage for various localities truly is?
> There's never any follow up like "where in the country does this occur?"
Are you serious?
https://www.bls.gov/opub/reports/minimum-wage/2023/
Table 3. Their methodology is addressed in the technical notes.
> You're also ignoring _how_ it came to be. . .
No. You asked a specific question and I was bored enough to help you look up a result. I’m not here to engage with whatever ideological problems you have going on in the subtext.
According to the WSJ, the California minimum wage increase for fast food workers reduced the number of those jobs by 20,000.
Why?
Pretty sure the data of the past few years has shown we don’t really need a minimum wage apart from ensuring people aren’t absolutely taken advantage of. Nobody is paying just minimum wage anymore, apart from servers and the like that make most of their income from tips. The local McDonalds pays at least 50% more, for instance.
This is how you tax small business owners. The vast majority of businesses are not owned by billionaires
You view this as zero sum. How many new business owners would be created if people had enough to save? How many new businesses would exist if more money was flowing in the economy? Should businesses exist if they can't pay livable wages?
These aren't hypothetical questions. We have an answer for them all over the country where state minimum wages are rising in Democratic states.
Is the answer a good one? https://www.nber.org/papers/w34033
yeah, actually. If the worst thing you can find when paying living wages for workers is a small drop of 2.7% employment among fast food chains, that sounds like a great trade off.
Seriously, do some introspection here.
Perhaps if we taxed the billionaires more we could subsidize increased wages for small business owners or even do something actually good like provide universal basic income so that they cannot be so easily exploited for wildly undervalued labor
The value of labor is what people are willing to pay for it.
... what people are willing to pay for it... when the corporations already achieved regulatory capture and can force a partly state subsidized work force to take shit underpaid jobs. It's like a handout to corporations.
Deliberately underpaying people and then telling them their work has low value is one of the most disgusting aspects of capitalists. There's lots of CEOs who are not especially productive, they just have leverage.
The government tries hard to repeal the Law of Supply and Demand, but so far has failed 100% of the time. The government can implement wage and price controls, but those still do not set the actual value.
For example, in the USSR, the price of bread was fixed by the state. But the real price of bread was how long you were willing to wait in line for it.
BTW, in the US, you are free to set up a company and then pay your workers whatever you want to. Workers can choose to work for you, or not.
Governments are on both sides of supply and demand: their powers to tax and spend mean they can put their metaphorical foot on the metaphorical scales to tip the balances whichever way they want, to a large degree, with rapid effect.
Central planning is only one of many ways to do this, it can also be managed more locally; and Soviet-style central planning is only one many ways to do central planning, most large businesses even in capitalist nations are also somewhat-centrally planned by the C-suite.
Corporations do do central planning, but they do so at the high risk of becoming unmanageable and then they fall, and a competitor replaces them. Government central planning just raises taxes to cover the inefficiencies, until eventually the economy collapses.
That's a similarity, not a difference.
Even regarding the scale of the organisation, there is lots of overlap between governments — at all levels, from countries, through states, to incorporated municipal governments — and businesses. You could reasonably compare Foxconn to Iceland or Wyoming (I would also list a US city, but https://en.wikipedia.org/wiki/List_of_cities_by_GDP gives me a lot of US Metropolitan Statistical Areas rather than cities, that seems like it would extend beyond the bit with the tax collection rules?)
Even governments get bailouts and/or bankruptcies, both from above (e.g. https://www.uscourts.gov/data-news/judiciary-news/2012/07/13...), and from outside (e.g. Greece).
And corporations, when big enough, become monopolies, and raise prices to cover inefficiencies, until something breaks.
> but so far has failed 100% of the time
Labor rights have been a raging success. 40 hour work weeks, minimum wage, sick leave, vacation leave (in non-shithole countries).
>BTW, in the US, you are free to set up a company and then pay your workers whatever you want to.
What happens when competition with deeper pockets price dumps you into oblivion? Free market is a free market only when there is competition based on the product, not how rich your investors are.
There is evidence the workers are being exploited everywhere if you bother to spend a second looking. Like the parent said, your apologism of capitalists is disgusting.
> Labor rights have been a raging success
so much success that now you need two working adults to support a family of 4 while 60 years ago a working man could support a much larger family with a single income.
> your apologism of capitalists is disgusting
Under capitalism, man exploits man. Under socialism, it's the other way around!
BTW, you might enjoy watching the movie Silk Stockings.
> What happens when competition with deeper pockets price dumps you into oblivion?
Funny you should ask. There was a famous case from the beginning of the last century where German bromide producers price-dumped it the U.S. in an effort to undermine Dow's efforts in the same direction. The result? They failed miserably.
https://en.wikipedia.org/wiki/Dow_Chemical_Company
> your apologism of capitalists is disgusting
Free market capitalism is the only system proven to work, over and over again. It brought billions out of poverty and it still does to this very day, when allowed to work, of course.
If you find that disgusting - I am guessing you are a big fan of poverty. I would prefer a world in which everyone is rather rich (or at least well off), a world that no system other than capitalism is even close to providing.
> Free market capitalism is the only system proven to work, over and over again. It brought billions out of poverty and it still does to this very day, when allowed to work, of course.
Capitalism? Yes.
"Free market capitalism"? No.
While regulated capitalism is very effective at aligning everyone's interests, a free market operates without the intervention of government or any other external authority, and rapidly decays into a market for lemons[0] — or worse, arbitrarily negative contractual obligations, which is how serfdom functioned.
Even when the governments start off by only intervening to prevent those two issues, with minimum quality requirements and prohibitions against unfair contracts, they often find themselves having to also intervene directly in the markets, everything from the US ban on trading onion futures[1] to printing and destroying currency to keep inflation in a particular range designed to encourage the spending of money rather than its hoarding on the one hand without also preventing people from saving on the other, and even to intervene in the employment market because 100% employment drives a spiral of wage inflation that the system as a whole would not be able to cope with etc. etc.
Same deal as the Laffer curve: zero regulation is bad, micromanagement is bad, people argue about where the peak in the middle is.
[0] https://en.wikipedia.org/wiki/The_Market_for_Lemons
[1] https://en.wikipedia.org/wiki/Onion_Futures_Act
> Free market capitalism is the only system proven to work, over and over again.
How come nobody practices it, then? In fact, right now the world's biggest economy is doubling down on trade restrictions.
It's not an on/off switch, of course, but rather a sliding scale. The free-er your markets are, the better the results. Till recently, USA was in top with both, in sharp contrast to, say, the EU who pro-regulation and anti-business.
But the tariffs are an interesting experiment, with some non-economical geopolitical goals thrown in, so we'll see how it goes.
> It's not an on/off switch, of course
Not as it is usually defined. Many places take inspiration from free market capitalism, like Javascript takes inspiration from C, but have developed their own systems. The US model is usually referred to as mixed-market capitalism and the EU model is generally thought of as a social market economy.
Of course, that's just semantics. While there is value in using shared terminology, you can make up any definition you want on the spot. You could call the old Soviet system "free market capitalism" if you really want to. The world is your oyster.
Making up one's own definition for words is a losing argument.
> How come nobody practices it, then?
Under capitalism, the rich are forbidden to rob the poor. Most elites are very unhappy with such ban.
> Free market capitalism is the only system proven to work, over and over again.
Name a country that in 2025 practices free market capitalism.
> If you find that disgusting - I am guessing you are a big fan of poverty.
An aggressively rude misreading of the GP.
There are countries that are more free market, and countries that are less free market.
The more free market ones are noticeably more prosperous.
Why not $250/hr? Or $2,500/hr?
the eternal question people avoid. there is no "fair wage" definition.
> Pay for the top 25 per cent of workers is up by 4.7 per cent in the year to June
Wait what? Anyone here getting 4.7% pay rises?
6% last year here.
Got an offer from a competitor, used it to negotiate a 20% raise.
Fairly certain the OP was talking about an annual "cost of living" adjustment, and not job searching for a better offer.
Fairly certain the quoted statistic was talking about total results, not people who stayed at the same job.
Ofcourse. That's what unions do. It's also why inflation is so damn nefarious because unions ALWAYS negotiate a pay rise to match it. Which as you can imagine gets very ugly fast.
The wage-price spiral is heavily criticised: https://en.wikipedia.org/wiki/Wage%E2%80%93price_spiral#Crit...
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We could have a billion Americans and keep employing them productively. Immigration has been America’s superpower for 150 years. The real problem is monopoly firms that suppress wages of workers and innovation at the same time. The same monopolies that outsourced our manufacturing. All of which started with deregulation and tightening of immigration controls.
So you’re wrong.
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As far as I can tell, the poorest workers' real wages grew, and grew faster than the median workers', on a relative basis, from 2019-2023:
https://www.epi.org/publication/swa-wages-2023/
Yes, the simplistic "immigrants are competion" narratives always disregard the fact that immigrants also contribute to the economy and uplift it. For instance, there is a credible theory that the "immigration crisis" was instrumental in managing the inflation crisis: https://fortune.com/2024/04/12/immigration-inflation-economy...
Current unemployment is a very low 4%, which completely contradicts your baseless theory.
Don’t you need a SSN for anything that’s not under the table?
I want to give you the benefit of the doubt here but I can't figure out whether that would mean that you're lying, or that you're stupid.
20 million? You think the US population had an additional 20 million population growth? And that we just absorbed that? That’s probably breaking a record or two.
Got any non Trump sources to back that up?
There is just no advantage to being poor in America.
Why should there be an advantage to being poor?
Presumably you might want to give the poor a systemic advantage over the rich in order to balance the system and make it more democratic. Otherwise the rich will have more influence.
God created all humans equal in His image. Therefore when humans impose disadvantages on other humans just because they are poor, they go against God.
...because if there isn't then your democracy will turn into an oligarchy. The advantage needs to be somewhat against the richest and for the poorest if you're going to protect that.
s/will turn/has turned/
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