How to End Low-Wage Work—Forever

How do you solve a problem like the disconnect between “wages employers are willing to pay” and “wages employees need to survive”? If you’re my guest this week, the answer is: a wage subsidy.

Today on the show, I spoke with Ben Glasner, an economist with a PhD in public policy and management in search of answers for how to build a fairer economy, about the proposal that he says has two very critical things most policies of this nature lack: efficient targeting and bipartisan support. We discuss:

• The significance of 21 million Americans earning less than $16 per hour, two-thirds of whom are women
• Why other attempts at incentivizing job creation are expensive ($100,000–$200,000 per job) and poorly targeted
• The target wage and proposed funding structure that Ben and his coauthor believe will minimize or eliminate fraud and make small-business hiring more competitive in cities with a lot of multinational corporations

…and more.

Listen now.

Since the standard deduction ballooned in 2017, the vast majority of Americans have found it preferable to itemizing their deductions. But with the increases to state and local tax (SALT) deductions from $10,000 to up to $40,000 this year, those of you who are in the early innings of a 6% mortgage or ramping up charitable contributions may find itemizing is now preferable. This feels like a good time for my standard annual reminder: Your mortgage interest is not tax-deductible unless you itemize your deductions. Here’s a handy little calculator for weighing your options. (Wall Street Journal)

This piece pointed out something about anti-consumerism content that is, in retrospect, obvious, but which I’d never noticed before: The majority of it is directed at women. In some regard this makes sense, since statistically women do the majority of—if we’re using fancy words—household procurement. Still, this means that well-intentioned calls to consume “better” (whether that means locally, sustainably, or just “less”) inevitably generate a moral project for which women are disproportionately responsible. A nuanced read before the mania of gift-giving season. (Kate Manne)

🪤 If the Affordable Care Act subsidies lapse at the end of the year, households with incomes just above 400% of the poverty line will see healthcare premiums skyrocket. This is known as a “benefits cliff,” in which the increase in costs associated with earning more money outpaces the increase in income. Cynthia Cox, vice president and director of the Affordable Care Act Program at KFF, called this “an unfortunate disincentive to work,” especially for families who “really need the health insurance.” (So…most of them, I’d assume.) One analysis found that around 2.5 million households, or about 10% of people on ACA plans, have incomes that place them around this cutoff point. One example: A family of four earning $132,000 would save $14,700 by earning $4,000 less. You don’t need a PhD in labor economics to understand these incentives are bad. (CNBC)

Feeling flat, foggy, or fried? This isn’t a “personal finance” tip, per se, but a video about how to escape a “dopamine hole.” No idea if the neuroscience here is legitimate, but the “pleasure must be paid back” principle shifted how I think about my precious TikTok Time.

Airlines are credit-card lounge businesses that just happen to fly planes. Absolutely titillated by this long read about one of my favorite liminal spaces, where one can be flocked by other “premium-economy professionals with business-class expectations.” This blew my mind: Annual charges on Delta’s American Express cards total about 1% of US GDP. (The New Yorker)

Spread my ashes in the 35,000-square-foot Terminal B Denver United Club.

US Baby Boomers make up one-fifth of the population but own more than half of all stocks. While I’d like to specifically disavow the “starter home” logic toward the end of this article as a vestige of an earlier era, this piece argues that the majority of Baby Boomers’ wealth accumulation worked this way—like a happy historical accident. (Washington Post)

By now you know I’ll never skip an analysis from Michael Green, a man I’ve only interviewed in spirit (read: digested everything he’s ever said in everyone else’s interviews, then regurgitated it for you mama bird-style). Last week, he turned his attention to the riddle plaguing pundits for years: Why does the economy feel so shitty for so many people if the data looks so good? He discovered an unlikely answer in the obscure calculation parameters for the US poverty line. “This week, while trying to understand why the American middle class feels poorer each year despite healthy GDP growth and low unemployment,” he writes, “I came across a sentence buried in a research paper: ‘The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.’ I read it again. Three times the minimum food budget. I felt sick.” It turns out this measure made sense when food consumed roughly one-third of your budget and everything else substantial (education, housing, healthcare, etc.) fit neatly and comfortably in the remaining two thirds. But unlike these other things, food spending (as a percentage of total income) has dropped precipitously—which means using the cost of food to calculate a subsistence line understates “sufficiency,” Green calculates, by about 4x. The threshold for a couple with two kids shouldn’t be $30,000, it should be $130,000. Fascinating read from a unique mind. Part two just dropped. (Michael Green)

Green’s analysis takes explicit aim at charts like this one, which are often used to prove the middle class is shrinking because people are getting richer.

Paid care work—“from laundering to nursing to nannying, food preparation to janitoring”—accounts for roughly a quarter of the US economy. This thorough review of three books about the care economy made a couple observations that stuck with me, namely: “Both [authors] point to a much more fundamental shift across the last fifty years. It is not the productivity of bodies but their decay and decline—the aging population of the last generation of industrial workers—that has become a new source for profit,” as cities like Pittsburgh opened new hospitals to “generate wealth from the vast need of aging, unemployed steel workers.” Also, this line: “[B]y commodifying care, we have worked out how to extract wealth even from those who are not creating it.” Wow. (The Boston Review)

Somewhere in a dimly lit conference room that smells of burnt Seattle’s Best, Boeing executives are thrilled that, for once, it’s not them: Airbus ordered immediate repairs to over half its global fleet of A320s, the 737’s primary competitor. It sounds like a relatively simple software fix pertaining to “solar flares [that] may corrupt data critical to the functioning of flight controls,” but after an already-overextended few months for air travel, it’s an unfortunate wrench. (I know, I know—two aviation stories in one issue? Keep it in your carry-on, Katie.) (Reuters)