Friends,

This week, we’re discussing this morning’s news that paychecks aren’t keeping up with rising prices, measuring the economic impacts of a full year of President Trump’s tariffs, examining why government should invest heavily in science, and exploring a new industry that’s helping private equity suck trillions of dollars out of businesses and leaving Americans with the bill.

But first, we open with what appears to be some good news: Last Friday’s jobs report from the Department of Labor blew away economists’ expectations. “The labor market added 178,000 jobs in March, a read of how hiring fared in the early weeks of the Iran war,” reports Courtenay Brown at Axios. “Job gains were a snapback from a worse-than-initially-reported loss of 133,000 jobs in February.”

“Much of the headline strength was concentrated in health care, where workers returning from a strike that boosted sector hiring,” Brown reports. “The sector extended its yearlong stretch of carrying the bulk of hiring last month, with 76,000 jobs added—or 43% of March’s gains.”

Remember, most of the jobs that have been added to the American economy since last year have been in the health care sector, largely because America’s large and aging baby boomer generation needs more elder care and increased medical care with each passing year.

Elizabeth Renter, the senior economist at NerdWallet, says the market has entered a volatile pattern in the past year. “Job growth has alternated from negative to positive every month since May of last year,” Renter said. “All told, these dramatic swings in either direction have netted out to roughly zero growth over the past 12 months.” Brown calls it the “yo-yo job market.”

Former Biden administration chief economist Jared Bernstein agrees with that assessment: “in reality, labor markets tend to run a lot less jumpy than what you see below in ‘25 and ‘26 so far, moving from losses to gains like that. Some of this is sampling noise as the payroll survey grapples with measurement issues generated by immigration changes, changes to the way they measure business births and deaths, and so on.”

The unemployment rate decreased from 4.4% to 4.3%, but that’s not because a wide variety of jobs were created last month. Brown explains, “A shrinking labor force accounted for the drop in the unemployment rate: Nearly 400,000 workers left the workforce in March.” So the labor market grew because fewer Americans were working.

Bernstein explains that between those 400,000 workers leaving the workforce “and the very low hiring rate we see from other BLS surveys, we can assume that workers have less bargaining clout than was the case back then.” We’re seeing “nominal yearly wage growth for the 80% of workers that are blue-collar production workers or non-managers in services—think mid/low wage growth.”

Paychecks aren’t growing as fast as they were in the peak of the post-lockdown labor market boom, and in fact, that decline in wage increases appears to be speeding up.

“What I’m saying here is that the combination of the war pushing up headline inflation and the already weakened labor market hitting nominal wage growth looks to me like it’s leading to a kind of real wage stagflation,” Bernstein concludes. “That could be short-lived, but it’s worth watching.”

There’s one group of workers who aren’t experiencing stagflation, according to the Associated Press’s Michael Hill: “The average Wall Street bonus rose to a record $246,900 in 2025 amid a surge in profits,” Hill writes. “The average bonus rose 6% - or almost $15,000 higher—from the previous year. Wall Street’s bonus pool reached a record $49.2 billion in 2025, up 9%.”

Chris Connors, an executive at Johnson Associates, told Hill that the bonuses made sense: “I think 2025 was a great year, probably the best year since 2021 for many firms on Wall Street. Trading, in particular, had an exceptional year.”

We’ve been talking for a while now about the K-shaped economy, in which members of the wealthiest 1% of Americans, including wealthy Wall Street executives, are making more, spending more, and riding high on a tsunami of wealth while everyone else is seeing their paychecks shrink against rising costs and rampant economic uncertainty. This kind of inequality is unsustainable—an economy can’t survive when the vast majority of people are at risk of losing everything. Those Wall Street executives will do better when the vast majority of American paychecks are growing, but the opposite simply isn’t true. We all do better when we all do better.

The Latest Economic News and Updates

Even Before Gas Prices Skyrocketed, Inflation Was Climbing

This morning, a report from the Bureau of Economic Analysis found that consumer spending remained basically flat in February, and a key inflation rate rose rather dramatically. For Quartz, Anthony Lopopolo writes that “real consumer spending edged up just 0.1% in February, following a flat reading in January. Stripping out food and energy, the core [Personal Consumption Expenditures] price index — which the Federal Reserve relies on as its primary inflation gauge — was up 3.0% on a year-over-year basis and gained 0.4% compared with January.”

The New York Times’s Ben Casselman explains, “Consumer spending is barely keeping up with inflation,” and the two flat months of spending “follows surprisingly weak 1.9% annualized spending growth in the fourth quarter of 2025.”

“Inflation was looking like a problem even before the war,” Casselman continues. “On a three-month annualized basis, PCE (both headline and core) topped 4% in February. Year-over-year core PCE is up 3%.” And none of those numbers take the bombing of Iran and its resulting skyrocketing gas prices into account.

When putting that decreased consumer demand next to rising inflation, Casselman concludes, “Americans’ income didn’t keep up with inflation in February. Real income, excluding transfer payments, fell 0.4% in February, and the three-month average was also negative.”

So spending is slowing down, and prices are rising faster than paychecks—and next month’s report will throw rising gas prices into the mix, which almost certainly promises to make everything worse.

“Separately, the Commerce Department reported that economic growth was even slower than previously reported for the fourth quarter of 2025,” Jeff Cox wrote at CNBC this morning. “Gross domestic product, a measure of all goods and services produced, rose just 0.5% on a seasonally adjusted annualized rate, down from the prior reading of 0.7% and the initial estimate of 1.4%.” While GDP isn’t a perfect economic indicator, the downward trend of these revisions should be troubling for anyone keeping track of today’s reports.

If consumer spending continues to slow down, that could mean labor markets around the country will start to strain under the weight of decreased consumer demand. Remember, those paychecks are what causes the economy to grow by creating jobs. If paychecks keep falling behind rising prices and people are inclined to buy less due to all the economic uncertainty, the whole economy is at risk.

What Tariffs Have Done to the Economy

A little over a year ago, Donald Trump announced a huge slate of high tariffs on virtually all goods imported into the United States.

“In the first five months of the fiscal year, the government raised $151 billion from tariffs — nearly four times as much as during the same period the previous year,” Scott Horsley writes at NPR.

President Trump swore that foreign manufacturers would pay those tariffs, but a joint study from Harvard and the University of Chicago found that a full 94% of the cost of tariffs was ultimately paid by consumers. That’s a little more than $141 billion in consumer dollars that would otherwise have been spent in local communities but was instead hoovered up by the federal government.

Unlike the revenue raised by taxes, the billions of dollars paid to the US government weren’t allocated to any spending at all—it just sat there. This spring, the Supreme Court ruled that Trump didn’t have the power to levy those tariffs, and Horsley notes that “officials are working on a plan to refund about $166 billion in tariffs that were wrongly collected, and they hope to have the details worked out by mid-April.”

As I’ve written before, the assumption is that the $166 billion will be given to the American companies that imported the products, when in fact the smarter economic move would be to give checks to the people who actually paid the higher costs of tariffs—American consumers.

The Center for American Progress estimates that “the average household paid roughly $1,700 in tariffs from February 2025 to January 2026.” That’s a significant bite out of a household’s annual expenses.

If working Americans received checks reimbursing them for that $1700 in tariffs, their spending would help to create jobs in local communities—a small step toward recovering some of the tens of thousands of job losses that the tariffs have caused in the past year.

And about those job losses: Trump claimed that adding tariffs to imports would supercharge American manufacturing, but Horsley notes that “manufacturing has been in a slump for most of the last year. U.S. factories employed 89,000 fewer people in February than they did in April, when the worldwide tariffs took effect.”

“Inflation has cooled considerably from its four-decade high in 2022 — but prices are still climbing faster than the Federal Reserve would like, in part due to tariffs,” Horsley adds. “Inflation in February was 2.4%, slightly higher than it was last April,” he notes, and “economists warn that inflation could now worsen after the U.S. and Israel started a war against Iran, sending global energy prices sharply higher.”

Through most of last year, Trump kept pulling the levers on tariffs, raising them higher when nations displeased him and lowering them when a leader did something that he approved of. At one point, tariffs on Chinese goods reached nearly 150%.

Now, Horsley writes, “the Tax Foundation estimates that the average tariff on imports is about 10%. That’s about half of what it was at its peak but still about four times as high as the average import tax at the beginning of last year, before Trump returned to the White House.”

On any number of metrics, the Trump campaign of tariffs has proven to be a failure. It has killed jobs, it has raised prices for American consumers, and it has made the economy more uncertain for everyone, stifling investment in American consumers.

We rarely hear Trump mention tariffs anymore—presumably because his attention has moved over to the mess caused by his bombing of Iran, which is also raising prices for Americans and creating even more economic uncertainty. But we should remember the economic lessons of this failed experiment: Raising prices on the American people hurts the whole economy.

How Cuts to Scientific Research and NASA Hurt Us All

Jeremy Berg on Bluesky has been tracking the number of grants issued by the National Institutes of Health (NIH) and the National Science Foundation (NSF) in the past year. You can see below the chart showing how many grants the federal government has awarded to researchers. The dark yellow line hovering below the grouping of multicolored lines is last year’s total number of grants. The red line stuck at the bottom of the chart is this year so far. It looks like in 2026, the federal government has essentially stopped funding scientific and medical research through the NIH and NSF.

To be clear, there is no private-sector remedy for this cutback in government research funding. Many of the greatest scientific advances in the last century have been funded by the federal government.

The NIH offers a page full of research showing the results of their grants. There are too many benefits to list here, but here are three:

• “NIH-supported research on drug development for eye diseases has saved $28.5 billion in health care costs over 10 years and reduced wet age-related macular degeneration (AMD)-related legal blindness by 50%.”

• “By implementing innovative clean-up strategies for hazardous waste sites, NIH-funded research has contributed to more than $100 million in savings for toxic waste clean-up costs.”

• “NIH-supported research on the effects of lead on child development and behavior was key to establishing bans on lead in paint and in gasoline for vehicles. The economic benefit of reducing lead levels among children by preventing lead exposure is estimated at $213 billion per year.”

These are not results that private businesses would have achieved through the profit motive alone. There are no quarterly profits to be found in research on the negative impacts of lead in fuel, for instance. The results of these studies benefit everyone—including corporations and the super-rich—by ensuring that we’re all healthier for longer.

And the NSF likewise has a page showing all the positive results of its science funding, including 3D printing, CRISPR gene technology, MRI scans, insulin technology, and improvements in eye surgery and kidney matching for transplants. These technologies have saved and improved the lives of untold millions of people around the world, and no one corporation could have funded the research that went into their discoveries and implementation.

Now the Trump Administration has released a federal budget that slashes science funding even further. Nature reports: “The plan proposes cuts to federal agencies that fund or conduct research on health, space and the environment. Some of the steepest cuts would be made to the National Science Foundation (NSF) and the Environmental Protection Agency (EPA): the budgets of both would fall more than 50% in 2027 compared to their current levels.”

They also report that “The budget for the US National Institutes of Health would drop 13%” under the proposed 2026 federal budget. Additionally, “The proposal would eliminate funding for the National Oceanic and Atmospheric Administration’s Office of Oceanic and Atmospheric Research,” and “NASA faces a 23% cut to its total budget and a 47% drop in funding for its science division. More than 40 projects would be terminated.”

An advocate for space exploration told Nature that the 2027 budget represents “an extinction-level event for science.”

It’s often hard to articulate the benefits of federal science funding, since these projects move on their own timeline and don’t often return benefits on a quarterly timeframe. But it’s downright bizarre that the Trump administration is releasing a budget that slashes NASA’s budget at the exact same time that NASA astronauts are currently on a groundbreaking mission to journey further than any human has ever gone into deep space.

The Artemis II mission has captured the attention of the world with its photographs of the Earth and its record-breaking crew. It introduced a new generation of children to an idea that many of us grew up believing: that astronauts are heroes exploring the very limits of human knowledge and experience.

And for all Elon Musk’s bluster, private businesses still aren’t capable of capturing the public’s imagination in that way. Without NASA to pave the way, there would have been no Space X. For the past week, we’ve all been watching a real-time demonstration of the power of what government can do to benefit all of humanity. And best of all, because Artemis II is funded by our tax dollars, we all own a piece of the mission, and we all have free access to the findings of the mission—including the breathtaking photos taken by astronauts during their voyage, like this one:

This Week in Trickle-Down

This week, we focused very narrowly on how President Trump’s proposed budget cuts would impact the world of science and technology. In weeks to come, we’ll be looking at other aspects of the budget and what its huge cuts might mean for working Americans. If you’re feeling impatient and would like a solid overview of Trump’s budget cuts, the Center for American Progress has put together a sweeping look at what this budget means for housing, education, and small businesses.

This Week in Middle-Out

The Economic Policy Institute has published an excellent report detailing how community benefits agreements can transform manufacturing jobs in the South from extractive, low-wage jobs into high-wage jobs that invest in the workforce.

This Week on the Pitchfork Economics Podcast

One of the world’s leading economists, Arindrajit Dube, joins the podcast this week to discuss his latest book, The Wage Standard: What’s Wrong in the Labor Market and How to Fix It.

Dube is one of the most important thinkers on the topic of wages—how your paychecks impact the economy, and how our economy can better serve your paychecks. His latest book examines how to fix the American labor market so that it finally works for everyone again.

Closing Thoughts

Over the last few years, working Americans have become more aware of private equity’s negative impacts on the economy. As large chains like Toys “R” Us and Bed, Bath, & Beyond are stripped for parts and wiped out, with employees laid off from coast to coast, people have learned about the private equity firms that left those companies to die.

In fact, those layoffs and resulting economic devastation is actually how private equity functions in America: Buy a declining but still-profitable company by taking on debt, load the company up with the debt that you used to pay for it, and then suck every penny of profits away from the company before selling it for scraps and leaving it to go bankrupt.

As high-profile companies like Red Lobster are nearly wiped out by private equity (we made a video on this last year), their vulture-capitalist business practices become more and more recognizable. For the American Prospect, Maureen Tkacik writes about another kind of vulture capitalism industry that is much less known but which walks in lockstep with private equity. It’s called private credit, and it’s costing Americans hundreds of millions of dollars and could potentially cause a financial crisis like the one we saw in 2008.

Here’s the mechanism of how private credit works: When most businesses take out loans, they do so through insured financial institutions like Chase. But high-risk businesses that have a high chance of failure—like, for instance, a company being purchased by private equity and pumped full of debt—instead turn to asset management firms like Apollo or Blackstone, which then loan them money directly at very high interest rates.

If the company can’t afford to pay off those high-interest loans, the private credit companies just defer the payments back into the loan itself, growing the amount that’s owed and subjecting it to those high interest rates. Because the private credit firm isn’t subject to the same regulations that keep financial institutions honest, that large loan doesn’t go on the books as a credit risk. Eventually, if the company has an IPO and goes public or is sold to another company, the private creditor is paid in full for the debt, making obscene amounts of profit.

“In the past five years, private credit has grown into a $3 trillion juggernaut, as fund managers promise large returns,” write Tkacik and David Dayen at the American Prospect. They explain, “many private credit funds, which after ten years should be mostly paid down, were only partially liquidated, with lots of deferred payments.”

Because they don’t have to report their losses, private credit firms simply keep moving the debt around, where it keeps growing and growing. “What this means is that private credit balance sheets are potentially a nuclear bomb waiting to detonate,” Dayen and Tkacik write.

This week, Tkacik wrote a followup piece looking at a software service called PowerSchool, which is one of the highest-profile private credit clients. PowerSchool has basically become a middleman in public school transactions. Tkacik explains that the company draws a small fee from parents who use the software to pay for their children’s school lunches. PowerSchool was sold to a private equity firm in 2015, and then sold again to Bain Capital in 2024—a purchase funded in part with a hefty $3.2 billion in loans that were then dumped back into PowerSchool.

By pretty much all accounts, PowerSchool is flailing. The company has laid off an untold number of workers, and its internal systems were brutally hacked, exposing “the Social Security numbers, medical records, and other personal data of more than 62 million students and 9.5 million teachers and support staffers.”

Tkacik reports that a number of private credit firms hold hundreds of millions of dollars of PowerSchool’s debt. In fact, she finds that PowerSchool is on the hook for “at least four of the seven funds that have suspended or limited redemptions this year due to a sudden rash in withdrawal requests from investors spooked by recent headlines about the hidden default risks lurking in their software-heavy portfolios.”

One lender’s annual report lists the value of the PowerSchool loan “at $108.9 million, just over $300,000 less than the $109.2 million it paid for the loan and a barely perceptible 1.2 percent discount from its par value.” So PowerSchool doesn’t seem to be paying its debts, and investors are getting nervous.

Dayen and Tkcacik report that the Trump administration recently rewrote some financial regulations in order to make it easier for 401(k) investment firms to invest in private credit. This means that if there is a private credit debt bubble created by moving an ever-growing pile of debt around, and if that bubble bursts, the private credit firms won’t be on the hook for those losses. Instead, tens of millions of Americans will pay the price out of their retirement funds.

In other words, private credit is increasingly looking like a shell game that private equity is using to shuffle potentially trillions of dollars of debt around under the noses of the general public, and the Trump administration seems to be making it easier for these firms to dump that debt in the laps of American workers.

This is an incredibly easy problem to solve: Regulations should be expanded to force private credit lenders to be subject to the exact same transparency laws that Chase and Wells Fargo have to adhere to. And proposed regulations from Senator Elizabeth Warren and others, which would put private equity firms on the hook for the debt of companies they purchase and force private equity firms to pay employees before they extract profits from businesses, would slow down the extraction process.

In short, we have to stop letting a tiny handful of wealthy vultures suck the life out of American businesses and stick Americans with the bill. This would be a home run issue for any candidate running for office in 2026 and 2028.

Be kind. Stay strong.

Zach

Friends,

This week, we’re looking at the stress American farmers are experiencing as a result of the war in Iran, a new report showing the low costs of a high minimum wage, and why workers are feeling so negative about the job market.

But first, we turn our attention to February’s Job Openings and Labor Turnover Survey (JOLTS) report, which was just released this week and continues the trend of bad news for American workers. “The private-sector hiring rate fell to 3.3% in February, the lowest since Feb. 2010, when the unemployment rate stood at 9.7%,” writes the Wall Street Journal’s Nick Timiraos.

Americans looking for work won’t find much to be enthusiastic about in the report: “There were 0.9 vacancies for every worker counted as unemployed in February,” Timiraos writes.

And things get worse when you dig into specific sectors: NBC reporter Carl Quintanilla reports that the “hiring rate for the construction industry fell to an all-time low in February.” The Engineering News-Record reports that when measured on “a monthly basis, the number of [construction] hires are down by 88,000, while total job separations declined by 34,000. Year-over-year, the number of hires fell by 74,000, with separations were down by 57,000.”

That’s not just terrible news for the construction industry. It’s also bad news for American workers who are hoping for an end to the housing price crisis. Without workers building new housing all across the country, it’s unlikely that Americans will see a marked decrease in home and rent costs anytime soon.

The ENR reports that Anirban Basu, chief economist at Associated Builders and Contractors, warned that “The combination of historically slow hiring and exceedingly few separations made February 2026 the month with the least construction labor force churn since the [Bureau of Labor Statistics] began this survey in December 2000.” Basu warned that this JOLTS data is from before the United States began bombing Iran, which caused the price of fuel to skyrocket, so “hiring is unlikely to rebound in the near future,” given all the economic uncertainty and rising energy costs.

All told, Wharton School economist Mohamed A. El-Erian notes, the JOLTS report showed that “Job vacancies fell more sharply than expected, sliding from 7.24 million to 6.88 million, while hiring cooled to levels not seen in six years.”

The best news in the JOLTS report was the fact that layoffs continue to remain at the very low levels that we’ve seen throughout the last four years. So while young workers new to the workforce are having a hard time finding jobs, workers who already have jobs are staying in their positions.

“With this latest JOLTS release, we’re at a US labor market churn rate that’s among the lowest since data began, rivaling the depths of the Great Recession,” writes Stripe Chief Economist Ernie Tedeschi.

While that probably sounds like good news for workers who are already employed and who see the uncertainty surrounding the economy right now, the fact is that a healthy economy has a certain level of churn in the workforce. Workers are more likely to get bigger raises if they leave their jobs and find new employment elsewhere, as we saw during the high-churn labor market of 2021 and 2022.

Right now, the American workforce is stagnant: Employers aren’t sending out tens of thousands of pink slips, and workers aren’t feeling secure enough to try to find better work elsewhere. In a growing economy, you want to see more flexibility and dynamism in the labor market because it creates opportunities for workers to take some risks and make more money, creating jobs with their higher wages.

When the labor market is slowly declining as it is right now, the only people who are generating wealth are the CEOs and elite shareholders at the tippy-top of the economy. They hoard that wealth, removing it from the economy, which hurts the wallets of 99% of working Americans and prevents that money from circulating through communities.

This slow-moving and downward-trending job market is having a negative effect on the entire economy. If we want to grow the economy for everyone, it’s essential that our leaders invest deeply in working Americans—to grow those paychecks and increase consumer spending, which creates jobs in the communities where Americans live.

The Latest Economic News and Updates

If Workers Are So Unhappy, Why Are Retail Sales Numbers Up?

As I noted above, the JOLTS report covers the month of February, so it doesn’t include the potential impacts of the war in Iran, which started on the last day of February. We’re already seeing warning signs that the conflict and its attendant skyrocketing gas prices will make things tougher for American workers.

“The U.S. military conflict with Iran is quietly draining the American labor market, with Goldman Sachs estimating that the oil price shock triggered by the war will suppress payroll growth by roughly 10,000 jobs per month through the end of the year,” reports Nick Lichtenberg at Fortune. He adds that those losses “will be felt most acutely in restaurants, hotels and retail stores across the country.”

“The logic is straightforward: when energy prices surge, consumers cut back on discretionary spending first — skipping vacations, eating out less, and trimming shopping trips — while continuing to pay for essentials like healthcare and housing,” Lichtenberg explains. “The oil shock, in other words, hits the working-class service economy well before it touches more insulated sectors.”

Workers are paying attention to all these negative signals, reports Claire Yubin Oh at Sherwood. She writes, “confidence in the job market has sunk in recent years, per a new Gallup workplace survey, with only 28% of workers saying that now is a good time to find a quality job, down from 70% a little under four years ago.”

Yubin Oh continues, “College-educated workers — a group that had been slightly more optimistic than other demographics until last year — are now feeling particularly pessimistic about the job market, with only 19% of respondents saying that now is a good time to find a quality job, compared to 35% of workers without a college degree.”

You would expect a workforce that feels pessimistic about job prospects to cut back on spending, but that doesn’t seem to be the case right now.

“Retail sales rose 0.6% in February, the Census Bureau said, reversing a January slump,” write Neil Irwin and Courtenay Brown at Axios. “Core control sales, which feed into GDP data, were up a similarly robust 0.5%, or 0.2% adjusted for inflation.

How can consumers be so pessimistic about their employment prospects without a dramatic reduction in spending? Brown and Irwin speculate: “The question for the months ahead is whether the underlying trends that have kept consumers afloat — including a buoyant stock market and a low-layoff job market — can power it through an era of war-induced shocks and weak hiring.”

This show of consumer confidence could be as simple as the fact that while American workers aren’t happy with their jobs, they also don’t see a whole lot of layoffs and other job cuts threatening the stability of their employment. Or it could be the K-shaped economy at work, with the wealthiest ten percent of the economy responsible for almost half of all consumer spending.

Perhaps most importantly, just as with the JOLTS data, those rising retail sales were recorded in the days before America started bombing Iran and gas costs started skyrocketing. Next month’s retail sales could look very different from this relatively strong showing.

How High Will Prices Climb?

The American Automobile Association is reporting that as of this writing, gas prices have increased just shy of $1.10 over the last month. In his excellent Substack, former White House chief economist Jared Bernstein explores a clever metric showing what those gas prices mean for American workers.

Bernstein measures “the hourly wage for mid- and low-wage workers divided by the price of a gallon of gas,” which “shows how many gallons you can buy for an hour of work. It’s back down to around where it was a few years ago, as energy (and food) supplies were recovering from the Ukraine shock.”

And while all eyes are on gas prices because they have the most direct effect on working Americans and the goods that they buy at grocery stores, the bombing of Iran is going to have long-term effects on other prices, too.

“The price of aluminum, a key component of auto parts, furniture, windows and more, hit a four-year high on Monday,” reported the New York Times’s Dealbook newsletter this week, “after Iranian attacks this weekend on two Middle East production sites. And manufacturers are worried about supplies of helium, which is used in chip-making and M.R.I. machines.”

“About a third of the world’s fertilizer is shipped via the Strait of Hormuz. With planting season starting in the Northern Hemisphere, fertilizer shortages now can result in poorer harvests and higher food prices later,” adds Patricia Cohen at the Times.

For the American Prospect, Emma Janssen looks more closely at the impacts that the fertilizer price crunch is already causing for American farmers.

“For farmers growing corn or wheat, fertilizer makes up between one-third and one-half of their operating costs,” Janssen writes. “Just a month into the conflict, prices are already increasing significantly, and the timing couldn’t be worse.”

Janssen continues, “It’s currently spring planting season, precisely the moment when farmers need fertilizer the most. Depending on the crop, farmers apply up to half of their nitrogen fertilizer in the spring. That includes about 50 percent of the nitrogen-based fertilizer applied to corn, 28 percent applied to cotton, and 42 percent applied to spring wheat, according to the American Farm Bureau Federation(AFBF).”

About one-third of the world’s supply of urea, a crucial component in fertilizer, passes through the Strait of Hormuz, Janssen writes. “American farmers are the biggest importers of urea in the world. At the end of February, just before the war began, the wholesale price of urea had a high-low spread of $460—480 per short ton. Just one week later, the price jumped to $520-620.”

This means higher prices are on the way for American consumers, and the world’s poorest citizens are facing a worst-case scenario. “The U.N. World Food Program estimates that, if oil prices remain above $100 a barrel in mid-2026, the number of people experiencing food insecurity could rise by 45 million and reach a record high of 363 million people,” Janssen writes.

There are steps that our leaders could take to bring prices down. “Advocates like antitrust lawyer Basel Musharbash are pushing for a larger overhaul of the fertilizer industry in the U.S. to increase domestic production and make supply chain disruptions like the Iran war less relevant,” Janssen explains.

History shows that the federal government can take a more direct hand in bringing down the cost of fertilizer: During the New Deal, the Tennessee Valley Authority manufactured fertilizer for American farmers, helping to keep family farms in business and bringing down food costs for all Americans.

“If the Trump administration has the political will, it could push the TVA to follow through on its mandate and boost fertilizer production at home,” Janssen writes. “So far, there’s no sign of that happening.”

This Week in Trickle-Down

In another sign that heightened market concentration drives down wages and worker power, three Harvard researchers released a new study which finds that “companies with a greater density of franchise establishments exhibit significantly higher rates of labor law violations.” In other words, when lots of franchises are tightly clustered in a geographic area, those franchises are more likely to ignore worker protections. “The effects are particularly pronounced for newer workplace regulations, such as fair workweek and paid sick leave laws,” they write. When workers have fewer choices for employment, employers are more likely to trample the rights that those workers have.

This Week in Middle-Out

• The Bipartisan Policy Center shows that child care is an “economic necessity” for American workers—and employers, too. “Businesses that invest in child care benefits for their employees reap substantial benefits: a Boston Consulting Group study found that American businesses that invested in child care benefits for their employees experienced up to a 425% return on investments,” they write. “On the flip side, an inability to access or afford child care limits businesses: a Goldman Sachs survey found 38% of small business respondents said a lack of child care has had a negative impact on their ability to operate or grow their business.”

• The Economic Policy Institute released a study proving that the State and Local Fiscal Recovery Funds (SLFRF) policy, which was enacted by Congress and signed into law by President Biden during pandemic lockdowns in 2021 to deliver $350 billion to states and cities, was “​​a transformative success. It averted a potential crisis. It empowered state and local leaders to address long-standing community needs. It helped millions of working families. It saved lives during the COVID-19 pandemic.” EPI concludes that lawmakers should copy and build on the SLFRF program in future crises in order to get the most money directly into the pockets of the Americans who need them most, rather than bailing out big companies and engaging in a top-down rescue plan like the one the government pursued in the 2008 financial crisis.

This Week on the Pitchfork Economics Podcast

Matt Stoller, the author of the BIG Substack, returns to the podcast this week to talk to Nick and Goldy about his concept of the “Boomcession,” in which economic indicators argue that the economy should be doing well while a majority of working people are reporting terrible economic conditions. When the numbers say the American people are doing well, and the American people are claiming the opposite is true, does that mean something in the economy is broken?

Closing Thoughts

Every few weeks, it seems a new research paper studying the impacts of the minimum wage is released. This week’s edition is a new paper by Jeffrey Clemens, Olivia Edwards, Jonathan Meer & Joshua D. Nguyen titled “The Effects of California’s $20 Fast Food Minimum Wage on Prices.”

As a reminder, California lawmakers passed a $20 minimum wage for fast-food workers in the fall of 2023, and that law went into effect in 2024. The authors were then able to isolate fast-food prices compared to the rest of the economy, where wages were not increased by law.

The researchers found that “California’s four in-sample MSAs increased by 3.3 to 3.6 percent relative to 17 control MSAs through December 2024.” Or, as James Medlock put it on Twitter: “A 14 cent price increase on a $4 burger in exchange for $20 minimum wage? Good deal.”

In fact, it’s a great deal. That 14 cents extra charge on a cheeseburger is going toward higher wages for workers. Those workers will then spend their bigger paychecks, creating jobs with their increased consumer demand and growing the economy, and growing paychecks, for everyone.

You will no doubt see multiple trickle-down outlets try to make a big deal out of the fact that fast food restaurants increased their prices by three or four cents per dollar after the minimum wage increased. But consider the fact that “average prices at McDonald’s climbed 10% in 2023,” with trade publication Restaurant Business Magazine reporting that “the average cost for Big Macs jumped 16.4% between 2021 and 2024” and “the McDonald’s cheeseburger increased a whopping 55%.”

Surely those prices rose because of inflation, you might ask? Actually, the increases went straight to the profit margins of the company. In 2023, McDonald’s reported $14.6 billion in profits, a 10.26% increase over the year before.

McDonald’s greedflation got so bad that Senators Elizabeth Warren, Bob Casey, and Ron Wyden wrote a letter to the company accusing them of profiteering off consumers’ inflation expectations.

“McDonald’s own reports indicate that the company’s price increases may be outstripping inflation. Operating expenses increased by 16.5% from 2020 to 2023,⁹ yet McDonald’s net profit margins increased from approximately 26% in 2020 to 32% in 2023, with margins continuing to rise in 2024,” they wrote. “As a result, McDonald’s net annual income rose by over 79% — to nearly $8.5 billion — from 2020 to 2023.”

Of course, none of those profits went to workers. So, who saw the benefits of the huge price increases? The senators note that “at the same time that McDonald’s was raising prices, McDonald’s has paid out almost $4 billion in stock buybacks in 2022 and over $3 billion in 2023.” So an elite class of shareholders got to keep those billions of dollars with no strings attached, while customers paid more and worker paychecks stayed flat.

So, to anyone who would protest paying 14 cents more for a hamburger in exchange for a $20 minimum wage, you should ask in return: Were you okay with paying over a dollar more for a cheeseburger in exchange for billions of dollars in bonuses for the executive suite and a handful of shareholders?

A report released last week from the Economic Policy Institute shows that there are plenty of other studies of the California fast-food minimum wage law that show the benefits of raising the wage to $20—for instance, raising the minimum wage didn’t result in job losses. In the report, EPI recommends that California’s Fast Food Council, which oversees the minimum wage for the sector, should raise the wage again by at least 3.5% to prevent inflation from eating away at the wage.

If the law doesn’t take inflation into account when setting the minimum wage, EPI notes, lawmakers are “providing a windfall to low-wage employers at the expense of their frontline employees. A failure to regularly index for inflation is essentially a backdoor method for unraveling the wage standard that policymakers passed into law.” We’ve been watching that happen to the federal $7.25 minimum wage, which hasn’t increased since 2009.

The minimum wage is such an important issue because it clearly illustrates the difference between trickle-down and middle-out economics. You have the choice between a virtuous cycle that grows the economy for everyone, or an extractive economy that sucks wealth from working Americans and hands it off to the wealthy few.

Be kind. Stay strong.

Zach

Friends,

In this week’s issue, we’re going to talk about the impacts of high oil prices, America’s rising gender pay gap, why corporations get a better deal from the tax code than working Americans, and what happens when a social media company is hit with a nine-digit penalty in court that amounts to a rounding error.

But first, we open with a categorically true statement: The American people are unhappy about the economy. This has been the case since prices started skyrocketing back in 2022. Now that the labor market has cooled down and prices are on the rise again since the US undertook military action in Iran, Americans aren’t just unhappy about the economy; they’re in full-on panic mode. This week, Catherine Rampell spotlighted three new polls that show how bad it’s getting.

Sarah Fioroni writes at Gallup: “For the first time since Gallup began tracking the life evaluation of the U.S. workforce, more workers report struggling in their lives (49%) than thriving (46%): a stark reversal from 2022 and 2023 when more than half of employees were classified as thriving.”

Workers who have traditionally been optimistic about the job market are now struggling: “For the first time in the past three years, college-educated workers are the most pessimistic about the job market, and younger workers are more likely than older ones to say it is a bad time to find a good quality job,” Fioroni writes.

“The data point to a workforce that is restless but largely stuck. Many workers who want to leave cite economic constraints — from pay and benefits to the difficulty of finding a comparable role — as the primary barriers to making a move,” she adds. “With life evaluation at a record low and job market confidence near historic lows, the conditions weighing on U.S. workers show few signs of easing.”

Gallup found that in the last quarter of 2025, “28% of U.S. employees said now is a ‘good time’ to find a quality job, with 72% calling it a bad time. This marks a dramatic reversal from mid-2022, when nearly 70% of workers were optimistic,” Fioroni writes. “The 42-point decline since then represents the largest collapse in job market confidence Gallup has recorded in the past four years,” she concludes.

Bear in mind that this polling extends only to the end of 2025, meaning that respondents were unhappy with the labor market far before the last two months of bad unemployment report data—to say nothing of the skyrocketing energy prices of the last few weeks. It’s hard to imagine that those numbers are any higher right now.

This data confirms the growing body of anecdotal evidence that American workers are in deep trouble, including this week’s New York Times report, which finds that many middle-class Americans are selling their plasma to make ends meet. While plasma collection centers used to pop up in low-income areas, “newer centers were increasingly likely to open in middle-class neighborhoods,” the Times notes. “Centers have sprung up in more than 100 such neighborhoods, in suburbs and wealthier sections of cities, since researchers finished collecting their data in 2021.”

In conjunction with worrying numbers about increasing credit card debt in middle-class families, all this data suggests that many working Americans aren’t even living paycheck to paycheck anymore—they’re scraping up every last cent from every available source to keep paying their bills.

New polling from Reuters/Ipsos indicates whom Americans are blaming for this bad economy: President Trump’s approval rating on economic issues has hit a new all-time low, at 29%—that’s lower than even President Biden’s numbers at the depths of the inflation crisis in 2023, and approaching some of the all-time lowest presidential polling we’ve seen in the modern era, surpassed only by Truman, George W. Bush, and Nixon.

Taken all together, these three charts show that the American people are profoundly unhappy with the direction of the nation, and they know exactly what’s wrong: They feel as though nobody is fighting to lower their prices and to grow their paychecks. Rarely in history does polling harmonize like this, to send a signal this unmistakably clear. The only question now is if any candidates can hear what the American people are shouting, loud and clear.

The Latest Economic News and Updates

Rising Oil Prices Put Pressure on the Economy

As the conflict in Iran continues into its third week, Americans continue to confront rising gas prices at home. In last week’s Pitch, I wrote about the big threat that higher oil prices mean for the whole economy. But with each passing day, we’re getting a clearer picture of what the individual costs of gas prices mean for working Americans.

Yesterday, the United States Postal Service announced that, due to rising fuel costs, it was adding an 8% fuel surcharge to the cost of all packages. And in an especially troubling sign, that surcharge will remain in place until at least January 2027—more evidence that supply chain experts don’t believe these higher fuel costs are going away anytime soon, even if combat were to come to a quick end in Iran.

The Wall Street Journal looked at how the truckers who deliver goods to Americans are hurting from higher diesel prices. “The average gallon of diesel crossed $5.20 nationwide on Saturday, up around 40% from a month ago,” the Journal reports. “Eight of the 10 states where diesel prices have shot up most compared with a month ago are in the Southeast.”

Because truckers are the last step in the supply chain between manufacturers and retailers, their cost increases are likely to be felt earliest by consumers. An economist told the Journal that “a 40% surge in the price of diesel results in an overall cost increase of around 10%,” suggesting that if diesel prices stay high, Americans could soon be facing another spike in inflation—especially at grocery stores, where products like milk, eggs, and produce are replenished faster than most other products.

And small businesses will feel the squeeze of high fuel prices before big corporations. For MSN, Marco Quiroz-Gutierrez reports that if the Strait of Hormuz continues to be impassable for oil freighters, “small businesses could start to feel the effects in as soon as two months as they run out of reserves or look to renew contracts at potentially higher prices.” He talks to one lobster fisherman who says a $2-per-gallon increase in gas prices for his boat has resulted in a $3 or $4 per pound increase on lobster already.

“While I wouldn’t broadly panic too much right now, some alarm from energy markets is warranted and could be constructive given the large and growing energy supply shocks from the attacks on the region,” the Roosevelt Institute’s principal economist, Michael Madowitz, writes.

He explains that the economy was already struggling before gas station prices started skyrocketing: “With the job market already anemic, growth slow, and inflation risks increasing, there isn’t much wiggle room for the economy to absorb the impacts of a new supply chain crisis.”

The Gender Pay Gap Increased Last Year

Today is Equal Pay Day, “a reminder that there is still a significant pay gap between men and women in our country,” write Emma Cohn and Elise Gould at the Economic Policy Institute. Today is the date that “represents how far into 2026 women would have to work on top of the hours they worked in 2025 simply to match what men were paid in 2025.”

So not only do women on average have to work nearly 15 months in order to earn what the average man earns in 12 months, that gender pay gap actually increased last year. “On an hourly basis, women were paid 18.6% less on average than men in 2025, after controlling for race and ethnicity, education, age, marital status, and state,” they write.

They add, “After narrowing to a series low of 18.0% in 2024—likely driven by a strong labor market recovery from the COVID-19 recession that lifted wages more at the lower end of the overall wage distribution—the gender wage gap widened slightly in 2025.”

Women have made great strides in educational attainment over the last four decades, but those college degrees aren’t earning them as much as their male counterparts earn. American women “slightly outnumber men in the college-educated labor force and are significantly more likely to obtain a graduate degree than men, Gould and Cohn write, but “Even so, women are paid less than men at every education level.”

Like so many economic metrics, the numbers are worse for Black and Hispanic women in the workforce than for their white peers. Black women only earn 68.3% of the annual pay of the average white man, while Hispanic women only earn 64.5%.

It doesn’t have to be this way. Gould and Cohn note that any number of solutions could help close the gender pay gap once and for all, including “enacting pay transparency laws, mandating Paid Family and Medical Leave (PFML), raising the minimum wage, funding universal child care, and removing anti-worker, so-called ‘right-to-work’ (RTW) statutes.”

It’s important to note that even though they would help close the gender pay gap, these policies don’t only benefit women in the workforce. In fact, they would benefit all American workers, which means they would grow the entire American economy for everyone.

When a $375 Million Penalty Is a Rounding Error

“A New Mexico jury on Tuesday ordered Meta to pay $375m in civil penalties after it found the company misled consumers about the safety of its platforms and enabled harm, including child sexual exploitation, against its users,” reports Katie McQue at The Guardian.

“The jury ordered Meta to pay the maximum penalty under the law of $5,000 per violation, totaling $375m in civil penalties for violating New Mexico’s consumer protection laws,” McQue continues. “The jury found Meta liable for both claims brought by the state of New Mexico under the Unfair Practices Act.”

This was an important ruling because it marked the “first jury trial to find Meta liable for acts committed on its platform,”and the $375 million in damages marks one of the highest penalties issued by a jury against a Big Tech firm.

A nine-digit penalty might sound like a lot, but Bluesky user Jordan Mallory did some “back of the napkin math” that puts that penalty in perspective. Mallory writes, “$375 million is 0.18% of Meta’s reported 2025 revenue of $200.97 billion, or 0.62% of Meta’s reported 2025 profit of $60.46 billion.”

In other words, $375 million is practically a rounding error for Meta.

It certainly seems as though the American legal system hasn’t kept up with the hoarding of wealth by the richest 1% and big corporations that has taken place over the last few decades—some of the penalties that big corporations face need to have two, three, or four zeroes added to them in order to be big enough to incentivize them to avoid criminal behavior. As it is, .6% of a company’s annual profits amounts to little more than a speeding ticket.

Speaking of speeding tickets, a Finnish traffic law might provide a policy solution for the problem of undersized penalties. “A multimillionaire businessman has been hit with one of the world’s highest speeding fines – €121,000 (£104,000) – for driving 30km/h (18.6mph) over the limit in Finland, where tickets are calculated as a percentage of the offender’s income,” wrote Jon Henley for the Guardian in 2023.

“Under the Finnish system, a ‘day fine’ is calculated based on the offender’s daily disposable income, generally considered to be half their daily net income. The more a driver is over the limit, the greater the number of day fines they receive,” Henley explains.

“Finland imposes sliding-scale penalties for a range of offences including shoplifting and breaking securities and financial trading laws, on the principle that since taxation is progressive, fines should be also: the more you earn, the more you pay,” he adds.

That seems like a straightforward way to curb corporate malfeasance by hitting them in their wallets: Rather than imposing a single jaw-dropping fine that amounts to peanuts for giant corporations like Meta, juries should be able to calculate their penalties in the form of a percentage of profits, to ensure that those companies don’t continue breaking the law in the future.

This Week in Trickle-Down

“The nonpartisan Congressional Budget Office (CBO) projects a 2.4-million-person reduction in average monthly SNAP participation as a result of expanded work requirements” written into the Trump administration’s tax bill last summer. “The Center for American Progress projects that would translate into nearly 70,000 avoidable deaths nationally by 2040.”

This Week in Middle-Out

• Senator Elizabeth “Warren, the top-ranking Democrat on the Senate Banking Committee, has sent a letter to YouTube star Jimmy Donaldson, better known as MrBeast, and founder of Beast Industries, raising concerns about the company’s recent acquisition of Step,” writes James Rogers at Investment News. Step is a financial technology company intended to encourage children and young adults to invest in bitcoin.

• I wanted to share two recent videos from New York Mayor Zohran Mamdani that serve as good examples of how to communicate strong middle-out policies to voters. The first is a fun explanation of how New York City’s Department of Consumer and Worker Protection reclaimed $2 million in wages owed to 800 NYC Taco Bell, Theory, and Dunkin’ employees who were scheduled in violation of the city’s predictable scheduling policies.

• The second is an explanation of how Mamdani directed city employees to cut wasteful spending, saving the city $1.7 billion annually. One of the cuts that Mamdani cites is trimming outside contractor spending, “and bringing a lot of that work in-house.” That’s a particularly smart call that benefits workers and undoes some of the trickle-down privatization of government work that has been happening for the past four decades. Note also the fact that Mamdani characterizes this as a way to help government do even more to benefit people—as opposed to the so-called “Department of Government Efficiency,” which reveled in the wholesale firing of government workers in the name of bringing down the deficit. (Note, too, that federal government spending and debt increased by a huge amount last year despite those firings, and with no meaningful benefits for the American people.)

This Week on the Pitchfork Economics Podcast

If you think your paycheck is smaller in real dollars than the paychecks your parents or grandparents collected, you’re probably right. Carter Price, the Senior Mathematician at the RAND Corporation and Professor of Policy Analysis at the RAND School of Public Policy, joins Nick and Goldy this week to talk about Rand’s breakthrough study proving that since 1975, the wealthiest few Americans have sucked some $79 trillion—yes, trillion with a “T”—out of the paychecks of working Americans. That loss of wages is a major cause of today’s affordability crisis. Price’s report proves that there is a connection between the hoarded wealth of centibillionaires like Elon Musk and the shrinking paychecks of American workers—that it’s all one big pot of money. In the 1970s, leaders made economic choices to distribute our nation’s wealth differently, and those choices were reinforced by generations of trickle-down leaders over the last five decades. And this report also proves that the economy isn’t run by immutable laws like physics. We could change how the economy works if our leaders chose differently today, and the vast majority of American workers—indeed, everyone in the economy—would benefit from the economic growth created by those bigger paychecks.

Closing Thoughts

As tax day approaches, more and more organizations are releasing reports examining the state of the American tax code. These reports are often difficult to distill into a four-minute segment on an evening news program, but they’re vitally important for our nation’s economic health.

The revenue raised from taxes powers government programs, and the amount that individuals and businesses pay in taxes helps determine the flow of wealth in America. The tax code essentially chooses winners and losers in the American economy by prioritizing certain kinds of wealth above others. If economics tells the story of who gets what and why, taxes are one of the most important mechanisms that enforce the realities of that story. So it’s important to continually assess how our tax code operates and who it’s prioritizing.

Unsurprisingly, a lot of attention is being paid to the consequences of the tax bill passed by Congress and signed into law by President Trump last summer. The Institute on Taxation and Economic Policy released a new report examining the costs of President Trump’s tax policies on the vast majority of working Americans. The report measures the impacts of three policies in particular:

The end result is quite dramatic: “The combined impact of these policies in 2026 is a tax increase for the average American in all income groups except the richest 5 percent,” ITEP writes. “The richest 1 percent, in particular, receive a noticeable tax cut compared to all other groups.”

“The more modest one’s income is, the more harmful these policies are,” ITEP continues. ITEP unrolls a few more eye-opening facts in the report, including the fact that “Trump’s tariffs are the biggest tax increase on Americans (measured as a share of the economy) since 1982.”

For a wonkier and bigger-picture snapshot of the tax code, in this week’s episode of Pitchfork Economics, Carter Price pointed out that RAND released a tool that “allows researchers to represent the entire U.S. federal tax code as a graph and quickly explore complex relationships.”

This is an incredibly cool idea—a way to visualize how complex our tax code is, and who it privileges and penalizes. When taken in sum, the tax code looks like a giant hairball. Each individual “hair” is made up of a deduction, provision, carveout, or any other detail written into the code.

There are lots of ways that experts can use this tool to understand how the tax code works in reality—and let’s be honest, many of those uses fly way over my head. But here’s one example of how the visualizer makes clear how corporations are prioritized over individual American citizens in the tax code.

Here’s one map showing the flow of money through American corporations in 2021:

You can check out the finer details on RAND’s website, but the gist is that the green lines on the left demonstrate all the money coming into corporations in the 2021 tax year—roughly $27 trillion dollars. The red lines spell out all the deductions made by corporations, including on advertising, depreciation, and many other categories. That thin blue line shows the net income of those companies. The thinner blue line shows the income that is actually subject to income taxes—about $1.7 trillion. And then that very thin brown line in the lower right corner shows the total income tax paid out of that $27 trillion—about $276 billion.

Now, let’s look at the map showing what individuals paid in taxes in 2021:

On the left, you can see the green lines demonstrating that individuals brought in roughly $15 trillion in total income. (Remember that this graph includes all Americans, including those at the very tippy-top of the wealth scale. So your income is in that big green bar, but so is Elon Musk’s.) That meager gray bar coming off the top of the income shows the total deductions taken by individuals. And then the blue bar shows the total taxes paid by individuals, totaling roughly $2 trillion.

This graph makes it clear who’s paying more: Corporations paid roughly 1% of their income in taxes in 2021, while individuals paid roughly 14%. And for the most part, corporations take advantage of a huge and complicated array of deductions to completely remove a large share of their income from being taxed.

Remember, the tax code isn’t some natural law like gravity. It’s shaped through the work of corporate lobbyists who influence leaders into twisting the code in their favor. This is the kind of tax code you get when you allow the reins of economic power to be held by trickle-downers on both sides of the aisle for the better part of five decades.

The good news is that since people created this lopsided tax code that runs completely counter to how the economy really grows, that means people can write a tax code that puts American workers front and center as the true job creators in the economy. Tools like this one from RAND help us understand what wealth inequality really looks like, and they help us visualize what a better tax code should be.

Be kind. Stay strong.

Zach

Friends,

This week, we’re talking about rising prices, how consumers feel about the economy one year after Trump’s tariffs began, and a truly bizarre anti-minimum wage editorial from the Washington Post.

But this week's top story is about the high prices that Americans are paying because of a conflict on the other side of the planet. With oil tankers still frozen out of the Strait of Hormuz as war rages on in the region and gas prices steadily rising, the world is preparing for the worst. As a reminder, roughly one-fifth of the world’s oil supply passes through the strait on a regular basis—a significant-enough percentage to throw the entire world into disarray.

For the New York Times, Emmett Lindler explains the military actions in Iran have “reduced supplies of oil and refined products from the Persian Gulf by around 17 million barrels a day, equal to most of the region’s previous exports.”

Lindler quotes one industry expert who calls the current situation “the largest supply disruption in the history of the global oil market.”

Nations around the planet are releasing hundreds of millions of barrels of oil held in reserve, and the US is set to release reserves of 172 million barrels starting this week. But Lindler notes that “the reserves don’t contain refined products like gasoline or jet fuel,” so we can’t expect immediate relief from the unleashing of reserves.

This is obviously bad news for consumers. In his newsletter, former White House chief economist Jared Bernstein calculates that the higher gas prices Americans are paying basically swallow up the average tax refund they have been claiming this year.

More and more, pundits are calling on the United States to increase its oil production to pick up the slack. But Big Oil isn’t likely to do that. For the Financial Times, Jamie Smyth writes, “Scott Sheffield, a veteran shale boss, said producers would resist costly new drilling programmes until they were certain oil prices — which hit an 18-month high above $80 a barrel this week amid fears of supply disruptions from the Gulf — would last.”

Now that prices are higher, so are oil industry profits, which will “just give them extra cash flow. They can reduce debt. They can do buybacks. They can pay dividends,” Sheffield told the Financial Times. We know Big Oil will funnel the profits from those higher prices into huge stock buybacks because that’s exactly what these same oil companies did after oil prices rose when Russia invaded Ukraine.

This is a perfect example of why free markets alone can’t be trusted to solve complex problems and why governments and government interventions are necessary. To a corporation, an energy crisis caused by a war isn’t a problem to be solved, but instead just an opportunity to rake in larger profits and enrich executives and shareholders.

And of course, none of this is taking into account the fact that the consumption of fossil fuels is the leading contributor to climate change, which is throwing the global climate into chaos and creating increasingly disastrous weather events. Rather than enriching oil CEOs with tax breaks and deregulation that allow them to profit from global crises like this, the federal government should instead be working to use all of its regulatory power to strengthen renewable energies like solar and wind and to encourage a shift to electrical power and increased public transit capabilities around the nation.

But for the New York Times, Maxine Joselow reports the Trump administration is paying windmill manufacturers to not install the windmills they were hired to build. She notes that under a new agreement reached between the Trump administration and French energy company TotalEnergies, “the Interior Department would cancel the leases in federal waters for the two projects, known as Attentive Energy and Carolina Long Bay,” and the administration “would then pay more than $928 million to TotalEnergies, reimbursing the company for its winning bids in lease sales during the Biden administration.”

Joselow adds, “In exchange, TotalEnergies would abandon its plans to begin building the wind farms. It would also commit to investing in natural gas infrastructure in Texas.”

This is something we have never seen before in The Pitch. Paying nearly a billion dollars to an energy company not to complete a project isn’t even trickle-down economics—it’s a waste of your tax dollars, and it’s just plain dumb.

The Latest Economic News and Updates

Working Americans Hear Economic Warning Bells

“Wholesale prices rose sharply in February, providing another sign that inflation continues to percolate even aside from rising energy costs,” writes Jeff Cox at CNBC. “The producer price index, a measure of pipeline costs that producers receive for their products, increased a seasonally adjusted 0.7% on the month,” he adds.

In other words, high prices will continue to plague American consumers in the months ahead. When wholesale prices increase for producers, consumers will likely be paying more down the line as products are assembled and delivered to retailers.

“On a 12-month basis, headline PPI inflation was at 3.4%, the most since February 2025, while core was at 3.9%, according to the BLS. The Federal Reserve targets inflation at 2%,” Cox writes.

“Against the backdrop of consumer frustrations with higher costs, the surge in wholesale goods costs last month stands out: Prices increased more than 1%, the largest gain since 2023,” writes Courtenay Brown at Axios, adding, “Roughly 40% of that increase can be traced back to the gain in wholesale food prices, which rose 2.4%.”

In fact, two of the sectors in which Americans most often intersect with pricing pressures—energy and food—were elevated in the report. Cox notes energy prices were up 2.3% last month. And he writes, “Food prices rose 2.4% while energy was up 2.3%. Within food, the index for fresh and dry vegetables soared 48.9%.”

Remember that America started bombing Iran on February 28th, so the spiking oil and gas prices caused by the closure of the Strait of Hormuz are not reflected at all in this report. Prices were rising even before military actions put the global supply chain at risk.

With that elevated inflation in mind, the Federal Reserve announced yesterday it was keeping interest rates steady at 3.5—3.75 percent. The New York Times reports a majority of Fed members expect interest rates will stay flat or only tick down one-quarter of a percentage point over the course of the rest of the year.

In his comments after the Fed’s announcement, Fed Chair Jay Powell talked directly about the economic direction of the nation, explaining “The thing a good number of people on the committee are concerned about is the very very low level of job creation.”

Powell continued, “If you adjust what has been the trend of job creation over the past 6 months for what we think is the overstatement due to overcounting, effectively there is 0 net job creation in the private sector.”

Then Powell said something that would likely confuse most Americans. He said the lack of job creation is “about what the economy needs.” As a refresher, the Fed operates under the assumption that higher interest rates slow inflation down by making it more expensive to borrow money, which supposedly keeps the labor market from expanding too much.

This was the guiding philosophy throughout the pandemic. The Fed’s trickle-down belief system holds that CEOs and big corporations are job creators in the economy, because they use excess capital to create jobs. It also assumes manufacturers and retailers won’t raise prices unless workers have more money, so the goal is actually to keep the labor market from expanding too much, essentially stifling job creation.

The problem with this strategy, of course, is that it hasn’t actually reflected how the economy has worked in decades, if it ever actually worked that way at all. Big corporations now hand off excess capital to an elite class of wealthy shareholders and corporate executives, rather than invest in research and development, job creation, and higher wages as the Fed expects. Those same big corporations were using the expectation of inflation to raise prices far above costs and pocket the rest in the form of record profits—a practice known as “greedflation.” And even though the labor market has slowed down considerably from its peak in 2022, and continues to slow down with each passing job report, those prices keep going up.

In fact, we’re now in a place where the Fed has less control over the economy than at any point in recent memory. That’s because three of President Trump’s direct actions—high tariffs on imported goods driving up prices for consumers, a massive campaign of forced deportations pulling people out of the American workforce, and military actions in Iran cutting off a large swath of the world’s oil—are putting immense pressure on prices and creating massive uncertainty in the economy. If those three actions were magically reversed tomorrow, Americans would be paying less for gas and groceries, more people would be at work, and the economy would be stronger. We’ll take a closer look at those impacts in the next item.

How Americans Are Paying for Trickle-Down Policies

As we approach the anniversary of President Trump’s so-called “Liberation Day” announcement of sweeping tariffs on imports from other nations, Ryan Mulholland and Kennedy Andara at the Center for American Progress look at who has paid the price for those tariffs.

“In the 10 months following ‘Liberation Day,’ the United States lost 89,000 jobs in manufacturing and 123,700 jobs in transportation and warehousing—two industries that are uniquely exposed to tariffs,” they write. “In fact, the manufacturing industry lost jobs in nearly every month following ‘Liberation Day,’ and manufacturing economic activity contracted for eight consecutive months as manufacturers pulled back in response to the Trump administration’s tariffs.”

CAP calculates in the past year, the Trump administration’s trade policies have wiped out 189,600 blue-collar jobs, and their new analysis concludes, “the cumulative loss in manufacturing jobs since April 2025 is equivalent to the closure of 2,800 average-size factories nationwide.”

“Investment in American factories has also declined, as the Trump administration’s decision to impose enormous tariffs has made it harder to produce competitively in the United States,” they write, adding “the Trump administration also repealed many of the tax incentives and other supports that had been driving new clean energy, battery, and semiconductor manufacturing growth.”

Those workers who have lost their jobs due to increased tariffs are likely to find it harder to access social-safety net programs their taxes have paid for. Tim Shaw notes at Reuters that the tax reform bill passed by Congress and signed into law by President Trump last summer intentionally shifted a number of programs from federal control to the states.

“One key provision requires states, for the first time, to pay a share of benefit costs for the Supplemental Nutrition Assistance Program (SNAP), which historically has been fully federally funded,” Shaw writes. Other programs, including funding for education, childcare, and infrastructure, have been shrugged off from federal control and pushed back to the states as well.

Because of its sheer size and scope, the federal government is the best collector, administrator, and distributor of these funds and programs. States don’t have the capacity or the funding to establish a significant social safety net. And this month’s military actions will likely leave more Americans needing to access those benefits. Think tank The Conference Board has recently revised its forecast for the American economy due to uncertainties around the war in Iran.

“Before the start of the war, consumers were already under pressure as 2025 tariffs continued to pass into retail prices,” they write. “An additional tax in the form of higher prices at the pump will likely dent consumer spending elsewhere.”

And for workers, “The recent spike in policy uncertainty due to the war may prevent companies from raising headcounts,” they write. “This would still nudge the unemployment rate higher in the coming months, even as companies abstain from laying off workers. This in turn could further cap personal income growth and restrain economic performance in 2026.”

Americans are definitely feeling this uncertainty in their daily lives. A new poll collected last week by YouGov in conjunction with The Economist shows that “59% of Americans say the economy is getting worse, based on a question asked almost every week since 2017.” This is “the highest share to say this according to any Economist / YouGov Poll since October 2022, and is up from 53% last week.”

“Almost all Democrats say the economy is getting worse, as was true last week (86% say this now, 85% said so last week,” YouGov reports. “The rise in Americans saying the economy is getting worse is driven by Independents (66% this week, 56% last week) and Republicans (24% vs. 18%).”

Americans know how the economy really works. Their paychecks create jobs in the local community, but those paychecks have been eaten up by rising prices and shrinking wages. One year into the Trump administration taking full control over America’s economy, they can tell the economy is not focused on growing their paychecks, and so their optimism for the economy and its immediate future is declining.

This Week in Trickle-Down

• The Center for American Progress explains how prediction markets have made corruption much easier—and in many cases, untraceable. “Prediction markets are digital platforms where anyone can bet, often anonymously, on the outcomes of a wide array of sports or other events—nearly anything that could happen. These characteristics have created the conditions for possible corruption by insiders who can leverage inside knowledge to place bets on outcomes where they receive advanced information or even can influence those outcomes directly.” CAP calls on Congress to regulate markets to end this loophole.

This Week in Middle-Out

• “Thousands of workers for the world’s largest meatpacking company began a two-week strike Monday in Colorado,” writes the AP. “The first walkout at a U.S. beef slaughterhouse in four decades follows accusations from union officials that the company retaliated against workers and committed other unfair labor practices. They said the company offered wage increases of less than 2% annually, which is below Colorado’s inflation rate.”

• A new Pew report looks into Austin’s housing policy and finds that building lots of new housing helps drive down the rent for everyone. “From 2015 to 2024, Austin added 120,000 units to its housing stock—an increase of 30%, more than three times the overall rate of growth in the United States (9%),” Pew notes. As a result, “Rents fell. In December 2021, Austin’s median rent was $1,546, near its highest level ever and 15% higher than the U.S. median ($1,346). By January 2026, Austin’s median rent had fallen to $1,296, 4% lower than that of the U.S. overall ($1,353).”

• “A majority of all voters, including 50% of Trump voters, are now in favor of publicly-funded job creation and healthcare to protect workers against AI-related job loss,” writes Joe Weisenthal of The Stalwart.

This Week on the Pitchfork Economics Podcast

The guest on this week’s episode is an economist named Misty Heggeness, whose latest book is titled Swiftynomics: How Women Mastermind and Redefine Our Economy. Her book uses Taylor Swift as a lens to examine economics, but you don’t need to be familiar with any of Swift’s songs to enjoy the book or the conversation—instead, Heggeness discusses how both art and women’s work are devalued in the economy, and why our economy would be stronger if everyone were included in it.

Closing Thoughts

The Washington Post, which is owned by one of the wealthiest men in the world, published an editorial this week taking a stand on a proposed referendum in Washington, D.C. that would raise the minimum wage to $25 an hour. Unsurprisingly, the Post is against raising the wage, warning near the top of the editorial, “D.C.’s [current] base hourly pay of $17.95 is already higher than all 50 states,” while not mentioning that Washington D.C.’s population and cost of living is more akin to a US city than a state, and dozens of American cities have minimum wages higher than $17.95.

“Natural competition between firms in a healthy business environment will always do more to raise wages than government mandates,” the editorial continues, adding, “Lowering taxes and cutting red tape would help workers far more.”

This is the kind of trickle-down blather that has been tossed at minimum-wage increases since the minimum wage was instituted during Franklin Delano Roosevelt’s administration. It’s unclear exactly how “cutting red tape” would manifest in higher wages for fast food workers and other minimum-wage workers.

And when the authors of the editorial talk about tax cuts raising wages, they don’t make the important distinction about whether they mean tax cuts for workers or the corporations that employ them. If the latter, it’s become apparent over decades of neoliberalism that tax breaks for big corporations never make their way down to workers in the form of higher wages.

If the authors are talking about cutting taxes for workers, the roughly 4% workers pay to Washington, D.C. in taxes subsidizes more benefits, in terms of public transportation, public services, and social safety net programs, than the small boost to their paychecks would generate. (For more on the trap of promising huge tax cuts for working Americans, read Eric Levitz’s great explainer for Vox.)

But the main claim of the article is that a minimum-wage increase would speed up the rate of automation, and robots would render minimum wage workers obsolete. This trickle-down threat, which is cleverly disguised as concern, has been a part of the minimum-wage conversation since at least the 1950s, and it’s nonsense.

The editorial links to a new report claiming a ten percent increase in the minimum wage results in an eight percent loss of manufacturing jobs. This report contradicts the findings of larger studies, including a major study from MIT showing on the whole, automation creates more jobs than it kills—or, as the report puts it, “All technologies create productivity effects that contribute to labor demand.”

For one thing, the Washington Post’s concern about manufacturing jobs being lost to automation doesn’t represent a major concern for Washington D.C., which has the lowest number of manufacturing workers in the United States—1000 workers in total. California, by contrast, has the most manufacturing workers in the nation—1.2 million—and those workers all earn, at the very least, the state’s $16.90 minimum wage.

Also, the Post’s scare-mongering ignores the fact that employers aren’t holding off on implementing technological advancements in their business out of the kindness of their hearts. If a technology existed which would cheaply replace workers, you can bet employers would adopt it without a second thought.

And for another thing, those threats of automation have failed to manifest in the fast food industry. We’ve all seen McDonald’s replace cashiers with digital kiosks, but those kiosks have not shrunken overall employment in the fast food industry.

“In 2011, there were an estimated 3.5 million fast food workers in the United States at 148,000 restaurants,” writes Alex Park at The Progressive. He adds, “Ten years later, there were an estimated 4.9 million workers—a 29 percent increase—at 188,000 restaurants, despite the fact that Congress hasn’t increased the federal minimum wage ($7.25 is still the wage floor in twenty states) since 2009.”

“For the industry,” Park concludes, “automation isn’t a means to reduce its workforce; it’s only a way to get more labor out of its workers.”

The Federal Reserve of Chicago also finds that if anything, automation in low-wage employment is more likely to result in a shuffling of employment than outright layoffs: “since low-wage jobs have few skill requirements and the minimum wage acts as a wage floor,” they write, “individual low-wage workers displaced from low-wage employment have been able to transition into newly created jobs without much of a wage penalty.”

Why is that? The Chicago Fed explains, “because automation of low-wage jobs has also led to the creation of new, similar-paying jobs that many displaced workers have been able to fill.” Automation actually creates work, and employers use automation to increase efficiency and expand their businesses further.

We’ve seen thousands of editorials like this one in the Washington Post threatening that minimum wage increases will only harm the very people they are intended to help. They’re all full of trickle-down bunk. But it’s important to keep pushing back against every one of them as they pop up, pointing out the large and growing body of evidence proving the minimum wage grows the economy for everyone, creating jobs with increased consumer demand.

Be kind. Stay strong.

Zach

Friends,

Last week ended with terrible news for the economy. “Friday’s employment report showed job losses of 92,000 in February,” writes the Associated Press’s Josh Boak. “The January and December figures were revised downward, with December swinging to a loss of 17,000 jobs.”

You might remember that a strong jobs report in January led some economists to speculate that the economy was creating jobs again after a choppy year of tariffs and unprecedented federal job cuts led by Elon Musk’s so-called DOGE team. Sydney Ember at the New York Times writes that last month’s optimism has largely evaporated.

“Revisions to previous months bolstered the case that the job losses in February were consistent with a broader trend rather than a blip,” she writes.

In fact, when you dig into the numbers, it seems that job growth as a whole has stalled. Many have noted that the only consistently growing job sector in the US over the last year has been health care, which is largely driven by the aging baby boomer population. Boak explains, “Without the health care sector, the economy would have shed roughly 202,000 jobs since Trump became president in January 2025.”

And the anti-immigrant talking points promoted by the Trump administration have been proven false, too. “Trump often brags that jobs are going to people born in the United States, rather than to immigrants. But the latest report punctured some of that argument,” Boak writes. “The unemployment rate for people born in the U.S. has climbed over the past 12 months to 4.7% from 4.4%. This means a greater share of the people who Trump said would get jobs because of his immigration crackdown are, in fact, searching for work.”

In virtually every single category, February’s jobs report delivered bad news. The Black unemployment rate ticked up to 7.7%. And Jared Bernstein writes that “Manufacturing employment, after a rare growth month in Jan (up 5,000) was down by 12,000 last month. Since peaking at around 12.9 million in early ‘23, it’s down by over 300,000.”

Bernstein also reminds us that many of these job losses are the direct result of policies enacted by President Trump: “ Trump chose to lay off hundreds of thousands of federal workers. He chose to carpet the globe with tariffs, and not just one-and-done, but at an uncertainty-generating on/off again cadence. He chose to go to war. He chose to ignore affordability concerns and push prices higher than they’d otherwise be,” Bernstein writes.

Bernstein’s point should be echoed from the rooftops: Had Trump simply allowed the economy to continue on autopilot—that is, if the economy remained on its existing course with no additional intervention since Inauguration Day of 2025—prices would be lower and more Americans would be at work right now.

But American workers deserve more than an economy run on autopilot, and they certainly deserve better than what they’ve gotten over the last year. In the modern economy, workers are the job creators, not the wealthy CEOs and corporations that have benefited from the tax bill the Trump administration pushed through Congress last year.

Each of the lost jobs in this month’s jobs report is more than just one paycheck pulled out of the economy—it’s also consumer demand stripped from your local economy. It’s fewer orders at the restaurant in your neighborhood and less spending at bookstores and bars and shrinking consumer demand for home renovations and repair. Ultimately, those lost paychecks result in lost jobs in your community. We need some deep investments in working Americans to stop this vicious cycle before it spirals out of control.

The Latest Economic News and Updates

February’s Inflation Report Is the Calm Before the Storm

This week’s reading of the Consumer Price Index came back essentially flat with last month’s reading at 2.4%. But before we dig into what the report has to say, it’s most important to note what’s not included in this month’s inflation report: This report was completed before the United States began bombing Iran last week, meaning that it doesn’t take rising gas prices into account.

“This is perhaps the most unimportant CPI in years,” Joe Brusuelas, chief economist at business consulting firm RSM, told Andrew Ackerman at the Washington Post. Brusuelas “estimates that rising oil costs alone could add roughly 0.5 to 0.6 percentage points to the annual inflation rate in next month’s data release,” which he says “means investors and policymakers can and should effectively discount the February reading.”

“AAA on Wednesday reported an average national price of $3.578 for a gallon of regular gas, up 59.8 cents from the average price of $2.98 on Feb. 26, two days before the U.S. and Israel launched strikes on Iran,” reports Mary Whitfill Roeloffs at Forbes, adding, “The price of diesel has risen even more sharply than regular gas, jumping 28%—to $4.83 from $3.77—early last week.”

Despite some good strides toward building a renewable energy system in recent years, America is still incredibly dependent on gasoline. Gas-powered vehicles transport hundreds of millions of Americans to work and school every day, and they deliver virtually every product we buy from factories and ports to warehouses and then to stores and homes.

The closure of the Strait of Hormuz off the Iranian coast has also clamped shut one of the globe’s most important fertilizer supply chains. Tyne Morgan at farm industry news site AgWeb reports that fertilizer prices have already spiked by 25% in the week since attacks began on Iran.

Morgan explains, “the sticker shock is hitting farmers hard, especially for those who waited to book fertilizer for spring.” She continues, “Typically, retailers may receive updated pricing once or twice a month. But with the ongoing uncertainty in Iran and the impact on the Strait of Hormuz is having on fertilizer shipments, some retailers say they are getting several pricing updates a day.”

Fertilizer prices were already on the rise before the military action began. “Last week, the U.S. Department of Justice launched an antitrust investigation into the U.S. fertilizer sector. According to a report from Bloomberg News, the probe is examining whether major fertilizer producers may have coordinated to push prices higher,” Morgan explains. “Companies reportedly included in the investigation are Nutrien, The Mosaic Company, CF Industries Holdings, Koch Industries and Yara International, firms that collectively represent a significant share of the U.S. nitrogen, phosphate and potash fertilizer markets.”

But even without the higher gas and fertilizer prices included in February’s inflation report, Brusuelas also noted that underlying data in the report shows that tariff prices are “on vivid display“ in driving up prices: “Appliance costs jumped 3.1% & apparel costs soared 1.3%, the most in eight years,” he posted on Bluesky.

And consumers who are stressing over high grocery bills aren’t going to find much comfort in February’s report, either: “Food prices shot up 0.4% last month, lifted by a 3.7% jump in the cost of candy and chewing gum. Fruit and vegetable prices increased 1.4%, while nonalcoholic beverages cost 0.8% more,” writes Lucia Mukitani at Reuters. The news isn’t all bad—“prices for dairy and related products dropped 0.6% and the cost of cereals and ‌bakery products fell ⁠0.2%”—Mukitani writes, but overall, “Food prices are 3.1% higher than a year ago.”

Even if the Iranian conflict is somehow laid to rest before next month’s inflation report—an outcome that seems more unlikely with each day that combat drags on—it seems virtually inevitable that Americans will see price increases not just at the gas pump but in produce sections and on retail store shelves in the coming weeks.

Are Health Insurance Costs Shrinking Paychecks?

The Federal Reserve Bank of New York published a report about wages and benefits that every American worker should read. It begins with a problem: “wage growth has slowed every year since 2022.”

“Among service firms, the average wage increase slowed from 5.6 percent in 2022 to 3.4 percent in 2025, and among manufacturers, from 6.3 percent in 2022 to 3.4 percent in 2025,” the Fed notes. “Wage growth is expected to slow further to 2.9 percent among service firms and to 3.2 percent among manufacturers in the year ahead.”

We’ve talked about that lag in paycheck growth many times here in The Pitch. Slowing wage growth is the end result of a weakening job market, rising prices, and corporations prioritizing record profits over worker paychecks.

But the New York Fed identified another rising pressure that is shrinking paychecks: “About three-quarters of service firms in our surveys and 90 percent of manufacturers provide health insurance to their workers. And while wage growth has been slowing since 2022, health insurance costs have been rising sharply.”

“According to the Kaiser Family Foundation, health insurance costs increased by about 6 percent in 2025, and were projected to rise by 11 percent in 2026, similar to the more than 13 percent increase businesses in our surveys reported as their policies renewed,” the Fed continued.

“Among those businesses experiencing an increase in employee health insurance costs, the average wage increase over the past year was 3.8 percent for both service firms and manufacturers, slightly higher than the 3.4 percent reported among all firms in the surveys,” the Fed reports. “However, these firms reported that the average wage increase they would have given to their workers if health insurance costs had not gone up was about 4.7 percent.”

As a rule, self-reporting surveys aren’t the most trustworthy source of information. Perhaps those employers really were planning on giving bigger raises to employees if health insurance costs didn’t rise, but that also could be a case of wishful thinking on the part of the employer—or just a convenient excuse to calm the protestations of angry employees. But the numbers behind the claims do line up pretty well, and it’s a known issue that health insurance costs are rising for all Americans.

At this point in the 21st century economy, it’s becoming increasingly problematic that health insurance in the United States is tied to employment, and it’s downright bizarre that the US is the only major nation that doesn’t offer some form of health insurance for all its citizens.

If American workers didn’t have to worry about going on COBRA or finding some other insurer every time they switched jobs, they would have more freedom to apply for jobs with higher wages or try to start their own businesses. And if employers didn’t have to worry about ever-rising health insurance costs for all their workers, they could raise wages to attract American workers who felt emboldened by the stronger job market to consider all their options. Removing the health insurance factor from employment frees up both employers and workers to better grow the economy for everyone.

This Week in Trickle-Down

• An excellent recent report from Seattle-area public radio station KUOW explains the difference between healthcare in the United States and Canada by exploring the costs of medical care for a pair of hypothetical twin sisters giving birth at the same time—one sister in the US and the other in Canada. Because the American sister has health insurance, she only pays $2750 out of pocket for the care. But the overall cost for the birth in America is roughly $20,000, while the Canadian sister pays no money out of pocket for the birth and the whole procedure only costs $2,481.

• “Instead of moving forward with a jury trial against Live Nation-Ticketmaster as expected, the Justice Department announced a settlement Monday that omitted what used to be on the top of its wish list: a breakup,” writes Lauren Feiner at The Verge. “What the DOJ did get was a series of concessions that some industry stakeholders found unsatisfying and even baffling.”

• Katherine Gallagher Robbins explains why “Women’s Economic Opportunities Are a Policy Choice,” showing that women’s workforce participation soared when government was creating and enforcing policies that supported them. But when leaders stopped creating robust workforce participation policies in the 1990s, the number of women in the workforce basically flatlined, and then dropped during the pandemic.

This Week in Middle-Out

• Journalist Hamilton Nolan interviewed Julie Su, the head of the Department of Labor for the Biden administration, about her new role as the deputy mayor for economic justice in New York City under Mayor Zohran Mamdani. Early in the interview, Su explains what her job entails: “making sure that the laws that protect working people are enforced fully, so that a worker who goes to work at the beginning of the day knows they’re going to come home with all the wages that they earned” as well as “measur[ing] the economic health of the city—including its growth, including our development, by how working people do. Whether they benefit from capital investments, or property and real estate” so that working New Yorkers can “enjoy the full cultural and artistic life of the city. The things that make it a world class city should not be out of reach for the workers that live here.” It’s an intriguing new role that, if successful, should be copied in other cities around the country.

• The Roosevelt Institute has published a straightforward plan to save the Supplemental Security Income program that is overseen by the Social Security Administration. Reforming SSI would reduce poverty in America by roughly 66% and lift about a half-million American homes out of deep poverty.

This Week on the Pitchfork Economics Podcast

Groundwork Collaborative Executive Director Lindsay Owens joins Goldy and Paul for an informative conversation about an enraging report co-authored by Groundwork and Consumer Reports that proved Instacart was showing different prices to consumers who were looking for identical products at one grocery store at the same time. Is algorithmic pricing about to squeeze you for every last penny?

Closing Thoughts

This week, Forbes published its annual list of global billionaires. This year’s list identifies a record 3,428 billionaires in the world, nearly 400 more than last year. When taking their wealth in aggregate, Forbes reports, the billionaires “are richer than ever, worth a record $20.1 trillion, up $4 trillion from last year. The U.S. has the most billionaires, with a record 989, including 15 of the top 20. China, including Hong Kong, is next, with 610, and India (229) ranks a distant third.”

Elon Musk “tops this year’s list with a record $839 billion fortune,” making him “more than three times richer than his closest competitors, world No. 2. Larry Page (worth an estimated $257 billion) and world No. 3, Page’s Google cofounder Sergey Brin ($237 billion) who themselves are a combined $212 billion richer than last year.” Musk has now amassed a fortune that is larger than the combined wealth of the bottom 693 billionaires on the list.

The Forbes list is always greeted with lots of glowing attention from other media companies, but another list was published this month that should be dominating headlines: The Low-Wage 20.

Compiled annually by the Institute for Policy Studies, The Low-Wage 20 is a report that “analyzes the 20 largest employers of low-wage U.S. workers.” The businesses in this year’s report “employ approximately 6.7 million people in the United States. Their median worker wages in 2024 ranged from $9,602 (Ross Stores) to $47,607 (MGM Resorts) — compared to an average CEO compensation of over $18 million.”

These low wages are all of our business because workers at these 20 corporations are paid so little that they have to rely on social safety net programs to survive. “15 of the Low-Wage 20 reported median pay in 2024 below the $35,631 income limit for a family of three to be eligible for Medicaid in most states,” the report says, while “13 of these 20 firms reported median pay below the $33,576 threshold for a family of three to be eligible for SNAP food aid in 2024.”

Here are three eye-opening bullet points from the report:

In Nevada, Walmart had 4,574 employees — 29.3 percent of their employees in that state — enrolled in Medicaid in 2024. Extrapolating this data to the national level suggests that Walmart likely has around 468,800 employees on Medicaid.

Amazon, the second-largest U.S. private sector employer, had 8,951 employees on Medicaid in Nevada in 2024, making up 48.4 percent of all Amazon employees in that state. If Nevada is representative of Amazon’s national practices, then roughly 577,000 Amazon employees are likely on Medicaid.

Four state governments (Colorado, Massachusetts, Illinois, and Michigan) have disclosed SNAP data revealing that Walmart had a total of 10,920 employees enrolled in this food aid program in these states. Amazon had the second-largest number of employees on SNAP, with 9,633, followed by Dollar Tree, with 5,021.

These employers don’t pay enough for their workers to survive on their wages alone. In other words, we are all subsidizing the low wages of these incredibly profitable companies with our tax dollars.

The money that should be in the paychecks of these workers instead goes to CEO and executive reimbursement—average CEO pay at these 20 firms works out to 899 times their average worker pay—and to an elite shareholder class in the form of hundreds of billions of dollars in stock buybacks.

And let’s be clear: If the workers at these 20 firms were compensated fairly with living wages, all 20 of these firms would benefit. The workers would spend their bigger paychecks at these businesses, increasing their profits and circulating money through the whole economy. Instead, the profits fill the coffers of a handful of rich people, where it just sits.

Which brings me back to the point of writing about these two lists together. The Forbes billionaire list and the Low-Wage 20 list share a lot more than a similar publication date. As the IPS report explains, “At least 16 U.S. billionaires owe their wealth to companies in the Low-Wage 20. These individuals, which include both current and former top executives and dynastic heirs, include eight associated with Walmart, two with Amazon and Tyson Foods, and one each with Home Depot, Best Buy, Starbucks, and Chipotle.”

That’s not a coincidence. The wealth of those billionaires is built on the wages that they refuse to pay their workers. Their wealth is subsidized by our Medicaid and SNAP programs. There is not a separate pool of money that distinguishes between the executive suite and the sales floor of a Dollar General or a Starbucks—the companies simply choose to prioritize the top at the expense of everyone else.

The IPS report offers policy solutions to the problems created by the Low-Wage 20 including levying fines on low-wage employers, raising the minimum wage, making it easier to unionize, increasing taxes on stock buybacks, and raising taxes on companies that have large CEO-to-worker compensation pay gaps. I encourage you to read the report and share it on social media. The more people understand where CEO and billionaire wealth comes from, the more likely we are to see action that invests in American workers.

Be kind. Stay strong.

Zach