This week, we’re exploring why drastic cuts to the regulatory state have contaminated our food supply chain, looking at the future of food price increases, and exploring how a lack of competition is wasting local incentives to create economic growth. But first we need to talk about the growing disparity between the paychecks of the wealthy and the paychecks of working Americans.

At Civic Ventures, we often say that the economy tells a story explaining who gets what and why. It’s admittedly a simplified explanation of economics, but as a rule of thumb it holds remarkably true: The economic systems that our leaders put in place prioritize certain groups over others, and they funnel money through the economy to fulfill those preferences.

For the last 40+ years, the preferred economic system of our elected leaders has been trickle-down economics, which means that they have constructed systems that favor the wealthiest CEOs and corporations over working Americans. You can see the results of that system in a chart that economic commentator Steve Rattner shared on social media this week:

Corporate incomes are sky-high this year, while worker wages have stayed flat. Investopedia reports, “annualized corporate profits were $400 billion higher in the second quarter than in the first. That’s the largest increase in dollar value on record, aside from the bounce-back after the most severe effects of the COVID-19 pandemic.”

A good share of the record corporate profits are a direct result of the tens of billions of dollars worth of tariff refunds that the Trump administration has handed away to the biggest corporations in the history of the world. That $400 billion additional quarterly profit that corporations reported “was boosted by an estimated $71 billion in tariff refunds companies got in May and June.”

Remember, Americans paid those tariffs in the form of higher prices. It would make sense to anyone that those tariff refunds should go to the people who paid them, but instead the Trump administration has just boosted an already sky-high quarter of corporate profits. That’s a choice—a decision about who should benefit in the economy. The Trump administration chose the wealthiest and most powerful people in the world over American workers.

How do we know that this is a policy choice enacted by our leaders? Because we have a recent example of what happens when leaders choose to prioritize workers over CEOs and corporate board members.

“Under Biden, wages at the bottom of the distribution outpaced those at the top,” Rattner writes. “Under Trump, wage growth has declined across the board, and the highest-paid are seeing bigger gains than the lowest.”

If the lowest-paid quarter of American workers saw such a mammoth boost in just three years of economic investments, imagine what their paychecks would look like under forty years of middle-out economics, as opposed to the trickle-down economics they’ve been languishing under since the 1980s.

And imagine what those workers would be able to do with that money had their paychecks continued growing. Using the $70 billion tariff refund as an example, devoting that investment toward corporate profits resulted in that money being handed away to an elite class of shareholders in the form of stock buybacks, where they will probably hoard most of it in accounts that only use the money to make even more money. (Later in this newsletter, we’ll look at a new paper which offers some insight into the hoarding habits of the super-rich.)

Had the Trump administration directed that $70 billion toward working Americans, they would have spent it immediately in communities around the nation. Some of that spending would likely have helped local small businesses, and much of it would have been spent at corporations, where it still would have boosted the profit margins of these companies.

In other words, everyone would have benefitted by investing in working Americans, whereas only a small handful of rich folks actually benefitted from the Trump administration’s refund plan. This is about as clear an example of who gets what and why as I’ve ever seen in the news—an obvious case against trickle-down and for middle-out economics.

The Latest Economic News and Updates

How Trickle-Down Is Making America Sick to Our Stomachs

For the Minnesota Reformer, Anna Claire Vollers wrote a must-read piece connecting the Trump administration’s anti-regulatory campaign to the shocking number of food recalls that have rocked the nation this summer.

“Jalapenos. Frozen berries. Beef. Alfalfa sprouts. A summer of food recalls, including the record-shattering cyclosporiasis outbreak tied to iceberg lettuce that has sickened thousands, has raised many Americans’ fears of contracting a foodborne illness,” Vollers writes.

“Last year, the Trump administration laid off thousands of employees at federal public health agencies including the CDC, which tracks and responds to disease outbreaks, and the FDA, which oversees and regulates food safety,” she continues. The administration has slashed the CDC workforce by 28% since the end of 2024, while the FDA’s workforce has been cut by 23% in the same timeframe.

It’s not just the cuts to staffing that have left our food supply chains vulnerable to contamination. The Trump administration cut nearly $5.8 billion in grants the CDC delivers to communities last year alone, weakening the public health infrastructure that might have identified these outbreaks before they spread across multiple states and sickened tens of thousands of Americans in the last few months.

“The federal government also has delayed requiring companies to comply with new food safety rules, included in a law enacted more than a decade ago, that would help regulators track where food comes from and where it’s going during outbreaks,” Vollers writes. Experts believe those rules “could have helped speed the government’s sluggish response to the cyclospora outbreak investigation after Taylor Farms initially tried delaying the recall.”

And the Trump administration also reduced the scope of systems that were in place to warn the public of food-bourne outbreaks. “Last year, the Trump administration also drastically scaled back FoodNet, an early warning surveillance system that required tracking of infections caused by eight different foodborne pathogens,” Vollers writes. “The federal-state collaboration is now only required to track two pathogens: salmonella and Shiga toxin-producing E.coli. The other six pathogens, including cyclospora, were made optional.”

Last year, as he was ramping up to slash regulations and spending for the Trump administration as part of his so-called “Department of Government Efficiency” initiative, Elon Musk wrote, “The world is suffering slow strangulation by overregulation. Every year, the noose tightens a little more. We finally have a mandate to delete the mountain of choking regulations that do not serve the greater good.”

That language now feels more than a little ironic, given that the regulations that the Trump administrations have cut are leaving Americans choking on their food. That’s the thing about safety nets: You don’t need them until you need them…and then you really need them.

Food Prices Aren’t Coming Down Anytime Soon

When our food isn’t actively trying to kill us, it keeps getting more expensive. For the Center for Economic and Policy Research, Dean Baker checks in on one of his favorite economic statistics: American spending at fast-food restaurants. At a time when the K-shaped economy sees the super-rich pushing up American spending rates, Baker uses fast-food spending to track the economic pulse of working Americans.

“Fast-food spending provides a useful metric since it is unlikely that increases in spending would be driven by rich people eating their stock gains,” Baker writes, adding that it’s “also useful in that it is very much a discretionary expenditure. If people are feeling stretched, it is easy to cut back on the frequency of eating out at fast food restaurants and instead cook at home.”

So are Americans still buying fast food? Baker notes that “spending has been largely flat since the fall of 2023. In fact, it is still below the peak hit in September of 2023,” indicating that working Americans don’t feel like they have the extra cash to spend on fast food, with food prices still rising.

Many experts are predicting that those prices are only going to rise over the next year. Thanks in large part to the war on Iran’s closure of the Strait of Hormuz wiping out global fertilizer supply chains, increased global temperatures killing crops, and the forced deportation of untold thousands of farm workers in the US, J.P. Morgan predicts that “global food inflation is set to rise from 2.8% in [the first quarter of 2026] to 5.0% in [the first quarter of 2027].”

Given that food prices have increased by 33% since 2019 and more and more Americans are putting their grocery bills on credit cards, that 5% could be disastrous for Americans who are just barely scraping by.

Two Kinds of Work in America

A new working paper examines why some of the biggest wage earners in the United States tend to hoard a large amount of their money in savings. “Using a newly available panel of household income from the universe of U.S. tax returns, we document that permanent income risk has risen substantially since the 1970s, with especially large increases at the top of the income distribution,” the authors report.

Using several economic indicators including “early retirement-account withdrawals and moves to lower-income ZIP codes,” the authors determine that Americans who draw the highest salaries in the country are also more likely to lose access to jobs with high salaries, which can result in a dramatic slide down the income scale.

“These increases in longer-horizon income risk are concentrated among top earners, with the variance of 10-year income changes increasing by nearly 15% at the 95th percentile of the prior income distribution since the 1970s and nearly 40% for the top 1 percent,” they write. Basically, Americans who earn less than the top five percent of wage earners are more likely to be able to find new work in a similar salary range, while the richest of the rich wage-earners are in a slightly more precarious position.

Perhaps as a result of that small but significant risk, the authors find “households with greater exposure to permanent income risk save more.” They suggest that increased saving “raises wealth concentration,” to the point that they find a “savings glut of the rich,” meaning that “saving rises sharply at the top even as lower interest rates dampen saving incentives for much of the rest of the distribution.”

At least in part, this explains the hoarding phenomenon I referred to in the introduction to this email: Rich people are much less likely to spend their incomes than workers in the lower 95 percent of wage earners, and that money is basically frozen out of the economy—a very bad thing in a consumer-driven economy like ours.

But while losing a comma in your yearly salary might feel emotionally devastating for the wealthiest few, it’s hardly a life-ending event. The vast majority of Americans who collect weekly wages are only one paycheck away from disaster. We should keep our focus on growing their paychecks, not ensuring the lifestyles of a handful of workers at the top.

We can expect the ranks of low-wage workers to continue to grow in the near future. Take a look at this chart from a recent Axios story detailing a Bureau of Labor Statistics study predicting the fastest-growing jobs of the next decade, and see if you can notice the problem:

Given our rapidly aging population, it makes sense that home health care aides would represent the fastest-growing job in the economy. The 847,000 predicted job openings in the field roughly matches the total number of job openings in the next four fastest-growing occupations, combined.

Now take a look at the median wage for those 850,000 jobs: $35,800 per year—the lowest wage of any occupation on the list save fast food counter workers. We should be preparing our economic policy to address the strain of adding nearly a million low-wage jobs to the economy over the next ten years. Without big bumps to their paychecks, many of those workers will likely have to join social safety net programs in order to make ends meet—so essentially we will all subsidize the employers who pay their shockingly low wages.

This chart also helps to identify one of the biggest lies of trickle-down economics—the claim that workers are always paid exactly what they are worth. If that were true, if the labor market always eventually reached an equilibrium state that found the perfect salary for every worker, then why would the most in-demand job of the next decade by far somehow fail to pay a living wage?

This Week in Trickle-Down

• Talmon Joseph Smith reports on Blackrock’s analysis of the Federal Reserve’s “Beige Book” report on current economic conditions. Blackrock finds that “the divide between the capital-spending economy and the consumer economy is becoming more pronounced,” splitting the economy into a “K”-shape where rich household spending “is still comparatively resilient” while most working households are “reducing discretionary spending” and “leaning on credit.”

• You can tell that families are stretching their stagnant paychecks even further to afford higher prices, Harold Meyerson reports at the American Prospect, because chain dollar store sales are skyrocketing: “Second-quarter sales at Dollar General, which has 21,000 outlets, rose by 3.7 percent over the first quarter of the year, while sales at Dollar Tree, which has 9,000 outlets, were up by 3.5 percent. Items purchased at Dollar General’s ‘Value Valley’—aisles in which all products are on sale for a flat $1—rose by 16 percent,” Meterson reports.

This Week in Middle-Out

• The California legislature just passed the nation’s largest bill to support the creation and growth of local media organizations, which Rebuild Local News says would offer tax credits of “$20,000 per journalist for up to five positions each year, plus $15,000 for each additional journalist, $15,000 for new hires (stackable on top of the retention credits),” and “$7,500 credits for part-time journalist roles.”

• “The average minimum wage for Americans in blue states has doubled to $15.73 since the last federal increase,” Steve Rattner writes. “In red states, it’s stuck under $10.”

Real-Time Economic Analysis from Civic Ventures

Senator Chris Murphy joins the Pitchfork Economics podcast this week for a great, in-depth conversation about his new book, Crisis of the Common Good, which seeks to define social necessities that rise above concerns of commerce and partisan bickering—programs like fire departments, policies like a high minimum wage, and regulations that ensure new technologies like AI don’t wipe out jobs wholesale.

Civic Ventures founder Nick Hanauer joined Obama administration economist Jason Furman in a debate about whether capitalism is broken or not. (Nick was arguing that capitalism isn’t working.) After you watch the debate, you can vote for a winner at Open to Debate.

And in his Substack, Nick reflected on how the debate went and extended his thoughts about the myth of marginal productivity—the economic belief, supported by Furman in the debate, that you are paid exactly what you’re worth.

Nick Hanauer

You Are Not Paid What You Are Worth

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3 days ago · 10 likes · 4 comments · Nick Hanauer

Closing Thoughts

The brilliant thing about markets as a social technology is that they drive innovation by putting sellers in direct competition for customers. Competition is the most powerful force in that equation—a robust market will force sellers to keep prices low while also working to deliver the best product to potential customers.

This is why monopolies are terrible for economies. When companies buy up their rivals and wipe out competition, they have no reason to pay higher wages to their workers or offer lower prices or better products to their customers. Instead, you get the worst aspects of capitalism with none of the benefits, and inequality is sure to grow as CEOs cut corners and worsen experiences in order to give themselves big bonuses.

But in his newsletter Boondoggle, Pat Garofalo explains how corporate consolidation kills another form of competition: It wipes out local development.

For example, Garofalo explains that if the Paramount and Warner Brothers merger goes through, the gigantic movie studio will have incredible power to scoop up tax credits designed to attract TV and film production in cities and states around the country.

“In New York, for example, Paramount and Warner Bros. collected a combined $330 million in tax credits from the fourth quarter of 2024 to the third quarter of 2025 — from a program that totals about $1 billion annually,” Garofalo writes.

Those two giant corporations—potentially soon to be one mega-giant corporation—scooped up a third of the available funds intended to encourage local video production, probably boxing out a number of local production companies that would likely have used the money to set up a permanent base in New York, which would have had a much bigger impact on the local economy in the long term.

“Consolidation also makes threats to leave a jurisdiction (a form of what’s known as a “capital strike”) carry more heft, as there are fewer potential replacements for lost facilities or economic activity,” Garofalo writes—an easily proven claim, given that Paramount CEO David Ellison recently threatened to move his studio out of California if the state continued to pursue its anti-monopoly suit against the merger.

This isn’t just about Hollywood. Garofalo explains, “A 2015 study of corporate subsidies in 14 states by Good Jobs First found that 90 percent of the money went to large corporations, while a 2020 survey found that ‘more than 30 percent of all establishments with over 1,000 employees receive discretionary subsidies, while the percentage is less than 0.2 percent for establishments with under 250 employees.’”

These giant firms are sweeping in and gobbling up investments that are intended to strengthen local economies, resulting in lower wages, less of a geographic commitment to the economy, and less of a lasting impact.

This seems like a problem that could be easily fixed by writing size limits, time commitments, and other such shaping factors into the policies, ensuring that the incentives actually perform as intended. And while it’s essential to guard against potential fraud, making it easier for local firms to apply for incentives only makes sense. Just as under-regulated markets eventually result in a gridlock of monopolization, local investments intended to direct economic development can’t just give every contender equal footing. Competition isn’t a useful tool unless it’s a fair fight with all parties agreeing on the rules and shared goals. That’s what economic policies are for.

Be kind. Stay strong.

Zach

There’s a lot to discuss this week, including the one state that’s bucking the national trend of low housing construction numbers, last month’s concerning drop in retail sales, and why the stratospheric rise in executive pay hurts your paycheck.

But first, the U.S. Bureau of Labor Statistics delivered bad news for American workers this week: “From July 2025 to July 2026, real average hourly earnings for all employees decreased 0.2 percent,” the Bureau reported on Tuesday.

This is bad news not just for workers, but for the whole economy. If paychecks shrink, there’s just simply not enough money to circulate through the economy to create jobs through consumer demand. Unless we get those paychecks growing again, this dip in wages could set the stage for a negative feedback loop of lower wages and weaker job creation. Our leaders should be working as hard as they can to invest in workers and turn this trend around.

The BLS also reported that the average workweek increased by 0.3 percent over the last year, meaning workers are putting in more time in exchange for less money. Since they’re working longer every week, BLS reports that workers technically saw “a 0.1-percent increase in real average weekly earnings over this period”—not due to a raise, but because they’re working more time for less money.

Those workers are also more productive than they were a year ago. BLS reported that for the second quarter of this year, “nonfarm business sector labor productivity increased 2.2 percent from the same quarter a year ago.”

So to recap: The average American worker is earning less per hour than they did this time last year, but they’re also working more hours and are significantly more productive than they were at this time last year. You might be thinking that these numbers don’t make any sense—and you’d be correct to assume that.

It gets even worse when we back up and look at the bigger picture. One of the most important economic charts of our time, compiled here by our friends at the Economic Policy Institute, shows that worker productivity rose more or less in lockstep with wages during the 20th century after World War II. It’s not a coincidence that the timespan from 1950 to 1980 represented the most remarkable period of growth and prosperity in the history of the world. The workers were supercharging the growth of the American economy.

It wasn’t until the Reagan administration and its forceful adoption of trickle-down economics that productivity and pay became divorced from each other. Through a coordinated campaign of tax cuts for the rich, deregulation for powerful corporations, and suppressed wages for everyone else, trickle-downers managed to shrink the paychecks of workers, even as they continued to produce more and more high-quality work. Now, worker productivity has grown nearly three times as fast as wages.

EPI concludes, “If pay had kept pace with productivity, the typical worker would be making $16.40 more per hour today, $13.53 of which is in greater wages.”

Just leaving out the additional benefits that have been lost and going with the lower wage gains EPI provided, that’s an average of $541 more in wages per weekly paycheck that the average American worker would still be earning, had wages tracked with productivity growth. It’s an annual difference of $28,142.

Virtually all of our major economic problems today can be traced back to this so-called “Great Decoupling,” which stole many tens of trillions of dollars from the paychecks of American workers and redistributed them upward into the hands of the wealthiest few. So just remember, every time we talk about a single bad report in this newsletter with wages declining by a fraction of a percent, like this week’s BLS report, those negative numbers are signaling a much larger problem in the American economy.

It’s important for us to keep all this in mind because we need to remember that in election years, we aren’t asking candidates to return that lost 0.2 percent of wages to our paychecks. American workers need to take home tens of thousands of dollars per year more in order to be truly made whole, and the economy itself isn’t going to improve until we make significant moves in that direction.

The Latest Economic News and Updates

New Housing Construction Keeps Falling Further and Further Behind

“US single-family homebuilding nosedived in July, falling 16% year-over-year as higher mortgage rates kept the market frozen,” reports Jake Angelo at Semafor.

“While those would-be buyers stay put, many are now relying on buy now, pay later services to help them stay afloat: Affirm, the pay-later app, is providing cash-strapped tenants loans to help out with rent payments,” Angelo continues.

“Single-family housing starts, which account for the bulk of homebuilding, dropped 9.9% last month to a seasonally adjusted annual rate of 808,000 units,” Reuters reports, noting that the number is the lowest since November 2022.

Reuters continues, “Total new home starts - including multifamily structures such as apartments - fell 12.4% to 1.239 million in ​July.”

The Federal Reserve has kept interest rates high in an effort to slow the economy down and to curb inflation, but those high rates have pushed mortgage rates to a punishingly high level—on Tuesday they hit 6.71%, effectively raising the asking price of homes by tens of thousands of dollars over the life of the loans. In conjunction with sellers keeping home prices high, those high mortgages have priced many working families out of the housing market. And it’s not unreasonable to believe that the administration’s campaign of forced deportations is also meaningfully shrinking the housing workforce, which is making home construction a more uncertain and more logistically difficult prospect.

Remember, experts estimated in 2025 that the United States was already failing to meet housing demand by roughly four million homes. They also predicted that it would take seven years for the housing industry to build enough homes to close that gap. But in the year since, construction has slowed remarkably, and the housing market has chilled, even as housing prices stay unsustainably high.

I’m happy to report, though, that we did receive some excellent news on the housing front this week—even as new housing construction fell behind nationally, Campbell Porter writes for KTVZ, “Oregon housing starts increased by 11.3% year-over-year during the first half of 2026, marking a second consecutive year of statewide construction growth.”

It’s not often you see one state completely buck national economic trends to fly in the opposite direction of the other 49. That kind of aberration typically suggests one of two conditions: Either the state is in the middle of a geographically unique economic surge—see the massive North Dakota gas boom of 2006-2012—or the state is pioneering a new policy to encourage that kind of growth.

It seems as though Oregon falls in the latter category. Oregon Governor Tina Kotek greeted the news of her state’s housing boom with an announcement that the “upward trend demonstrates what’s possible when the state partners successfully with local government and the private sector with a shared vision and shared urgency, with or without a reliable federal government.”

Campbell explains that Oregon’s policies include “re-launching a permanent lending program for housing construction offering interest rates lower than private sector options,” along with the creation of “grants intended to spur more than 8,000 housing units within urban growth boundaries across several Oregon cities, alongside investments in shelter and transitional housing for unhoused residents.”

Oregon offers a bright spot in a pretty dismal month for housing news. Leaders throughout the country should be watching the policies that Kotek and the Oregon legislature passed and considering adopting a major pro-housing slate in order to ensure that housing costs don’t continue to climb.

Retail Sales Drop in July. Is It a Blip, or Are Americans Finally Closing Their Wallets?

“US retail sales fell in July by the most in more than a year as consumers pulled back on purchases at online stores and auto dealers,” reported Julia Fanzeres at Bloomberg last week.

Fanzeres continues, “The value of retail purchases, which isn’t adjusted for inflation, decreased 0.6%, the most since May 2025.”

“Five of 13 categories in the report posted declines, led by a 2.2% drop in sales at nonstore retailers such as Amazon,” Fanzeres explains, citing Census retail report data. “Sales at motor vehicles and parts dealers fell 1.8%. Meanwhile receipts at restaurants and bars, the only service-sector category in the retail report, rose 0.5%.”

It’s possible that these numbers declined largely due to the skyrocketing cost of gas, which has been rising since President Trump launched the war on Iran earlier this year. But it’s also possible that consumers who have been stretched thin since inflation began to rise back in 2022 have finally reached a breaking point.

One data point for the stretched-consumer theory was published in the New York Times on Monday: “Americans spent $160 billion last year through pay-later loans, according to research released recently by Federal Reserve economists — nearly twice what consumers spent two years earlier, in 2023,” Stacy Cowley writes. “That’s still a fraction of the more than $3 trillion U.S. shoppers spend annually on consumer credit cards. But the industry continues to expand by double-digit rates each year.”

“A quarter of those surveyed by LendingTree who use the loans said they had at times had three or more loans outstanding at once,” Cowley writes. “And because pay-later loans often pull their payments directly from customers’ bank accounts or debit cards, one mistimed withdrawal can set off a cascade of overdraft fees and other missed payments.”

Those buy-now-pay-later apps are expanding into other categories besides shopping. Cowley explains that two services “allow customers to take out loans to pay for their broadband, electricity, health insurance, mobile phone service, mortgage and water bills,” while another “has started providing some tenants loans to extend their monthly rent payment for a few weeks.”

Last year, total American household debt stood “at $18.8 trillion and [had] increased by $4.6 trillion since the end of 2019, just before the pandemic recession,” the New York Fed reported earlier this year.

The most important figure to watch in the Fed’s annual report, delinquencies on loans, isn’t yet in the danger zone. Last year, the number of delinquencies just finally reached pre-pandemic levels and is nowhere near the massive spike in delinquencies we saw during the Great Recession:

There is a warning sign in this year’s data, though: Samantha Fields at Marketplace reports that “More people are delinquent on their credit card payments now than at any other point since the Great Recession.” Next year’s Fed study could show a worsening credit report for the average American.

All these numbers suggest that the finances of a majority of American families are precarious. When expenses are rising, and your daily life can best be described as surviving from paycheck to paycheck, it doesn’t take too much disruption to knock millions of people out of the economy and into dangerous levels of debt.

This Week in Trickle-Down

Ben Zipperer reminds us that even though the Trump administration promised that increased forced deportations would increase native-born American employment, in fact, the number of native-born Americans in the workforce has been tanking this year:

Steven Rattner wrote a must-read piece for the New York Times that investigates eleven distinct promises that President Trump made while running for re-election, pitting them against charts showing the Trump administration’s actual economic performance. Despite Trump’s promises to balance the budget—and Elon Musk’s claims that he would cut $2 trillion from the budget—the federal deficit is on track to grow at a record clip under Trump:

This Week in Middle-Out

In an editorial for In These Times, Heidi Shierholz agrees with Nick Hanauer’s argument that the affordability crisis is also a wage crisis. She suggests that increased union power will help win back the wage gains that workers have lost. “We find that tripling union membership would raise pay for the typical worker by more than $7,700 every year, or nearly $270,000 over a 35-year career,” Shierholz writes. “This would be life-changing for a working family — nearly covering the cost of raising a child from birth through age 17, for example.”

Real-Time Economic Analysis from Civic Ventures

On the Pitchfork Economics podcast, Nick and Goldy talk with Carrie Joy Grimes, founder of the nonprofit WorkMoney, which helps working Americans save more and pay less. Her bestselling book, The Joy of Money, consolidates some of the most important lessons Grimes has learned in her time at WorkMoney. This is a different kind of conversation for Pitchfork Economics—a ground-level look at the personal impact of not feeling good about the way you manage your money. It’s a great episode to send to friends who might not think they care about economics but know they’re falling behind financially for reasons beyond their control.

And Nick Hanauer appeared this week on a live video presentation of Anand Giridharadas’s Substack publication The Ink for a substantive conversation about the origins of Nick’s interest in economics, his work developing Market Humanism with Oxford economist Eric Beinhocker, and much more.

Nick Hanauer

Nick Hanauer, traitor to his class?

Listen now

17 days ago · 23 likes · 4 comments · Nick Hanauer and Anand Giridharadas

Closing Thoughts

One report I look for every year is the AFL-CIO’s Executive Paywatch, which compiles publicly available CEO pay data from the Standard & Poor’s 500 index and compares it to worker pay. It probably won’t surprise you to learn that this year delivered another year of record-breaking compensation in the corner office.

“S&P 500 CEOs took home an average pay of $22.8 million in 2025 and made 312 times the wage of the median U.S. worker, up from 285 times in 2024,” the AFL-CIO reports.

“Thanks to a 21% increase over the previous year, this year’s report shows the highest-ever level of executive compensation in three decades of tracking,” they write. Remember, even though Econ 101 professors tell students that the free market pays every worker exactly what they’re worth, that 21% pay increase is a raise that CEOs essentially gave themselves, with the blessing of their executive boards. The free market doesn’t factor into the equation at all.

One noteworthy development in this year’s report is that the AFL-CIO had to omit the earnings of one of the executives because his pay was so high it would have marred the dataset beyond recognition. They separated out “Elon Musk’s $158.3 billion pay package,” which temporarily pushed Musk into trillionaire status when SpaceX stock went public this year. Musk’s salary was “a figure so high it would have skewed the data on its own.”

Had they included Musk’s compensation, “the average S&P CEO pay [would have] exploded to $340.1 million in annual salary, a 1,700% increase from 2024.” The report notes that “Musk’s total compensation alone was 2,522,203 times the median Tesla worker’s pay in 2025.”

At the same time, “Tesla reported owing $0 in 2025 U.S. federal income tax on $5.68 billion in adjusted income, thanks to a number of tax breaks, including those signed into law by Trump in 2025.”

This is what I mean when I say $80 trillion of the wealth of the top 1 percent was sucked directly out of the paychecks of working Americans. The additional millions of dollars that CEOs opted to give themselves this year used to be invested into the workforce, who would then spend it in their local communities. That circulating money would grow the economy for everyone. Instead, it’s hoarded at the top, where the richest people in the world rub money together to make more money.

Mark Zandi, the chief economist at Moody’s Analytics, recently shared a graph that is fast becoming one of the most essential trackers of the modern American economy: The diminishing wealth held by working Americans versus the surging wealth held by the wealthiest Americans:

“From WWII to Y2K, workers received close to two-thirds of the pie, while capital received the other one-third,” Zandi explained. Now, “the split [is] closer to fifty-fifty.”

Zandi suggests the two biggest factors in the loss of worker wealth are the emergence of China as a world economic power and the pandemic. I’d argue that the three pillars of trickle-down economics—tax cuts for the rich, deregulation for the powerful, and wage suppression for everyone else—are much more likely to blame.

The economy is much healthier when workers own more of the economy. In general, the more consolidation we see, the unhealthier the economy is—it’s just as true when discussing monopoly power as it is when we talk about trillions of dollars in the hands of a few guys in suits.

These two charts, and in fact pretty much every chart in this issue of The Pitch, indicate to me the most important economic mission of the next time middle-out leaders win elections. It’s beyond clear that the people who gain their wealth through the accumulation of capital—that is, people who passively make money on stocks and other investments—are being preferred over people who gain their wealth by working for a living. In our tax code, we tax the profits made from an hour of work more than the profits made from an hour of sitting on top of a massive stock portfolio.

That needs to change. We need to revise our economic systems so that they once again respect the power of a hard day’s work more than they respect a private equity executive who shutters businesses, lays off workers, and pockets millions of dollars before lunchtime on a Monday. That’s the next great goal for the American project, and it is a goal that I believe we can win.

Be kind. Stay strong.

Zach

Since the spring, economists have argued that the labor market was at best holding steady and at worst slowly losing steam. That argument fell apart on Friday, when we saw the July jobs numbers: “Employers cut 23,000 positions on a seasonally adjusted basis last month,” Lydia DePillis writes for the New York Times.

Ben Casselman explains that “The July drop was partly driven by a big decline in public school employment, which could be a quirk of seasonal adjustment. But private-sector job growth has also slowed to a crawl,” he warns. DePillis adds, “the unemployment rate dropped slightly to 4.1 percent as hundreds of thousands of people left the labor force.”

The number of workers leaving the workforce is especially concerning. Aaron Sojourner reports that if you leave out Covid, July’s 61.4% workforce participation rate—meaning the total percentage of working-age people who are holding jobs—is the lowest it’s been in over 50 years. Nearly 40% of working-age Americans are unemployed and currently not looking for work.

Americans who do have jobs are bringing home less in their paychecks. “Hourly earnings grew 3.2 percent over the year, the slowest pace since May 2021,” DePillis writes.

The stronger-than-expected job gains that the Labor Department reported in May and June, which buoyed many economists’ hopes for a positive turn in the labor market this fall, turned out to be a mirage. May’s addition of 129,000 jobs was revised down to 53,000 jobs in this month’s report, and June’s 57,000 jobs created actually turned out to be 20,000 jobs.

The jobs report looked even worse when you started to look at the underlying numbers. Joey Politano pointed out that despite the Trump administration’s claims that forced deportations of immigrants would create job opportunities for native-born Americans, “prime-age employment rates for native-born Americans fell to the lowest levels in more than four years.”

Virtually every economist predicted that the job market in restaurants and hospitality would boom this summer as tourists arrived for the World Cup. Those jobs never materialized as predicted: America actually lost 12,100 restaurant jobs in June and 26,100 in July

So the toplines of Friday’s jobs report delivered bad news for American workers, and the smaller details of the report delivered even worse news. And in the bigger picture, we can see exactly how much workers have lost throughout the entire trickle-down era. Axios reports that U.S. labor share has reached an all-time low.

“The labor share tells you what percentage of the giant paycheck produced by the U.S. economy goes to workers in the form of wages and benefits, rather than to corporate profits, dividends, rents and interest paid to other economic actors,” reports Matt Phillips.

After decades of deterioration throughout the dawn of the trickle-down era, workers lost more and more wealth to the rich and powerful throughout the 21st century—and now labor share has been plummeting since a brief post-pandemic upswing.

That share is now the lowest ever recorded—53.7%, down more than 10% from when economists began measuring the labor share after World War II. The deal for all of modern history has been that we all own a piece of the American Dream. This is no longer the case. Working Americans own a shrinking share of our national wealth.

It goes without saying that this is unsustainable. As Civic Ventures founder Nick Hanauer famously said, these are conditions for growing unrest, eventually ending in either a violent rebellion or a police state. The percentage of wealth owned by workers will be one of the most important metrics for measuring the nation’s health in the months and years to come.

The Latest Economic News and Updates

Inflation Slows Down a Bit, but Paychecks Are Falling Way Behind

Yesterday’s Consumer Price Index report almost perfectly aligned with most economists’ expectations. “U.S. consumer prices rose 0.1 percent in July and were up 3.4 percent from a year earlier,” Ben Casselman writes. The so-called “core” price index, which excludes volatile food and energy prices, “were up 0.2 percent month/month and 2.5 percent year/year,” Casselman explains.

This is a very small step in the right direction—prices are increasing more slowly than they were in the spring, when uncertainty surrounding the war on Iran caused oil and fertilizer prices to skyrocket. But this report is hardly a win for the American people.

While many economists and the Federal Reserve are excited to see core inflation match some recent lows, we need to remember that core inflation is probably the least important metric in the CPI report for working Americans. Remember, core inflation strips out energy and food prices because those are traditionally volatile. Not including food and energy makes sense for professionals who need to chart the overall course of how inflation is trending over time.

For the American people, though, high energy and grocery prices are the whole ballgame—in conjunction with housing prices, they are the top three pricing pressures that families are facing every single month. And food and energy prices are still near the high-water mark of the past three years. Anyone who celebrates this week’s inflation report needs to take a step out of the academic bubble and talk to real people at gas stations and grocery stores to gain some perspective on what all these numbers actually mean.

Another number that was released by the Bureau of Labor Statistics yesterday offers more bad news for Americans: “Real average hourly earnings for all employees decreased 0.1 percent from June to July, seasonally adjusted,” the bureau reported. “This result stems from an increase of 0.1 percent in average hourly earnings combined with an increase of 0.1 percent in the Consumer Price Index for All Urban Consumers (CPI-U).”

So the typical American paycheck stayed flat, but because prices increased last month the spending power of those paychecks fell—not just for groceries or energy, but for everything.

Virtually everywhere you look at consumer data, you can see that workers’ wallets are straining. The New York Federal Reserve issued a report this week showing that debt held by Americans has grown: “Non-housing debt balances grew by $48 billion, or 0.9%,” from the first three months of the year, the New York Fed notes.

Aside from improvement in student loan debt balances, the rest of the report shows debt continues to grow: “Auto loan balances rose by $28 billion (1.7%), and credit card balances increased by $21 billion (1.7%). Other balances, which include retail cards and consumer finance loans, edged up by $6 billion to $568 billion.” Marketplace notes that “More people are delinquent on their credit card payments now than at any other point since the Great Recession.”

The most positive signal in the New York Fed report is that mortgage balances declined by $74 billion over the last three months. But that number might be decreasing because nobody can afford to buy homes.

“Sales of previously occupied U.S. homes slowed again in July as record prices and the highest mortgage rates in a year prove to be an insurmountable hurdle for many prospective buyers,” reports the Associated Press, which adds that “Existing home sales fell 1.7% last month from June.”

Sales likely dipped in part because “Home prices continued to rise, hitting unprecedented levels for the month of July,” the AP notes. “The U.S. median sales price increased 2% from a year earlier, to $434,100.”

“In June, the median sales price hit $442,800, an all-time high for any single month on data going back to 1999,” continuing a streak of 37 consecutive months of home price increases. With the spending power of paychecks declining, it’s hard to see how that number turns around without major policy interventions that make housing more affordable for working Americans.

Fighting Price Gouging and Growing Paychecks in American Cities

It’s been a rough week in terms of economic data, so let’s turn our attention to some much-needed good news. State and city leaders from coast to coast are promoting policies that seek to bring down costs and grow paychecks for workers. I wanted to highlight two interesting policies that are now being debated in major cities—policies which, if passed, could soon be adopted in other parts of the country.

In my home city of Seattle, Mayor Katie Wilson joined with city councilmembers to put forth a new policy that would make Seattle the first city in the nation to address algorithmic discounts, also known as “surveillance pricing,” through which grocery stores use your personal data to raise the prices of specific items just for you.

The mayor’s office explains that the Fair and Transparent Pricing policy “will bar large online and brick-and-mortar grocery retailers from using sensitive personal information such as employment status, race, gender, social media posts, browsing history, chatbot conversations, or other similar data to set different prices for different customers.”

The law demands that “Prices must be clearly posted and publicly available,” and carveouts will still exist for “Conventional coupons and discounts for seniors, veterans, and other similar groups,” along with “other types of open and transparent discounts.” In other words, coupons, senior discounts, and grocery store club card discounts will still function as they always have, but those discounts must be transparent and broadly available to everyone who meets the standards.

You might remember that last year, Consumer Reports and Groundwork Collaborative found that Seattle grocery stores were charging Instacart shoppers different prices for the same products, indicating that the AI-powered algorithms were likely using the personal information of shoppers to jack up the prices. (Nick and Paul talked with Groundwork Executive Director Lindsay Owens about this report on the Pitchfork Economics podcast.) This law would ensure that grocers wouldn’t be able to use cutting-edge surveillance technology to squeeze an extra few bucks out of you every time you shop, just because you posted about the promotion you earned at work on social media.

And in New York City, Mayor Zohran Mamdani is promoting legislation that would stop big employers from misclassifying delivery employees as subcontractors.

“Major corporations like Amazon have built billion-dollar businesses on a subcontracting system designed to shield them from responsibility,” the mayor’s office writes. “Through delivery subcontractors, corporations dictate hiring standards, delivery routes, steep productivity quotas and workplace expectations while denying that the workers making those deliveries are employees.”

The Delivery Protection Act would establish “a licensing system for certain last-mile warehouses and distribution facilities while establishing new safety, training and labor standards.” In addition, it would “hold the company operating the facility, such as Amazon, responsible for employing the workers performing core services, such as delivery.”

The subcontracting arrangement in so-called “last-mile” delivery facilities allows large employers to avoid responsibility for unsafe working conditions, wage theft, and other workplace safety and worker rights regulations. The mayor’s office points out that unrealistic work performance expectations result in unsafe conditions for everyone else: “78% of nearby areas experienced an increase in injury-causing crashes after last-mile facilities opened,” because drivers under intense quota demands felt pressure to drive over the speed limit and ignore traffic safety laws.

In general, eliminating contractor and subcontractor status is a win-win for workers. Contractors and subcontractors earn thousands of dollars less per year than regular workers, they’re typically not eligible for benefits, and they’re often not protected by the same regulations as typical workers. This policy would immediately benefit some of the most exploited workers in New York City, and those workers would immediately have more money to spend in New York City, growing the economy for everyone.

This Week in Trickle-Down

“The average U.S. household has already paid an additional $610 in gasoline and diesel costs since the start of the war in Iran,” reports the Center for American Progress. “Meanwhile, five of the top American and international oil producers alone have brought in a whopping $65.5 billion in profits in the first half of 2026—65 percent higher than in the same period in 2025.” Those five companies have more than doubled their quarterly profits over last year, CAP notes, “including Chevron, which nearly quadrupled profits.”

This Week in Middle-Out

Jason Calacanis, an investor and co-host of the Silicon Valley-friendly All In podcast, has written a mea culpa on raising the minimum wage that should be a must-read for all minimum-wage opponents. I can quibble on some of Calacanis’s points, but it’s refreshing to see someone—especially a public figure—look at the data with clear eyes and come away with an opinion that is the opposite of what they believed for years.

Real-Time Economic Analysis from Civic Ventures

Nobel Prize-winning economist Daron Acemoglu joins Nick and Goldy on the Pitchfork Economics podcast this week to talk about his latest book, What Happened to Liberal Democracy? They discuss why growing wealth inequality has resulted in widespread distrust in democracy around the world.

And on his YouTube channel, Nick Hanauer explains why the fuss over funding Social Security is overblown. He proposes a simple two-part plan that would fully fund Social Security for generations to come and simultaneously grow the annual paychecks of every worker in America by roughly 6%. This is a fun one:

Closing Thoughts

Last week, Texas Senate candidate James Talarico delivered a remarkable policy address that should be shared far and wide. The speech was noteworthy because it identified one of the central problems in America today, explained the deep roots behind that problem, and offered solutions to the problem in a sweeping bit of storytelling.

This is not the kind of speechwriting that you see very often in American politics anymore. Talarico combined a history lecture with explanatory storytelling to contextualize the real fight that’s going on right now—the battle between the haves and the have-nots. You can watch the speech on YouTube:

Or Talarico’s team provided the full text if you prefer to read speeches. Either way, it’s a speech for the ages.

First, Talarico laid out the problem statement. For most Americans, “It’s too expensive to buy a home,” “It’s too expensive to get married and have kids,” and “It’s too expensive to retire comfortably.”

“People are working hard and playing by the rules,” Talarico explained, “But the ‘rules’ of today weren’t written for us. They were written for billionaires.”

Jeff Bezos, Elon Musk, and Mark Zuckerberg “now own more wealth than the entire middle class,” Talarico said. “The top 1% put the American Dream behind a paywall.”

This is the end result of a real-life plan, he continued. We know it was a real plan because it was written down by a lawyer named Lewis Powell. “The Powell Memo outlined a strategy: unite corporate special interests, privilege corporate perspectives in the media, appoint sympathetic judges to the courts, and buy politicians on both sides of the aisle,” Talarico said, adding, “And it worked.”

Readers of the Pitch know trickle-down economics promises that if you invest in wealthy people and corporations by slashing taxes on the rich and deregulating the powerful, the wealth those policies create will eventually trickle down to everyone else. But actually, due to the third leg of the trickle-down stool—lower wages and less worker power—workers’ paychecks have stagnated. Some $80 trillion in cash that used to go to worker paychecks is now airlifted up to the top one percent. As Talarico says, “Trickle-down economics isn’t a theory. It’s theft.” It’s taken from tens of millions of working Americans, and handed to the elites.

All this historical context is nice, but what does it mean for Americans today? What does all this have to do with whether James Talarico wins the Senate seat in Texas?

“This ‘affordability crisis’ isn’t something that happened in the last five years. This affordability crisis has been fifty years in the making,” Talarico said.

That’s an important point. That $36,000 that’s been sucked out of the paychecks of average working Americans would make a lot more things a lot more affordable. “We have an affordability crisis because we have a corruption crisis,” Talarico said. “We’re getting screwed. Whether you’re a little more conservative or a little more progressive — we’re all getting screwed.”

This is not a partisan issue, he explained. Democrats and Republicans have both been in on rigging the system against the vast majority of working Americans. “They see us as people they can rip off. They see us as one opposing team. So we might as well act like one,” he says.

“It’s time for us to come together — across these manufactured divides — and take on the people at the top who have been screwing us over,” Talarico said. “Because the real fight in this country is not left vs. right; it’s top vs. bottom.”

This is perhaps the most straightforward and informative description of how trickle-down economics became the economic operating system of the United States of America that I’ve heard from a politician. It’s a compelling argument that trickle-down is behind most of our problems of inequality and affordability. So what does Talarico say he’s going to do about it?

That’s where the policy solution part of the speech comes in. Highlights include raising the minimum wage and expanding overtime pay, repealing the tax cuts passed by the Trump administration, and making it easier to form a union. He also proposes canceling medical debt, capping credit-card interest rates, expanding the child tax credit, and investing heavily in education, among other policies.

I urge you to listen to or read the whole speech for the full policy agenda. But Talarico explains that all of those policies are in service of three simple goals that hearken back to the beginning of the speech: By stripping trickle-down out of America’s economy, Talarico hopes to create an America where working Americans have access to “A house big enough to raise a family in,” a “quality education for yourself and your kids,” and a “retirement that is comfortable and secure,” as well as more “time doing what you love with the people you love.”

Put another way, his goal is nothing less than the renewal of the American Dream. Is this a tall order for one Senate candidate? For sure. But by making this cogent and powerful case against trickle-down and for investing in working Americans, Talarico is doing the important work of explaining to the American people that they’re not mistaken—the economy really is rigged against them. And he painstakingly explains who did the rigging, who benefits, and how.

Every economy is a story, one that explains who gets what and why. Fifty years ago, Lewis Powell and his associates changed the story to one that benefited the wealthy few at the expense of the many. With this speech, Talarico is doing his part to tell a better story about America. It’s a story that I believe many Americans would be very interested in hearing.

Be kind. Stay strong.

Zach

Back in January, United States Commerce Secretary Howard Lutnick made a bold prediction about the American economy: “I think we’re going to grow more than 5% GDP this quarter,” Lutnick said. He specifically cited President Trump’s tariffs, tax cuts, and deregulation as the drivers of that remarkably high Gross Domestic Product.

Lutnick’s prediction was very wrong. In fact, his estimate turned out to be three times higher than reality—first-quarter GDP actually came in at 1.6%.

A month before, Lutnick made a similar prediction for the second quarter GDP results ending in June: “Look for the second quarter to be amazing as all this money comes back into the economy from this Big Beautiful Bill,” he enthused.

Last year, Treasury Secretary Scott Bessent promised that “We could see between 4 and 5% real growth” in the GDP in 2026. In June, Bessent downgraded his promise, instead predicting that GDP would “have something with a three in front of it this year.”

On Thursday, we learned that GDP did grow in the second quarter of 2026, but that number was hardly “amazing,” and the final number didn’t have a three, four, or five in front of it—or even a two. “The American economy slowed in the second quarter of the year, expanding at an annual rate of 1.5 percent as the war with Iran upended prices, supply chains and energy markets,” wrote Talmon Joseph Smith at the New York Times.

Smith adds, “Growth in both personal income and consumer spending also slowed in June.”

Before we dig into what the Q2 GDP report means, we have to first acknowledge that GDP is a flawed measurement. It measures all the goods and services produced in the United States in a three-month period, but it does not differentiate between positive and negative goods and services—someone buying a pack of cigarettes is just as positive to GDP as someone buying a basket of summer produce at a farmer’s market.

And it doesn’t measure where that money goes. GDP doesn’t care if a corporation puts $10 billion toward a stock buyback that enriches a tiny handful of shareholders or if that corporation puts $10 billion toward higher wages for workers—even though the workers would immediately spend those wages, creating jobs with their increased consumer demand, while the shareholders would likely just stash the money in offshore accounts.

But even as we acknowledge that GDP is an inherently trickle-down measurement of the economy, it’s still the best gauge of our economy’s health that is currently available to us. As Smith wrote in the Times, this month’s GDP report should be worrying.

I want to circle back to Bessent and Lutnick’s failed GDP predictions because they’re important. The two cabinet officials were not shy about sharing their expectations for the economy, and they were eager to give the reasons for why they thought the economy would be soaring right now. They specifically cited the Trump administration’s tax reform bill, which delivered huge tax cuts to the richest Americans, and the rampant deregulation of corporations as the source of that predicted prosperity.

People who advocate for trickle-down economics argue that the wealthy few are the real job creators in the economy, and so they support policies that redistribute funds to the tippy-top of the economy, in the form of tax cuts and deregulation. For the last five decades, trickle-downers have consistently hacked away at the tax code and regulatory state in pursuit of that economic growth.

Trickle-down has not performed as they promised. In fact, you can see the shift into trickle-down at the dawn of the Reagan administration, in the early 1980s, on this graph of GDP readings over time. GDP contracts into a much smoother, smaller line.

The only recent time when GDP rose to the levels that we saw in the 1950s, 1960s, and 1970s was just after the pandemic, when the suppressed spending caused by economic anxiety in the early days of the Covid lockdowns finally relaxed. (The middle-out economic policies of the Biden administration, which invested heavily in the American people and led us to the fastest and strongest economic recovery from the pandemic in the world, also obviously helped.)

So Lutnick and Bessent’s failed predictions point to a different hypothesis: What if our current meager GDP is actually the best economic growth we can muster under trickle-down economics? Maybe after decades of tax cuts for rich people and more than $80 trillion shifted from 90% of American workers to the wealthiest few in the top 1%, there simply isn’t enough cash circulating from the paychecks of workers through their communities to raise GDP any more.

If we truly wanted to see the economy grow at levels equivalent to when the American economy was at its strongest, we would pursue policies that invested deeply in working Americans and grew their paychecks. It stands to reason that a measurement of economic growth that tracks all goods and services created and sold in the United States would show more growth if more Americans had more money to spend. Fifty years of stagnation in the paychecks of working Americans has left us with anemic growth, and all the tax cuts in the world aren’t going to get us on the road to shared prosperity.

The Latest Economic News and Updates

If You Don’t Have It All, You’ve Got Nothing

In the introduction, I wrote about the early victory laps that Trump administration officials were taking to celebrate Q2 GDP results. When those results turned out to be lackluster, though, the Trump administration was much more subdued. National Economic Council Director Kevin Hassett, who previously predicted that GDP would rise to 6% this year, appeared on Fox News to address America’s poor economic showing.

“I think that America’s farmers have had some tough breaks,” Hassett told Maria Bartiromo. “A bumper crop in Brazil made it so prices went down globally, the disruptions in the Gulf have made fertilizer prices go up,” he explained.

Hassett is correct—America’s farmers have had an exceptionally difficult year, and their economic difficulties reverberate throughout the economy. But he doesn’t mention that most of those difficulties are a direct result of the Trump administration’s policies. The forced deportations happening from coast to coast have left farm workers reeling and created work shortages that leave crops out in the fields to rot. Hassett also doesn’t mention that the “disruptions in the Gulf” that created a fertilizer shortage were directly caused by Trump’s decision to attack Iran.

This is par for the course for the Trump Administration: It is laser-focused on getting money into the hands of the wealthy and powerful while ignoring the out-of-control prices and other costs that are dragging down working Americans.

Here’s another example: After the Supreme Court demanded it, the Trump administration has finally started to issue refunds for the illegal tariffs that it collected last year. Those refunds aren’t going to the working Americans who paid the higher prices caused by those tariffs. Instead, they’re handing billions of dollars back to corporations.

According to Newsweek, the Trump administration has given $2.2 billion to Apple, $1.3 billion to Ford, and one billion dollars to Nike. Amazon has gotten $600 million in tariff refunds, and GM has collected $500 million.

Imagine if American families received reimbursement checks for the roughly $1000 extra that they paid on tariffs last year. They would spend those checks immediately in their communities, supporting local businesses and improving the economy for everyone.

Instead, Apple will just toss its $2 billion check into the same bottomless well of profits that the company has cultivated for the last twenty years. To Apple, that $2 billion rebate is a drop in the bucket compared to the $100 billion stock buyback that the tech giant announced earlier this year.

The billions that Apple is getting back from the government will just sit at the top of the economy, where it will be hoarded and used to create even more wealth for an elite class of shareholders.

Increasingly, big corporations aren’t interested in investing in anything that will benefit workers or customers. Instead, they’re dumping huge amounts of money and energy into AI infrastructure. Economist Joey Politano notes that investments in data center construction and other AI necessities recently hit an all-time record of $450 billion per year.

That’s more than America spent on the construction of new single-family homes last year. It’s more than America spends on the construction of factories and electricity generation combined in a single year. It’s roughly four times the amount that America spent on the construction of new multi-family homes last year.

These are staggering numbers, and it remains to be seen how much, if any, of that spending will benefit anyone except a tiny handful of wealthy shareholders and corporate executives by puffing up stock prices.

We’ve talked a lot about the K-shaped economy, in which the economy favors a tiny handful of wealthy families at the expense of the vast majority of working Americans. But this trickle-down on steroids, in which a handful of CEOs are directing the flow of trillions of dollars away from working Americans, feels like something else again. In the next section, we’ll take a look at how working Americans are responding to this massive upward flow of wealth.

What It’s Like for 90% of Americans

The American people can clearly see what’s going on. They understand that rich people seem to be living in a strong economy of their own that’s completely separated from the existence of working Americans. And they know they are struggling with their own finances.

New polling from Navigator Research shows that a full 60 percent of Americans report having trouble making ends meet, and more than half of those 60 percent of Americans say they’re living paycheck to paycheck.

Another economic study, the essential University of Michigan Consumer Sentiment Study, recently reported that the number of Americans who say they’re having trouble making ends meet specifically because of high prices hit an all-time high in June. Some 56% of respondents said the higher prices are harming their personal finances:

The respondents to the Navigator poll had a very good idea where the higher prices they’re paying are coming from. They correctly identify tariffs, the war on Iran, and the forced deportations as the top three drivers of high prices. Nearly a third of respondents also see the cuts to SNAP funding as a major economic problem as well:

Increasingly, the relationship between a full-time job and economic stability is fraying. In June, the Government Accountability Office released a report that was grossly under-covered in the media. GAO examined the data in eleven states and found that of the millions of people in those states enrolled in public assistance programs like Medicaid and SNAP, about two-thirds of all enrollees worked in full-time jobs, and the vast majority of those enrollees work for private employers. Some of the larger employers had thousands of workers enrolled in social safety net programs.

Here, for instance, are the top ten employers of workers enrolled in Medicaid in the state of Indiana:

And here are the top ten employers of workers enrolled on SNAP in Indiana:

It should not be a controversial opinion to state that anyone working a 40-hour-a-week job should be compensated well enough that they don’t need to apply for food assistance programs. America’s current health care system is built on the idea that full-time employees should be insured by their employers, not state assistance programs.

Although it must be said that employer-provided health insurance is not particularly popular with workers. A recent poll found that 24% of all working Americans “report staying in unwanted jobs for health insurance — a figure that’s risen dramatically in the last five years,” according to NPR’s Joseph Kim.

That’s a lot of facts and figures, but they all point to a single conclusion: Americans feel as though the deal that they were promised in the American Dream is no longer relevant. Not even full-time employment is enough to ensure a stable middle-class life. In some cases, full-time employment isn’t even enough to guarantee a life above the poverty line.

It’s important to tie all of this together: The wealth concentration at the tippy-top of the economy isn’t happening independently from the bottom dropping out for working Americans. The wealth concentration at the top is causing the bottom to drop out for working Americans—it’s the same money. This is what it looks like when you redistribute $80 trillion to the wealthy few through the application of nearly 50 years of trickle-down economics.

It’s a daunting problem, but the solution is clear: Rather than directing wealth to the top of the economy, we just need to reorganize our tax code, labor laws, and other economic systems so that they prioritize growing the paychecks of workers first. That’s how you fix the economy so that it grows for everyone.

This Week in Trickle-Down

• The Economic Policy Institute looked at the amount of taxpayer money—$4.4 billion—that’s currently being spent on forced deportations in Minnesota and explained what that money could have done for the people of Minnesota instead. The state could have hired 14,000 full-time teachers, kept 130,000 more rural Minnesotans on health insurance, fed every single hungry family in the state, or given every household a $2000 tax refund.

• “For 2027, employers plan to raise their base pay by an average of 3.5%, up a meager 0.1 percentage point from this year’s hike,” reports compensation software company Payscale. “Such pay increases will keep worker pay ahead of inflation, but perhaps not by much,” reports Megan Cerullo. “Consumer prices rose at an annual rate of 3.5% in July, according to recent government data.”

This Week in Middle-Out

This week’s primary elections delivered big wins for middle-out political candidates around the country. One of the biggest wins of the night was in Missouri, where voters overwhelmingly rejected a state initiative that, if passed, would have eliminated the state income tax. Voters understood that tax revenue results in investments for working Missourians, and they rejected the amendment by nearly 85 percent. This is an important reminder that trickle-down politics—especially tax cuts for the rich—are hugely unpopular with the American people, and they’re only growing more unpopular with each passing year.

Real-Time Economic Analysis from Civic Ventures

On the Pitchfork Economics podcast this week, Nick and Goldy were joined by Washington State Attorney General Nick Brown, who explained why Washington joined a dozen other states in a lawsuit to stop the merger between Paramount and Warner Brothers. It’s a great conversation about outsized corporate power and government’s role in fighting for the people who get left behind when monopoly power grows.

Civic Ventures founder Nick Hanauer and Oxford economist Eric Beinhocker joined Current Affairs for a long conversation about Market Humanism, their synthesis of the latest thinking that explains why economies grow when you invest in the many, not the few at the top.

Roosevelt Institute president and CEO Elizabeth Wilkins joined Pitchfork Economics to explain the Good Life Agenda, which is Roosevelt’s policy platform for unrigging the economy and putting working Americans at the center of the economy again.

Closing Thoughts

Thanks to the many increases we’ve seen in states and localities around the nation, the minimum wage is now one of the most-studied economic policies of our time. Those studies have proven time and again that despite the threats of trickle-downers, raising the wage doesn’t kill jobs, and newer studies are showing that, in fact, raising the minimum wage actually creates jobs.

What about raising the overtime threshold? The economic policy that Nick Hanauer once called the minimum wage for the middle class has basically gone unexamined by academics and economists during the last couple of decades.

There are two major reasons why the minimum wage has been studied so extensively, and the overtime threshold has not. First, fewer locations have raised the overtime threshold to ensure that more workers are paid time-and-a-half for every hour worked over 40 in one week. (California and my home state of Washington, which will soon have the highest overtime threshold in the nation, are two of the biggest exceptions.)

Second, the minimum wage is an incredibly simple subject to understand. Overtime is a bit more complicated. The rule used to be simple: If you earned less than the federal overtime salary threshold, which currently sits at $35,568 per year, and you worked over 40 hours in a week, you were paid time-and-a-half for every hour worked over 40 hours. If your employer didn’t want to pay the additional wages, they’d simply make sure the workload was distributed evenly so that workers would go home on time.

Trickle-downers have written a ton of exceptions into overtime regulations, making the rules so complicated that many workers now don’t even know whether they’re eligible for overtime pay. Because managers weren’t eligible for overtime pay, the title’s qualifications were expanded to the point at which minimum wage employees with no experience or supervisory responsibilities were given pointless “manager” titles that meant employers would never have to pony up extra pay.

All those trickle-down efforts to keep the threshold low and to meddle with the rules have basically decimated access to overtime pay. In 1975, roughly 65% of all salaried employees were eligible for overtime pay if they worked more than 40 hours in a week. Today, only 8% of salaried employees are eligible for overtime pay.

The long dry spell for economic research on overtime ended in July, when Simon Quach published a paper studying the employment impacts of raising the overtime threshold. Quach studied “administrative payroll data and state-level [overtime] threshold changes from 2014-2021” to examine what happens to workers when states make more people eligible for overtime pay. The results are fascinating.

Quach found that employers were not likely to hire more workers to lessen the workload and make it less likely that employees would work more than forty hours a week. But contrary to trickle-down threats, employers didn’t try to lower wages for new hires in order to lessen the costs of paying time-and-a-half.

“Instead, employers raised salaries above the threshold to keep workers exempt from overtime,” Quach writes. Those raises tended to be quite significant, topping out near 8.5%. Quach concludes that “these results suggest that expanding overtime coverage increases workers’ earnings without negatively impacting employment.”

That’s a big deal. Raising the overtime threshold results in a significant and immediate raise for workers who are below the new threshold—and I do mean immediate: “on the exact month that the overtime exemption threshold increases, the number of salaried workers earning between the old and new thresholds falls by 21%,” Quach reports. More than a fifth of the job market eligible for overtime pay immediately receives a raise so that employers won’t have to pay time-and-a-half for every hour worked over 40 per week.

Hopefully, Quach’s paper and methodology will inspire more economists to explore the benefits of overtime for American workers. Remember, those early studies on the minimum wage after the Fight for $15 only showed minimal benefits for workers because researchers were specifically looking for damage caused by raising the wage. Trickle-down dogma had so infected the economics profession that virtually every economist believed for a fact that raising the wage always kills jobs.

It was only after economists stopped looking for the nonexistent negative results of the so-called “tradeoff” between raising the wage and layoffs that they started to see that raising the minimum wage actually was good for everyone in the economy. It’s likely that future economists could similarly build on Quach’s important research to find more benefits for workers under a healthy overtime threshold.

Be kind. Stay strong.

Zach

Attention, NYC Shoppers: Lower Prices Are On the Way

This week, New York City Mayor Zohran Mamdani followed through on one of his highest-profile campaign promises. At a press conference on Monday, Mamdani announced that New York City was on track to open five new municipal grocery stores, with the first set to open in late 2027.

Mamdani ran on the idea of government-run grocery stores as a way to combat food deserts in low-income neighborhoods. At the press conference, he announced exactly how the grocery stores, which will be called N.Y.C. Groceries, would bring prices down for New Yorkers: “a core basket of everyday groceries will be 30 percent cheaper” than in other grocery stores. The discounted products include “all fresh produce, meat and seafood, along with roughly 20 additional categories of pantry staples, dairy and refrigerated goods.”

Importantly, this isn’t some means-tested program that low-income New Yorkers will have to fill out forms in order to access. That 30% discount “will apply to all regardless of income, with prices locked in and predictable rather than fluctuating week to week as is the case at private grocers,” the press release explains.

For regular N.Y.C. Groceries shoppers, “savings are projected to cut New Yorkers’ average grocery bill by 15 percent, about $90 a month, or roughly $1,000 a year.”

Obviously, this is a big deal. Grocery prices in America have increased by 33% since 2019, meaning that all the items in a hundred-dollar grocery bill from before the pandemic now total an average of $133.

The cost of living has increased everywhere in the United States, but it’s especially high in New York. The city recently released a report (PDF) showing that 16% of all NYC households are below the poverty line and 34% of households have fallen below the true cost of living for the city, meaning that roughly half of all NYC households are struggling to make ends meet.

Even seemingly comfortable middle-class New Yorkers are sensitive to skyrocketing grocery costs. A Siena University poll found that 81% of all New Yorkers report rising food costs are having a “serious impact” on their financial conditions.

Government-owned grocery stores aren’t exactly ubiquitous in the United States, but N.Y.C. Groceries wouldn’t be the first of its kind. The federal government has been in the grocery business for over 150 years on military bases around the world: “Military commissaries are an excellent example of how storefront collaboration can keep prices competitive. By having their network of stores share suppliers, they are able to maintain prices 25-30 percent lower than retail stores,” report Omar Ocampo and Maya Khadr at Inequality.org.

Sparsely populated rural areas around the country, even in the reddest of red states, have had to devise new ways to bring healthy groceries to the people. “The St. Paul Supermarket, a grocery store owned and operated by the city of St. Paul in Kansas, is a successful example of a city-owned shop,” Khadr and Ocampo write. “After the retirement of Joe and Sue Renfro, the city government decided to purchase it. The grocery store is now in its twelfth year of operation as a city-owned enterprise.”

But Wait—Isn’t This Socialism?

No.

Really? Government-Owned Grocery Stores Aren’t Socialist?

I repeat: No. That’s the short answer.

But if you’re really concerned about this, here’s the long answer: The media seems to be trying to gin up a socialist scare right now. This week, Jim VandeHei and Mike Allen of Axios published a histrionic post warning that the Democratic Party is already halfway down the six-step path to socialism, which they equated with the Republican Party’s descent into Trumpism. I can’t recall reading anything quite so panicky published in Axios since the site began in 2017.

Because he’s a high-profile elected official with ties to both the Democratic Party and the Democratic Socialists of America, Mamdani and his grocery stores are a common target of the media’s socialist panic. Fox News rolled out the “s”-word in a story about N.Y.C. Groceries, warning that they will kill competition and wipe out for-profit grocery stores on the taxpayer’s dime. Back in April, the local ABC affiliate warned of creeping socialism and the death of private business if Mamdani’s grocery store plan became real.

This obviously isn’t socialism. For one thing, Mamdani’s grocery store plan is a public-private partnership with for-profit grocery vendors. It pays for-profit suppliers for groceries that the stores will then sell to customers in exchange for money. This is the most basic definition of capitalism. I also want to note that Mamdani’s last major initiative before announcing N.Y.C. Groceries was a plan to slash regulatory red tape to make it easier for small businesses to operate in the city—not exactly the height of Marxist economic theory.

It’s true that the Mamdani plan for N.Y.C. Groceries will put $70 million of government funds toward setting up the stores and subsidizing the stable low prices for eggs, meat, vegetables, and other staples. Governments subsidize all kinds of goods and services all the time for the American people.

The federal government subsidizes American farmers to the tune of tens of billions of dollars every year, for instance, averaging out to about 13% of every farm’s net income. We do this because it would be a bad thing if our farmers were unable to produce food due to financial strife, and we can’t trust the free market to ensure that Americans have enough food to eat—especially during financial downturns and other emergencies like the pandemic.

Libertarians who want to whine about Mamdani’s grocery stores choosing winners and losers in the free market should turn their eyes to the energy industry, where the federal government has for a century and a half had its thumb on the scale on behalf of the biggest polluters on the planet. The Center for American Progress estimates that the federal government has delivered some “$549 billion in direct tax subsidies” for the oil, gas, and coal industries over the past 150 years. It’s delivered less than a third of that amount for renewable, clean energy over that same time frame.

It’s not just Big Oil and Big Ag. Unemployment insurance is a government subsidy. So are Obamacare plans for low-income Americans, and SNAP food assistance programs and free school lunches. Plenty of states and localities have government-owned or supported utilities that are proven to keep bills lower and services better. One group found that publicly owned power companies charge customers 14% less than private utilities, and offer more reliable service than private electric companies.

It’s All About Competition

As Zach is fond of saying here in The Pitch: This is exactly what government is supposed to do! Capitalism uses markets to pit businesses against each other, and that competition brings prices down for consumers and wages up for workers. But capitalism doesn’t always run smoothly. Some markets simply don’t deliver the best outcomes.

Government subsidies are especially important in cases when the free market fails. No corporation has yet figured out how to profitably deliver food to rural Americans in far-flung outposts in Kansas and North Dakota, so those communities have created government-run grocery stores to pick up the slack. Food deserts exist in urban areas because grocery chains don’t want to serve certain impoverished communities—often due to systemic racism.

What about the claims that by selling a market basket of staple goods for 30% less than other grocery stores, Mamdani’s grocery stores will put bodegas and corporate grocery chains out of business? Isn’t he picking winners and losers, here?

Not at all. That argument only works if everyone is, as Econ 101 has argued for decades, a perfectly rational consumer who always finds the lowest available prices. In reality, not everyone chooses to shop at Grocery Outlet or Family Dollar because their prices are lower than Whole Foods. Human beings are complex creatures who often behave irrationally, and we respond to billions of different inputs when making decisions.

Put another way, all of New York City’s 8,584,629 residents aren’t going to shop exclusively at the five N.Y.C. Groceries locations because their prices are lower on beans and bread. But the 77% of families in the Hunts Point neighborhood of the Bronx who are struggling to make ends meet and don’t live within walking distance of a grocery store will likely be happy to have the option when the first N.Y.C. Groceries opens there in 2027.

What Mamdani is doing is creating competition that will likely bring down prices among other grocers and suppliers, too. Nobody expects Whole Foods to match the 30% discount at N.Y.C. Groceries, but they will likely lower some prices on specific staples in an effort to attract shoppers. It must also be said that many of these grocery prices were artificially high, to begin with. Don’t forget that the biggest egg producers in the United States colluded with each other to raise their prices and take their profit margins to record-high levels before they were sued and forced to stop.

It’s also a big deal that Mamdani is requiring grocers who participate in N.Y.C. Groceries to “deliver quality jobs alongside affordable groceries. Operators will be required to provide family sustaining wages and benefits and commit to a Labor Peace Agreement so that workers who want to organize can do so without interference.”

Remember, it’s not just prices: Labor markets need robust competition in order to push worker wages higher, too. The lack of competition in the grocery space, with a handful of big corporations owning a huge chunk of the national market, has held wages too low for too long. Even worse, it’s also emboldened grocery chains to illegally repress wages. Big grocery chains Kroger and Albertsons secretly entered into a “no-poach” agreement that said they wouldn’t compete to hire each other’s workers, which forced all grocery worker wages lower.

For the last 50 years of trickle-down economics, grocery store retailers have swallowed each other up in a never-ending game of Monopoly, and they’ve passed the cost of those mergers and acquisitions on to everyone else. The Biden administration stopped the merger between Kroger and Albertsons, and Mamdani’s high-profile New York grocery stores are the beginning of an attempt to grab some of that power back for customers and workers.

This is how we improve industries that are in desperate need of repair: By encouraging change through competition. There’s nothing socialist about that.

Is This the Ultimate Solution for Price-Weary Working Americans?

We need to keep in mind that the N.Y.C. Groceries experiment could very well prove to be a failure. There are a lot of moving parts in the plan, public-private partnerships are always sticky, and maybe customers will reject the stores when they finally open. That’s okay. The thing about new policies is that they don’t always work.

What does matter is that working New Yorkers see that someone is out there fighting for them, taking big swings to bring down the cost of groceries to the tune of a thousand dollars a year. Notably, none of the people or organizations ringing the alarm bell about socialism have offered an alternative policy to lower prices for consumers. That’s because they’re not on the side of working Americans—they’re arguing on behalf of the fat cats who are benefitting greatly from the system as it is.

City-owned grocery stores aren’t the only solution to the problem of skyrocketing grocery prices. In Mexico, President Claudia Sheinbaum, one of the most middle-out national leaders in the world right now, negotiated with food producers and grocers to keep a basic “market basket” of 24 essential grocery items below the equivalent of 50 American dollars.

Canada passed a Grocery Code of Conduct that installs rules to ensure that all participants in the grocery supply chain, from producers to distributors to grocery stores, behave in a manner that benefits the community and encourages “reciprocal trust and collaboration.”

And Australia recently banned price-gouging by major grocery retailers, with “Penalties for breaches…set at a high of A$10m ($6.8m), three-times the financial gain from the breach, or 10% of the retailer’s annual turnover in the previous 12 months.”

Most of the world is currently wrestling with high grocery prices, and leaders everywhere are experimenting with ways to get food costs under control. The likely solution will involve many of these policies working in tandem. But the one thing I can say beyond the shadow of a doubt is that grocery store chain CEOs are not going to solve this problem out of the kindness of their hearts. When free markets fail, we turn to the government to fight on our behalf. Thankfully, leaders like Mayor Mamdani are doing just that.

This week we’re exploring the unwelcome return of tariffs, another economic signal warning that our economy is fractured between the haves and have-nots, and why the worst SNAP cuts in three decades couldn’t have arrived at a worse time.

I also want to talk about the public health crisis that’s been making headlines this week, but first we have to step back and talk about corruption. I’ve been writing with some regularity about corruption in the federal government, and last week another case of a federal employee allegedly profiting from their taxpayer-funded job came to light.

Bobby Allyn at NPR reports, “Federal regulators are in settlement talks with President Trump’s longtime teleprompter operator, who is alleged to have made nearly $100,000 on the prediction market site Kalshi.” Allyn explains that the teleprompter operator “is suspected of profiting off of his access to the president’s prepared remarks on a type of betting on Kalshi known as ‘mention markets,’ where people wager on words and expressions the president will or will not say during public events.”

Admittedly, when we’re talking about paydays like the president and his family making a billion dollars from cryptocurrency, $100,000 is a drop in the bucket. But that’s the thing about corruption: Any exterminator will tell you that if you spot a single cockroach on a kitchen counter, there are almost certainly dozens more lurking behind the walls. For every one instance of self-serving in the White House that is reported on, there are likely to be ten more people behind the scenes enriching themselves at taxpayer expense. Corruption engenders distrust, and when distrust spreads widely enough through a system, people begin to doubt the trustworthiness of the entire system.

As you know, the Food and Drug Administration is currently struggling to contain an outbreak of the parasite Cyclospora, which can be found on fruits and vegetables and which causes severe digestive distress, to put it politely. As of Monday, health agencies across 27 states have reported more than 6000 cases of people sickened by Cyclospora. The FDA reported that some test results indicated the likely culprit was shredded iceberg lettuce from Taylor Farms, a major producer of fruits and vegetables that both distributes to restaurants and sells directly to consumers through grocery stores.

On Sunday, the FDA issued a rare retraction of those claims, writing “FDA laboratory experts re-reviewed the sample results and have concluded that the finding does not represent true amplification and should be considered a false positive.”

The New York Times reports that the FDA’s retraction “followed days of confusion after Taylor Farms voluntarily recalled iceberg lettuce from 27 states, but did not offer more information about how people would be able to tell whether they had bought the contaminated product.”

“The F.D.A.’s retraction of the test result only enhanced uncertainty about what’s to come in the largest recorded cyclospora outbreak in U.S. history,” the Times added.

As I write these words, Americans are still confused and alarmed about the Cyclospora outbreak, and many people are avoiding raw fruits and vegetables altogether until reported cases die down. Two days ago, Health and Human Services Secretary Robert F. Kennedy Jr. said the outbreak was “under control,” but that claim hasn’t seemed to resolve the panic.

On his Patreon, reporter Matthew Cortland pulled together a few important facts to explain why a fairly typical public health incident has transformed into a widespread panic:

1. First, he notes, the Biden administration passed a “law called the ‘Food Traceability Rule,’” which was “designed to make tracing contaminated food easier.” The law “was supposed to go into effect on January 20, 2026.”

2. One year before the bill was to be enacted into law, Cortland writes, “Taylor Foods started paying Sidley Austin to lobby on ‘regulation of food safety.’”

3. Less than three months after Taylor Foods hired the lobbying firm, on March 20, 2025, Cortland notes that the “FDA announced they were pushing back the implementation of the ‘Food Traceability Rule” by 30 months.’

4. Six days after the Trump administration announced it had delayed the “Food Traceability Rule,” Cortland notes that “Taylor Fresh Foods Inc contributed $1,000,000 to MAGA Inc, a Trump-aligned super PAC.”

We can’t look at these facts and determine beyond a reasonable doubt that Taylor Fresh paid Donald Trump’s political machine to kill the FDA’s ability to trace foodborne outbreaks like the one the nation is facing right now. But because there are so many stories of corruption in this administration—because even the guy who runs the teleprompter was apparently using insider knowledge to make money on the side—we see scandals everywhere we look. In this environment, the facts that Cortland shared make it easy to come to the conclusion that the federal government is protecting Taylor Foods in exchange for political donations.

A culture of corruption in politics doesn’t just enrich the politicians who are busy getting their beaks wet—it also advances their political positions by inspiring fear and mistrust in the government.

If people believe that government is captured by selfish, self-interested crooks who are only looking out for themselves, they’ll stop trusting government to handle tax dollars responsibly and to provide investments that benefit the American people. That kind of environment is toxic and dangerous, but it’s also favorable to trickle-downers who can use that growing distrust in government to campaign for tax cuts for the rich and deregulation for the powerful.

The Taylor Farms debacle is a great example of why it’s important for progressive politicians to run on a strong anti-corruption campaign. Senator Elizabeth Warren has written an excellent anti-corruption bill that would be a good place for any candidate to start. Among other things, the bill imposes limits on the politician-to-lobbyist pipeline, breaks up close relationships between federal employees and corporations, and requires the disclosure of any potential conflicts of interest with strict repercussions for any violations.

We only have a short time to undo this damage before it becomes permanent. If a large number of self-serving politicians are quickly arrested and convicted for profiting on the people’s dime, our next crop of leaders can repair this growing distrust between the people and their government, and government can get back to the necessary work of informing and protecting the public, while also punishing the big corporations that play fast and loose with public health.

The Latest Economic News and Updates

Tariffs Are Back

Last week, we wrote about the lower-than-expected inflation report, which suggested that the ceasefire in Iran had inspired a temporary reprieve from the rising prices Americans have been struggling with for the past four years. In the days since that inflation report, the war on Iran has restarted, and shipping traffic through the Strait of Hormuz has essentially dropped back to zero:

If those pressures weren’t enough, this week President Trump decided to reignite his campaign of high tariffs on imported goods—this time on goods from Canada.

“The Trump administration announced Monday it will hit Canada with a 50% tariff on many goods imported into the United States,” reports Michelle Stoddart at ABC News.

“The list of goods covered by the new duties is very wide-ranging, from dairy products, alcohol and alcohol-related products to some food products,” Stoddart continues. “The tariffs also cover construction materials, clothing, furniture and technology, among other things.”

That wasn’t the only set of high tariffs imposed by the Trump administration this week. Mary Cunningham writes at CBS News, “Imported generic drugs could face tariffs of up to 100% beginning in 2028 under a plan announced Tuesday by President Trump, who said the measure is intended to push manufacturers to move production to the U.S.”

The idea that any Big Pharma company could reshore generic drug manufacturing in the United States in a span of roughly two years is highly unrealistic, to say the least. As a reminder, America has lost over 100,000 manufacturing jobs in the first year of the Trump administration after several years of manufacturing growth.

This is the first major spate of tariffs imposed by Trump since the Supreme Court ruled that the first round of tariffs was illegal and required the Trump administration to reimburse businesses that paid the tariffs.

“According to the budget data, the US has paid out $81 [billion] in tariff refunds so far this fiscal year, which started in October 2025, compared with $5bn during the same period last year,” Laura Almeida at the Guardian reported.

There are likely more tariffs on the way. “The latest proposal could affect leading partners including the UK, Japan, India, Taiwan and China, and would enable Trump to skirt previous court-imposed limits on his protectionist agenda,” Almeida writes. “The new tariff rates are expected to be between 10% and 12.5%. The US has also threatened to impose fresh levies of 25% on Brazil.”

“Last month Trump also threatened a 100% tariff on European countries, including the UK, that pursue a tax on the biggest US tech companies,” Almeida adds.

As we saw during the first round of tariffs last year, these tariffs are nothing more than an additional sales tax on American consumers. The Senate’s Joint Economic Committee determined that the average American family paid more than $1700 in tariffs between February of 2025 and January of 2026, totaling more than $231 billion in tariffs over the course of those eleven months.

While big corporations are enjoying the windfalls of tens of billions of dollars in tariff refunds, the working Americans who actually paid hundreds of billions of dollars in tariffs last year will not see a single penny of that payout. Instead, it looks like they’re being rewarded with even more tariffs this year.

Even though Americans have seen prices rise virtually everywhere for the last four years, the fact remains that they are still spending money. “Retail sales rose 0.2% in June, the fifth straight monthly increase, after May was revised up to a robust 1%,” writes Courtenay Brown at Axios.

The sales figures weren’t all strong. “Grocery sales fell 0.4%, while spending at clothing stores declined 0.3% and health and personal care retail shopping dropped 0.8% from May,” Brown reports. This could be a continuing sign of the K-shaped economy, with wealthy consumers in the top quintile of the economy holding up retail sales while everyone else struggles to pay their weekly grocery bills.

For Black Enterprise, Sidnee Michelle writes, “The Urban Institute found that 63% of working-age adults used a credit card to buy groceries during the previous year.” That’s a seven percent increase in Americans using credit to buy groceries over last year.

Michelle continues, “While most paid their balances in full, 19.6% carried a balance while making at least the minimum payment, and 8.7% said they did not consistently make the minimum payment.”

“The survey also found that nearly 10% of adults used buy-now, pay-later loans to purchase groceries. Among those borrowers, 34.8% missed at least one payment,” she adds. “About 20% of respondents also reported using savings intended for emergencies or other long-term financial goals to pay for groceries.”

This is a blinking red light for the American economy. Food is an essential expense, and a growing number of Americans are finding it difficult to pay those bills. And in the closing of this email, we’ll look at the unfortunate fact that millions of Americans are simultaneously being wiped off the rolls of food assistance programs around the country.

The massive income inequality between the wealthiest ten percent and the rest of the economy is obfuscating the pain that ordinary Americans are feeling—and if the Trump administration continues its war on Iran and campaign of tariffs, that pain is only going to get worse in the next year.

Our Fractured Economy Favors Investors Over Workers

“During the Biden administration, federal incentives were put in place to push companies into developing clean energy technologies. Hundreds of projects were put in motion, costing billions of dollars, to do just that,” explains Nico DeMattia at Inside EVs.

Then, “the Trump administration reversed those Biden-era policies, causing the stalling or cancellation of 223 different projects, totaling $82.9 billion in lost investments.”

That has resulted in a disaster for working Americans. DiMattia explains that “111,765 jobs were lost as a result of these project cancellations.”

The Trump administration has also made it harder for just over 3,000 clean-energy companies to access tax credits put in place by previous administrations to encourage alternative energy sources. Those lost tax credits could put “$695.2 billion [in clean-energy investments] at risk, threatening almost 1.2 million jobs.”

This is another kick in the teeth for American workers, even as the elite shareholder class currently enjoys record profits from Big Oil companies thanks to the skyrocketing price of gas.

For the American Prospect, Harold Meyerson explains the fracture in the American economy in language that’s about as succinct as I’ve seen: “If there’s a problem with the American economy, it’s only because some people have to work for a living,” Meyerson writes.

“Income from investment—the primary source of income for roughly 1 percent of Americans—is soaring,” he explains. “The remaining 99 percent, who depend primarily on income from their work, are the laggards grousing about prices and necessities that may be out of reach.”

There are two things we need to do to repair this fracture between the elite investor class and hundreds of millions of working Americans. First, we need to rewrite the tax code to tax investment income at least as much as we tax work income. Second, we need to raise wages for all American workers so that they’re compensated for their productivity again, the way they were before the dawn of trickle-down economics in the early 1980s.

The Economic Policy Institute establishes one way to reinvest in American workers by proposing that we set a goal of tripling union membership in the United States of America. Doing so, they argue, would raise wages for the median worker by $7,700 annually, amounting to more than a quarter of a million dollars in additional pay over the course of a typical 35-year career. It would shift more than $1 trillion away from the wealthy few and into the pockets of working Americans, narrowing racial wage gaps and increasing the number of working-age people with health insurance by as much as 25%.

EPI suggests that lawmakers can meet that goal of tripling union membership by passing legislation including the PRO Act, which makes it easier for workers to organize workplaces, and guaranteeing the right to organize for all public-sector employees. Another intriguing policy from EPI: Any corporation whose CEO is compensated more than 100 times the average worker’s annual pay automatically enters into a collective bargaining agreement, in which workers can advocate for a greater share of the company’s profits.

Union membership isn’t the only solution to the problem of outsized wealth inequality, but EPI’s argument is a good one. When workers are compensated fairly for their labor, everyone benefits—unemployment benefits increase, public education improves, and more people vote. It’s no wonder why trickle-downers favor policies that kill high-paying clean-energy jobs and keep working Americans struggling to make ends meet: When everyone can participate in the economy, outcomes improve for everyone—not just a wealthy few at the top.

This Week in Trickle-Down

Early next month, Missouri voters could decide to eliminate the state’s personal income tax system. The Center on Budget and Policy Priorities warns that doing so would “ shift the responsibility for funding state services further onto workers, families, and seniors and away from wealthier taxpayers.”

This Week in Middle-Out

“On July 16, 2026, Sens. John Boozman (R-AR) and Kirsten Gillibrand (D-NY) introduced the More Paid Leave for More Americans Act to incentivize states to expand access and improve coordination of paid family leave benefits for workers,” reports the Bipartisan Policy Center.

Real-Time Economic Analysis from Civic Ventures

We at Civic Ventures have been talking about the economic paradigm shift that’s happening right now. Yesterday, Civic Ventures founder Nick Hanauer published a video explaining how, though it may not feel like it, we are living through a paradigm shift right now. The status quo is very invested in keeping our economy functioning the same way it has for the last 50 years, but the thing about new ways of thinking is that the truth always wins out in the end.

In this week’s episode of Pitchfork Economics, Nick and Goldy talk with economist Preston Mui about why productivity has become a policy choice that is divorced from wages, rather than a reflection of how successful a worker is at their job. The separation between productivity and wages is especially important right now, when technology threatens to increase productivity at an exponential rate even as paychecks stagnate.

Closing Thoughts

Earlier in this newsletter, I wrote that retail spending rose for the fifth consecutive month even as grocery sales declined—a likely sign that even though wealthy Americans are spending freely, working Americans are struggling to deal with the cumulative 33% grocery price increase since 2019. Bain & Company’s grocery sales analysis finds that the last five months have seen declines in grocery spending over the year before.

“Our analysis of NielsenIQ grocery data shows a trend in negative unit growth starting in mid-2025, masked by steady price increases. But since February 2026, units have stepped down sharply enough to pull sales lower across the US,” Bain notes in their report. “Prices are still climbing 2% to 3% year over year, roughly in line with food-at-home inflation, while units are down about 2% year over year in most months since February.”

Bain concludes, “Pricing growth and inflation can no longer hide that shoppers are buying fewer items.”

Survey data seems to back up Bain’s research: “80% of Americans say they’re still trying to spend less, and 28% are actively trying to cut back on groceries,” Bain reports. “Among those trimming their grocery bills, 56% are trading down to lower-priced brands, 49% are simply buying fewer items, and 44% are leaning harder on coupons and promotions.”

No matter how much groceries cost, and no matter how much paychecks have stagnated this year, human beings have to eat. So what happens when a growing number of Americans can no longer afford to pay for food? For most of the 20th century, the answer was that they would go on Supplemental Nutrition Assistance Program (SNAP, the program formerly known as food stamps) which would help feed struggling families until they finally got back on their feet again.

Last year, the Trump administration issued some draconian cuts to SNAP programs in order to fund a tiny sliver of the massive tax cuts it handed to the richest Americans. As a result, the Center on Budget and Policy Priorities reports that this year has seen the biggest drop in Americans on SNAP rolls in exactly three decades, since the Clinton administration pushed through a drastic program of neoliberal cuts to the social safety net in 1996.

In fact, according to USDA data, nearly five million Americans have stopped participating in SNAP programs over the last year—a decline of 11 percent. Every single state except Alaska has seen SNAP enrollment drop.

It gets worse: CBPP estimates that this year alone, one million children are no longer covered by SNAP. Since last June, that number may be as high as 1.5 million children.

These numbers haven’t declined because the circumstances of four million Americans have drastically improved over the past year. The labor market is still roughly the same as this time last year, and wages have been stagnant in 2026. The only significant economic factor that has changed for the entire nation in that time period is the Trump tax bill and its cuts to the social safety net.

To reiterate, groceries are now a third more expensive than they were seven years ago. In other words, $300 worth of groceries in 2019 now costs $400. Given that wages have flatlined this year, it’s safe to assume that many working American households are going hungry. And remember that SNAP also serves as revenue for grocery stores in many of America’s most impoverished rural areas, meaning that it’s not just the SNAP recipients who are likely to suffer now that SNAP funds aren’t circulating through local economies.

This is unsustainable, and it’s harmful to all Americans. I’ve written recently about the fact that childhood hunger can have negative impacts that last a lifetime. And adults who can’t access three solid meals a day are more likely to have accidents and be less productive on the job. It’s in everyone’s best interests to make sure that we’re investing in programs that feed people.

Now, when demand is rising along with grocery bills, the Trump administration’s austerity is making it even harder for people to access SNAP. In an economy like ours that works best when everyone can participate, those hunger pains hurt us all.

Be kind. Stay strong.

Zach

This week, we’re looking into the relationship between your wages and rising prices, digging into a new law in New York City that makes it easier to unsubscribe from unwanted services, and looking at two huge proposals to address the complicated relationship between retirement savings and high housing prices.

But first, we need to look at some news that broke on Monday: “A coalition of 12 Democratic states including California, New York and Washington filed a lawsuit Monday to block Paramount’s $111 billion acquisition of Warner Bros. Discovery,” reports the New York Times, which adds that this is “the most serious legal challenge to date for one of the biggest media deals in history.”

The Times explains, “the states argue that the deal would harm movie theaters by damaging the competitive market for distributing films, including blockbusters that generate a large portion of studio revenues.” And additionally, they argue that “the deal would give the combined company anti-competitive power over the market for distributing basic cable TV channels, like CNN.”

The state attorneys general argue that if the Paramount-Warner merger is allowed to go through, only four large movie studios will control 86% of the market for major films, and those four large studios will be responsible for producing 90% of all the highest-grossing blockbusters. The resulting company would also control nearly a third of the standard basic cable bundle.

“After this merger, for every dollar generated by wide-release theatrical films and basic cable channels in this country, the combined company will pocket more than a quarter,” the lawsuit states. “This merger, in short, would create a media behemoth.”

Focusing on the possibility of Paramount-Warner raising prices for movie theaters and cable companies isn’t the most compelling political argument but it’s probably the smartest legal tactic the states could take to fight the merger. It’s an argument based on a successful monopoly-busting suit from four years ago.

The Times explains that this argument “mirrors a tactic that the Justice Department used to successfully block the acquisition of the book publisher Simon & Schuster by Penguin Random House in 2022,” when “a federal judge found the merger would harm competition among publishers that were buying the rights to books they anticipated would be top sellers.”

But this isn’t just about risks to the movie theater industry. It’s hard to grasp how powerful this merger would make the Paramount-Warner entity and its leaders. The Times explains that if it does go through, “David Ellison, who runs Paramount, will control two news networks, CBS News and CNN; two major movie studios, Paramount Pictures and Warner Bros.; and two popular subscription streaming services, Paramount+ and HBO Max.”

During the trickle-down 1980s, failed Reagan Supreme Court nominee Robert Bork created a new understanding of how the government should treat large corporate mergers and acquisitions. Bork argued that larger corporations can lower prices for consumers, and that consumer prices, not market control, should be the most important metric by which government should assess every possible merger.

That argument, of course, is total BS. Study after study shows that when corporations concentrate power, prices go up for consumers. One study showed prices increasing by over 5% after a merger, depending on the total market concentration possessed by the newly merged firm, and other papers found immediate price increases of up to 7%—or even 10%.

While there doesn’t seem to be much long-term research into how prices rise in the years after market consolidation, there is no reason to believe those large short-term price increases would flatten out over time. When there’s less competition in a marketplace, sellers understand that they can raise prices with impunity.

And wages also fall when market concentration rises, which makes complete sense. For instance, if you’re a movie studio PR person who is looking for work, this merger means you have one less potential place to apply for a job. With fewer firms competing for talent, the market price for labor—in other words, paychecks—declines.

That might not mean much for celebrities who earn multimillion dollar paychecks per movie, but it could result in losses of thousands and even tens of thousands of dollars every year for the union employees (electricians, set builders, makeup artists, caterers, etc.) who work behind the scenes to create movie magic. And all this is to say nothing of the likely thousands of workers who will almost immediately lose their jobs if the merger goes through and the combined Warner-Paramount begins a round of layoffs to erase redundancies in the new, larger corporation.

So to sum up, the Paramount-Warner merger will raise prices for movie theater and cable providers by reducing competition among sellers of entertainment. It is all but guaranteed to raise prices for consumers who pay for movie tickets, cable bills, and streaming subscriptions. And it will result in lower wages for the 2.3 million or so working Americans who are estimated to work in the entertainment industry in some fashion.

We could have hours of heady debates about power and media control and what all this means for the future of entertainment and news in America. But for legal purposes, probably the most important argument is the one made in the lawsuit: When one company controls so much of the market, that’s bad news for working Americans. Period.

During the Biden administration, Federal Trade Commission Chair Lina Khan finally directed the federal government to begin to turn away from the Bork argument and toward one that centered the needs of working families before CEO golden parachutes. The Trump administration is trying to roll back the clock to that 1980s merger-and-monopoly boosterism. But this lawsuit from the states helps to keep that middle-out, post-Bork perspective alive, to remind those in power that these mergers should only ultimately serve the interests of the American people, not the rich guys in the boardrooms.

The Latest Economic News and Updates

Prices Dropped in June, but Paychecks Are Treading Water at Best

Tuesday morning, the Bureau of Labor Statistics reported that inflation dipped significantly last month. In his Substack, Jared Bernstein explains, “The Consumer Price Index fell an historically large 0.4% last month, the biggest decline in the monthly index since April of 2020, when pandemic deflation was taking hold.”

“The yearly increase fell sharply from last month’s 4.2% to 3.5%,” Bernstein writes. Those numbers came back far below the expectations of economists. Housing and grocery prices only increased by a fraction of a percentage point, though grocery inflation is still up by a high 2.7% for the year.

The cause of this month’s precipitous drop in the inflation report came from falling gas prices caused by the ceasefire between the United States and Iran. “The retail gas price was down 9.7% in June after rising 7% in May,” Bernstein explains.

If you’ve been paying attention to the headlines, you can probably see what the problem is: The ceasefire between the U.S. and Iran has fallen apart in the past week, and uncertainty has shrouded the Strait of Hormuz again, meaning that the world’s supply of oil and fertilizer might again be cut off for the foreseeable future, which means this month’s inflation report could represent a short-term reprieve if gas prices climb again.

Even with this month’s drop in inflation, Justin Wolfers points out that America’s inflation rate is far above most of our peers in the wealthiest nations on the planet.

There’s one big reason why our inflation rate is higher than other nations: President Trump. His decisions to levy tariffs on imports from just about every nation and his decision to attack Iran, which shuttered the Strait of Hormuz, are the primary forces pushing inflation higher for the United States (and likely our neighbor and close trading partner, Canada.) Without those voluntary decisions from the president, our inflation rate would be much lower now, as the below chart from Bernstein shows. The real inflation rate is in blue, and the inflation trendline without the pressures of tariffs and the war on Iran is in red:

And most importantly, your wages aren’t rising fast enough to pay for these price increases. Bernstein notes that “real wages for June bounced back to a strong 0.8%, the largest monthly jump since the pandemic wage spikes,” but “On a yearly basis, real wage growth was flat (+0.1%) after declining for the past few months.”

Wolfers charted that recent precipitous decline in paychecks:

So while this report offers some good news, it remains to be seen whether we can expect that good news to continue in the coming months. And even though the White House is crowing over this report, our economy won’t be truly strong until worker paychecks consistently grow faster than prices. Those wages are what matter most, because they’re what make our economy grow.

“Click-to-Cancel” Hits the Big Apple

“New York City became the first municipality in the country to adopt rules that require businesses to make canceling a subscription as easy as signing up for one,” writes Prajwal Bhat at The Nation. “Mayor Zohran Mamdani announced the ‘click-to-cancel’ rule July 10, and it takes effect on October 1.”

“Click-to-cancel” requires subscription providers to make it just as easy to cancel a service as it is to subscribe to it in the first place.

“The new rule promises hefty fines and aggressive enforcement for companies that violate them. Companies that do not provide a simple option to cancel subscriptions could pay $525 per user subscription,” Bhat writes. “The rules will extend to all companies that run online subscriptions with customers in New York City including online tools, streaming services, and gym memberships.”

It should be noted that “click-to-cancel” was supposed to be law across the United States right now. President Biden’s Federal Trade Commission was on the way to passing a national “click-to-cancel” law in October of 2024. At the behest of corporate lobbying groups, the Trump administration killed the rule before it could be implemented last summer. It’s also not a coincidence that Lina Khan, the head of the FTC who pushed the Biden administration to pass “click-to-cancel” in the first place, is now an advisor in Mayor Mamdani’s administration.

This is a straightforward, popular policy that addresses a major source of expenses in modern life: The gym membership, cable subscription, or online service that makes it easy to sign up and pay a regular membership fee every month, but makes the unsubscription process so complicated that American workers lose money paying for subscriptions they don’t even use. And that’s also not to mention the fact that they lose precious time and patience trying to figure out how to opt out.

And if enacted properly, this is one of those simple policies that shows people government can be a positive force in the world, which is exactly why trickle-downers hate it. Hopefully, other state and city legislators around the country will follow NYC’s lead and pass legislation that matches New York’s. It would be much harder for corporations to fight “click-to-cancel” if the policy is written into law in states and localities around the country.

This Week in Trickle-Down

• The Federal Reserve recently announced the formation of five task forces to focus on how the Fed interacts with the economy. One of the teams was formed to assess “the economic impact of new general-purpose technologies, including artificial intelligence, to inform the Federal Reserve’s policy judgments.” The members of that task force include Microsoft executive Asha Sharma; economist Charles I. Jones, who has worked for AI firm Anthropic; and Marc Andreessen, the cofounder of Andreessen Horowitz and a vocal advocate for trickle-down economics. So far as I can tell, the Fed has not placed one single working American who is at risk of being replaced by AI on the task force that’s supposed to examine how AI impacts the economy. These omissions are telling.

• “A March report by Cox Automotive found that tariffs drove a 10.4% increase in the average suggested retail price of a new car. Sticker prices rose by an estimated $5,000 to $8,900 for imported vehicles and about $1,600 to $2,000 for U.S.-made cars,” writes the editorial board of the Wall Street Journal in a surprising broadside against Trump’s international trade policies. “Dealers have shed 6,100 jobs since Mr. Trump became President. Cause and effect? Manufacturers have also added fees to avoid raising base prices. Cox says GM and Ford charge “destination fees” of $2,795 for full-size trucks and SUVs. GM has increased such fees by 40% (about $800) on its Chevrolet Silverado. Call it the Trump tax.”

• After bipartisan outrage led to Ohio Governor DeWine vetoing a bill that would have loosened child labor regulations on teens in the workforce, Ohio State Senator Tim Schaffer snuck some of those same pro-child-labor policies into an unrelated bill that then passed into law.

• More Perfect Union made a great video explaining why it’s a big deal that so-called fintech providers like PayPal, Venmo, and Wealthfront promise customers that they have FDIC protection for online accounts. It turns out, many of these firms are operating without a banking charter and if the firm should fail you might not be eligible for a refund. This is all thanks to lobbying from big-money Silicon Valley types like Peter Thiel and Marc Andreessen, who are all heavily invested in fintech firms.

This Week in Middle-Out

• While economists are signing a letter warning about the future of an unregulated artificial intelligence industry, “Demis Hassabis, Google DeepMind co-founder and CEO, is calling on the U.S. to establish an AI watchdog with the power to screen the world’s most advanced models — and coordinate an industry-wide slowdown if dangers mount,” reports Axios.

• New polling from Navigator Research finds that the American people trust Democrats more on issues like affordability and health care. I was especially surprised to see how popular some progressive healthcare policies are with voters—particularly a public healthcare option, which is approved by 65 percent of voters and is even positive among MAGA Republicans:

Real-Time Economic Analysis from Civic Ventures

On this week’s episode of Pitchfork Economics, Nick and Goldy chat with political economist Clara Mattei, author of The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism, about how austerity is a central pillar of trickle-down economics, and why creating an environment of budget cuts and slashed investments in the majority of the population ultimately can weaken democracy and even pave the way for the rise of fascism.

Closing Thoughts

In his roundup of this week’s inflation news that I quoted earlier, former White House economist Jared Bernstein wrote that there was one good piece of news: “Housing, which accounts for about a third of the [inflation] index, rose a low 0.1% for the overall shelter index and also 0.1% for rent.” Unlike the turbulent gas prices in this month’s report, housing prices have been on a steady downward slope: “On a yearly basis, both measures are cruising at around pre-pandemic rates, which will help keep the overall index in check,” Bernstein said.

It does indeed seem as though housing prices have declined from their pandemic highs and returned to something resembling the normalcy of 2019. But we have to remember that housing prices were prohibitively high in 2019, too. Even before the pandemic, America’s housing was wrapped up in a very complex problem that was raising prices higher than many working families could afford.

For the New York Times, economic commentator Kyla Scanlon explains the core of the problem: “A home has stopped being just a place to live — it has also become an asset that has to appreciate in value to underwrite the homeowner’s retirement,” Scanlon writes, adding, “Homeownership became, in short, the typical American retirement plan.”

That creates a host of problems: If a home is damaged or if local property values plummet, that means the owner might not be able to afford retirement. And those older homeowners need home prices to stay so high that younger, less wealthy families just starting out can’t afford them.

“Housing was not always this way,” Scanlon writes. “It was once an enormous opportunity, built on purpose in the aftermath of World War II, by a country that was actively defining the American dream through home ownership.”

But during the Reagan administration, employers started to scrap the pension plans that allowed most Americans to retire comfortably in exchange for 401(k)s. “A pension bet on rising markets, too,” she writes, “but the employer carried much more of the risk. The 401(k) handed the downside to the worker.”

As a result, house value became central to the retirement plans of many Americans, and older Americans started to jealously guard their investments. “Since 2010, Americans 55 and older added roughly $20 trillion in real estate wealth. Americans under 40 added $3.5 trillion,” Scanlon writes. “Of the housing wealth America added since then, two of every three dollars now sit with Americans 55 and older.”

Civic Ventures senior fellow David “Goldy” Goldstein wrote about exactly this problem in Democracy Journal last year. “In 2019, housing wealth accounted for between 50 and 65 percent of the total assets of middle-income households,” Goldy wrote. “Yes, it’s better to have housing wealth than not, but America’s overreliance on homeownership as our primary tool for building middle-class wealth has locked up the bulk of our wealth in our homes.”

Both Goldy and Scanlon agree that the solution to the housing affordability crisis is relatively simple: We need to build a lot more housing—housing of all types—pretty much everywhere. But the problem of those families expecting their homes to finance their retirements is much more complex.

Goldy’s solution to the problem is to make renting more affordable through a “social housing” program through which government builds housing and then rents it at market rate to working-class families. They then hold the rent essentially flat, meaning that the housing gets more and more affordable as the tenants age, giving them more opportunity to build their wealth for homeownership—or retirement.

Scanlon proposes another solution: “give both retirees and the young a nest egg that isn’t a house,” she writes.

Specifically, she calls on Congress to create a fund “seeded from the A.I. boom and invested broadly, the way Norway took oil money and bought diversified shares of the world economy — so the floor can come from the boom without entirely depending on it.”

“The returns should flow to households as dividends, similar to the Alaska model,” Scanlon writes. “A fund like this would give Americans a floor — on top of Social Security, which was never enough to carry the weight alone.”

These are two big, bold middle-out proposals that invest in working Americans. And they’re exactly the kind of big ideas that we need to address the complicated, thorny issue of housing affordability in America. I’m excited to see people finally begin to propose solutions that recognize the size of the problem and respond with solutions which meet that scale.

These are the kinds of civic conversations we need to have as we start down the long, slow road to the 2028 presidential election, so that the American people can choose between two very different visions of the American future. I’m willing to bet that one side will be arguing for austerity and slashing benefits, so it’s important that the other side has an arsenal of big, transformational policies at the ready. Now is the time to test those ideas with public debate.

Be kind. Stay strong.

Zach

This week, we’re looking at the absurd claims that rising grocery prices aren’t a cause for concern, the reasons behind a slump in factory construction, and why we should all support free and reduced-price school lunches.

But first, a new report from the Roosevelt Institute finds that its “analysis of data on Kalshi, now the largest prediction market in the United States, found that ordinary users of the platform have lost more than half a billion dollars from its launch in July 2021 to May 2026.”

The report adds, “when retail traders made money, it was mostly on a small number of the largest wagers.”

App-based prediction markets have exploded in popularity over the last two years, as technology finally caught up with a 2018 Supreme Court ruling that essentially deregulated sports gambling nationwide. Since then, users have lost hundreds of millions of dollars betting on sports, current events, and other outcomes that would have been unthinkable for the majority of the population a decade ago.

People who are tracking the massive explosion of income inequality in the US will not be surprised to hear that prediction markets have worked out in a very familiar way. Reports have found that “the vast majority of people participating in prediction markets (retail traders) lose money, with the profits being captured by an extremely small number—the top 0.1 to 1 percent—of sophisticated users.”

Gambling tends to trigger bravado in certain individuals—especially risk-prone young men—who believe that they can somehow beat the system and become part of that sophisticated top 0.1 percent. That’s why it’s important to note that the tiny percentage of people beating the odds on Kalshi and Polymarket “participate in these markets in ways that are entirely different from how the average user interacts with them.”

In other words, they’re not just better at picking bets—they’re spreading their bets wider and investing larger amounts of money on smaller-risk bets to steadily reap rewards in a way that working Americans simply can’t afford.

The systems are rigged against participants with the least money to spend and in favor of the wealthiest people who can bend the rules in their favor. (And as I’ve noted in the past, these deregulated gambling industries are also rife with insider trading.)

Everywhere you look in the headlines, you’ll find someone rigging the game in their favor and reaping the rewards. Last week, President Trump disclosed that he had pocketed over $1 billion from various cryptocurrency investments last year alone. David Goldman reports for CNN that when Trump announced a crypto venture called $TRUMP, a so-called “memecoin” for his followers to invest in, he “earned transaction fees each time $TRUMP was bought or sold,” and he also likely sold his shares of the memecoin at strategic points before the value crashed.

“$TRUMP was an instant success, catapulting to a $15 billion market valuation, according to CoinMarketCap. It’s now worth just $400 million – a 97% implosion,” Goldman reports. To be clear, that’s a direct transfer of wealth from Trump supporters who are working Americans to an elite class of insiders who somehow knew exactly when the value of $TRUMP would drop and pulled their investments at their peak.

This week, the New York Times reported that “Nearly 1 million people who bought President Trump’s memecoin have lost money through the end of June.” Their losses are estimated at $3.81 billion.

It’s likely that only a handful of extremely wealthy individuals, including President Trump himself, took home a lion’s share of that $3.81 billion. Forbes spoke with several Trump supporters who lost significant portions of their wealth in the $TRUMP crash, including one man whose $205,000 investment in $TRUMP is now worth roughly $30,000.

Looking at these two stories, is there any wonder why the American people are feeling discouraged about the economy and politics? As prices keep rising faster than wages and unregulated financial systems are fleecing working people in favor of a handful of elites who are in on the scam, you can expect to see unrest and dissatisfaction with the system continue to grow.

And it’s not just Republicans who appear to be benefiting from these systems. We’ve talked before about how Nancy Pelosi’s stock portfolio has skyrocketed far above the return that average Americans see from their investments. And for The American Prospect, Fletcher Calcagno and Dylan Gyauch-Lewis write that New York Senator Kirsten Gillibrand’s 22-year-old son recently saw the kind of success that virtually no recent college graduate could fathom.

“Theodore Gillibrand, son of Sen. Kirsten Gillibrand (D-NY), had received a $30 million round of investment for his company, American Perpetuals Exchange Corporation (APEC),” they write. “The funding round valued APEC at $300 million and was led by Lux Capital, a venture capital firm whose other investments include the Peter Thiel–backed Anduril Industries and Erebor Bank.”

Gillibrand’s son’s venture combines the unregulated thrills of prediction markets with the worst of crypto’s volatile swings in wealth. The Prospect explains, “Rather than betting on the price of crypto going up or down, perps traded on APEC will allow users to speculate over the value of a stock increasing or decreasing without ever taking ownership.” So the fund isn’t trading actual crypto investments; it’s taking bets on how those investments will pan out.

It’s possible that Gillibrand’s son is an exceptionally precocious financial genius who formulated this idea entirely on his own. But a U.S. Senator’s son heading directly from his college graduation to a $300 million valuation of a company is enough to continue the perception of corruption that is eroding the economic faith of working Americans that the system is working. We’ve come to expect to see people cashing in for themselves and their families at everyone else’s expense, and that’s bad news for the whole system.

The good news is that we know how to combat this kind of corruption. The late 19th century saw a progressive anti-corruption slate that brought the first Gilded Age to an end, and for most of the postwar 20th century, corruption laws worked to prevent the worst kind of pillaging and looting. We just need to reinstate the protections that worked and update a new slate of policies for the 21st century to prevent the modern-day Gilded Age from getting even worse.

It’s easy to imagine a slate of policies encouraging maximum transparency and accountability in financial transactions and smart regulations that rein in the worst impulses of prediction markets and crypto profiteers. We also need to hold anyone accountable who uses inside information or unfair rules to bilk working people out of their fortunes with jail time.

Those three goals—transparency, regulation, and consequences—are all that we need to undo the excesses we’re seeing in the headlines today. That needs to be our message to Americans who are giving up hope when they see a tiny share of the most shameless people extracting wealth from millions of working people: We can fight corruption. We’ve done it before, and we can do it again.

The Latest Economic News and Updates

Yes, Price Increases Are as Bad as You Think

Andy Kalmowitz at auto news site Jalopnik reports that the monthly payment for new cars has hit a record high: “vehicle buyers are paying more than ever before to finance their purchases as average monthly payments hit a record $777 in the second quarter of 2026,” he writes.

Automotive News also reports that consumers are taking out loans that last longer, in an effort to try to drive down the monthly fees: “Consumer loan terms longer than 72 and 84 months are increasing as well. In the second quarter, 23.9 percent of buyers signed on for loans of 84 months or longer, a record, compared to 22.9% in the first quarter.” Of course, those auto buyers will pay more over the long run because they’re adding more interest payments over a longer period of time.

What’s driving up those monthly payments? “You can thank the ever-rising cost of new vehicles, which we’ve recently reported to be nearly $52,000, for the increase,” Kalmowitz explains. “Add in rising insurance costs and the fact that just about everything else costs more, too, and there are some very extreme affordability concerns for the average consumer.”

About those very extreme affordability concerns: We’ve now again reached the point in the news cycle in which pundits—in this case, Peter Coy—argue that price increases aren’t as bad as everyone else is making them out to be. The title of his piece? “There’s Not a Grocery Price Emergency in America.”

Specifically, Coy argues that since grocery prices “only” went up by 3.2 percent last month—”more than you’d like to see,” he admits—while wages increased by a higher percentage, there’s not a significant problem.

This is a clear-cut case of economist-brain, when the topline numbers begin to detach from reality, and economists argue against the lived experience of anyone who’s been in a grocery store in the last few weeks. The problem is, there is not a single human being alive who stands at the grocery store looking at a nearly 20 percent increase in ground beef prices since their last shopping trip and thinks “Well, on the aggregate, all groceries increased by 3.2% this month and worker wages increased by 4.7%, so I’m still coming out on top.”

For one thing, not every worker receives a raise every time average wages go up. And for another thing, it only takes two or three individual items skyrocketing in price on a typical grocery run to make the whole experience feel out of control. And finally, as Coy himself admits, the prices on everything else are increasing, from health insurance to housing to cars. If you stop thinking like an economist and remember that those numbers impact human beings, it’s easy to see why affordability is still a top issue with most Americans.

Jared Bernstein devoted a newsletter to unspooling Coy’s argument, and it’s well worth your time. He points out that grocery prices had been largely flat for a very long time before the pandemic and supply chain disruptions first launched prices into the stratosphere.

“The affordability crisis isn’t just about inflation,” Bernstein notes, adding, “it’s also about the price level—what things cost—and the fact that, especially when prices [that were formerly low and stable] suddenly spike upwards, consumers become lastingly annoyed.”

There’s another grocery pricing trend that Bernstein notes: the number of hours of work required to buy a week’s worth of groceries.

“The hours of work needed to afford weekly groceries fell sharply until the post-pandemic spike. It peaked in mid-’22, regained its downward trajectory, then, most recently, flattened out,” he writes. “It’s now about tied with its trough value from ‘21, which is a better place to be than where we were but is well above where the pre-pan trend would have left us.”

For five years, groceries were costing less compared to wages, and dropping by a lot. Then came the pandemic, and while that number has fluctuated, it has never returned to the downward arc that the metric was on back in 2019, so Americans perceive that as a loss.

And there are plenty of other pressures. “The Iran war has cost Americans roughly $1,000 per household in higher fuel, food and other expenses since the start of the conflict in February,” writes CBS reporter Mary Cunningham, citing an estimate by Moody’s Analytics chief economist Mark Zandi.

Rising fuel prices are the leading cause of that $1000 price tag, but Zandi also includes increases on the interest rate, jet fuel, and the cost per taxpayer of military actions. Zandi warns that this estimate is likely too conservative, saying that the “true cost is likely higher — meaningfully higher.”

It seems as though we’re entering a new round of bombing in the war on Iran, so you can expect a number of pundits to try to talk down the problem of high prices over the next few weeks. They can spin the numbers all they want, but they’re not going to convince Americans that they’re not being squeezed on virtually every front for every single last penny. Reality hits harder than slick media-friendly spin every time.

Two Years Ago, We Were Building Factories in America. Now We’re Not.

In a post for the Center for Economic Policy and Research, Dean Baker writes that the current presidential administration frequently brags about creating “an unprecedented boom in investment, and especially in factory construction.” Baker continues, explaining that President Trump “constantly talks about the $18 trillion in new investment he has secured for the country, and how everyone is building factories here.”

Baker has crunched the numbers and found that “there is zero evidence of this investment boom to date,” and in fact “factory construction is going the wrong way fast.”

There was a boom in factory construction during the end of the Biden administration due to the big investments found in the IRA and CHIP acts, but since the Trump administration has been actively undoing many of the Biden-era investments in clean energy and infrastructure, those projects have dropped off precipitously since Trump took office in 2025:

Baker says that factory construction is now about 25% of its peak in 2024.

This is a perfect illustration of the importance of government directing markets. Without incentives to invest in the construction of factories and to develop workforces inside the United States, many corporations will simply choose to build elsewhere. The role of government, through incentives, investments, and regulation, is to direct businesses to where their investments are most needed.

American businesses are brilliant at many things—we lead the world in innovation and productivity—but sustainability is not within their purview. If you want to build something that lasts and benefits the broadest number of people, governments often need to step in.

Here’s another example of businesses choosing short-term profitability over long-term sustainability: Roosevelt Institute economist Mike Madowitz dug into last week’s jobs report and found that despite the desperate need for more housing across the United States, the only growing part of the construction sector is in building AI data centers.

Last month, the American job market lost 2,900 residential building construction workers and gained 3,200 nonresidential building construction workers, and lost 5,700 residential specialty trade contractors while gaining 14,100 nonresidential specialty trade contractors. So of the 11,000 construction jobs added to the economy in last month’s lackluster employment report, a majority of them are probably building data centers that most Americans don’t want, rather than housing that the nation desperately needs.

On a corporation’s balance sheet, the reason for this asymmetry is obvious: Data centers have a lot of money behind them, and it’s money that moves fast. But building an apartment building is a more complex job that moves on a much slower timeline—and the building will take years to pay for itself. If we had huge federal incentives to make the construction of housing more attractive, that would balance out the market and put the power of American business behind something that would be economically beneficial for everyone in the economy.

This Week in Trickle-Down

“The number of students admitted to Ph.D. programs this fall dropped 15 percent from the previous year, according to data from over 50 top research universities, raising fears that the nation’s capacity to produce new science could be diminished,” writes Vimal Patel at the New York Times. “The decline is driven, in part, by a chaotic and unpredictable federal funding environment under the Trump administration, as federal cuts are promised and then reversed, and budgets remain unclear.”

This Week in Middle-Out

• A new report from the Washington Center for Equitable Growth finds that making it easier to apply for social support programs helps the working Americans who most need those investments. “In 2012, Virginia moved its application systems for health, nutrition, and cash assistance programs into a single digital platform, which researchers found meaningfully increased participation in social programs,” write Neil Cholli and Derek Wu. “The enrollment portal not only brought new families into program participation, but also helped families already receiving benefits from one program to add others for which they were eligible but had been missing.”

• Here’s some good news from Aurelia Glass at the Center for American Progress: “Last month, the U.S. House of Representatives passed the Faster Labor Contracts Act (FLCA), which would require contract negotiations with new unions to go to arbitration if an agreement cannot be reached within 90 days. The bill’s bipartisan passage demonstrates real interest from policymakers in improving labor law, and evidence from a study of Canadian provinces that implemented similar laws suggests those changes increased unionization rates by 2 percentage points.” Even though it’s unlikely that the bill will pass through the Senate, this is a good first step toward making it easier for workers to unionize, and hopefully that bipartisan group of lawmakers can continue to find new ways to advance laws like these.

Real-Time Economic Analysis from Civic Ventures

As part of the summer “Myths That Built Trickle-Down Economics” series on the Pitchfork Economics podcast, we’re revisiting a lively conversation that Nick and Goldy had with Nobel Prize-winning economist Paul Krugman about his book on the zombie economic theories that just refuse to die.

Closing Thoughts

People often find economics to be challenging because the field is so broad. As a topic, economics can refer to anything ranging from international trade to the regulation of prediction markets to the minimum wage. But sometimes, economics is as simple as making sure that children have three meals a day.

Something as simple as regular school lunches can have tremendous long-term impacts on children’s lives. The University of Utah collected recent research showing that children who suffer from food insecurity are likely to “score lower on IQ tests” and have “a harder time getting along with others and specifically have lower math and general achievement test scores than their peers who have enough food.” They’re also “more likely to repeat a grade and have issues with their physical and emotional health.”

“Students as young as kindergarten age who have food insecurity have poor reading performance and impaired social skills, and this can persist into the later grades,” the report shows. These impacts can stretch onward through life, resulting in “mood disorders, behavior issues, substance use, and even suicide” for teenagers and adults.

This is not a niche issue. The University of Utah reported in 2024 that “18% of children under age 18, more than 13 million kids, live in food-insecure households.”

The good news is that food insecurity is a pretty easy problem to solve: If we improve access to food and make SNAP benefits (the food assistance program formerly known as food stamps) easy to access for parents, we can virtually eliminate it overnight. By making food easy to access and free or affordable, we can improve outcomes for one out of every five children in America—and those kids will grow up to be healthier, happier, and more prosperous adults. It’s a tiny short-term investment in long-term economic growth and happiness. We could also improve these programs to make them easier to access, and also allow pre-prepared meals and hot foods, both of which have been left out of many nutrition assistance programs.

Unfortunately, we’re currently moving backward on childhood nutrition and food assistance. The Center for American Progress released a report this week explaining how the tax bill that the Trump administration pushed through Congress last year, which gave huge tax breaks to the wealthiest Americans and corporations, is slashing access to free and affordable school lunches.

CAP estimates that around 34 million children enrolled in public schools took part in a free or reduced-price lunch program last year. But the Trump tax bill “threatens to eliminate free school meals for students, despite these meals often being their healthiest option, by making cuts to SNAP and Medicaid and putting states in difficult financial positions that may force them to make tough budget decisions that further limit access to food.”

Since the tax bill passed last year, “nearly 4.2 million people lost SNAP benefits by February 2026 following the implementation of more burdensome paperwork requirements and stricter eligibility restrictions,” CAP notes.

Over and above that 4.2 million people being yanked off SNAP rolls, “beginning in October 2026, states will be required to cover 75 percent of SNAP administrative costs—up from 50 percent—and by October 2027, will also assume 5 percent to 15 percent of benefit costs,” CAP notes.

Kids whose families aren’t eligible for SNAP or Medicaid anymore will potentially lose certification for free or reduced-price school lunches, meaning the one guaranteed hot, nutritious meal they get every weekday will be thrown into question. And many school districts are in danger of losing school lunch funding altogether: “If a school or district drops below 25 percent of its student population directly certified, it loses eligibility” for the Community Eligibility Provision, CAP explains, which would remove ”access to free school meals from an entire school or district and [reduce] federal meal reimbursements to schools.”

That adds even more expenses for cash-strapped families: “CAP estimates that a family with two children in public school will spend an additional $1,170 on school-offered lunch and $720 on school-offered breakfast, totaling $1,890 per school year, or more than $2,214 on packed meals.” For many impoverished families, that additional two-thousand-dollars-plus is a cost that they won’t be able to afford, so the kids will either go hungry or eat less than they should.

There is bipartisan support to, at the very least, delay this push of SNAP and other nutrition assistance programs onto the states. For First Focus, economic security expert Chad Bolt writes that “the Republican and Democratic governors of all 50 states have come together to ask Congress to delay implementation of these changes.”

In a statement, the governors warned that “These impacts cut across states of all sizes and political affiliations and, if applied based on disrupted data, risk undermining ongoing investments in program integrity and ultimately the viability of the program.”

Bolt and the governors urge Congress to stall the cuts in state SNAP funding by writing a delay into the next farm funding bill that the Senate will consider this fall, presumably before current agricultural funding ends on September 30th of this year.

Obviously, we need to do much more to ensure that no child in America goes hungry. But for now, there is broad bipartisan support to at least temporarily undo the drastic cuts to child nutrition that were enacted by Trump’s tax bill. If Congress agrees to stall the cuts to SNAP, that would be an opportunity to transform that bipartisan support into a stronger push to improve child nutrition. We can do this by reminding leaders that feeding children isn’t just a moral imperative—it makes good economic sense, too.

Be kind. Stay strong.

Zach

This week, we’re analyzing today’s jobs report, exploring why America is falling behind in clean energy, unspooling a price-fixing scheme that raised the price of eggs, and looking at the toll rising prices are taking on American families.

But first, let’s start with some great news: Yesterday, more than a third of a million American workers received raises when Oregon, Alaska, and Washington D.C.’s minimum wages increased, along with 14 cities and counties around the nation. The Economic Policy Institute has determined that those 361,000 workers collectively will receive an annual $221 million boost to their paychecks.

EPI also offers a clearer picture of exactly who these workers are. More than half of them are women, and a disproportionate share are Black and Latino workers. As opposed to the common trickle-down sentiment that only teenagers earn the minimum wage, over 90 percent of the workers who earned a raise yesterday are older than 20. And more than half of the affected workers are in full-time jobs.

Unlike your standard CEO bonus or stock buyback, those workers are not going to hoard their pay raises. Instead, they’re going to spend them in their local communities, creating jobs with their increased consumer demand.

And plenty of economic research has found that when the minimum wage goes up, workers who earn more than the minimum wage also get raises. One study has found that the entire bottom fifth of wage earners tend to see bumps in their paychecks after minimum wage increases:

The Washington Center for Equitable Growth offers a brief summary of those reports, including one which found a large retailer raised the wage for 30 to 40 percent of their workforce after a minimum-wage increase, even though only 5 percent of its workforce was directly impacted by the increase.

So we know that raising the minimum wage is great for the economy, it’s important for Black, Latino, and women workers who have traditionally been left behind, and it benefits way more workers than just those at the very bottom of the wage scale.

The question that remains is: How the hell is the federal minimum wage still stuck at $7.25 an hour? That’s where the wage has remained since its last bump up in 2009. Anyone who has seen the price increases of the last four years can understand that if your paycheck doesn’t increase every year, it’s actively shrinking. In fact, EPI estimates that the $7.25 hourly minimum wage now goes 30% less far than it did in 2009, meaning that it’s lost nearly a third of its value.

That’s why it’s important that last Thursday, Senator Chris Murphy introduced a bill that would raise the federal minimum wage to $25 per hour. “A minimum wage in America should be a living wage,” Murphy said in his speech, pointing out that “if wages had just kept up with the increase in worker productivity,” the minimum wage in America would already be $25.

The Living Wage for All Act would immediately raise the federal minimum wage from $7.25 to $12 in its first year, and then the wage would increase every year until 2032, when it would hit $25 for businesses that employ more than 500 workers. Eventually, all employers would be required to pay a $25 minimum by 2039. After that, the minimum wage would be tied to two-thirds of the national median wage, meaning that the floor will rise as other workers see raises. The bill also gradually eliminates the national tipped minimum wage, which currently stands at $2.13 per hour.

This is a big deal. Currently, 45% of the American workforce earns less than $25 per hour. When you consider the upstream effects of raising the wage, helping workers who earn slightly more than the minimum, that means the Living Wage for All Act would essentially renegotiate paychecks for roughly two-thirds of the American workforce. It’s an important step toward grabbing back the $32,000 the wealthiest one percent suck out of every American worker’s paycheck every year.

Since the minimum wage has stayed fixed at $7.25 for 17 years, that means a generation of workers in the 20 states that are at the federal minimum wage have lost spending power at a remarkable rate. There are tens of millions of workers who have only seen their paychecks lose value, year after year. Imagine the prosperity that would grow when those millions of workers are finally paid something resembling the actual value of the work that they produce—and then they spend that money in their communities.

The $25 minimum wage should be a litmus test in the coming midterm elections. If Democrats win back both houses of Congress, they should promise to pass it and send it to President Trump’s desk. And if Trump vetoes the bill, that should set up a larger question for the 2028 elections.

No issue delineates the economic lines like the minimum wage. Either you’re on the side of the wealthiest few who have sucked $80 trillion out of the paychecks of working Americans for 50 years, or you’re on the side of workers. In the coming months and years, the Living Wage for All Act should force every politician in America to explain exactly which side they’re on, and why.

The Latest Economic News and Updates

Labor Market Returns to Weakening in the Latest Jobs Report

This morning, the Bureau of Labor Statistics released the June employment report a day early due to the long July 4th weekend. The report was unexpectedly weak, and it showed signs that the last two months of stronger job gains may have been, at least in part, a mirage.

“Payrolls rose 57,000 last month, about half of what was expected, and the prior two months of job gains were revised down by 74,000,” Jared Bernstein wrote in today’s edition of his indispensable Substack. “The unemployment rate ticked down to 4.2% but wholly due to a large decline in the labor force, i.e., fewer people looking for work vs. more people getting jobs.”

Everywhere you look in the report you can find negative signals. The prime-age employment ratio, which shows the number of core employment-age adults (which economists determine to be 25 to 52 years of age) participating in the market, declined by 0.6%. That’s the steepest drop since widespread pandemic lockdowns ended in 2022.

Economist Joey Politano notes that the tech sector continues to lose jobs at a very steady and very large clip:

The expected hiring boom in the hospitality sector for the World Cup celebrations happening around the nation hasn’t seemed to materialize. Glassdoor chief economist Daniel Zhao notes that the leisure and hospitality sector actually lost 61,000 jobs last month.

And as was the case for most of the last year and a half, the vast majority of the job gains last month were in the healthcare sector, which needs plenty of workers to care for America’s aging population of baby boomers.

As is always the case, these numbers are often adjusted up and down in coming months as the Bureau of Labor Statistics collects more detailed information. But after two months of big job gains that were adjusted down, this month represents a return to the job market that we’ve seen for the last year and a half—one in which job creation is slowly flagging in all but a few industries, and wages are failing to keep up with the price increases of inflation.

Killing Clean Energy Isn’t Just Wasteful—It Harms the Economy

“The Trump administration on Monday said it would pay Duke Energy $129 million to abandon its plans to build an offshore wind farm off North Carolina,” reports Maxine Joselow at the New York Times, adding, “It was the fourth such deal struck by the administration to throttle the development of offshore wind power.”

Let’s put this another way: The Trump administration spent more than a hundred million dollars of your tax money to pay an energy firm not to build something it was supposed to build.

That doesn’t just rob the people of North Carolina of an affordable, clean source of energy—it also killed the construction jobs that would have built the wind farm and the maintenance jobs that would have overseen the farm once it was constructed. There’s no way to calculate the loss to the local economy, but your best guess is probably not an overstatement.

And this is only one-fourth the damage done. In total, Joselow writes, “the government has so far committed to spend more than $2.5 billion to get companies to terminate their offshore wind leases.”

This is not the only way the Trump administration has unplugged potential sources of affordable clean energy. In fact, behind the scenes, reporter David Roberts writes, “Trump is succeeding in stifling America’s clean energy boom. Absolutely ceding the field to China.”

JP Morgan’s latest report on clean energy projects in the United States shows the clear difference between Biden-era clean energy investments versus both Trump Administrations. Much of the second Trump term has been devoted to undoing the massive green-energy investments made throughout the Biden Administration:

Even before Trump returned to office, China was spending more than twice as much as the United States on clean energy investments like electric transport, renewable energy, and power grids. At the same time, the EU was spending slightly more than us.

JP Morgan’s latest report warns that China is “dominating” renewable energy supply chains—the manufacture and distribution of clean energy parts like solar cells, wind power, and batteries. It’s a loss that could leave the United States decades and trillions of dollars behind on the international stage.

Even with the Trump administration’s attempts to turn back our energy infrastructure to the 1980s, the transition to clean energy is still happening here at home. Solar power generated more energy in the United States than coal for the first time in history last month. “Solar also became the third-largest source of electricity in the US in May, behind natural gas and nuclear,” the Guardian reports.

“Wind and solar combined have overtaken coal in the past, and wind power alone has outpaced coal during spring months when wind speeds pick up,” the Guardian continues. “Renewables will become the largest global energy source, used for almost 45% of electricity generation by 2030, according to the International Energy Agency.”

At the same time, last month the Trump administration “announced a plan to boost the struggling US coal industry by spending nearly $700m to support coal-fired power plants and coal exports,” even though coal consumption dropped in both India and China this year for the first time in over 50 years.

This doesn’t just matter in the fight against climate change—though the deadly heat wave smothering the eastern half of the United States is certainly a reminder that climate change is getting worse—but it’s also killing good-paying blue-collar jobs in clean energy manufacturing and installation. Even a trickle-downer who doesn’t believe that climate change is real should see the intrinsic value in clean energy investments and the economic growth that follows.

The trickle-down plan to destroy clean energy investments isn’t good climate policy—and it turns out it’s not even good economic policy. Doubling-down on coal and oil at a time when the global thirst for clean energy is rapidly growing only makes sense when you realize the goal of Trump’s energy policy isn’t to set up America for success, lowering energy bills for Americans and creating a supply chain that could create local jobs in states around the nation for decades to come. Instead, the goal is to enrich a few wealthy corporations and CEOs at the expense of everyone else. And when looking at the Trump administration’s policies through that lens, it is succeeding in a big way.

Egg Producers Pay to Settle Price-Fixing Charges

Remember the egg price crisis that started in 2022? For about three years, the high cost of eggs stood in as a symbol for out-of-control grocery prices at large.

“Average U.S. egg prices soared to a record high of about $6.23 per dozen in March 2025,” notes Wyatte Grantham-Phillips at the Associated Press. I wrote about these price increases three years ago here in the newsletter. Egg producers raised prices by more than 100% and blamed those price increases on bird flu, even as the quarterly profits of the biggest egg producers rose from $92 million to $318 million in less than a year.

Now, we have an even better look inside the conspiracy to raise the price of eggs on American consumers. Grantham-Phillips explains, “The U.S. Justice Department and 17 states reached settlement agreements with three major egg producers this week to resolve allegations that the companies illegally colluded for years to raise prices.”

Specifically, the suit “accused Cal-Maine Foods, Versova and Hickman’s Egg Ranch of a behind-the-scenes arrangement” to coordinate the bids they submitted to “Urner Barry Publications, a company that runs an index key to determining how much grocery stores, restaurants and others pay for billions of eggs each year.”

The egg producers inflated their figures in sync, which drove up the market price and the price that consumers paid for eggs, and then they pocketed the difference in skyrocketing profit margins. Tellingly, those coordinated bids “dropped significantly” after the egg producers “learned of the Justice Department’s investigation and were instructed to preserve documents in March 2025,” Grantham-Phillips writes. They were caught red-handed, and the price of eggs immediately dropped.

Unfortunately, the consequences of that price-fixing collusion aren’t especially harsh. The three big egg producers “will collectively be on the hook for $3.3 million and 53 million eggs,” Grantham-Phillips writes. “Those eggs would be donated by the companies and make their way to food banks and nonprofits. The money will be distributed to the states.”

Ideally, that $3.3 million shared settlement would have had an extra couple of zeroes, or even a comma, added to it. It’s hard to imagine any CEO who thinks a one-million-dollar settlement isn’t worth the cost in exchange for hundreds of millions of dollars in profits.

One of the conditions of the settlement is that the egg producers must adopt “antitrust compliance programs” and ban “communicating with competitors on pricing and bidding strategies.” But it’s hard not to recall that those regulations were mostly in place before they committed the price-fixing scheme, too.

What’s most maddening here is that the many tens of millions of American families who paid more than double for their eggs over the course of a few years will not see a single penny of those expenditures refunded to them. This might not be a win for the competition-killing egg producers, but it’s hard to read it as anything but a total loss for American consumers.

It should be clear to anyone paying attention that America desperately needs to reform its antitrust laws. Any businesses that collude with their supposed competitors to raise prices for American consumers should have to face immediate and painful consequences, and the American people should be made whole for their losses.

That concept of repaying victims of corporate price-fixing scams might have been impossible during the Progressive era of the 1890s, when the United States first broke up big businesses and price-fixing on behalf of the American people. But here in the 21st century, we can easily distribute funds to an infinite number of people. Doing so would remind Americans that the government is fighting on their behalf against outsized corporate power—in other words, the exact thing that government is supposed to do.

This Week in Trickle-Down

• On the first anniversary of the passage of the Trump administration’s tax bill, the Center for American Progress looks at how those tax cuts have impacted Americans who get their health insurance on the Affordable Care Act exchanges. “Average monthly net premium costs among marketplace enrollees increased by 58 percent—from $113 in 2025 to $178 in 2026,” CAP notes, and over a million people lost their health insurance this year.

• The Washington Post crunched the numbers and determined that President Trump talked about his construction projects in Washington, D.C., as often as he talked about inflation in public comments last month. He discussed the White House construction and his proposed arch far more often than he’s discussed raising wages for workers or making healthcare more affordable.

This Week in Middle-Out

The Center for American Progress put out a report explaining that the majority of business income now comes from pass-through “partnerships,” rather than the standard C corporation you probably think of when you think of American businesses. The tax code hasn’t kept up with this change in business culture. CAP explains how we can rewrite the tax code to fully address this shift. “Research shows that pass-throughs pay less tax per dollar of income than C corporations because pass-through business owners’ profits face one tax rate of 29.6 percent, while owners of C corporations can pay a maximum of 36.8 percent,” CAP notes.

Real-Time Economic Analysis from Civic Ventures

As part of the summer series exploring the central myths of trickle-down economics, we’re revisiting a conversation with William Lazonick and Lenore Palladino about how shareholder value became the all-consuming goal for corporate America, above every other metric including sustainable growth, customer satisfaction, and research and development.

Closing Thoughts

“Consumer confidence fell to 91.2 in June,” economic commentator Steve Rattner writes, adding that “the Conference Board’s index has now sat below its 1985 benchmark of 100 for 16 straight months.”

He continues, “Americans were far more optimistic at the 2024 election (113) and when Trump took office (105). The mood keeps sliding.”

Naturally, as Americans continue to report feeling bad about the economy, the media has responded with another round of stories about how the “vibes are off” among American consumers, even as the topline economic metrics like GDP are good.

“The big-picture indicators of the U.S. economy — GDP, unemployment and so on — are doing fine while public opinion on economic conditions is at rock bottom,” writes Neil Irwin at Axios.

Irwin reports that a collection of Biden administration economic thinkers, including Lael Brainard and Rohit Chopra, have put together a new self-described “policy pop-up” called the Kitchen Table Project that will advise Democrats on how to address these issues. He explains that the Project believes the bad feelings about the economy are “the result of not just the elevated prices reflected in macroeconomic data, but higher and more volatile prices for the specific items that dominate Americans’ day-to-day living expenses.”

The Kitchen Table Project “conducted survey work and modeled how a family of four with a median income has been affected by a slew of economic shifts of recent years, including changes in food, gas and health care prices.” After pulling together all that research, the team concluded that “even as overall inflation has slowed in the last few years, many of the most salient goods and services people buy are more unaffordable than ever, and that rising wages and tax cuts haven’t been enough to offset it.”

“”People are extremely worried about unexpected expenses, and how they will handle it,” Brainard told Irwin. “Things that people pay for frequently, like food, groceries, gas, really are top of mind when it comes to their sense of ‘am I doing OK?’”

The best quote from Brainard: “What we learned is that people are feeling squeezed because they are squeezed.” In short, she concludes, “their monthly budgets just aren’t going as far as they used to.”

This probably doesn’t sound like news to you. But the thing is, it actually is news to certain members of the media—this is why we’re now in something like the sixth round of “why are people so unhappy with the economy?” stories—and it’s certainly news to the people who are in charge of economic policy in the White House right now.

When it comes to bringing prices down, the Project promises to “find the best policy ideas across the board and develop new ones to tackle the costs that matter most to Americans.”

If I may make a suggestion, one of the most important policy solutions can actually be found front and center in the introduction of this email—raising the federal minimum wage to $25 an hour. As Civic Ventures founder Nick Hanauer pointed out in a recent video, it makes no sense to focus on bringing prices down for American consumers without also talking about growing worker wages:

The fact is that American workers are making about $32,000 less on average per year than the same workers made 50 years ago. Restoring that $32,000 to paychecks would address the affordability crisis virtually overnight, and then some.

Obviously, there’s a lot more that our leaders need to do in order to bring down the biggest pricing pressures—housing, childcare, and healthcare are all way too expensive, and most other developed countries have already devised solutions to most of those problems. Monopolies need to be broken up, and competition needs to be restored to the marketplace. Those are all important policies that would directly bring down prices for consumers.

But as Nick says in the video, “I’m not saying prices aren’t high. They are. I’m not saying you’re wrong to feel squeezed. You’re not. What I am saying is that the people who spent 50 years rigging the economy against working Americans are thrilled to talk about the price side of affordability.”

He adds, “here’s the trick: As long as you’re focused on prices, you’re not focused on wages. And wages are where the real heist is happening.”

So let’s remember going forward, as we enter the inevitable seventh and eighth cycles of stories pondering why ordinary Americans are unhappy with the economy, that we won’t be able to get out of the pricing hole we’re in without raising wages for all American workers. That’s how we will make everything more affordable while also growing the economy for everyone.

I hope you have a great Independence Day weekend. Please try to make some time to remember the things that make this country worth fighting for, and to reflect on the things you can do to make it a better place in the months and years ahead.

Zach

This week, we’re going to take a look at what the American people want to do about prediction markets, why prices won’t necessarily go back down if the Strait of Hormuz reopens to shipping traffic, and how care work became so underpaid in comparison to other careers. But first I want to talk about a step in the right direction on housing.

Since the 2024 elections, Congress has rightfully caught a lot of flak from voters of both parties for its inaction on a host of issues. The legislative branch of the federal government has failed to act on lowering prices, raising the hourly minimum wage from its shameful current rate of $7.25, or curbing the Trump administration’s harmful slate of tariffs and the war in Iran that caused the closure of the Strait of Hormuz.

So in the spirit of fairness, I want to point out that this week, Congress finally passed a bill that would lower housing costs for many working Americans, and it did so with sweeping bipartisan support, clearing the House with a vote of 358 for and 32 against, and the Senate by a vote of 85 to 5. These are numbers that we never see in our hyperpartisan times.

This is the first major housing bill from Congress in more than three decades.

“The 21st Century ROAD to Housing Act includes grant funding and pilot programs to build new homes. It would also ease some regulations and empower local governments to expedite reviews to build housing,” reports Sahil Kapur at NBC News, adding that “a key section titled ‘Homes Are For People, Not Corporations’ would limit any ‘large institutional investor’ from buying single-family homes.”

That last detail has garnered some of the biggest headlines in the wake of the bill’s passage through Congress. Kapur explains that it would “bar institutional investors that own over 350 single-family homes from buying more.”

“The measure would also have the federal government create model zoning plans, which local officials could then adopt as their own,” Tony Romm writes at the New York Times. “And lawmakers looked to retool billions of dollars in federal grants sent to states and localities, primarily aiming to reward communities that construct new residences.”

“The sum of those provisions could encourage more development as new construction is lagging,” Romm continues. “Housing starts in May fell 15 percent from the previous month, according to federal data, which is seasonally adjusted. That was a nearly 9 percent decrease from the previous year.”

As I write these words on Wednesday, news just broke that, even though the White House supported the bill’s advancement through Congress, President Trump canceled the signing ceremony for the bill hours before it was supposed to happen. Now he is demanding that Congress pass an unpopular bill that would limit the voting rights of Americans around the country before he signs the housing bill into law. Like so many of President Trump’s decisions in the past year, he’s holding the economic survival of working Americans hostage in an awkward attempt to pass unpopular policies that would only serve the president himself.

If Trump doesn’t sign the bill into law, it will go into effect in ten days. If he vetoes it, Congress does have a veto-proof majority and can pass it into law anyway. Or there is a slight possibility that Trump could enact a so-called “pocket veto,” which would kill the law if Congress goes into recess before the bill naturally passes into law in ten days.

But regardless of what happens to this housing bill, one thing seems pretty clear to me: By passing this bill with such popular acclamation, Congress has all but ensured that the housing conversation will remain at the top of mind in Washington, D.C. for the near future. Because on its own, this bill isn’t a solution to America’s ongoing housing affordability crisis. It is nowhere near big enough to address the size of the problem. In many parts of the country, buying a house now swallows up nearly three times the share of worker incomes than it did in 1980:

The nation needs millions more units of housing of all types in order to bring prices down and make buying and renting housing more attainable for everyone. Instead, if it does eventually become law, the bill should be viewed as the starting point for a conversation about how to truly address the outsized scale of the problem.

So with that in mind, let’s look at a few potential policy solutions to the housing affordability crisis that middle-out politicians should run on, whether the housing bill passes through Congress or not.

• The Roosevelt Institute’s Good Life Agenda calls for a national construction financing fund to support the construction of housing, even if the Federal Reserve makes loans and mortgages more expensive by raising interest rates. It would also require those housing subsidies to be tied to increased labor standards that ensure construction workers can afford to live in the houses they help build.

• The Center for American Progress has proposed “investing in new financing models and supercharging innovation to build more affordable homes at a lower cost; and protecting consumers and lowering other housing expenses by reducing junk fees and preventing collusive pricing,” which would lower housing costs for American families by an estimated $1,000 per year.

• The Congressional Progressive Caucus has already written bills that would offer $20,000 investments for first-time homebuyers and call for “$1 trillion to create and preserve affordable and accessible housing, support public housing, expand homeownership opportunities, and expand rental assistance.”

• And last but certainly not least, my coworker at Civic Ventures, David “Goldy” Goldstein, wrote an excellent piece for Democracy Journal envisioning a “public option” for housing. You should read the whole thing, but here’s the thesis: “What America needs is a massive investment in building a public option for rental housing, affordably priced and perpetually owned outside the rent-seeking impulses of the private market,” Goldy writes. “By issuing bonds against the revenue generated by future rents, local housing authorities can build millions of units of affordable middle-income housing at no cost to taxpayers.” The best part: “if they patiently wait for inflation to erode the value of the money borrowed, this publicly owned housing will grow even more affordable over time.”

Housing affordability is not a small problem. When mortgage payments and rent consume more than a third of a family’s budget, they have less money to spend on everything else—and that means the money which used to circulate through the economy is instead sucked up into the profit margins of big banks and corporate landlords.

Now that we’re talking about the need for investments in housing construction and support for renters who are at risk of being priced out of their homes in any given month, it’s clear that we need to devise even bigger and faster policies to make housing affordable for working Americans again.

If Congress can find near-unanimous support for a small bill to address housing affordability, that means constituents could probably press a clear majority of their Congresspeople to come up with solutions that meet the size of the problem—or they can vote for candidates who understand what needs to be done in November.

The Latest Economic News and Updates

Inflation Is Up, and It’s Not Just Because of the War

Just this morning, the Bureau of Economic Analysis issued its monthly inflation report, and the data show that the higher prices Americans are paying aren’t just due to the war in Iran—though for the New York Times, Ben Casselman notes that the invasion of Iran absolutely “made the whole U.S. inflation problem worse.”

“The Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures price index, rose 0.4 percent in May,” Casselman notes. “Prices were up 4.1 percent from a year earlier, the fastest annual inflation in more than three years.”

Casselman explains that the core inflation measurement, “which excludes volatile food and energy prices, rose 0.3 percent in May and was up 3.4 percent from a year earlier — a sign that the pickup in inflation isn’t limited to the categories directly affected by the war.”

Later on in this week’s issue, we’ll talk about why we can’t expect high gas prices to suddenly return to pre-war levels, even if the Strait of Hormuz opens. And of course we’ll have more to say about this morning’s inflation report in next week’s issue.

Americans Want the Federal Government to Regulate Prediction Markets

As the popularity of prediction markets continues to grow, Americans are seeing the downside of an unregulated industry that allows anyone to bet money on virtually any outcome on their phone in seconds. We’ve already seen what appear to be clear cases of insider trading, with government employees allegedly profiting from knowledge that nobody in the general public could possibly have.

About half of all U.S. states have responded to the rise of prediction markets by trying to formulate a regulatory response. Kentucky, for instance, claims that the markets should be governed by the state’s Horse Racing and Gambling Corporation’s right to license gambling within state lines. And Illinois is taxing bets placed on apps like Kalshi.

But Americans have made it clear that they don’t want a patchwork of state-by-state regulations, taxes, and rules for prediction markets. For Semafor, Eleanor Mueller shares a new poll showing that voters “in both parties prefer federal oversight of prediction markets to state oversight.”

“That breaks down to 48% of Republicans who favor federal oversight versus 27% who prefer state oversight,” Mueller reports, “while 45% of Democrats favor federal oversight and 35% prefer state oversight.”

When nearly half of all Republicans prefer federal oversight of an industry, you know things are getting serious. Americans can see the obvious capacity of unregulated prediction markets to become hotbeds of corruption and cultivators of gambling addiction, and they think it would be better to have one clear standard for the entire industry, as opposed to 50 different rulebooks depending on your geographic location.

And a new poll from Politico shows that a majority of respondents don’t believe that prediction markets should be allowed to let users bet on the results of political events, “like what President Donald Trump will say, who he will pardon, and the outcome of the 2028 presidential election.”

Political wagering seems especially ripe for corruption, which is why the Senate rushed to ban prediction-market trading for senators and their staff. The House hasn’t responded as quickly, though a ban on certain political-themed prediction markets did just recently move forward.

The American people outright hate the idea of their elected officials getting rich off of insider information that they receive on the job. A 2023 poll found that overwhelming supermajorities of respondents in both parties—87% of Republicans, 88% of Democrats, and 81% of independents—favor banning members of Congress from trading the stocks of individual companies for just that reason.

But when you watch this video of Georgia Senator Jon Ossoff calling for an immediate vote to ban stock trading and crypto purchasing for members of the Senate, you can see why the overwhelmingly popular policy hasn’t passed: Within seconds, Wyoming Senator Cynthia Lummis objected to Ossoff’s proposal “because there are alternatives” to an outright ban. It’s a classic ripped straight from the trickle-down playbook: Paralyze forward motion on good policy by gumming up the works, adding to the public’s overall sentiment that government is corrupt and unable to get anything done.

Lummis isn’t running for re-election, but Ossoff should continue to talk about this incredibly popular policy and force its opponents to go on the record. The American people can tell when someone is trying to sell them a load of BS.

Nobody Expects Prices to Go Back Down

For industry blog Grocery Dive, Catherine Douglas Moran highlights four numbers that show the strain on American consumers when it comes to food prices. She points out that the total food and drink purchases in America fell by just shy of one percent in the last week of May. In fact, total sales of food and drink in the U.S. fell for every single week in May. “Perishables sales last month dropped 0.8% year-over-year, with seafood taking the hardest hit and refrigerated dairy posting the only sales increase in the category,” she writes.

You don’t often see such a consistent drop in food sales over multiple weeks in a row, for the obvious reason that everyone needs food to survive. The biggest factor for this decline is that still-rising grocery prices, which increased by 2.7% in May, have finally hit the ceiling of what consumers are able to spend. Another number in Douglas Moran’s report backs that up: One survey found that nearly a third of all consumers—29%—reported using a buy-now-pay-later service to purchase groceries.

Another reason food sales are dropping: Fewer Americans are on the food assistance program known as SNAP, formerly known as food stamps. She notes that after the Trump administration cut support programs in order to fund their tax cuts for corporations and the rich, “SNAP participation fell by more than 3.5 million people” in less than a year. “Tightening food assistance eligibility has led to worries that more people could face food insecurity and turn to food banks,” Douglas Moran writes.

The worst part of all this is that those food prices are likely to continue rising. “The possible end of the Iran war will not cure the drought that has stunted the wheat crop,” writes David J. Lynch at the Washington Post. “It won’t secure soybean export orders caught in the U.S.-China trade war. And it will do nothing to promote competition in agriculture.”

“President Donald Trump’s February decision to join Israel in attacking Iran aggravated the farm economy’s struggles,” Lynch writes. “Soybean growers, who were already suffering from the president’s tariffs, are expected to lose money in 2026 for the fourth straight year.”

As a result, “Rural voters backed Trump’s economic policies by a 45 percent to 43 percent margin early last year but now disapprove of them 61 percent to 31 percent,” with about half of all agricultural workers saying that the economy is not headed in the right direction.

Lynch notes that “soybean prices are down by roughly one-third from their 2022 levels. The combination of higher input costs and lower sales prices leave many soybean farmers needing to borrow money.” But the problem is that even money is more expensive these days: “For loans in excess of $100,000, farmers face interest rates of nearly 7 percent, more than twice the figure from four years ago.”

If the Strait of Hormuz does reopen to cargo traffic, a large percentage of the world’s fertilizer supply will finally make its way to farms around the world. If the economy was the perfect system of supply and demand that trickle-downers would have us believe, that would mean fertilizer prices would drop, bringing grocery prices down with them.

But Lynch talks to one farmer who “worries that the small number of fertilizer suppliers will use their market power to keep prices high.” He’s seen that happen again and again due to “the agribusiness consolidation of recent years.”

Many of the high prices we’ve seen over the last two years have been the direct result of President Trump’s choices—primarily his campaign of tariffs and the war in Iran. But the farmer who Lynch interviewed is correct to assess that those prices will not naturally come back down thanks to the good hearts of the CEOs of big fertilizer corporations. The only way to bring prices down is to encourage competition—and that means breaking up the stranglehold that a handful of companies have on the market.

Similarly, Niraj Chokshi explains for the New York Times why airline ticket prices might not come back down if and when gasoline prices finally start to fall. “Even when fuel does become cheaper, airlines may not reduce fares for a long time because they want to recover the money they spent and have figured out that travelers are willing to pay more for tickets anyway,” Chokshi writes. Ticket prices have risen by 28% for domestic flights and 18% for international destinations since the war in Iran began.

Chokshi talks to an aviation business expert who suggests that “while many carriers in the United States, Europe and elsewhere will resist lowering fares, they could be forced to do so to remain competitive.” That’s an almost laughable thought, given how noncompetitive the airline industry has become.

Just this year, Congressman Jamie Raskin explained the problem with the industry during a Congressional investigation: “In 2000, the four largest carriers controlled roughly 60 percent of domestic traffic. Today they control about 80 percent,” Raskin said.

“One merger after another has consolidated the market power of the four major airlines: American, Delta, Southwest, and United,” he continued. “The result: higher prices, lower wages, and growing profits.”

So even if oil and fertilizer traffic begins freely flowing across the world, Americans don’t expect prices to come down. Is it any wonder why a record-low number of Americans report that they believe in the American Dream?

“Sixty-eight percent of respondents in a new Gallup poll” said they believed in the American Dream in terms of achieving economic success, reports Danielle Paquette at the Washington Post. That marks “a four-percentage-point drop from the last survey on the topic in 2024.”

This kind of self-reporting poll often skews too high because respondents don’t often want to admit that they’re experiencing economic anxiety or difficulties making ends meet. Tellingly, only 46 percent of the same respondents believed that every American “had the opportunity to attain the same success,” crossing below the halfway mark from two years ago.

Bad things happen when majorities of the public believe that the system has stopped working. The American Dream is a shorthand for the economic well-being of the country and its prospects for the future. The optimism behind the American Dream has been the secret weapon of America’s economy for our lifetimes—it’s encouraged countless business owners and workers to take bold swings and make big plans for the future. Rekindling that optimism and encouraging Americans to bet big on each other’s success will be the most important task for whoever becomes the next steward of the American economy.

This Week in Trickle-Down

The Economic Policy Institute just issued a heartbreaking report showing that state lawmakers around the country continue to weaken child labor protections this year, while only four states worked to strengthen their child labor protections. Meanwhile, child labor violations are skyrocketing:

New York Times economics reporter Talmon Joseph Smith reports that corporate earnings were “insane” in the first quarter of the year, including a 14.8% net profit margin. This indicates that corporations are on track to continue their trend of hoarding record profits while the wages of workers barely budge.

This Week in Middle-Out

• This morning, Senate Democrats released the text of a bill that would “raise the federal minimum wage to $25 per hour in five years, drawing a contrast with Republicans at a time when many workers say they’re struggling to make ends meet,” reports Dave Jamieson. “The legislation is identical to a bill House Democrats put forward earlier this year, and shows a growing faction of the party is coalescing around $25 as their goal for a wage floor.” This is breaking news, and we’ll obviously have more to say about it next week.

• Massachusetts Senator Ed Markey put forth two solid pieces of legislation that would protect worker rights in the 21st century: The No Robot Bosses Act would “put safeguards on the use of automated decision systems, which can include AI, to make work related decisions. Additionally, Senator Markey, along with Senator Schatz and Senator Cory Booker (D-N.J.), today introduced the Stop Spying Bosses Act to address the growing use of surveillance technology in the workplace.”

• The Center for American Progress put out a report on the national debt that included several graphs showing how much the Bush and Trump tax cuts for the rich contributed to the debt. Without those tax cuts—depicted in the graphs below by an orange line—our debt would be on track to hit about half its current levels:

Real-Time Economic Analysis from Civic Ventures

On his YouTube channel, Civic Ventures founder Nick Hanauer checks in on his prescient 2014 predictions that runaway income inequality would cause massive societal upheaval. He also explains three simple lies that rich people tell you in order to get you to support policies that increase inequality:

And on the Pitchfork Economics podcast, as part of our summer series exploring the myths that power trickle-down economics, we’re revisiting a conversation Paul and Nick had with former Labor Secretary Robert Reich about why regulations don’t kill growth.

Closing Thoughts

The Roosevelt Institute published a new report this week about what it calls “the care cascade.” It’s based on the idea that workers in the care economy—which is to say, nurses, daycare workers, and other workers in hospitals, nursing homes, schools and childcare facilities—are continually at the bottom of a cascade effect that strips their careers of wages and benefits.

“The US relies on a DIY model of care that pushes responsibility downstream,” Jessica Calarco writes at Roosevelt. “Rather than treating care as a collective obligation, the system expects families to purchase or provide whatever care they need and absorb the costs when they can’t.”

In other words, because America has no affordable childcare program or a universal healthcare program, that means Americans are largely on the hook for childcare, intensive elder care, and care for disabled family members. But because working Americans have lost more than $80 trillion in wealth from their paychecks to the top 1 percent over the past 50 years, their yearly median household income is about half of where it would have been had paychecks grown at the rate they did during the postwar decades of the 20th century.

Because everyone earns less than they used to, they have less money to spend on care economy services. So either care workers earn less, or American workers have to leave the labor market to care for their family members rather than hire help.

We have to acknowledge that class plays a role in this problem, too. Men still earn more than women in the workplace on average, and white workers earn far more than equivalent Black or Hispanic workers. It’s no coincidence that care work is a field that is not favored by white men. In fact, “One in five careworkers nationally are immigrants, and 97.6 percent of them are women,” Calarco writes.

That’s why “ care in the US has reached a crisis point,” Calarco explains. “Americans need care, but most cannot find or afford the quality care they need to live with dignity.^”

She continues, “At the same time, care workers are underpaid relative to other industries, leading to shortages and high rates of turnover, as all but the most vulnerable workers flee for better-paying work.”

So even though the demand for care work continues to climb…

…care work pay continues to fall below the pay rate of other entry-level occupations.

For Capital and Main, Mark Kreidler points out that those numbers are even worse for public school teachers: “ According to the most recent data from the Economic Policy Institute, the gap between average public school teacher pay and that of comparable college graduates working in other professions hit a record 27% in 2024,” Kreidler notes. By contrast, “In 1996, the furthest year back before an interruption in data gathering, that gap sat at only 6%.”

Of course, this is another refutation of the trickle-down idea that the free market pays every worker exactly what they are worth. The law of supply and demand that we all learned in our Econ 101 classes should mean that the pressing demand for care workers will drive up wages, but that’s not what happens in real life. In fact, the opposite is true in red and blue states around the nation.

But those shrinking paychecks do have real-world results. Workers are finding jobs in other fields. “Worker shortages in caregiving professions—like K-12 teaching, nursing, social work, and mental healthcare—are likely to become increasingly prevalent as earnings in these fields stagnate,” Calarco writes, “and as policymakers push more of the costs of higher education onto students and their families.”

It should be clear to everyone that the unfettered free market is not going to solve this problem. In other words, it’s a problem that only government can solve. Many European nations have done just that, through universal healthcare and childcare programs. Just last week, we looked at two universal childcare programs that seem to be succeeding in New Mexico and New York City, and how they can serve as models for other states and cities to follow. We also touched on the fact that those policies must increase the pay for care workers.

Many of the sluggish jobs reports we’ve seen in the past year would have been even bleaker had America’s aging population not increased the need for care workers in the health sector. Healthcare jobs have been the one bright spot in one of a handful of the most tumultuous years for the American job market in our lifetime. But many of those care jobs are extractive, low-wage care work.

This is another reminder that it’s not just our duty to measure the quantity of jobs created in the economy every month—we need to make sure those jobs are high quality, too. If the people who care for our most vulnerable neighbors don’t make enough money to participate in the economy, the resulting inequality will have bad results for all of us.

Be kind. Stay strong.

Zach

This week, we’ll learn the lessons from two popular universal childcare programs and explore why states that haven’t raised the minimum wage are failing working Americans. But first, let’s talk about why Chris Turner, the CEO of the corporation that owns national fast-food chains like Taco Bell and KFC, went on CNBC to justify his company’s sale of the global Pizza Hut chain of restaurants to a private equity firm.

The sale of all non-China Pizza Huts to Long Range Capital for roughly $1.5 billion, Turner said, “positions Pizza Hut for even greater growth going forward.”

We’ve all come to expect CEOs to make wildly improbable statements in the media, but even after years of empty promises, it’s hard not to roll your eyes at Turner’s statement.

That’s because we’ve all seen how the private equity playbook works, again and again. First, these firms buy profitable-but-declining brands like Red Lobster and Bed Bath & Beyond, paying huge price tags financed with debt. Then they transfer that massive debt to the company that they purchased, basically poisoning the balance sheets for years to come and instantly transforming a steadily profitable venture into a money-losing deadweight.

Next, they start cutting costs by laying off workers, closing locations, and slashing the goods and services that customers have come to expect. While that death spiral plays out, they airlift all incoming funds out of the company and its workers, sucking the company dry of profits.

And finally, after the PE firms have sucked the profit from the bones of the company and left vacant storefronts and laid-off workers nationwide, they sell the corpse for scraps and move on to their next victim. It’s a system that enriches nobody except a handful of wealthy executives at the private equity firms, while thousands of workers are left with less than nothing. (If you’d like some more information about the mechanics of private equity, Senator Elizabeth Warren has been leading the charge and has published several great explainers.)

If Long Range Capital follows this PE playbook and Pizza Huts nationwide eventually close, the media will invariably refer to Pizza Hut as a “flagging brand” that was doomed to failure after years of decline. But to be clear, Pizza Hut is still remarkably popular.

As CNBC reported when the sale was announced, as of six months ago, “Pizza Hut had nearly 20,000 locations across 108 countries and territories and reported $12.8 billion in annual system sales, according to regulatory filings from Yum.” The company still earned hundreds of millions of dollars in profit every year.

So while Pizza Hut enjoys nowhere near the ubiquity and popularity that it did in the 1980s and 1990s, it still brings in a steady stream of income that could have been applied to refreshing and reinvigorating the chain for the 21st century. After all, that’s how we were taught in Econ 101 how capitalism is supposed to work.

Under private equity, though, businesses aren’t profit-making pipelines to be invested in and cultivated. Instead, they’re resources to be strip-mined, exploited, and discarded. And while big national chains like Toys “R” Us and Red Lobster are the most public victims of private equity, the reality is that private equity firms are now entering local economies around the country and snapping up small businesses.

For the American Prospect, Robert Kuttner explains that private equity firms are establishing mini-monopolies in communities around the country in what’s called the rollup business model by consolidating mom-and-pop businesses under one big firm and winning “market dominance and thus pricing power.”

Kuttner explains that for about ten years, “private equity rollups have targeted a wide range of smaller businesses, including nursing homes, medical specialties, funeral parlors, trailer parks, ski slopes, veterinary practices, as well as such home services as HVAC, plumbing, electrical contractors, roofing, and pest control.”

“Typically, the PE partners put little of their own cash into a deal, but borrow most of the money, and then pile the debt onto the books of the operating company,” Kuttner writes. “Following the acquisition, the new PE owner may run the company for a while and reap supernormal profits, or may extract so much money from the operating business that it will be driven into bankruptcy.”

Again, that money-extraction process results in fewer employees, worse service, and higher prices. If you’ve needed to hire a plumber or electrician in the past decade or so, you might have encountered some of the side effects of this rollup practice, including a frustrating inability to actually get a human being on the phone to discuss pricing or service availability.

The process happens so gradually and on such a small scale, Kuttner explains, that these firms tend to avoid antimonopoly laws. But as their reach exceeds their grasp, these small private equity companies are finally attracting negative attention. One company tried to corner the market on anesthesiologists in Texas, for instance, which prompted the FTC to act against the monopoly.

And Kuttner writes that another rollup firm has quietly bought a number of fire truck manufacturers, which led the International Association of Fire Fighters to warn that ““The average price of a new fire engine has roughly doubled since 2020, and wait times that once ran about 18 months now stretch up to four and a half years,” resulting in small local fire departments limping along by keeping “aging, sometimes unsafe, apparatus in service far longer than they should.”

As we pointed out on the Pitchfork Economics podcast, over the last decade, private equity firms have insinuated themselves into pretty much every aspect of American life, stripping value from working Americans and handing it off to a few wealthy elites. If the American middle class is to survive, the practice of extractive capitalism needs to end. Kuttner points out that “Sen. Elizabeth Warren’s Stop Wall Street Looting Act would essentially do that, by taking away PE’s special tax breaks, requiring essentially the same disclosures as publicly traded companies, prohibiting extractions of special dividends at the expense of the operating company, and constraining other forms of predatory behavior.”

We need more of our elected leaders to frame private equity as anticapitalist behavior. Private equity removes competition and economic growth from the equation, replacing them with a rigged game that benefits only the super-rich. That’s not capitalism—it’s oligarchy, and it is un-American to its core.

The Latest Economic News and Updates

How Popular Policies Can Survive Trickle-Down Cuts

In this week’s episode of the Pitchfork Economics podcast, economist Kathryn Anne Edwards explains her vision of what a national universal childcare system might look like.

“It would probably be one of the largest investments the federal government has made in communities across the U.S.,” Edwards says.

That’s a worthy goal. States and cities around the U.S. are already starting to think about what their local versions of universal childcare might look like. One day, perhaps those local childcare programs might inspire a national program. But in order for that to happen, the state and local programs have to be successful—meaning, they have to deliver what they promise, and they have to be popular with voters.

For the Roosevelt Institute, Josh Wallack looks at New York City’s universal childcare program, which was attacked by any number of national and local trickle-downers throughout its dozen years in existence, but which remained universally popular and is now on track to become a statewide policy.

“New York City Mayor Bill de Blasio’s signature policy initiative—universal, free childcare for three- and four-year-olds—was largely regarded as a success and proved popular during his administration,” Wallack writes. “From the launch of the program in 2014 to the end of his second term in 2021, over 500,000 three- and four-year-olds participated.”

The policy was successful, Wallack writes, because it was universal, free, and easy to access—that is, the childcare was physically accessible to every neighborhood in the city, and it didn’t require reams of paperwork to sign up.

Things changed when a new mayor, Eric Adams, came into office. “The Adams administration publicly backed off the promise of a universal program for three-year-olds, saying that it was unaffordable,” Wallack explains. “The Adams administration quickly and publicly cut close to $300 million from the budget, reducing resources for both services and program support. Subsequent years saw even further cuts.”

Wallack explains that the Adams administration created “a kind of negative policy feedback loop” that threatened to pull the plug on the popular program. “As families were forced to seek out other care if they could afford it or care for their children themselves, demand for the service decreased, which the administration used to justify further cuts,” he writes.

This is a common trickle-downer tactic: Make the investments harder to access, defund them, and create enough ill will around them in the public space that they become controversial. People then take sides on the issue—typically, though not always, along partisan lines—and the fight over cuts and funding eventually weakens it to the point of uselessness.

So what was different about universal childcare in New York City? Wallack says, “a group of committed activists, providers, families, and former staff from the program, including the author, came together in 2022 to try to reverse this trend.”

This team worked to “ensure that the childcare issue remained front and center in public discussion even during the cycle of disinvestment and declining support,” Wallack writes, eventually “leading to a historic announcement from the current administration that the city and state would build universal childcare statewide.”

Not to belittle the hard work of those people who fought for childcare even as the Adams administration tried to kneecap it, but it also helped that the policy was designed for success. Wallack cites a checklist from political scientist Alexander Hertel-Fernandez that determines whether a policy can create a positive feedback loop with voters:

“Pre-K for All met most, if not all, the criteria on the checklist,” Wallack concludes. He draws three main lessons from the case study: “childcare is a strong candidate for a leading priority for any local, state, or national administration,” he writes. “Few other topics create the opportunity to demonstrate that government can deliver something that makes such a dramatic material difference in people’s lives in ways they can see and feel quickly.”

Second, Wallack explains, the policy needs to be universal, free, and easy to access. And lastly, “It will always be important to fund and support organizations that are building the public support and issue advocacy coalitions needed to win and maintain policy victories.”

That last piece, the buy-ins from advocates, activists, and partner organizations, is the factor that most politicians forget they need when passing big policies that benefit working people. And in many cases, that support can make the difference between a popular policy that falls apart when it’s signed into law and a treasured government program that generates a positive feedback loop of enthusiasm, investments in the American people, and economic growth.

How New Mexico Is Building the First Statewide Universal Childcare Program

As current New York City mayor Zohran Mamdani and New York State Governor Kathy Hochul prepare to expand NYC’s universal childcare program to statewide status, the leaders will undoubtedly be looking to New Mexico for guidance. Last September, New Mexico became the first state in the country to enact its own universal childcare program for kids from birth through the age of 13.

Now, in New Mexico, “Participating families can choose from a wide range of options, including center-based care, home-based providers, before- and after-school care, and faith-based centers,” writes Karen Fischer for educational news site The Hechinger Report. “On average, the universal program is expected to save participating families $12,000 a year.”

As the state becomes the first in the union to build such a program, it’s now struggling to answer questions that could serve to shape New York and other states in the very near future. First and foremost, Fischer writes, the state is trying to figure out how much childcare workers should be paid.

As a result, New Mexico’s leadership “has had to decide questions such as how to weigh experience against education in child care wages, how to financially incentivize centers to adopt rigorous measures of quality and a whole host of issues that have typically been left to the market.”

To be clear, the unregulated free market has done a terrible job of managing the costs and wages of childcare. Even though the average annual cost of childcare in the United States has skyrocketed to $13,128 per child, early childhood education (ECE) professionals are among the lowest-paid jobs in the entire United States—below 97% of all other jobs.

“New Mexico has currently set aside $60 million for increased wages for the state’s child care workforce,” Fischer writes. “A working group is now refining a ‘wage scale and career lattice framework’ intended to support experience, education, and quality.

Right now, New Mexico is encouraging employers to pay higher wages in order to unlock higher reimbursements per child. Fischer writes:

Mirna Polendo, the director of Imagination Station, a Christian preschool in the mountain resort town of Ruidoso, made some changes to her program when the state moved to a universal system. New Mexico pays enhanced rates to centers that are open at least 10 hours a day and that pay increased wages to teachers. Polendo extended her hours from 7:30 a.m. to 5:30 p.m. and bumped employee wages to $17 an hour to qualify for more state reimbursement.

In return, Polendo receives $1,400 per month from the state to care for an 18-month-old infant, $1,075 for a toddler and $890 for kids ages 3 to 5. Across the board, the state reimburses more for care than private tuition ever did.

When taken into consideration alongside Wallack’s observations of New York City’s universal childcare program, Fischer’s story indicates that childcare might just be the next major issue for middle-out leaders. It’s a policy that benefits a huge number of American workers, it eliminates one of the fastest-rising price pressures of the last decade, and it helps reestablish the wages of a criminally underpaid segment of the workforce. And of course, those higher wages will have the added benefit of growing the local economy for everyone as childcare workers spend their bigger paychecks in the community.

Those leaders who do decide to take up the mantle of universal childcare need to keep in mind the lessons from New York: It’s not enough to pass a popular policy—you also need buy-in from people who will fight to protect your policies from entering the trickle-down death spiral, when you’re no longer in office to defend them. Now that we’ve seen that universal childcare is possible in America, I expect to see a lot of exciting innovation in the political and policy design of this issue in the months and years ahead.

This Week in Trickle-Down

• As the price of beef continues to skyrocket, South Dakota representative Dusty Johnson went on Newsmax to justify the prices by saying it’s “still an incredible value. We’re not used to paying $8 or $9 for a pound of ground beef, but you compare the nutrition in a pound of beef to a $9 bag of chips, and I would tell you beef still packs a powerful punch.”

• The Center for American Progress published an extensive report documenting how the Trump administration’s budget cuts could potentially result in disaster for Americans on two major fronts: First, by cutting the National Weather Service budget, the administration is making us less prepared for potential weather disasters. Second, by slashing the Federal Emergency Management Agency budget, they’re reducing government’s ability to respond to those disasters once they’ve passed.

• “1 in 10 U.S. workers (15.5 million) finds her primary job in a ‘nonstandard’—i.e., subcontracted, temporary, on-call, on-demand, or freelance—work arrangement,” reports the National Employment Law Project. Those workers are much more likely to suffer losses of wages and benefits than workers in more traditional employment situations.

This Week in Middle-Out

• For the Center for American Progress, Rosa Barrientos-Ferrer writes that the Deferred Action for Childhood Arrivals program, despite being under attack from the Trump administration’s continued campaign of forced deportations, is one of the most important tools to help America overcome a nursing shortage.

• Bloomberg Law reports that dozens of former federal employees who lost their jobs due to the so-called Department of Government Efficiency cuts that brought about the biggest federal workforce layoffs in living memory are now running for Congress around the country. This could inspire a necessary civic conversation about the importance of federal employment and funding, and how it relates to local economies. For a lighter look at the issue, the Daily Show recently profiled several DOGE-d candidates from around the country:

Real-Time Economic Analysis from Civic Ventures

Civic Ventures founder Nick Hanauer appeared on the Hot Girl Finance podcast to talk about his history as the first non-family investor in Amazon.com and his eventual realization that growing economic inequality could eventually lead to global chaos. It’s a great overview of Nick’s deep roots in the business world and his evolution as an economic thinker:

As I mentioned at the beginning of this email, in this week’s Pitchfork Economics podcast, Nick and Paul talk with Kathryn Anne Edwards, the host of the excellent Optimist Economy podcast, to talk through her thoughtful three-part series for Bloomberg exploring AI-inspired job losses and potential policy responses that can help workers—and therefore the economy—survive the adoption of artificial intelligence.

Closing Thoughts

Unfortunately, this week, primary voters in Oklahoma rejected a measure to raise the state minimum wage to $15 an hour by 2029.

“More than 350,000 Oklahoma workers will not receive raises that would have totaled to over $783 million as a result of Question 832 failing,” writes Claire Bernard at Bloomberg Law. “Oklahomans last received a minimum wage increase when the federal floor was raised in 2009.”

Putting on my political operative hat for a moment, I’d say the measure failed in large part because it was moved by executive order from the November 2024 elections to the June 2026 GOP primary ballot, thanks to meddling from the conservative governor and business and farm lobbying groups. The enduring popularity of a higher minimum wage with independents and the broader voting base suggests that the measure likely would have passed had it been on the ballot in the high-stakes 2024 general election.

So, thanks to the dirty pool that defied the will of voters who supported the initiative in 2024, Oklahoma will still be one of the 20 US states whose minimum wage sits at the federal minimum of $7.25 an hour.

In a fantastic newsletter, economist Arin Dube recently looked at the differences between the economies of the 30 states that have raised the minimum wage above $7.25 since 2013 and the 20 states that still have a $7.25 minimum wage.

Dube finds that there is now a huge and growing gap between workers in the states that raised the wage and workers in the 20 states that haven’t. “In the 30 ‘raise states,’ the average floor climbed from $7.60 in 2010 to $14.44 by 2025,” Dube writes.

“The light green band shows the spread between the lowest and the highest of these floors by year, ranging from $8.75 in West Virginia to $16.66 in Washington in 2025,” Dube continues. “For the 20 ‘federal-floor’ states, in contrast, the nominal minimum wage remained stagnant at $7.25 throughout the whole period.”

One of the big arguments made by trickle-down opponents to Oklahoma’s minimum wage was that only a small portion of workers were still actually only receiving $7.25 per hour—most employers had to pay more than that to attract workers. This meant, the trickle-downers argued, that the free market was raising wages for everyone.

Dube crunched the numbers for restaurant workers in the 30 states that raised the wage against workers in the 20 states that didn’t, and he found that overall wages have stayed virtually flat in states with a $7.25 minimum wage. He found that “the average wage grew by around 7.7% ( ±3.3%) more in the raise states since 2013.” In other words, raising the minimum wage actually increased the wages of other workers in the same field who earned more than the minimum wage.

Dube also found that the higher the minimum-wage increases, the more jobs were created compared to states with $7.25 minimum wages.

Most Americans understand how this could be the case: When you pay restaurant workers enough money that they can afford to eat in restaurants, that’s good news for everyone. Restaurants have to hire more workers to meet the increased consumer demand, and those workers have more money to spend in the economy.

It’s a message that is easy to understand intuitively, and that’s why raising the minimum wage is universally popular—and it’s also why trickle-downers and the politicians who do their bidding have to resort to changing the rules to subvert the will of the people. That kind of interference can only go on for so long before people respond by voting in candidates who fight for them rather than against their will.

Be kind. Stay strong.

Zach

We have a lot of ground to cover this week, including a new inflation report, some startling consumer and worker data, and the looming Social Security “crisis” that is actually pretty easy to fix.

But first, we have to address an op-ed in the New York Times that tries to reframe the debate about affordability and inequality by answering a simple question: How big is the American middle class?

To give you an idea of what the piece concludes, we have to recognize that the authors of this editorial are Stephen J. Rose and Scott Winship, two economists who work at the libertarian-leaning American Enterprise Institute. Their piece immediately attacks the proposition that inequality and affordability are hollowing out the middle class, and tries to debunk the commonly accepted idea “that many families can no longer achieve the American middle-class dream the way their parents once did.”

This editorial, if left uncontested, will serve as a handy link that trickle-downers can throw into thousands of editorials opposing raising the minimum wage, improving outcomes for working Americans, and combating inequality. The New York Times’s credibility will allow those arguments to gloss over the realities of the economy for the vast majority of Americans. It’s a foot in the door that allows a smooth-talker the space and time to make economic arguments that would otherwise never fly in polite company. So it’s important that we take the time to recognize this argument for what it is and debunk it fully.

Here’s the nut of AEI’s argument from the Times editorial:

In 1979, 36 percent of families were in the middle class. At first, it looks ominous that by 2024, a smaller number — 31 percent — could claim that status. But it’s worrisome only if you overlook that over the same period, the upper middle class grew to 31 percent of families from 10 percent. Meanwhile, the number of Americans falling short of the middle class — once more than half — dropped to 35 percent of all families.

The traditional middle class shrank because so many families became better off over time, not because more people fell short.

The first thing we have to address is AEI’s definition of the term “middle class.” AEI measures the 1976 inflation-adjusted “middle-class” against the 2025 poverty line: In other words, they measure 1976 incomes, given a modest bump for inflation, against modern standards of living. The Pew report on inequality, by contrast, has for decades measured family wealth and class against that year’s median income—and Pew’s findings line up much more cleanly with the typical American’s assessment that the rich have gotten richer while everyone else has lost ground.

Pew noted in 2022 that the “widening of the income gap and the shrinking of the middle class has led to a steady decrease in the share of U.S. aggregate income held by middle-class households.” So for example, “In 1970, adults in middle-income households accounted for 62% of aggregate income, a share that fell to 42% in 2020.”

In short, AEI selected the broadest definition of the middle class and muddled the numbers to support their worldview. Winship and Rose also do not explain in the Times the way they measure inclusion in the upper, middle, and lower classes. For that, you have to read their full report at AEI. There, they state their thesis right up at the top of the report: “using a definition of the middle class that keeps the entry and exit points constant in terms of purchasing power tells an unappreciated story.”

This is very important—and, again, it’s never mentioned in the Times piece. Rose and Winship are comparing two American families from two different time periods—one family from today and one from 1976. And to measure their economic health, they ask: “Does the 2026 family have more purchasing power than it did in 1976?”

When you just measure those two families together using economic tools that purposefully undercount inflation, it is strictly true that modern families across the economic spectrum have more purchasing power. But Winship and Rose didn’t compare the worlds of 1976 and 2026. Just because a family can purchase more items from AEI’s carefully selected list of goods for less money now than their economic peers did a half-century ago doesn’t mean that families have more aggregated wealth or opportunities than they used to.

As the Washington Post pointed out in 2024, families today spend about a third less on groceries than families 50 years ago, and about half as much on clothing. However, they’re also paying nearly a third more on housing and nearly double on health insurance. Using this EPI cost-of-living calculator for my home of Seattle, we can see that the average family of four spends $30,052 per year on housing, $14,613 annually on groceries, and $15,150 per year on health insurance. You don’t need a degree in accounting to understand that the modern family’s savings on groceries compared to the 1976 family are dwarfed by the tens of thousands of dollars in additional housing and healthcare expenses that the modern family has to pay.

We could pick AEI’s argument apart for the entirety of this email, but suffice it to say that you can’t just compare a 1976 family directly against a 2026 family without accounting for all the complex economic changes that have occurred in between. Wealth is accrued differently, people spend money differently and on different goods and services, and goods are manufactured, distributed, and purchased differently.

A few weeks ago, I wrote about the fact that we most often use the words “working Americans” in The Pitch to describe the broad majority of the population because the old terms of lower, middle, and upper classes have become so scrambled and uneven that they no longer make any sense. This editorial and report from AEI is a desperate attempt to dust off those old class descriptors and make them fashionable again.

Why does AEI want to revive these old-fashioned class distinctions? Because as we learned during the trickle-down era, it’s much easier to pit Americans against each other when they have a distinct “other” that they can punish. From the 1980s through the beginning of the 21st century, most Americans believed they were in the middle class, even if their wealth fell above or below the true definition of middle-class living. That made it easier for presidents Reagan and Clinton to villainize the poorest Americans as takers and to use those bad feelings to rationalize cuts to the social safety net.

What AEI doesn’t seem to recognize is that Americans have given up on those distinctions. In current economic polling, most people now see the economy as divided between two groups: The vast majority of Americans who work for a living, and the tiny group of wealthy folks who don’t earn their wealth through salaries but rather through financial wizardry, hoarding, and manipulations of the system that suck tens of trillions of dollars’ worth of wealth from the paychecks of everyone else.

The Latest Economic News and Updates

Paychecks Have Stayed Flat for a Year and a Half

Last Friday, the economics world reported on the release of a jobs report that they hailed as good news for American workers. “The labor market is finding its footing,” NPR’s Scott Horsley wrote.

“Restaurants and bars added 48,000 jobs last month in anticipation of strong summer demand,” he continued, “while the overall hospitality industry added 70,000 jobs. Construction companies and local governments were also hiring. Healthcare, which has been a steady source of employment gains, added another 35,000 jobs.”

There was plenty of good news in the report, to be sure: Some 83,000 Americans either started new jobs or started or relaunched their job searches, which demonstrates some optimism that has been missing over the last year or so in the labor market.

The fact remains that the job market is not exactly roaring. Layoffs are still not broadly rising, it’s true, but the construction industry and manufacturing are still way behind in terms of job creation. And when you look at the paychecks of American workers—the truest indicator of the nation’s economic health—things are much shakier.

To explain what’s happening to those paychecks, we need to look at another report—specifically, the monthly inflation numbers, which were released on Wednesday.

“U.S. consumer prices rose 0.5 percent in May and were up 4.2 percent from a year earlier,” New York Times reporter Ben Casselman wrote yesterday. He added that so-called “core” prices, meaning inflation “excluding food and energy, were up 0.2 percent month-over-month and 2.9 percent year-over-year.”

“In inflation-adjusted terms, workers have now seen *zero* wage gains since Trump returned to office,” Casselman writes. He explains, “the surge in prices over the past few months has wiped out all of the real wage gains made in the first year of Trump’s second term.”

Paychecks tell us where the economy is most likely to go next. When your paycheck grows, you’re going to spend that money in the local economy. And when everyone’s paychecks are growing, that increased consumer demand creates jobs.

Now, paychecks are shrinking compared to the rising prices caused by the closure of the Strait of Hormuz and the forced migration campaigns of the Trump administration, among other pressures. Economist Aaron Sojourner reports that if this trend of rising prices and flatlining or declining wages continues for the year, an hour of your work will actually buy 5.4% less than it did last year:

When Americans see prices rising faster than their wages, they pull back on spending, and that results in less job creation. In the next section, we’ll dig into some of the most distressing signs that American consumers might be approaching a breaking point.

CEOs Warn That Americans Are Running Out of Money

“American consumers have kept the economy afloat for years, even as inflation, high borrowing costs and rising grocery bills squeezed household budgets,” reports Jing Pan at MoneyWise, adding that “some of the country’s biggest corporate leaders are now warning that shoppers may finally be hitting a breaking point.”

Steve Cahillane, the CEO of the Kraft Heinz corporation, recently delivered a somber assessment of the American economy. He warned that American consumers are “literally running out of money at the end of the month. We’re seeing negative cash flows in the lower-income brackets where they’re dipping into savings.”

Cahillane isn’t the only CEO who’s worried about the spending habits of working Americans. The CEO of McDonald’s recently talked about the “heightened anxiety” that the company saw in its customer spending habits. (I can’t in good conscience quote the CEO of McDonald’s talking about economic anxiety without pointing out the fact that his company is the poster child for extractive low-wage practices, and he could do his part to improve the economy for everyone by paying a living wage to his workers.)

Most of these CEOs report that the war in Iran, with its attendant closure of the Strait of Hormuz and skyrocketing gas prices, were the real breaking point for their customers. That’s when Whirlpool CEO Marc Bitzer reported that his company started to see “amplified consumer concerns about the cost of living.”

“According to the Bureau of Labor Statistics, food prices in the U.S. have increased 33.3% since the beginning of 2020, while housing costs are up 32.5%,” Pan writes. “Energy prices, meanwhile, have surged 48% over that period.”

With all that in mind, is it any wonder that the gold-standard University of Michigan consumer sentiment study shows a dramatic decline in optimism from American consumers about the future of business conditions and personal finances over both the long term and the short term, or that consumers expect inflation to continue to climb in the near and far future?

For the Guardian, Heather Timmons points out that it’s not just the high prices that are driving consumer sentiment down. “Many consumers feel they are constantly fighting against an onslaught of overcharges, customer service hassles, shoddy products and billing mistakes that always seem to go in the company’s favor,” she writes.

This might just sound like entitled griping, but Timmons points out that these failures of customer service are actually symptoms of systemic decline: “That toxic cycle is now being sped up by a Trump administration that is defanging government watchdogs, consumer rights advocates say.”

It’s not just the fact that the Trump administration has fired the watchdogs: Decades of deregulation have transformed the consumer experience into something genuinely ugly and exploitative.

“Federal laws and agencies that consumers depended on to protect them have been substantially weakened in recent years,” Timmons writes. “Supreme Court rulings over the past decade have weakened consumer protection agencies, backed forced arbitration and made it harder for consumers to get restitution.”

So everything is more expensive, the consumer experience is littered with grift and buffered with few protections, and paychecks have flatlined. American workers have plenty of reason to pull back on their spending—and they’re probably not going to be happy about President Trump’s comments in the Oval Office yesterday when asked if he was concerned about the latest inflation report.

”No, I love it. The numbers were great,” Trump said. “I love the inflation.”

This Week in Trickle-Down

• Axios reports on the many proposals that billionaires are offering in the face of growing unrest as AI threatens to make income inequality even worse. These policies range from cutting taxes of working people to universal basic income, but the one thing they all have in common is that they would not interfere with the capabilities of the wealthiest few to hoard even more wealth. Oh, and also, none of the proposals include taxing the wealthy even a penny more than they already pay.

• For the American Prospect, Robert Kuttner reports that American primary care physicians are “leaving the medical profession in droves because their conditions of practice have become intolerable. These doctors are being pressured to see more patients in shorter appointments despite ever more complex cases and treatment options, even as they are required to spend more time at computer terminals entering patient data. One recent paper in the Journal of General Internal Medicine calculates that primary care doctors, to meet all of their clinical and clerical obligations, would literally need to work 26.7 hours a day,” he writes. Many of these pressures are caused by corporate consolidation in the medical field and in health insurance.

• “In an era of poisonous politics, Democrats, Republicans, and independents have found common cause over the value of tax breaks worth billions to Big Tech companies worth trillions,” reports Kuttner at the American Prospect. “What residents see in exchange are higher electricity and water rates, a paltry number of new permanent jobs, and a host of unsavory environmental impacts, from the desecration of green spaces, erasures of wildlife habitats, and air and noise pollution. The public outcry has had a serious impact: Across America, at least 25 different data center projects were canceled last year, and half of all data centers expected to open in 2026 will be delayed or simply canceled, according to reporting from Bloomberg.”

This Week in Middle-Out

• Senator Bernie Sanders proposed an interesting policy to address AI’s growing income inequality in the New York Times. It’s called the American A.I. Sovereign Wealth Fund Act, and it “would give the public a direct ownership stake in the largest A.I. companies in our country” by creating a “sovereign wealth fund through a one-time 50 percent tax — not on the profits of OpenAI, Anthropic, xAI and other companies, but paid with something far more valuable than that: the stock.”

• Will Fischer at the Center on Budget and Policy Priorities reports that to address our high housing costs, leaders will need to expand renter assistance programs: “Housing vouchers and other rental assistance close the gap between the cost of housing and what households can afford. Rental assistance has proven highly effective at enabling people with very low incomes to afford stable housing. But only 1 in 4 low-income households who need rental assistance receive it due to inadequate funding, and there are long waiting lists for assistance. Policymakers should expand rental assistance toward the goal of guaranteeing it for everyone in need.”

Real-Time Economic Analysis from Civic Ventures

We talk a lot in this newsletter and in our other channels about the fact that worker protections have been weakened by over four decades of trickle-down economics. In this week’s episode of Pitchfork Economics, Goldy and Nick talk with economists Lawrence Mishel and Josh Bivens about the specific decisions and policies that shrank worker paychecks and stripped workers of the hard-fought protections that were in place for much of the 20th century.

Elsewhere, Goldy made a fantastic video explaining how Senator Ted Cruz is trying to falsely disguise a tax cut for the super-rich as housing relief for working Americans. This is worth it for Goldy’s clear and passionate explanation of some wonky manipulations of the tax code alone, but there are also some striking visuals illustrating the point that I suspect you’ll enjoy:

Civic Ventures founder Nick Hanauer was interviewed on the very popular Diary of a CEO podcast this week, and it’s a wide-ranging, substantive economic debate about the role of government in the relationship between consumers, workers, corporations, and small business. Below is a small taste, and you can also watch or listen to the whole episode here.

And for the New Republic, Monica Potts interviewed Nick about the concepts behind Market Humanism and why an economic paradigm shift isn’t just likely to happen—it’s an absolute necessity. For what it’s worth, I love the headline on this interview: “What If Everything We Know About the Economy Is Dead Wrong?”

Closing Thoughts

“The financial forecast for Social Security worsened this year, according to the annual financial report released on Tuesday by the program’s trustees,” reported the New York Times on Tuesday. “If Congress does not develop a plan to shore up the program, it will need to cut benefits for millions of Americans in just a little more than six years.”

The 68-million-plus beneficiaries of Social Security could see a drastic cut of 22 percent to their benefits by the end of 2032, according to the report. “But that situation would come to fruition only if lawmakers didn’t act to strengthen the program before then, through some combination of higher taxes or reduced checks,” the Times notes.

To be clear, this isn’t just a problem for the tens of millions of Americans who will receive Social Security benefits in 2032. It ultimately will harm the whole economy. “Social Security benefit spending supported more than 12 million jobs in 2023,” Meredith Mackenzie De Silva writes at the Roosevelt Institute. “And the checks keep coming even when the job market worsens, helping local economies get through hard times.”

Also for the Roosevelt Institute, Stephen Nuñez puts the report in context: “This does not mean that Social Security is failing. It means the economy is failing to support Social Security.”

For one thing, this is a known problem. “The Social Security Administration has known for at least 15 years that the trust fund reserve would reach this point sometime between 2033 and 2035,” Nuñez writes.

And contrary to popular belief, Social Security isn’t in trouble because of the large population of Baby Boomers reaching retirement age. It’s because Congress amended the rules through which Social Security is funded in 1983, and Nuñez explains that those amendments didn’t take into account “rising income inequality and the depth and slow speed of recovery from the Great Recession.”

The Great Recession piece is fairly obvious: Thanks to trickle-down policies that favored the wealthy and corporations, American workers saw 10 years after the Recession in which job growth and wage gains were stagnant. So a whole generation of workers simply didn’t make the predictable investments into Social Security that otherwise would have happened without that lost decade.

And then, “Rising income inequality starved the fund of expected revenue (and the opportunity to build reserves) because the vast majority of earnings gains went to workers with earnings that exceeded the FICA tax cap, which did not grow fast enough to capture them,” Nuñez explains.

The great news is that we already know how to solve this problem. In fact, Congress has been sitting on a bill called the SSI Restoration Act since 2013. If passed into law, that policy would address the problems with Social Security that have lingered since 1983.

“The bill would reform SSI’s outdated asset limits, streamline benefit calculations, remove the SSI ‘marriage penalty,’ and increase the maximum benefit,” Nuñez writes with Jack Landry at Roosevelt. “The proposed reforms could both improve the material conditions of SSI recipient households and reduce the complexity and expense of administering the program.”

It’s the limits on Social Security taxes that are currently causing the biggest problem. Earlier this year, Civic Ventures founder Nick Hanauer identified the problem and proposed a simple solution. “The problem with Social Security isn’t that the benefits are too generous. It’s that the tax base has collapsed as inequality has shifted more and more national income above the cap,” Nick said. “If you make $60,000 a year, you pay Social Security tax on every dollar you earn, but If you earn $60 million a year, you stop paying after the cap of $168,000.”

That’s a lot of money that should be going into Social Security that isn’t being paid. Nick’s big idea is a very simple one, and it includes a big benefit for working Americans. “Let’s cut the Social Security payroll tax in half from 12.4% to 6.2%,” Nick said. “And then, this is key, apply the same 6.2% to all income with no cap. Wages, capital gains, dividends—everyone pays the same rate. No loopholes, no cliffs, no exemptions.

The beauty of Nick’s idea is that it would give “95% of Americans a 6% raise overnight. A real raise— not a tax credit, not a rebate. A permanent increase in take-home pay. For a median household, that’s between $3 and $6,000 a year, every year, forever.” And it would also ensure that “Social Security is fixed permanently—not patched, not kicked down the road.”

Social Security is one of the most popular policies in America. Working people inherently understand that it’s their money, and they trust it to be there for them when they retire. This week’s new report about the threat to Social Security may not have offered much new information, but it did offer an opportunity to litigate the issue in full view of the American public.

If middle-out candidates offer a simple and straightforward solution to the Social Security “crisis” that calls on wealthy people to pay their fair share into the system, it would force trickle-downers to go on the record explaining why the wealthy shouldn’t be expected to pay the same rate that their workers do. And in the current political climate, telling the American people to put up with less so that the wealthy can have more is not likely to be very persuasive at the ballot box.

Be kind. Stay strong.

Zach

This week we’re talking about new studies that show worker wages losing ground to CEO pay and corporate profits, discussing a bold new policy agenda, and taking a close look at the need for national protections from heat-related workplace injuries. But first, we have to talk about how we can change America’s mind about how the economy really works.

Last week, I shared an important new piece in The Atlantic from Civic Ventures founder Nick Hanauer and Oxford economist Eric Beinhocker about a new economic paradigm called Market Humanism. In the piece, they argue that scientists, researchers, and deep thinkers working individually across disciplines have composed a body of work that, when considered together, finally offers a new economic model that upends and replaces the fatally flawed economic paradigm that has dominated the fields of economics and politics for the past half-century—a paradigm we know alternately as neoliberalism and trickle-down economics.

This week, Eric and Nick have published a companion article to the Atlantic piece in the Democracy Journal that offers a deeper dive into the science and research behind Market Humanism. The piece makes three main points:

• “First, that the democratic emergency we face—the rise of authoritarian populism across the developed world—is not primarily a political failure but an economic one.”

• “Second, progressive responses—while valuable—have not filled the paradigm vacuum because they have operated largely within the neoliberal frame rather than replacing it,” and:

• “Third, that an emerging modern economic consensus we call Market Humanism has the potential to replace neoliberalism—not by proposing a new set of policies, but by constructing a new paradigm grounded in twenty-first-century science.”

That first point is an observation that hasn’t gotten enough attention over the past decade, as every pundit has struggled to explain the rise of nationalist politics. But really, it’s a pretty simple equation: After nearly 50 years of trickle-down politics that have slashed wages, forced economic uncertainty onto the majority of working Americans, and enriched a tiny handful of the wealthiest people and corporations, the American dream feels out of reach to a majority of the voting public.

When voters see criminal behavior rewarded with billions in profits even as working people can no longer afford basic necessities, they conclude that the entire system is corrupt. They’re more likely to vote for outsiders who acknowledge that corruption—even if those outsiders themselves seem to be profiting from the broken system.

“Democracies do not fail because citizens stop valuing freedom. They fail because citizens lose faith that democratic institutions can deliver the material conditions that make freedom meaningful: security, opportunity, the reasonable expectation of a better life for their children,” Nick and Eric write. “When that faith collapses, authoritarian alternatives become attractive not because they promise liberty but because they promise order, belonging, and an explanation for why things went wrong and who is to blame.”

At the same time, they argue, “The progressive response to this paradigm over the past 50 years has been, in retrospect, a strategic catastrophe.”

“Rather than contest the neoliberal theory of growth—rather than argue that trickle-down economics was wrong about the mechanism, wrong about the causation, and wrong about where prosperity actually comes from—Democrats largely accepted its premises and argued only about its conclusions,” Eric and Nick explain.

Simply propping up a system that rewards rule-breaking corporations and enriches the already-wealthy isn’t a compelling argument. And calling for a return to normalcy isn’t appealing when the majority of voting adults can’t recall a time in their lives when it felt like the economic system worked in their favor.

That’s where Market Humanism comes in. By not buying into the failed trickle-down arguments of the past and instead offering a clear case of how the economy actually grows—through the paychecks of working people—progressives aren’t just putting a Band-Aid on a bullet wound. They’re meeting the size and scale of the problem with a solution that actually improves outcomes for working Americans.

The Democracy piece walks the reader through the four major revolutions in thought that break from the trickle-down paradigm and establish a new economic understanding. Why should people care?

“Washing one’s hands was not a new idea, but when Pasteur’s germ theory of disease came along it changed from something doctors rarely did to something they had to do. And that one change had immense consequences for human wellbeing,” Nick and Eric write. “Likewise, most of the policies in Roosevelt’s New Deal were not new ideas, but they weren’t politically possible until the crisis of the Depression and Keynes’s paradigm shift made them a necessity.”

Market Humanism, they write, “is not the property of the academics who built it or the policymakers who will implement it.” Instead, it “belongs to the people whose lives it describes—workers, small business owners, teachers, nurses, scientists, young people told their whole lives that the rules of the neoliberal economy are incontestable facts of nature, and who now are beginning to suspect, rightly, that they were scammed.”

If you live long enough, you are virtually guaranteed to fall for a scam at some point in your lifetime. Anyone who’s lived through a scam can tell you that accepting that you’ve been tricked is never easy. People often respond with anger and disbelief, making irrational decisions that make the situation even worse. That’s where we are right now, as a country.

But by accepting that we’ve been lied to for generations, and by understanding that working people aren’t takers who rely on the wealthy few to bestow wealth upon them but rather the one true source of America’s astonishing prosperity, we can begin to make some truly remarkable things happen.

Imagine if that $80 trillion that’s been sucked out of working peoples’ paychecks and up to the wealthy elite was returned to the wages and wallets of Americans around the country. We could build a second great American century, the way we did when the American middle class was at its strongest—one that ensures every child born in America truly has the chance to do better than their parents, and that nobody is one ambulance ride away from destitution. These are the kind of results that shift from fantasy to reality when you change how you think about the economy, and that’s what Market Humanism is all about.

The Latest Economic News and Updates

Worker Wages Flatline as CEO Pay and Corporate Profits Skyrocket

Every year, the Associated Press publishes the results of its annual CEO compensation survey, and the latest edition shows that the gap between CEOs and the workers who create value for them is bigger than it’s ever been.

“The typical CEO compensation package rose nearly 6% in 2025 to $17.7 million, as company boards rewarded their top executives for bigger profits and higher stock prices, and gave them incentives to stick around and make even more money for shareholders,” the AP notes. “The median employee at companies in the S&P 500 earned $89,744, reflecting a 4.7% increase year over year.”

“At half the companies in AP’s survey it would take the worker at the middle of the company’s pay scale 200 years to make what the CEO did in one,” the AP writes. That’s an increase from last year’s study, which found that the median worker would “only” have to work 192 years to earn one year’s worth of the CEO’s compensation.

“While the biggest gaps occur at companies where the CEO received compensation loaded with one-time awards of stock, the pay ratio also tends to be highest at companies in industries where wages are typically low,” the AP reports. “For instance, at Coca-Cola, its CEO earned nearly 1,739 times the median pay of $17,947 for its workers. The CEO at the retailer TJX Cos. makes about 1,774 times what a worker making the company’s median pay does.”

To be clear, that’s not a coincidence. These companies are literally choosing to pay as little as possible to their workers and shift the money that should have gone to wages over to corporate profits and executive pay. And it’s not just the employees who are paying the price for this outsized corporate greed—a 2021 study in Massachusetts found that four percent of TJX employees made so little in wages that they were on state food assistance programs, meaning that taxpayers in Massachusetts were subsidizing the corporation’s low wages.

So CEO pay has become completely unmoored from worker pay. This violates one of the central tenets of trickle-down economics, which told workers in Econ 101 textbooks for decades that they were paid exactly what the market determined they were worth. It seems hard to imagine how Coca-Cola’s CEO could possibly work 1739 times as hard as one of the workers in his bottling plants.

And now, another report shows that worker pay is increasingly detached from corporate profits, too. The latest Gross Domestic Product report finds that “Worker compensation—wages and benefits—grew 0.8% in the first quarter from the fourth, while domestic corporate profits jumped 2.7%,” reports Greg Ip at the Wall Street Journal.

“As a result, labor’s share of gross domestic income (conceptually similar to GDP) sank to 51%, the lowest since records began in 1947,” Ip writes.

Meanwhile, “Profits’ share climbed to 12.1%, the highest since 1950.”

Ip reports that this growing chasm between corporate profits and worker pay is “the latest milestone in a trend that became pronounced in the 2000s, then picked up speed after the pandemic. Adjusted for inflation, hourly wages are up 3% since the end of 2019 while profits are up 50%.”

This raises an essential question that our elected leaders should be asking: If workers aren’t being compensated for the value they’re bringing to the corporations where they work, how are their wages being determined? Ip offers several explanations for why this is happening, including a decrease in union power, increased corporate concentration killing competition in the labor market, and the frenzy around AI investments that keeps pushing the stock market higher.

The answer is probably that all of these factors play a role in the divide between corporate profits and worker paychecks. But it’s also true that none of this would be happening without 40 years of trickle-down economics that have purposefully attacked worker power and rewritten tax codes and regulations to redistribute money to the top of the wealth scale.

Meet the Good Life Agenda

As my coworker Paul Constant noted here in The Pitch back in February, with the midterm elections happening this fall, we need to be talking about big ideas right now. Politicians, policy wonks, and civilians alike should be tossing out ideas for how government can improve the lives of working Americans.

The most important thing is that these ideas should be big. No occasional voter ever raced to the polls to support an idea that incrementally improved their living conditions. The American people have repeatedly proven that they want leaders to pass big ideas that invest in the lives of working Americans, not the super-rich.

That’s why I was pleased this week to read that the Roosevelt Institute published “The Good Life Agenda,” a sweeping policy platform proposal that would remake the American economy with workers at the center.

“This report lays out an agenda for reversing America’s slide into extreme inequality and oligarchy,” Nobel Prize-winning economist Paul Krugman writes in the foreword. “These policy ideas range from measures to improve affordability, to policies to increase economic security and improve life for families with children, to policies to restore power to ordinary Americans and limit the influence of corporations and oligarchs.”

The platform focuses on three major goals: Reducing costs, raising wages, and ensuring that Americans have more control over their time. Many of the problems it seeks to solve stretch all the way back to the dawn of the trickle-down era during the Reagan Administration:

That’s a huge mountain to climb, and the Roosevelt Institute identifies several tools that can help finish the job, including public options, taxes, industrial and anti-monopoly policies, among others.

These tools represent nothing so much as the most ambitious suite of policies since the Roosevelt Institute’s namesake in the New Deal era. There’s too much to list here, but the policies include reducing housing and medical prices, creating new paths to retirement savings, shorter workweeks, increased worker power, and much, much more.

I urge you to go check out the report and start discussing it with your social circle. Critics will undoubtedly call this agenda too ambitious, but that’s just concern-trolling. In order to repair the egregious damage done to the American economy over the last 40+ years, it’s going to take a lot of work. I’d argue that the Good Life Agenda is the first major policy suite I’ve seen that actually addresses the size and scope of the problem.

And if the second Trump administration has taught us anything, it’s that the old days of presidents focusing their attention on addressing one big policy at a time are long dead and gone. Whoever is in office next will have to move fast on multiple tracks in order to take back power from the super-rich and return it to the hands of working Americans, where it belongs.

Perhaps most importantly, Roosevelt tested the Good Life Agenda with the American people in a large poll, and the people resoundingly approved of this big-swing approach.

“79% of Americans support the Good Life Agenda overall—including 78% of people disillusioned with government and 86% of working-class people,” Impact Research reports, adding that “No demographic group tested falls below majority support.” Universal health care showed nearly 60% support with voters, and almost two-thirds of respondents call expanding Social Security “extremely important.”

Why are these polling numbers so high? It’s probably in part because eight in ten respondents told the pollsters that they are worried about their financial circumstances, with just 18% of respondents saying they haven’t cut their expenses at all during the past two years. Now that income inequality is felt by a super-majority of voters, the rules of politics have changed. The people want big, bold swings from leaders on their behalf, and the Good Life Agenda is nothing if not a big swing.

Of course, no policy agenda is perfect. What are your thoughts on the Good Life Agenda? What do you think it missed, what do you wish it included? As Paul wrote, now is the time to dream big and fight for what you believe in. This moment offers a better opportunity to change the paradigm and remake political economy than any other point I’ve seen in my lifetime. What an exciting time to be alive!

This Week in Trickle-Down

• “The Department of Labor received nearly 40,000 comments on a proposed rule that would help 401(k) plans invest in alternative assets, including private equity and private credit,” writes Dan Primack at Axios. The rule would let 401(k)s off the hook if risky investments into private equity and private credit firms didn’t pan out, meaning that investors wouldn’t be allowed to sue if a private credit firm tanked and took their retirement funds with it.

• The American Prospect looks at some of the grants that the Trump administration is supporting, including billions of dollars toward building the border wall, forced deportations, and a new plan “to set up a pilot program for doing debt collection on student debtors.”

• “Americans are burning through their financial cushion at an accelerating pace, spending faster than their income is growing, as the energy shock from the Iran war slams household budgets,” writes Courtenay Brown at Axios. “In 65 years of economic data, the personal saving rate — that is, what’s left of a paycheck after taxes and spending — has been lower only in two other periods: briefly in 2022 and in the mid-2000s, before the financial crisis.”

This Week in Middle-Out

• Based on recent threats that the super-rich are going to leave New York City because of proposed taxes on second homes and other additional taxes, “the Fiscal Policy Institute has published extensive research on the nature of outmigration in New York City. They found that the top 1 percent of earners are the least likely to move out of New York City, compared to the top 95–99 percent and bottom 95 percent income brackets,” reports AMNY. In other words, the super-rich get much more out of living in New York City than any of the proposed taxes might detract from their experiences, and their threats of leaving town are mostly just noise.

• “Raising the federal minimum wage to two-thirds of the national median wage would lift pay for nearly 40 million workers, about a quarter of the workforce,” writes Ben Zipperer at the Economic Policy Institute. “Two-thirds of the median—equivalent to roughly $17.70 today, a projected $20 in 2030, and a projected $25 in 2038—matches the benchmarks used in other high-income countries and tracks the direction of recent minimum wage research. Indexing to median wage growth thereafter would keep the floor from losing ground to inflation or falling behind the broader economy.”

Real-Time Economic Analysis from Civic Ventures

On the Pitchfork Economics podcast, Goldy and Paul talk with Civic Ventures founder Nick Hanauer about the work he’s been doing with Oxford economist Eric Beinhocker to reimagine a new economic paradigm that invests in American workers, not the wealthy few at the top of the wealth scale.

And Nick went on the Young Turks to talk about why wages haven’t risen with productivity and why it would be better for the economy if workers made $2 trillion per year.

Closing Thoughts

Subscribers to this newsletter live all over the country—in nations all over the world, in fact—but I still feel confident in saying that wherever you’re reading these words right now, you have experienced some unusual weather patterns recently. Maybe it’s been an unnaturally hot spring. Perhaps you experienced some flooding or wildfires in your area. Maybe you were hit by a once-in-a-century snowstorm over the winter—and maybe that was the second or third once-in-a-century weather event you’ve had to deal with in your lifetime.

No matter where you live, climate change is impacting your life. And that means it’s impacting every single aspect of your life, affecting your purchasing decisions, your leisure habits, and your plans for the future. As we head into summer, these concerns are at the top of mind.

Climate change is also changing the way Americans work. It’s impacting the crops of farmers and the yields of ranchers. It’s making the commutes of Americans hotter and more unpredictable. And if you work outdoors, it has made your workplace much more dangerous.

This week, in her excellent newsletter, Heather Boushey shared an eye-opening chart showing how many Americans have suffered from injuries as the temperature gets hotter. “From 1999 to 2023, the number of heat-related deaths in the United States increased117%, with 2023 being the highest and 2022 being the second highest,” she writes.

Given that the last decade has been the hottest on record and this summer will bring an El Niño weather pattern that is expected to make rising temperatures and catastrophic weather events even worse, those numbers aren’t going down anytime soon.

“As climate change drives hotter, longer, and more frequent heat waves, millions of workers – especially in agriculture, construction, warehousing, and transportation – face increasing risks of injury, illness, and death,” reports the Groundwork Collaborative, adding “In 2023 alone, high temperatures contributed to an estimated 28,000 workplace injuries.”

Groundwork explains that the United States does not have “ a comprehensive federal standard to protect workers from heat exposure, leaving worker safety dependent on employer discretion and uneven state policies.”

The Biden Administration called on OSHA (the Occupational Safety and Health Administration) to establish national regulations protecting workers from heat exposure, but the Trump Administration has gutted the agencies that create and oversee these regulations and postponed the ruling, leaving workplace heat safety regulations squarely in the hands of state leaders. Boushey explains that “only 22 states have their own OSHA programs. Only seven states—ranging from Nevada to Minnesota—have heat-protection standards for workers.”

Groundwork notes that business groups and chambers of commerce have used the typical trickle-down arguments against national workplace heat safety regulations, framing them as “rigid,” “burdensome,” and “impracticable.” And those firms are combating state laws with even more fervor: “In Florida and Texas, industry groups successfully backed laws that prevent local governments from requiring basic workplace protections, like water and rest breaks,” Groundwork notes. “This multi-tiered corporate campaign to prevent enforceable standards from taking hold anywhere is hurting, and in some cases killing, workers.”

So what do good heat safety laws look like? “California’s heat standard, which mandates common-sense requirements including water, shade, rest, acclimatization, and adequate enforcement, was associated with a 33% reduction in heat-related deaths among outdoor workers,” Groundwork notes, adding that “Extending similar protections nationwide could prevent as many as 1,500 worker deaths each year.”

Given that the vast majority of voters are workers, it shouldn’t surprise you to learn that these are incredibly popular policies. In 2024, Data for Progress polled Americans and found that OSHA’s proposed workplace heat safety regulations were popular with 90 percent of voters. That’s not a typo—nine out of ten Americans favor heat safety regulations. In fact, 86% of Republicans were in favor of the rule.

Those numbers are probably so high because, as I noted, this is an issue that affects just about everyone. Data for Progress reports that eight in ten voters are concerned about extreme heat in the workplace:

Workplace heat protections pass every single litmus test for a successful middle-out policy—they improve outcomes for workers, they restore faith in the idea that government can fight for working Americans against corporate greed and negligence, and they’re incredibly popular. If I were running for office in a state that was impacted by climate change—that is to say, all 50 states—I would work hard to let voters know that I am on their side in this fight.

Be kind. Stay strong.

Zach

This week, we’re looking at the disparity between the roaring stock market and the shrinking wealth of workers, digging into the Pope’s message on AI, and exploring a new report that suggests private equity is pushing up rent prices.

But first, Civic Ventures founder Nick Hanauer and his frequent collaborator, Oxford economist Eric Beinhocker, just published a piece in The Atlantic that’s well worth your time. (If you don’t yet have an Atlantic subscription, here’s a gift link that will be active for the next week or so.) The piece offers some context around the exciting new economic paradigm that will combat America’s worst crisis of economic inequality in living memory.

“Although the neoliberal paradigm has taken heavy fire over the past decade from academics, activists, and populist politicians, it has proved stubbornly hard to eradicate, and its flawed assumptions still shape large swaths of economic policy making,” they write.

Let’s take a step back for a moment and define our terms. Economic paradigms are important because they explain how the economy works, and once that thinking becomes conventional wisdom, it actually shapes the world around us. For the better part of fifty years, our leaders, thinkers, and educators have believed that the wealthiest few at the top create jobs and prosperity. They promoted policies that have enriched those few through tax cuts and deregulation, under the mistaken belief that the wealth would eventually trickle down to everyone else.

That flawed worldview is why, when Nick began to publicly support raising the minimum wage to $15 over a decade ago, he was at best politely ignored and at worst laughed at—even in the most progressive spaces. “These were not people who disagreed with our goal of fighting inequality. But they were unwitting captives of an economic paradigm,” Eric and Nick write.

That paradigm was considered as real and as obvious as laws of physics, and it argues that “anything that forces employers to raise wages kills jobs,” they explain. “It was basic supply and demand: Make something (labor) more expensive, and you’ll get less of it. If you accepted that premise, then a $15 minimum wage was an act of economic madness that would harm the very people we were intending to help.”

Of course, Seattle did eventually adopt a $15 minimum wage, along with red and blue states and cities across the country. The minimum wage went up, and contrary to the neoliberal paradigm’s predictions, a vast and growing body of research shows that raising the minimum wage doesn’t kill jobs—in fact, we’re starting to learn that raising the wage creates jobs through increased consumer demand. As Nick is fond of saying, when you pay restaurant workers enough that they can afford to eat in restaurants, good things happen.

But paradigms are not easy to erase. Leaders on both sides of the aisle continue to promote neoliberal policies that enrich the wealthy and hand even more power to the powerful because a paradigm isn’t just a way of thinking—it’s as omnipresent as the air that we breathe. To truly eliminate a paradigm, you have to create a paradigm shift to a new way of thinking.

That’s what this Atlantic piece is about: Nick and Eric argue that enough great thinkers in varied fields, including anthropology, biology, and economics, have done enough work exploring how the 21st century economy works that a new economic paradigm is ready to take the place of neoliberalism.

“We believe that this emerging cross-disciplinary body of scholarship represents a new and coherent economic framework that we call market humanism,” Eric and Nick write. They continue:

The neoliberal paradigm treats capital efficiency as the supreme social good and worker compensation as simply a cost to be minimized. It looks at a policy such as a minimum-wage hike and asks, How much damage will this do?

Under market humanism, the questions change. What level of minimum wage produces the best outcomes for the whole system—for workers, for consumer demand, for the trust and participation on which growth depends? At what point do returns diminish? How do we combine wage floors with antitrust enforcement, labor protections, and public investment to build the broadly prosperous economy that actually generates growth? These might be harder questions, but they are also better ones.

In a moment that sometimes feels devoid of optimism, this is a powerful message: We’ve been told for generations that selfishness and greed are the best way to grow the economy. That’s a lie. In fact, cooperation and shared prosperity create a better economy that improves outcomes for everyone—not just the wealthy few at the top.

Of course, paradigm shifts don’t happen overnight. It takes a lot of work to essentially rebuild our communal understanding of how the economy works. But this piece from Nick and Eric is an important first step—it identifies the problem that has caused our massive income inequality, and it invites the reader into a vibrant conversation about how we can fix it. That’s hard work, but it’s joyful work, and we’ll continue it here every week in The Pitch.

If Eric and Nick’s piece speaks to you, I hope you’ll share it with friends and invite them into the conversation. After all, market humanism argues that inclusion and diversity of thought are essential to solving human problems. Or, to put it in simpler terms: The more, the merrier.

The Latest Economic News and Updates

While Americans Go Hungry, Wall Street Feasts on Profits

When I saw this headline in my local newspaper over the weekend, I had to read it a few times to make sure I understood:

The headline shouldn’t make any sense. After all, how can the stock market continue to break records if two hundred million Americans are unable to afford groceries, gas, and other ordinary expenses?

But the story beneath the headline, by Associated Press writer Christopher Rugaber, confirmed that the facts in the headline were true. “U.S. consumer confidence declined slightly this month as gas prices stayed high and inflation remained elevated, a sharp contrast to soaring stock prices hovering near record levels,” Rugaber writes.

“Consumer sentiment is mostly gloomy even as the economy is still growing and the unemployment rate has stayed low,” he continues. “Some economists argue that the gap reflects inequality in a ‘K-shaped’ economy, with higher-income Americans benefitting from rising stock prices and still spending while lower-income households struggle.

Those consumer sentiment surveys showing record lows seem to bear out that K-shaped hypothesis: One recent survey “showed that confidence grew among households with incomes at or above $100,000, while it fell for most others.”

For the record, the New York Times’s Talmon Joseph Smith argues that the economy looks less like a “K” and more like an alligator jaw. “The Top Tercile/Quintile (pick your threshold) is sharply up & to the right,” he notes on Twitter, “But since covidflation/Jan’25 (pick your time) bottom half outcomes are ~flat.”

Smith has been one of the most essential economic commentators of our turbulent times, but I’d argue that with prices set to be on the rise this summer, the “K” analogy is still more accurate—as paychecks flatline and prices rise, the bottom 90% of wage earners will likely see their purchasing power decline this year rather than just stay flat.

For instance, Bloomberg reports that “The latest USDA food price outlook, published Friday, projected a 3.2% advance in grocery prices this year, while [California Polytechnic State University agribusiness professor Ricky] Volpe said he expects inflation more on the order of 4% to 4.5%.”

The reasons for these increases are varied. Meteorologists predict an intense “El Niño” weather pattern to manifest later this year, flooding some parts of the country and causing droughts elsewhere. The war in Iran and the shutdown of the Strait of Hormuz has raised the price of oil and wiped at least 20% of the world’s fertilizer supply off the map. And the Trump Administration’s anti-immigrant policies have wiped out a significant sector of America’s agricultural workforce. As a result, beef prices are now at an all-time high, and the price of tomatoes has increased by a third over the past two months. Those beef prices have risen so high so quickly, in fact, that some beloved Texas BBQ joints are closing their doors forever.

No matter the reasons for these price increases, Americans are struggling. Just yesterday, the New York Federal Reserve issued a report finding “a remarkable increase in food insecurity, particularly among lower-educated and lower-income households and households with young children,” alongside a “contemporaneous increase in pessimism” among most working Americans.

Reuters’ Michael S. Derby reports that the Fed “surveyed Americans on whether they had recently used savings ​to cover expenses, had trouble finding enough food to eat or skipped eating altogether, or had received ⁠some form of public or private food assistances.”

In the months between October of 2025 and February of 2026, the Fed found “meaningful increases” in Americans reporting trouble buying food “across race, age, income, and education groups,” with particular difficulties among “nonwhites, lower-income and lower-educated households, and households with children.”

But the day before the New York Fed released its report showing a dramatic increase in hunger among working Americans, Wall Street hit record highs. These massive inequalities simply can’t exist side-by-side for long.

The economy is currently being held aloft on the sugar-high of trillions of dollars of AI investments. While those numbers are dramatic, they’ve essentially turned the economy into a precarious, top-heavy Jenga tower balancing on a single brick. If rich people stop the flow of their consumer spending, or if Big Tech companies stop spending on AI investments, the whole thing topples over.

All this is to say that right now, Wall Street and the White House might claim that they’re driving the economy to bold heights, but you can’t construct a stable economy without the broad spending of hundreds of millions of working Americans. Without those workers building the wealth and spending their paychecks in communities, Wall Street is floating checks that it won’t be able to back up if a crisis occurs.

The Middle-Out Pope?

This week, Pope Leo XIV issued the first major encyclical of his papacy, and the 42,300-word document has captured the attention of the world by focusing on the topic of AI. “Framed as an appeal for the defense of humanity in a rapidly automating world,” Nandika Chatterjee explains at TIME, “the text urges governments, corporations, and individuals to slow the rate of technological development and ensure that AI remains subject to ethical and political oversight.”

For the purposes of this newsletter, the most interesting section of the encyclical is chapter 5, which focuses on the economic impact of artificial intelligence. Leo focuses specifically on the importance of work, citing previous church documents on AI that found “The need to keep up with the pace of technology can erode workers’ sense of agency and stifle the innovative abilities they are expected to bring to their work.”

Leo concludes, “Precisely in order to avoid this drift, it is necessary to design systems that are centered on the human person and not solely on performance.” That sounds pretty middle-out to me: A technology devised to put tens of millions of people out of work is not going to improve life on earth for the vast majority of people, though it will surely enrich a few CEOs at the top of the corporate org chart.

“In some contexts, there is a legitimate fear of a significant and rapid contraction in available jobs that would create a chain reaction deeply impacting families, young people and local economies,” Leo continues. “In many sectors, this can already be seen in new forms of job insecurity and inequality, characterized by outsized remuneration for a highly specialized minority alongside declining wages for a large portion of the workforce.”

Leo warns, “it is not enough to react only when jobs disappear; we must oversee the transformation in advance.” That’s why he lays out three potential policy areas that should be used to address the economic peril that AI poses: First, “every introduction of automation and AI should be accompanied by verifiable measures to protect the employment, retraining and participation of workers.”

Second, Leo says, there must be free training and support for people who have lost jobs due to the transition to AI. And third, he calls for a “corporate commitment to include quality and dignity of work among its indicators of success. When these conditions are present, innovation can serve as an ally of safer, more creative and dignified work; without them, innovation tends to become an accelerator of injustice.”

It’s quite remarkable that Leo’s writing about the economic impacts of AI very closely resembles the conversations we’ve been having around the offices of Civic Ventures and with policy professionals and experts from around the nation. Focused as they are on the importance of working people and economic equality, this encyclical is very obviously a middle-out document.

Several of his statements about how the economy works, too, match Nick Hanauer and Eric Beinhocker’s statements about Market Humanism and growing the economy from the middle out:

• “Entrepreneurial initiative can indeed be a true vocation, generating wealth and improving lives, rather than a variable that is dependent only on profit.“

• “It is important to move beyond the current metrics of development — which for more than eighty years have been tied to the concept of Gross Domestic Product (GDP) — since these metrics almost systematically neglect aspects essential to the overall wellbeing of people and the environment. “

• “Just laws and methods of redistribution are certainly necessary for correcting imbalances, including tax systems that lighten the burden on the weakest and ask for more from those with greater resources.“

• “More than ever, in the age of AI and robotics, it is no longer possible to rely solely on the ‘invisible hand’ of the market. Politics has the task of orientating economies and technologies to the common good, promoting dignified work, social inclusion and an equitable distribution of the benefits of innovation.

The language is more poetic than anything you’ll find in The Pitch, but the economic message behind these words couldn’t be clearer. Pope Leo is making the case that the only way through the societal adoption of AI is to make sure that we invest first in working people, because they’re the ones who make the economy grow and work for everyone.

This week, we’ve also seen several leaders come forward with more detailed policies to address the threat of AI. Michigan Senate candidate Mallory McMorrow issued a thoughtful platform that includes retraining initiatives, the taxation of AI tokens, a job guarantee fund, and a stronger social safety net.

And Massachusetts Senator Elizabeth Warren has written a thoughtful essay about why we have to tax AI companies in order to make the huge changes in our economy that will keep American workers on the job:

Taxing AI is one way we make sure the winnings from AI benefit all Americans, rather than channeling them only to the wealthy few. If millions of people lose their jobs to AI, we’ll need the funds to deliver universal health care so those workers are not bankrupted by a visit to the doctor. If AI transforms the future of work, we’ll need to invest in free education and apprenticeships and a new jobs guarantee so that all Americans have good-paying work. And while workers get back on their feet, we’ll need the revenue to bolster unemployment insurance to keep families afloat. The only way we can get there is by overhauling our tax code.

AI has been evolving very quickly for several years now, and it’s good to see that leaders of all kinds are finally presenting huge solutions that meet the size of the problem.

This Week in Trickle-Down

For Vox, Eric Levitz makes a great case that “Trump could have presided over a pristine economy, if he’d simply refrained from increasing import prices, reducing labor-force growth, and launching a war of choice near the aorta of the global energy market.” In other words, had Trump simply done nothing when he retook office, the economy would still be slowly drifting down from its pandemic highs with the added boost of slower inflation.

This Week in Middle-Out

• As it becomes harder and harder for new college graduates to find work in the labor market, NELP makes an interesting proposal to offer a “jobseeker’s allowance” for people just entering the workforce. It’s a smart policy that would allow people looking for work a little breathing room so that they don’t have to take the first offer out of sheer desperation—instead, they can find the job that they want, where they’ll likely stay employed for longer and learn more skills they can carry with them for the rest of their careers.

• I was thrilled to see the excellent economic messaging from a campaign to raise the minimum wage to $15 an hour by initiative in Oklahoma. It correctly makes the case that raising the minimum wage isn’t just good for a few workers—raising the wage boosts the economy for everyone. It’s a very well-done ad:

Real-Time Economic Analysis from Civic Ventures

This week on the Pitchfork Economics podcast, we’re sharing the excellent conversation CV founder Nick Hanauer and Oxford economist Eric Beinhocker had with the Washington Monthly podcast about the economic paradigm we discussed in the opening of this week’s newsletter—Market Humanism, which argues that the economy grows from the middle out, not the top down.

The Washington Monthly

The Capitalists Trying to Fix Capitalism

Billionaires are the apex predators of the modern economy…

Listen now

4 months ago · 11 likes · 1 comment · Washington Monthly and Anne Kim

And on his YouTube channel, Nick Hanauer published a video essay calling out the missing piece in our affordability conversation: raising wages. He explains two policies that leaders could enact right now that would give two thirds of Americans a significant raise and improve the lives of working people.

Closing Thoughts

American renters are struggling to afford their homes. “A household is considered rent-burdened if it spends more than 30 percent of its income on rent and utilities,” explains the Headway newsletter from the New York Times.

“In 2024, the most recent year with reliable data from the U.S. Census Bureau, nearly half of all renter households in America — 22.7 million — were rent-burdened,” they continue—noting that it is “the highest number on record,” and “up nearly 9 percentage points since 2001.”

This isn’t just a problem for the lower end of the income spectrum at this point. “Almost half of renters earning between $45,000 and $74,999 were rent-burdened, twice the equivalent share in 2001,” Headway notes. Just as a reminder, the median American income as of 2024 stood at just over $83,000 per year, so that rent-burdened number is impacting a lot of American workers across the economy.

If you look at a chart of median monthly rents over time, it’s easy to spot when rent affordability started to falter. After a couple of decades of stability, rents began to skyrocket in 2020, at the start of the pandemic:

There are plenty of theories about why rent went haywire since the pandemic, but a new report offers some insight into who is owning those rental properties—and it might offer an explanation why rent is climbing so quickly.

“Updated analysis from the Private Equity Stakeholder Project (PESP) reveals that at minimum, private equity firms now own 11,800 apartment buildings with almost three million units in the U.S., representing about 1 in 8 (13%) apartment units in the country,” writes Sam Garin at the PESP website.

“Of the almost 3 million apartment units that private equity companies currently own,” Garin continues, “they have acquired almost 1.7 million of them (57 percent of the total) since 2018, and “they have acquired over 1.3 million of them, (45 percent of the total), just since 2021.”

The report itself shows that those private equity firms bear a significant share of the blame for rising rents. “Five states where private equity landlords own the largest percentage of apartment units – Arizona, Nevada, Georgia, Texas, and Florida – were among the six states with the biggest increases in the share of ‘cost-burdened’ renters,” the report explains. “For instance, Arizona, where private equity companies own 23% of all apartment units in the state, had the largest increase in the share of cost-burdened renters, rising from 46% of renters to 54%.”

Meanwhile, “The five metropolitan areas where the cost burden for renters has worsened the most since 2019 – Tampa-St. Petersburg, Phoenix, Dallas-Fort Worth, Atlanta, and Charlotte– are also areas where private equity companies own a large percentage of the apartment units.”

What’s happening here? Well, on a broad scale, these private equity companies are buying up a lot of market share in cities and states around the country, lessening competition. When landlords don’t have to compete to provide lower rents and quality units, bad things start to happen to renters including rising rents and decreased service from the landlords.

And given that we’ve already seen at least one instance of a rent-setting algorithm allowing multiple landlords in a region to fix their rents at an artificially high rate, forcing consumers to pay, it’s not beyond the realm of possibility to imagine that this is happening here as well.

This year, Senate Democrats proposed legislation that would stop private equity from receiving corporate tax breaks in exchange for buying single-family homes—a policy that has moved forward with bipartisan support. But there hasn’t been a high-profile response to the problem of private equity buying up apartment buildings, even though the scale of this problem is much greater, with PE estimated to own only about 1 and 2 percent of single-family homes and single-family home rentals, respectively.

Regulating private-equity ownership of rental stock will not solve the entire problem of rent affordability in America. But this report from PESP seems to indicate that limiting their ability to jack up rents to 3% or less annually, establishing renter protections, and requiring private equity to disclose their ownership of apartment buildings, among other policies, would help American renters a great deal. At a moment when Americans are counting every single penny as they navigate out-of-control pricing pressures, this seems like a straightforward way to stop a handful of wealthy PE executives from extracting excess wealth from the pockets of working Americans.

Be kind. Stay strong.

Zach

This week we’re looking at the outlook for price increases this summer, unpacking some trickle-down thinking shared by one of the richest men in the world in a recent interview, and exploring what we mean when we talk about “working Americans.”

But first, as universities around the nation hold their graduation ceremonies, a trend is becoming clear: The class of 2026 does not seem to like artificial intelligence. Here are some anecdotes from just the past few weeks alone:

• “Former Google CEO Eric Schmidt faced repeated jeers over the weekend during his keynote address to about 10,000 University of Arizona graduates on the rise of AI,” reports the Associated Press.

• “The University of Central Florida’s 2026 graduating class booed as a real estate development executive spoke about how ‘the rise of artificial intelligence is the next Industrial Revolution’ and about ‘living in a time of profound change,” Sonya Mansoor writes for The Guardian. “The crowd of students was so loud that Gloria Caulfield paused, turned away from the podium and threw her hands up in the air.”

• “The graduating class at Middle Tennessee State University reacted similarly when Scott Borchetta, CEO at Big Machine Records, said, ‘AI is rewriting production as we sit here,’” writes Sarah Bregel at Fast Company. “When the crowd began to express their distaste, the speaker pushed back, saying, ‘Deal with it. Like I said, it’s a tool.’”

In general, teens and young adults do not shy away from the adoption of new technology. But a recent Gallup poll found that only 18 percent of people aged 14 to 29 feel hopeful about AI. So what’s going on here?

“Part of the backlash from graduating students stems from the dismal job market they’re entering,” the Associated Press reports. “The unemployment rate for college graduates ages 22 to 27 has reached its highest level in a dozen years.”

For students looking to join the tech sector, AI has undoubtedly made it harder to find a job. As I noted last week, the number of information technology jobs has been steadily declining since 2024, and the number of layoffs and firings has increased dramatically over the past couple of months.

Multiple CEOs have said that AI is best at replacing entry-level workers. Anthropic CEO Dario Amodei said in an interview that “Things like summarizing a document, brainstorming, putting together a financial report” that AI is competent at doing “makes me worry a lot that entry-level jobs in areas like finance, consulting, tech, and many, many other areas like that…are going to be first augmented, but before long replaced by AI systems.”

So it’s no wonder that graduating students would be unhappy with graduation speakers praising the virtues of the technology that they see as their direct competitors in the job market.

But the other side of the coin is the remarkable fact that all three of the graduation speakers mentioned above responded to the booing with shock and disbelief. They simply couldn’t understand that students were vocally protesting the next big technological advancement—one which they perceived as an inevitability. In their own lives as wealthy captains of industry, everyone is parroting the same positive talking points about AI, so they were befuddled and angered to receive pushback from hundreds of graduates.

In fact, those wealthy people are in an echo chamber. Polling shows that the more money you make, the more you like artificial intelligence. Seeking Alpha wrote about a study released by the New York Federal Reserve showing that “66.3% of workers earning more than $200K had used AI tools in their jobs over the past 12 months as of November 2025, according to data recently shown by Arbor Research. That compares with just 15.9% of workers earning less than $50K.”

Much like the K-shaped economy that allows wealthy families to participate fully in the economy while poorer Americans are falling out of the economy altogether, AI seems to be a K-shaped technological tool. While high-paid managers and CEOs see AI as a way to be more productive for less money, most workers see AI as a competitor—one with an unfair advantage. (In case you missed it, we made a video about the K-shaped economy recently that explains the growing divide between the haves and the have-nots.)

I bring up the K-shaped economy to make a broader point: While artificial intelligence is bearing the brunt of criticism from working Americans, the truth is that AI is a symptom of a much larger problem. Those students are understandably responding to praise of AI with jeers and boos because it poses a real threat to their economic future. But the overall threat isn’t AI-specific—it’s the underlying economic system that’s making it impossible for working Americans to find the economic stability that their parents and grandparents took for granted. AI is the current ubiquitous threat to that economic stability, but the problem is much bigger than that, and it’s been going on for a lot longer than the current AI boom.

Civic Ventures founder Nick Hanauer recently made a video about this very subject: “We’ve seen this movie before: The computing revolution. The internet boom. The smartphone,” Nick says. “Each time, workers got more productive. But shareholders got the reward. And neoliberalism gave us the language to justify this heist.”

In his excellent Substack The Bully Pulpit, Bharat Ramamurti recently wrote about the steps that other nations are taking to ensure that AI adoption doesn’t wipe out the labor force. “America’s response to AI has been anemic compared to these foreign models,” he writes. That’s by design—it’s the result of four decades of anti-regulation trickle-down economic dogma, which has trained generations of lawmakers to leave business alone and let workers fend for themselves. And that trickle-down dogma has left the American workforce uniquely vulnerable to the harms of the adoption of AI.

All this is to say that there’s not one simple solution to the problem of AI taking workers’ jobs. There’s no one law that can fix everything. In order to ensure that American workers stay on the job, we have to rewire the American economy by replacing the false trickle-down model with a new economic paradigm that understands that those workers and their growing paychecks are the true source of prosperity—not an AI that serves the needs of the CEOs in the corner office.

The Latest Economic News and Updates

Costs Are Going to Rise This Summer

Memorial Day weekend begins the day after tomorrow, which means now is a great time to take stock on how the American people are doing. “Soaring fuel costs mean soaring travel costs for Americans—a sharply different trend from spring 2025, when gasoline prices heading into Memorial Day were at multiyear lows,” notes the Center for American Progress. “In April 2025, the national average gas price was $3.30 per gallon, but just a year later, in April 2026, it had risen to $4.24 per gallon.”

In fact, just yesterday morning, Axios noted that “All 50 states have average gas prices above $4 a gallon.”

If rising fuel costs have inspired you to stay at home and have a cookout for Memorial Day, you’ll still be paying higher prices for food.

“The price of ground beef has increased by 18.9 percent compared with a year ago, and the price of sirloin steak has increased 19.5 percent,” CAP notes. At the same time, “Produce prices have generally increased due to tariffs, higher energy costs tied to the Iran war, and climate-related supply disruptions and high production costs.”

CAP also notes that urban Americans are paying less of the higher fuel costs than their rural counterparts. They report that “rural households are now paying an extra $26 per week for gasoline, on average, compared with the average price before the war began, and urban households are paying an extra $21.” All told, those increases amount to “an extra $114 and $90 monthly per household, respectively, using the current average national price for gas and assuming consistent consumption trends.”

“Rural households utilize around 14 percent more energy than their urban counterparts and spend a larger share of their income on home energy costs,” CAP continues, “meaning a prolonged closure of the Strait of Hormuz into the summer could further increase the energy burden for these households as cooling needs drive higher energy consumption.”

That’s not the only additional cost that rural households are paying: “longer food supply chains for rural areas that require more diesel to transport food could contribute to more substantial grocery price hikes,” CAP writes.

And farms in those rural areas are facing higher costs on multiple fronts. “Diesel accounts for more than 60 percent of fuel expenditures for farm operations. Prices rising 51 percent from prewar times means that farmers in planting season now are spending at least $350 more per day for a full run of just one tractor with a fuel tank capacity of 200 gallons,” CAP notes. “Additionally, the price of urea—the most common form of nitrogen fertilizer, critical during planting season—has spiked 27 percent above prewar levels.”

Given the fact that the Strait of Hormuz is still effectively closed, it seems reasonable to believe that prices on groceries and energy will likely continue to rise for at least the first half of the summer if not through the end of the year.

Axios warns, “Widely watched GasBuddy analyst Patrick De Haan said Wednesday morning that the national average could hit an all-time record north of $5.03 per gallon if the Strait of Hormuz remains closed through mid-summer.”

And Newsweek interviews economist Chris Barrett, who warns that the “impacts of the major fertilizer supply disruption haven’t yet hit.” Barrett estimates that fertilizer shortages will “materialize starting in late summer and build over the course of the fall and winter as the impacts emerge from diminished harvests in places like India, Thailand and Vietnam.” By the end of December 2026, Barrett expects food prices to rise roughly 11 percent over December 2025.

In the meantime, just one week after saying he doesn’t “think about Americans’ financial situations,” President Trump is arguing that the economy is doing great and the growing number of Americans who are unhappy with his stewardship of the economy are whining about nothing. “We just hit a new high in the stock market,” Trump told reporters yesterday, adding, “everything’s going good.” Trump then characterized the high cost of gas as “peanuts, and I appreciate everybody putting up with it for a little while.”

Jeff Bezos’s Tax Cut Scheme Is Pure Trickle-Down Economics

Yesterday, Jeff Bezos granted an interview to CNBC. It’s a remarkable exchange that reveals the economic philosophy of one of the ten richest men in the world. Perhaps unsurprisingly, Bezos’s grasp of how the economy works is essentially pure, uncut trickle-down economics.

Right at the outset of the interview, Bezos acknowledges that America this year is “a tale of two economies. So you have a bunch of people in this country who are doing really well, but you also have a bunch of people in this country who are struggling – struggling to pay rent, groceries.”

I’d argue that the number of people who are “doing really well” is less than “a bunch,” but directionally, Bezos is correct: Inequality is out of control. Exhibit A for this case is his personal wealth of nearly a third of a trillion dollars.

Bezos’s solution for this problem of inequality is to cut taxes for working Americans. “A nurse in Queens who makes $75,000 a year pays more than $12,000 a year in taxes,” he says. (We’ll have more to say about that number in a minute.) Bezos continues, “does that really make sense? People talk about making the tax system more progressive. How about we start by having the nurse in Queens not pay taxes?”

He concludes, “That’s $1,000 a month that could help with rent or groceries or anything.” Bezos then proposes making it so that the bottom half of all wage-earners pay zero federal taxes. Of course, this plan appeals to Bezos because it lets extractive employers off the hook by essentially subsidizing their low wages with a tax cut.

Interviewer Andrew Ross Sorkin asks Bezos, “on the other end, the question is, should you be paying higher taxes?”

Bezos replies, “You could double the taxes I pay and it’s not going to help that teacher in Queens, I promise you.” He claims that the government is wasteful by comparing the New York City public school system to Amazon and concludes that government doesn’t have a revenue problem. Instead, ”we actually have a spending problem.”

So let’s look at what Bezos paid in taxes in the most recent year available to us. According to Forbes’s Phoebe Liu, Bezos paid $2.7 billion in taxes in 2024—primarily in the form of capital gains on the sale of $13.6 billion in Amazon stock.

That $2.7 billion tax bill, which obviously sounds significant, actually “represented only 4.5 percent of the 2024 increase in [Bezos’s] personal net worth — approximately $60 billion — and barely more than 1 percent of his overall $230 billion net worth,” according to Bob Lord at Inequality.org. That’s much less than the roughly 16% tax bill that the hypothetical nurse pays in Bezos’s scenario.

If Bezos’s capital gains were taxed as much as the nurse’s labor is charged, that represents billions of dollars in investments that could be made into the healthcare system, which would undoubtedly be felt by that nurse in the scenario. And keep in mind that every other billionaire and centibillionaire would be taxed at the same rate, meaning that tens of billions of dollars in revenue would be freed up to spend on improving the lives of working people. That would work out well for everyone in the economy—including Jeff Bezos, who would benefit from a growing high-wage population of workers spending money at his businesses.

And stepping back a bit, the numbers behind Bezos’s hypothetical nurse (or teacher) don’t actually pencil out. James Medlock points out on X that a $75,000 salary wouldn’t actually be eligible for Bezos’s proposed bottom-50% tax cut, since a $75,000 annual salary places a worker in the 65th percentile of wealth. Additionally, that hypothetical worker would “not pay $12k in federal income tax,” Medlock writes, estimating that their tax bill would be “more like $7,900.”

The only thing new about Bezos’s trickle-down argument is the idea that working people in the bottom half of the economy shouldn’t pay taxes. It’s a fresh coat of paint that’s clearly been formulated to calm down the populist anger that’s being directed toward super-rich people and corporations that pay very little in taxes.

Just last week, I wrote about why these tax holidays amount to very little in savings for working people while benefiting the super-rich people who employ them. It’s not a serious economic proposal—it’s just more trickle-down sleight-of-hand intended to trick the American people into funneling even more money into Bezos’s own hoard of wealth.

This Week in Trickle-Down

“Many U.S. employers hire union avoidance consultants to keep their workers from organizing and bargaining for better pay and working conditions,” reports the Economic Policy Institute. “We estimate that employers spend roughly $1.7 billion a year on union avoidance consultants and law firms for this purpose, which has an undeniable impact on workers’ ability to organize and bargain collectively.” Imagine the boost to our economy if that $1.7 billion annual expense went to worker paychecks around the country instead, rather than a few wealthy consultants and law firms.

This Week in Middle-Out

At the Economic Policy Institute, Josh Bivens explains why we should think about the affordability crisis as a crisis of inequality: He argues that if lawmakers limit their policies to lowering prices without simultaneously raising wages, they won’t actually address the affordability crisis. In other words, it’s not just about price tags—Americans’ paychecks are way too small, too. We’ll have much more to say about this topic next week

Real-Time Economic Analysis from Civic Ventures

First up this week, Civic Ventures founder Nick Hanauer and Oxford economist Eric Beinhocker join the Washington Monthly podcast for a great discussion of Market Humanism, their new understanding of how the economy really works. Anne Kim writes, “Hanauer and Beinhocker don’t want the end of capitalism, or the end of markets. What they’d like to see is better market organization of markets to produce outcomes that benefit humanity (i.e., not more billionaires). It’s a bold, optimistic idea: to elevate ‘human flourishing’ over ‘efficiency.’”

The Washington Monthly

The Capitalists Trying to Fix Capitalism

Billionaires are the apex predators of the modern economy…

Listen now

4 months ago · 10 likes · 1 comment · Washington Monthly and Anne Kim

On the Pitchfork Economics podcast, Goldy and Paul talk with Columbia professors Kate Andrias and Alexander Hertel-Fernandez about their new report for the Roosevelt Institute which imagines what an abundance agenda for American workers might look like.

And on our YouTube channel, Goldy debunks the trickle-down argument that states which slash taxes and regulations for corporations are somehow better for business.

Closing Thoughts

When you publish a topical weekly newsletter like this one, it’s important to stop every once in a while and refocus on the definition of frequently used terms. I talk a lot about working Americans and their importance as the real job creators in the American economy. You’d think that a term as simple as “working Americans” would be straightforward, but the term’s meaning has actually changed multiple times in my lifetime.

For instance, back in the Obama era, it was pretty common for politicians to use “working Americans” as synonymous with “lower-class Americans”—it referred specifically to blue-collar workers who didn’t have office jobs and were in danger of falling behind as globalization shuttered factories in the Rust Belt.

That’s not the definition of “working Americans” that I’m referring to in the context of middle-out economics. In last week’s New York Times interview with Maine senatorial candidate Graham Platner, I heard what I think is the clearest explanation of “working Americans” in politics in 2026. Platner was asked by interviewer Lulu Garcia-Navarro whether the term “working class” truly applied to him, since his grandfather was a famous architect and Platner attended private school. Here’s Platner’s response:

As Platner explains, that question of who is truly working class is “a political weapon that throughout history has been deployed against people whose primary political goal is to improve the lives of working folks around them, to call into question their bona fides.”

That’s exactly right. Part of the reason why trickle-down economics worked as well as it did was because Americans developed a very skewed understanding of class. In the 1980s and ‘90s, huge swaths of the American population—wealthy and poor alike—believed that they were “middle-class.”

That assumption made it easy for trickle-downers to incite anger toward the poorest Americans as welfare cheats and lazy parasites, because it represented another, separate group that most Americans didn’t believe they belonged to. It made it easy to villainize poor people as an “other,” the way modern populist politicians have demonized immigrants.

As more and more Americans have stopped believing in the American Dream and as the economy has grown more and more K-shaped, privileging the super-rich in just about every way, more and more people are seeing the real split along class lines for what it is. When everyone is one or two paychecks away from falling out of the economy, they understand that the real welfare queens aren’t poor people. The real welfare queens are corporations paying almost nothing in taxes every year and CEOs who have figured out all sorts of loopholes to avoid paying the same tax rate as their lowest-paid workers.

In short, if you are a working-age person who relies on every paycheck to make ends meet, you’re likely feeling anxiety about your economic status. You are a working American. If you live off investments or interest on your wealth, you’re in a different class entirely—that upward arrow on the “K.”

Admittedly, this definition of working American is a big tent. But that’s the economy we’re living in—one which is so unequal that only the wealthiest of the wealthy are seeing any benefits. That’s what happens when you suck some 80 trillion dollars out of the paychecks of working Americans in less than 50 years. You eventually wind up with one of the largest voting blocs in modern history: Tens of millions of people who are tired of their paychecks shrinking in real dollars, and who demand real change from their leaders. This is how you change paradigms.

Be kind. Stay strong.

Zach

This week we’re exploring the numbers behind the jobs report, explaining why cutting gas taxes won’t solve the affordability crisis, and sharing an exciting new source for middle-out economics news.

But first, we have to address this week’s awful news about prices. “The Consumer Price Index rose 3.8 percent in April from a year earlier,” wrote Lydia DePillis at the New York Times on Tuesday, noting that the metric is “up from a 2.4 percent annual increase before the conflict started in February and a 3.3 percent increase in March.”

The inflation rate, which climbed at the fastest rate since May of 2023, “was driven largely by energy prices, up 3.8 percent just since the previous month and nearly 18 percent from a year earlier,” DePillis writes. Of course those prices were led by skyrocketing energy prices, caused by the closure of the Strait of Hormuz in March. The price of gas increased 54.3% over this time last year and gasoline is up 24.8%.

The problems in the inflation report were caused by more than just the Iran war, DePillis notes. When “stripping out volatile food and energy prices” from the topline numbers, the calmer so-called “core” inflation metric “also rose 2.8 percent over the year in April, up from 2.6 percent in March.” That means rising gas prices aren’t the only problem—underlying price pressures seem to have been on the rise before the Strait of Hormuz closed.

Ken Foster, an agricultural economist at Purdue University, confirmed to the Associated Press that he believed the rising grocery prices we saw in this month’s inflation report predate the Iran war. “We’re cautiously waiting to see what the June numbers and the May numbers might show as they come out in terms of ... the extent to which energy shocks in the Strait of Hormuz and shipping blockades and so forth are going to impact food prices,” Foster said.

Yesterday, we saw another terrible metric for prices: “U.S. wholesale inflation came in hot last month,” Paul Wiseman writes at the Associated Press. “Producer prices rose 6% from a year earlier, the highest point in more than three years.”

This is especially bad news because the Producer Price Index tracks wholesale prices—meaning the prices of raw materials that manufacturers combine into products and then distribute. So it’s often an indicator of higher prices heading down the pipeline toward consumers in the months ahead.

Like the core reading from the Consumer Price Index, when you remove skyrocketing energy prices from the Producer Price Index, Wiseman notes that the PPI still “rose 1% from March and 5.2% from April 2025.” Prices were almost certainly on the rise even before we shut off 20% of the global oil supply and much of the world’s fertilizer.

High prices aren’t a new story in 2026, but after four decades of essentially steady 2% inflation, the past four years of elevated prices have felt particularly tough for Americans. There hasn’t been any respite at grocery stores, restaurants, retail stores—and now, gas stations. There’s no end in sight to these latest price surges.

Most importantly, we’ve also crossed a significant line that makes these rising prices feel even worse: Paychecks are growing slower than inflation. Your wages aren’t keeping up with rising prices.

In fact, Mike Konczal pointed out that rising inflation has wiped out the last year’s worth of real wage gains in the past two months alone. Economist Arindrajit Dube puts that into wider perspective: “The average hourly wage for private-sector workers in April 2026 was $37.41,” he writes. “When Trump took office in January 2025, it was $37.35 (adjusted for inflation).”

That means that “There has been essentially zero real wage growth under Trump 2.0,” Dube writes.

That’s a long time for American workers to go without a raise—especially with prices rising due to tariff pressures and now the war in Iran. This is especially important since worker paychecks are the real job-creating mechanism in the economy. That diminished spending is probably already resulting in fewer jobs being created in communities around the country. In the next section of the newsletter, we’ll look at how all these numbers are impacting the workforce more directly.

Every other American president in my lifetime would likely consider these numbers to be an emergency situation for the economy. That’s why it was especially startling to see President Trump state flatly earlier this week that “I don’t think about Americans’ financial situations” when planning his next move in Iran.

No matter what your preferred political party might be, you have to admit that Trump’s response does not meet the moment. The stagnant paychecks of workers are losing ground to prices and nobody in the White House seems to have a plan of action to change course. Every month that American paychecks falter is another major blow to our economy.

The Latest Economic News and Updates

Is the Economy Really Working for Workers?

Economic pundits treated last Friday’s jobs report as a positive note for American workers. “Job creation remained solid in April, as businesses shrugged off uncertainty brought on by the war in Iran and higher gas prices,” Sydney Ember wrote at the New York Times. “Employers added 115,000 jobs last month, surpassing expectations. The unemployment rate remained at 4.3 percent.”

While the labor market did add jobs in April, the underlying numbers in the report displayed a weakness that many reporters missed. As we noted in the introduction to this newsletter, Navy Federal Credit Union economist Heather Long points out that “Inflation is wiping out wage gains,” which she characterizes as “the big Achilles Heel in the US economy.”

“Wages are being eaten up by inflation due to the war in Iran. This is a big shift from the past several years when wages were growing well above inflation,” Long reports. “Yes, workers have jobs, but this is a squeeze.”

Tax advisory firm KPMG’s chief economist, Diane Swonk, notes that the unemployment rate stayed steady in April, but it did so “for the wrong reasons. Participation in the labor force continued to drop,” Swonk explains.

In the report, “Men over 55 left the labor force along with prime-age women,” Swonk writes. It’s getting harder to find work, and that, combined with other economic pressures, are forcing these workers to abandon the prospect of employment. “About half of all unpaid elder care providers are men, while women with a bachelor’s degree or higher and small children have been leaving the labor force,” Swonk explains. That’s because “Childcare is expensive, while some of the flexibility we saw post pandemic and accompanying rise in work from home are being replaced by return to office mandates.”

Swonk estimates that “Under the hood, the U6 or more holistic measure of unemployment, jumped to 8.2%, its highest in five months.” The U6 unemployment rate is a broader lens that captures pretty much all potential workers in the US, including people who would ordinarily work but have instead given up on finding employment. That rate is higher than any time since the early days of the pandemic:

Edgy economics website Zero Hedge explained that most of the job gains in April’s jobs report came from the healthcare sector—remember, healthcare needs a massive influx of workers to deal with the increase of problems caused by America’s aging population. The economy lost 2000 manufacturing jobs last month, and the manufacturing sector has now lost 73,000 jobs total over the past year. One underreported piece of data is that information jobs, meaning jobs in the tech sector, have been declining since 2024 and have seen an especially pronounced drop off over the last six months. :

Is this just a matter of tech companies laying off workers who they hired during the pandemic to deal with the problems caused by an excessively online population during lockdowns? Or is it the first wave of layoffs caused by AI disruption?

Zero Hedge also notes that “full-time jobs in April plunged by 424K, while part-time jobs surged by 123K.” So people are falling out of the workforce to care for their families, certain sectors are nosediving in terms of job losses, and hundreds of thousands of Americans are under-employed.

All these problems, especially when combined with the flattening of paychecks and the spiking of prices that I noted previously, combine to paint a pretty bleak picture. “Americans are increasingly leaning on credit cards and loans to absorb rising costs, with consumer borrowing posting its biggest monthly jump in March since late 2022,” writes Zachary Basu at Axios. “The personal savings rate fell to 3.6% in March, its lowest level since 2022, as lower-income households burn through savings to cover essentials.”

So while major media outlets reported that the labor market showed signs of strength on Friday, the data don’t really back that optimism up. And the American people know it, which is why the University of Michigan Consumer Sentiment Index recently reported the lowest-ever consumer sentiment scores in history.

The topline numbers of the jobs report might be showing an economy that’s still benefitting American workers, but the American people don’t find that evidence to be especially compelling.

Confessions of a Class Traitor

I wanted to call your attention to a new YouTube channel that will focus on explaining how the economy really works. It’s hosted by Civic Ventures founder Nick Hanauer, and it will also feature video explainers from CV fellows David “Goldy” Goldstein and Paul Constant. To give you a sense of the tone, the name of the channel is Nick Hanauer: Class Traitor.

On the channel, Nick will use his experiences as a founder and investor in dozens of small businesses (including as the first nonfamily investor in Amazon.com) to explain how wealthy people like him have managed to rig the system in their own favor. He’ll also explain how the economy really grows—here’s a hint: it’s not because wealth trickles down from the wealthy few—and how we can make the American worker the true center of the economy again.

Or as Nick explains, his goal with the channel is nothing less than to “expose the myths driving wealth inequality and make the case for a new economics—where a thriving middle class, not plutocrats, is the true engine of growth.”

In the launch video for the channel, Nick explains that the real threat of the artificial intelligence boom isn’t the rise of a world-destroying AI overlord. Instead, he makes the case that the super-rich monopolists who lead Big Tech are using AI to increase their control over the economy, expanding inequality even more than it already has.

We’ll also be posting Paul’s video explainers, and making plenty of room for Goldy’s irreverent takedowns of conventional economic wisdom. That means you can expect plenty more videos in the vein of Goldy’s attack on the Economist’s faulty argument that raising the minimum wage kills jobs:

I hope if you like what you see on the Class Traitor channel that you’ll subscribe for future updates. If you find these videos to be as informative and entertaining as I do, I hope you’ll share them on social media. It’s important to spread the word about middle-out economics in as many ways as possible—to meet people where they are.

This channel is an important next step to help people understand that the economy is a story we tell ourselves, explaining who gets what and why. If enough people understand that we can change the current, failing economic paradigm into one that understands where economic growth actually comes from, we can establish a new era of American prosperity that works for everyone—not just a handful of people at the top.

This Week in Trickle-Down

Last week, I wrote about millions of Americans falling (or more accurately being pushed) off the SNAP rolls. Now, for the Financial Times, Gregory Meyer writes that food brands and grocery stores are starting to feel the loss: “Kraft Heinz and supermarket operator Ahold Delhaize have disclosed that lower demand from recipients of America’s Supplemental Nutrition Assistance Program, or Snap, had dented sales, and more food manufacturers and retailers were expected to follow,” Meyer writes.

This Week in Middle-Out

• At EPI, Jennifer Sherer explains how the governors of Virginia and Colorado can undo decades of anti-union legislation in their states by passing a handful of pro-union policies into law.

• The Roosevelt Institute has put together a snapshot of what America’s labor force is likely to look like ten years from now. “Over the next decade, the occupations with the most projected growth are home health and personal care aides (approximately 600,000 jobs by 2034) and fast-food and counter workers (approximately 200,000 jobs by 2034),” Roosevelt reports. “Both of these jobs are currently performed by a predominantly female and disproportionately non-white workforce, the majority without college degrees.” That means it’s vital to establish policies now that ensure those workers have bigger paychecks and better protections in place, in order to ensure that the whole economy is stronger.

• David Dayen explains how New York City Mayor Zohran Mamdani inherited a twelve billion dollar deficit but still managed to balance the city’s budget without cutting any investments in New Yorkers. Remember this story the next time a state or city leader tries to tell you that austerity measures are the only way to make budgets work.

This Week on the Pitchfork Economics Podcast

Mother Jones journalist Tim Murphy joins Nick and Goldy this week for a wide-ranging conversation about AI data centers. What does it mean for communities when a gigantic warehouse the size of Central Park gets built in their back yard? Do these data centers represent a next step in the AI revolution, or are they just another tool for growing the wealth of a handful of already-wealthy tech plutocrats?

Closing Thoughts

As gas prices continue to rise, two very different politicians proposed ending or pausing the federal gas tax to lower the cost of gas.

“President Trump said in a phone interview with CBS News Monday morning that he aims to suspend the federal gas tax,” writes Nancy Cordes. “But suspending the excise taxes — 18.4 cents per gallon on gas and 24.4 cents a gallon on diesel — requires an act of Congress, and pausing it would cost the federal government about a half billion dollars a week.”

On the opposite end of the political spectrum, progressive Maine senatorial candidate Graham Platner also proposed ending the tax on gas, along with a few additional policies: “U.S. Senate candidate Graham Platner wants to eliminate the federal tax on gasoline and diesel fuel, freeze electric rates and fund clean energy developments,” writes Peter McGuire at Maine Public.

“A cornerstone of the plan is to cut the 18 cent per-gallon tax on gasoline and 24 cent per-gallon tax on diesel charged by the federal government,” McGuire continues. “The plan also calls for a 50% per-barrel windfall tax on big oil profits and a national freeze on electric rate increases.”

It may seem at first blush like a middle-out policy to revoke gas taxes—after all, doing so puts more money in the pockets of workers. Middle-out economics is built on the premise that working Americans are the engine of the economy and raising paychecks of working Americans is the best thing you can do to broadly grow the economy in a way that works for everyone.

However, tax cuts aren’t the best way to grow paychecks. In fact, doing so often benefits big corporations and the super-rich at everyone else’s expense. Cutting gas taxes might put a few more dollars into the pockets of working Americans, but it will also starve infrastructure budgets of revenue and swell the already-bursting profit margins of Big Oil companies.

Really, consumers are unlikely to see even the small return that those tax cuts offer. As Paul Krugman explained back in 2000 when presidential candidate George W. Bush suggested cutting gas taxes to promote consumer spending: “If the price of gas at the pump were to fall, motorists would buy more gas. But there isn’t any more gas, so the price at the pump, inclusive of the lowered tax, would quickly be bid right back up to the pre-tax-cut level,” Krugman explains. “And that means that any cut in taxes would show up not in a lower price at the pump, but in a higher price paid to distributors.” In other words: The tax cut would only serve to grow the profit margins of Big Oil, not consumer spending.

So no, repealing gas taxes isn’t the best way to grow the economy for working Americans. Platner at least gets credit for his proposals to tax the windfall profits of Big Oil and freeze other energy costs for Americans while also encouraging clean energy production.

Progressive candidates in general need to stop trying to score populist points by floating massive tax cuts. This is turning into a trend. Earlier this year, Democratic politicians started floating big tax cuts. “New Jersey Senator Cory Booker, for example, wants to more than double the standard deduction to $75,000 for married couples,” the Boston Globe explained in March. “Maryland Senator Chris Van Hollen wants to exempt individuals making $46,000 or less and couples making $92,000 or less from paying federal income tax. And California gubernatorial candidate and former representative Katie Porter is promising to eliminate state taxes for families earning less than $100,000.”

After four decades of trickle-down talking points that argue that every tax dollar is onerous and unnecessary, it’s disheartening to see some of the most progressive politicians of our time walk into this trap. Tax money is how we pool resources to deliver on the public good. The gas tax cut would cost tens of billions of dollars of revenue for transportation projects, and Booker’s proposed plan “would cost $5.4 trillion over 10 years even when accounting for the proposal’s tax increases on higher-earners,” the Globe explains.

I like how the Globe points out that not all tax cuts are created equal: “It may be true that most people don’t like to pay taxes, but if they’re getting good services in return — and a robust social safety net that makes sure no one falls through the cracks — then it’s a cost they should be willing to bear. If government is good, then taxes are worthwhile,” they write.

The tax code does need a lot of work. “A progressive income tax system — where the more money you make, the larger the proportion of it you pay — is still the fairest way to raise revenue and redistribute wealth,” the Globe writes. “But building a strong and sustainable social safety net requires that everyone do their part.”

The tax code absolutely needs to be rewritten so that the wealthiest people and corporations pay a lot more into the system. We need to ensure that money made from investments, mergers, and other high-finance tricks are taxed more than money earned from a hard day’s work. And we definitely need to increase taxes for Big Oil companies that have been raking in record profits at the same time that gas prices have been soaring.

But we also need to remember that the people who suffer most when taxes get cut and government programs get weaker are working Americans. The only people who benefit from massive tax cuts are the super-rich.

Be kind. Stay strong.

Zach

This week, we’re looking at why millions of Americans have fallen off the SNAP rolls, exploring why economists resisted raising the minimum wage for so long, and congratulating the Senate on the passage of an anti-corruption rule.

But first, we have to talk about the biggest economic pain most Americans are feeling in their daily lives: “The average price of a gallon of gas in the United States is on the rise in all 50 states,” reported Keith Liang at USA Today on Monday. Liang adds, “the average price of gas rose to $4.46 per gallon on May 4, up from an average of $4.11 one week ago on April 27, according to the AAA auto club.”

These prices don’t affect all Americans equally. Talmon Joseph Smith at the New York Times writes that “higher-income people increased spending on gasoline the most in March,” but they bought basically the same amount of gas as they did in the months before the war on Iran began.

“Lower-income households, however, spent much more on gas than usual but cut back on the amount of gasoline they bought,” Smith writes. Even gas prices, a relatively inelastic good, are a part of the K-shaped economy. In other words, for a chunk of the working population at the low end of the wage scale, gasoline is becoming a luxury good.

And now we’re starting to see the upstream effects of the war on Iran and its subsequent closure of the Strait of Hormuz are having on the rest of the economy. To get a feel for how much further this goes than just your local gas station, this graphic from the Center for American Progress, which uses data ending on April 22nd, shows the effects of the war on prices for goods ranging from jet fuel to fertilizer:

All those higher prices are manifesting in the economy in a bunch of different ways. For one thing, the restaurant industry is seeing more customers staying home.

“Several U.S. restaurant chains including Wingstop and Domino’s reported weaker-than-expected sales growth in the latest quarter, saying that soaring gasoline prices caused by the U.S.-Israeli war on Iran have ​forced their customers to cut back on other spending,” reports Waylon Cunningham at Reuters.

Just this morning, Shake Shack shares plunged after the fast-food chain reported results that came in lower than expectations and McDonald’s warned that higher costs will bring its profits down, too. It doesn’t help these last two chains that the price of beef has recently neared a record $7 per pound, and industry experts predict those prices will stay high for at least a year and a half.

In the end, it’s just plain math: The higher gas prices go, the less likely people are to visit restaurants. An analyst at Revenue Management Solutions reported that “for a restaurant drive-through with 300 daily transactions, a $1 spike in gasoline prices loses the restaurant about six customers a day, piling up to $22,000 in lost annual sales.”

This gas price crisis is demonstrating the real economic powerhouse of the American economy—workers and their families. Gas prices are a clear metric of that spending power because if they rise quickly, consumers will have less to spend in their everyday lives. Restaurants are a leading indicator of how badly these prices are hurting American workers, but probably every neighborhood business is starting to feel the pinch as people readjust their budgets.

Higher gas prices have also put pressure on the social safety net. For Atlanta News First, Adam Murphy explains that rising prices “are putting increased pressure on organizations like the Atlanta Community Food Bank, which depends on a fleet of trucks to distribute food across the region.”

Murphy explains, “The nonprofit says its fuel costs have jumped 28% in recent months, adding about $3,000 to its monthly expenses — money that would otherwise go toward feeding families.” That amounts to roughly 9000 meals that weren’t made or delivered to Atlanta-area families in need.

As Americans are planning their summer vacations, the rising cost of fuel is forcing them to make some tough choices about their plans for air and car travel. That means we might soon see a decrease in spending at destinations around the country, and many of the jobs supported by that consumer spending are going to be at risk.

At the same time, oil companies are reporting massive profits. Chevron “announced first-quarter earnings on Friday that exceeded consensus expectations from Wall Street analysts,” reports Bitget. The report continues, “Chevron’s largest business segment—the upstream division including crude oil—generated about $3.9 billion in profit, an increase of 4% year-over-year.” Those profits come in large part from the higher prices that Americans have been paying since the bombing in Iran and the closure of the Strait of Hormuz.

In the earnings call, Chevron reiterated an earlier vow to buy back somewhere between $10 billion and $20 billion in stocks from shareholders this year—meaning those runaway profits, built on the higher costs that the American people have been paying for gas, will instead be turned into a massive no-strings-attached giveaway for an elite group of shareholders and corporate executives. Those higher gas prices are flowing straight from the pockets of working people into the offshore accounts of the rich and powerful.

Whenever I’ve written about gas prices recently, I’ve gotten responses from people who correctly point out that climate change is ultimately a bigger problem than a two-dollar increase in the price of gas. And that’s true: America needs to do a lot more to break its oil dependence, and hopefully this crisis will force us to consider the establishment of policies that speed our transition to clean energy technologies and off the fossil fuels responsible for our worsening climate crisis.

Building a cleaner-energy future isn’t just better for the environment—it makes smart economic sense, too, as it can reduce energy costs and create millions of jobs to build whole infrastructure pipelines in our country. And right now, we have to face the reality that the high price of oil is eating away at the wallets of American workers. They’ll spend less in their communities, and local job markets will soon start to show the effects of that decreasing consumer demand. This is not a problem that will go away in a matter of days or weeks; it’s looking more and more like something that will be dragging the economy down for at least the next year.

The Latest Economic News and Updates

SNAP Participation Way Down

With most Americans falling farther and farther behind, you’d think that participation in the Supplemental Nutrition Assistance Program—the food subsidization policy formerly known as “food stamps”—would be increasing right now. Not so, according to the Center on Budget and Policy Priorities. In fact, since President Trump signed his tax bill into law last summer, millions of Americans have fallen off of SNAP rolls.

The Trump tax bill, which handed trillions of dollars in tax cuts to the richest Americans, also shifted “significant new costs to states,” the CBPP reports. Additionally, it “dramatically expands SNAP’s already harsh and ineffective provision taking away people’s benefits for not meeting a work requirement. And it ended eligibility for many people with a lawful immigration status.”

CBPP studied the numbers and found that “SNAP participation nationwide fell by more than 3 million people (8 percent) between the law’s July 2025 enactment and January 2026.”

Because SNAP is a partnership between federal and state governments, the dropoffs in SNAP rolls “are especially pronounced in some states — 42 percent in Arizona (51 percent using more recent state data) and 12 percent in Virginia and Tennessee.”

On the graph below, which tracks the SNAP participation in every state, you can see that participation has dropped across the board—every one of those fine grey lines is a state, with Georgia and Arizona dipping especially low at the bottom. The blue line represents the national loss of 8.25% of SNAP participants since the tax bill was signed at the beginning of July.

CBPP also reports that since the tax bill passed, “SNAP participation has dropped in every state, including by 5 percent or more in 36 states.”

Anyone who’s lived in America for the past year can tell you that the economy has not improved on virtually any metric felt by working people. So those three million people didn’t suddenly find jobs that pay a living wage. Instead, they’ve fallen out of the system entirely. Remember, SNAP doesn’t just feed hungry children—it also keeps grocery stores open in economically distressed areas. This number represents millions of dollars that used to be spent on food in communities around the country, but which instead has been funneled up to the wealthiest 1% in the form of tax cuts.

Why Economists Hated the Minimum Wage for So Long

This week, Oxford Professor Eric Beinhocker, a good friend of the shop here at Civic Ventures, joined the Slingshot podcast to discuss an idea that he and CV founder Nick Hanauer have been working on for quite some time. He explains why economics is preparing for a major paradigm shift toward a new understanding of how the economy actually works.

First, Beinhocker explains how our leaders and economists currently believe the economy works: “the neoliberal paradigm asserts a model of growth that basically says the economy grows top-down.” Readers of The Pitch are very familiar with this paradigm. The assumption is that the rich and powerful will then use that money to create jobs and grow the economy—the money will then “trickle down” to everyone else.

Obviously, that theory has been proven false. “The reality that we’ve seen over the past decades—and there’s a growing body of evidence for it that I’ll talk about—is that the economy, in fact, actually grows from what we call ‘middle-out,’” Beinhocker continues.

He explains that “this makes intuitive sense: the bulk of the economy, the broad middle, between the bottom 10% and the top 10%—that’s where most of the spending in the economy comes from. That’s where the workers are; that’s where the savers are.”

“And so when the middle class does well, the economy does well,” Beinhocker says.

Hal Singer, the co-host of the Slingshot podcast, asks Beinhocker if he thinks economists opposed increasing the minimum wage for so long because that kind of neoliberal thinking benefits the wealthy people and institutions who sponsor the studies and institutions that keep economists in business. In less polite terms, Singer wonders, is the entire profession of economics corrupt?

Beinhocker rejects that hypothesis. He argues that it’s “not necessarily corruption or bad intent, at least by our fellow economists. I think what in essence happened is you had generations of economists who grew up in a particular economic framework, a particular economic paradigm.”

This is an important thought: If you’re an expert who has been swimming in the waters of neoliberalism for your entire education and career, it’s very hard to imagine anything else. Beinhocker continues, “because they’re locked into that framework, they find it very hard to believe the evidence right in front of their eyes.”

“When Alan Krueger and Andrew Card published their landmark study on the minimum wage in the 1990s, they were kind of given hell for it because no economist could believe it,” Beinhocker explains. “And then we’ve had decades of basically confirming their work. The problem isn’t the data; the problem is the paradigm, the theory.”

Eric and Nick have spent more than a decade working together to synthesize all this new research into a coherent paradigm that demonstrates how the economy really works, called Market Humanism. Just as neoliberalism is the economic theory powering trickle-down economics, Market Humanism is the thinking that powers middle-out economics.

We’ll have a lot more to say about this in the weeks and months ahead, but for now, if you’d like a preview of Market Humanist thinking, you should check out the Slingshot podcast.

This Week in Trickle-Down

• The Center for American Progress has released a new interactive map showing the childcare deserts in every major urban area in the United States. “Child care deserts are areas with little local licensed child care capacity, which includes center-based care, home-based care, Head Start, and state preschool programs, relative to the number of local young children, such that there are at least three local children for every one available local licensed slot,” the authors write, adding, “these gaps can result in missed early education opportunities during a critical developmental period, leading to persistent academic disparities that can strain the K-12 system and negatively affect children’s long-term outcomes.”

• Karla Walter at CAP sounds the alarm on The American Franchise Act, a piece of legislation that, if voted into law, would “let corporate franchisors off the hook when they undermine workers’ rights and leave small franchisees solely liable for labor law violations.” Walter explains, “If enacted, the AFA would roll back protections for the nearly 9 million Americans working at franchises, thereby leaving the owners of more than 800,000 individual franchise establishments solely accountable for any workplace misdeeds.”

This Week in Middle-Out

• The Center on Budget and Policy Priorities explains how a proposed California law would make it harder for corporations to shift their funds overseas in order to avoid paying taxes. The bill would update the way the law sees corporations, explains CBPP’s Don Griswold, “treating an entire corporate group — including all of its operating subsidiaries and fabricated shell companies around the world — as a single, integrated, unitary business enterprise, just as its corporate leadership and financial regulators treat it.” This is a common-sense piece of legislation that would make corporate tax evasion much more difficult.

• The Roosevelt Institute published a great report explaining why it would be a bad idea to give up on American manufacturing: “Despite employing less than 10 percent of workers, the US manufacturing sector is still the second largest in the world, the second most important in domestic output, the leading funder of research and development (R&D), the top export sector, and the second largest employer of engineers.”

• A new study from the Center for American Progress explains how sectoral pay standards—establishing pay levels and benefits within certain job sectors like security guards or construction workers—could increase the paychecks of working Americans. “These sorts of wage-setting mechanisms can reflect collective bargaining norms and complement other approaches to setting compensation across sectors,” Karla Walter writes. “Under these conditions, wage and benefit requirements will likely come close to the collectively bargained rate, reducing nonunion employers’ incentives to oppose unionization by taking labor costs out of competition.”

This Week on the Pitchfork Economics Podcast

We’re revisiting one of our favorite Pitchfork Economics episodes this week: A lively conversation with Anand Giridharadas, the author of Winners Take All, about how wealthy people use philanthropy to clean up their reputations, even as they continue to make income inequality even worse.

Closing Thoughts

Last Thursday, the Senate quietly passed a rule that should have gotten much more attention. And at a time when Congress faces criticism for its inaction and its unwillingness to challenge President Trump, it’s even more remarkable that the rule is a positive change.

“The Senate has approved a bipartisan resolution to prevent its own members from using prediction markets, banning senators who are often privy to sensitive information from making bets on upcoming events,” writes Mary Clare Jalonick at PBS.

Because the resolution passed unanimously and only affects the Senate’s internal rules, “it will go into effect immediately,” she continues.

Prediction markets have exploded in popularity in the past year, and they present a particularly lucrative opportunity for lawmakers who are often privy to top-secret information and developing situations weeks and months before the general public.

“Earlier this month, The Associated Press reported that a group of new accounts on Polymarket made highly specific, well-timed bets on whether the United States and Iran would reach a ceasefire on April 7, resulting in hundreds of thousands of dollars in profits for the new customers,” Jalonick writes.

Those bets attracted a lot of attention: “On the same day the AP published the report, the White House warned staff against using private information to trade on prediction markets,” Jalonick writes. But when a public servant is facing an opportunity to take home hundreds of thousands of dollars by placing a single well-timed bet on prediction markets, a warning simply isn’t enough. That’s why it’s important for the Senate to place this ban on prediction markets.

It’s also why more lawmakers want to go even further. “Sens. Todd Young, R-Ind., and Elissa Slotkin, D-Mich., have introduced a bill to ban all federally elected officials and government employees from using insider information to make prediction market bets,” Jalonick writes. “Young said the resolution was ‘a good first step’ and he encouraged the Senate to take up their bill.”

I agree with Senator Young—the Senate should be praised for taking action to prevent this new form of insider trading from taking root, but it should also apply this action to the entire federal government, and it should establish that anyone who violates the law faces strict punishment.

And for much the same reason, public servants with access to privileged information shouldn’t be allowed to make their own stock trades. Congresspeople through the years have introduced legislation to make stock trading illegal for members of Congress, but those bills haven’t moved forward. This new Senate ban on prediction markets should eliminate a number of the excuses against elected officials buying stock.

I say all that to point you toward this video by Georgia Senator Jon Ossoff, which is a particularly strong candidate statement that directly ties together middle-out economics with the urgent need to end government corruption. He begins by discussing the affordability crisis that has raised so many of the essential costs of life in the United States—rent, education, healthcare. And then, Ossoff ties those costs back to political corruption.

“The problem is that the people’s elected representatives don’t represent the people,” Ossoff explains. Instead, “they represent the donors, and special interest. Corruption is why things don’t work for ordinary people.”

“Corruption’s impact isn’t abstract—it shows up in our daily lives,” Ossoff explains.

“Take prescription drugs,” for example, Ossoff says. “The cost of medicine in America is astronomical compared to other wealthy countries. About one in three American adults skip the medication their doctor prescribed, because they can’t afford it. Drug companies charge hundreds of times what it costs to produce.”

Ossoff asks, “But how have they gotten away with it? Every election cycle, drug companies spend millions on campaign contributions to Republicans and Democrats to shape policy and protect their profits. And members of Congress fall in line.”

“It’s corruption in plain sight,” he concludes.

This is true. And it’s important to make the case that corruption isn’t some problem separate from neoliberal politicians writing trickle-down economic policies into law. Corruption is how trickle-down economics takes over the system in the first place.

Ossoff tells a bracing story about how Congress defanged a 2003 law that would have allowed the federal government to negotiate with Big Pharma companies to lower drug prices, and the Congressmember who helped wipe out the government’s drug negotiation power almost immediately left Congress to take a $2 million-per-year job lobbying for Big Pharma.

When judging by the letter of the law, that Congressperson did nothing wrong. But nine out of ten Americans would likely tell you that was corruption, plain and simple. It’s literally taking money out of the pockets of Americans and transferring it to Big Pharma’s profits.

Ossoff points out that almost 20 years later, with his help, a bill did eventually pass through Congress that finally allowed Medicare to negotiate directly with Big Pharma. But the billions of dollars that Big Pharma raked in during those two decades, taken from poor and elderly Medicare patients, will never be returned.

While many campaign advisers consider promises to fight political corruption to be a non-starter for political candidates, it is in reality a middle-out issue—one that is popular with the American people. Because when you stop the flow of corrupt money, you free up more money that stays in the pockets of the American people. That’s about as core a middle-out principle as I can imagine.

Be kind. Stay strong.

Zach

We’ve got a week packed full of economic stories, including this morning’s announcement of GDP and consumer spending data, why consumers feel like the economy is worse than any time in the last 25 years, the Fed’s decision to keep interest rates flat, and a new report on how governments might be able to economically prepare for artificial intelligence.

But I wanted to open with some good news: Yesterday, the Congressional Progressive Caucus unveiled its “New Affordability Agenda,” a policy platform (PDF) that seeks to bring costs down for American consumers through a number of different avenues, including lowering grocery prices, homebuying and rental assistance programs, outlawing surveillance pricing, bringing down prescription drug prices, and much more.

The press release offers some highlights of the bill:

• Making prescription drugs cheaper by establishing a government program to sell generic drugs at a discount, cutting the price of a vial of insulin from $300 to $50;

• Making utilities cheaper by cracking down on for-profit utilities overcharging consumers, saving the average family $500 a year;

• Making gas cheaper by charging big oil companies a tax on extra profits because of the war, then refunding that money to consumers. If oil stays at $100 a barrel, most families would get $324 back;

• Making childcare cheaper by guaranteeing no family pays more than 7% of its income – under $10 a day for most families;

• Making housing cheaper by building millions of new homes, offering every first-time homeowner $20,000 in downpayment assistance, and expanding rental assistance;

• Making groceries cheaper by cracking down on big grocers who fix prices and on companies that abuse seed patents to make farming more expensive;

• Making time off cheaper by guaranteeing every worker two weeks of paid vacation time;

• Banning ‘Surveillance Pricing,’ where companies use personal data to raise prices with AI;

• Putting money in pockets by requiring companies to pay double wages for overtime, as opposed to the current time-and-a-half standard;

• Abolishing Super PACs so billionaires can’t buy more policies that make stuff more expensive.

There are a lot of great policies in there—many of which we have discussed here in The Pitch over the years. And it’s fantastic that the proposal includes policies that would bring costs down for consumers while also growing the paychecks of American workers. The commitment to two weeks’ paid vacation and the shifting of overtime payouts from time-and-a-half for every hour worked over 40 to double-time are particularly interesting—though it’s unclear why they don’t move to increase the federal minimum wage as well.

Any campaign manager will tell you that it’s not enough for policies to be smart. In order to pass them into law, they also need to be popular. The Progressive Caucus also released polling showing that every single one of the policies on its agenda is above 60% approval with the American people.

Perhaps most importantly, all of the policies poll above 60% among Republicans:

Obviously, pundits will have a lot of opinions in response to this policy platform. And that’s fine—no policy platform is perfect. (Again, I’m surprised that it doesn’t include an increase in the federal minimum wage.) But this is a great start to forming a policy platform that will bring down prices and increase wages for American workers—much stronger, for instance, than the Democratic or Republican platforms for reducing prices in 2024.

But in a media environment that has very little patience for policy discussions, the trick for the Progressive Caucus is to now get this message out to the American people. If I may make one suggestion to the Caucus: Be sure to talk not just about why this platform will bring down prices and raise paychecks for American workers, but also why doing so is good news for everyone in the whole economy.

It’s important to remind people that the American economy grows when workers do well. It’s workers spending their paychecks that drive the economy—they are the real job creators. This clear fact is what transforms this policy platform from a nice-to-have wish list to an absolute necessity to save the American economy. That’s the kind of messaging that the American people intuitively understand.

The Latest Economic News and Updates

Parsing Today’s Flood of Economic Data

This morning, the federal government released a lot of new data all at once. Here are the toplines:

• The first quarter’s GDP grew by 2%, below economists’ expectations. “The government shutdown depressed G.D.P. in Q4; the reopening lifted it in Q1. If you just average the two, you’re left with ~1.25% growth,” reports Ben Casselman.

• I often say that GDP isn’t a great measurement of how working Americans are doing, and that’s especially true with this GDP report. Casselman writes, “Business investment contributed nearly 1.5 percentage points to Q1 growth, more than the 1.1 points contributed by consumer spending, which is usually the driver of the U.S. economy.”

• That business investment largely took the form of data center construction and other AI investments, which are outpacing all other construction in the nation. “US spending on data centers & computers has grown so much that it’s larger than basically all other physical investment categories—more than all single-family housing construction, factories, power plants, industrial equipment, apartments,” writes Joey Politano.

• In fact, consumer spending slowed down in Q1, which could be a sign that the stagnant labor market and rising prices are taking a bigger bite out of the most important metric we have for economic growth: Worker paychecks.

• Matt Stoller dug into the numbers and discovered that “nearly all” of the small increase in consumer spending last month went “to gasoline, health care, and financial services - aka necessities.”

• We also received new pricing data, and those numbers are especially worrying. “Consumer prices were up 3.5% in March from a year earlier, the fastest year-on-year inflation since 2023. And core prices were up 3.2%, suggesting inflation isn’t just an energy problem,” Casselman writes.

• “Consumer spending is keeping up with inflation -- real spending rose in March. But families’ *incomes* are not. Inflation-adjusted income, excluding transfer payments, fell in march for the second month in a row. And the saving rate fell to its lowest level since 2022,” Casselman concludes.

All this data is deeply troubling because it indicates that consumer spending could be starting to falter, while AI spending is propping up the economy, making the numbers look more healthy than they actually are.

This information is just a couple of hours old as I write this, so there’s sure to be plenty of analysis and context published over the course of the next week. I’ll have much more to say about all this in next week’s issue of The Pitch.

Americans Rate the Economy as the Worst in 25 Years

Given the bleak economic data we just got, it’s no wonder that the “share of Americans who say their financial situation is getting worse is higher now than at any point in the past 25 years, per new Gallup data out Tuesday morning,” writes Emily Peck at Axios.

“55% of respondents to a poll conducted April 1-15 said their financial situation is getting worse; that’s up from 53% last year and 47% in 2024,” she continues. “The number is higher than at any point since 2001, even compared with recessions during the pandemic or in the wake of the financial crisis.”

Rising prices are the main problem. “Energy costs, which have risen notably this year, are mentioned by 13% of Americans, up 10 percentage points from last year and the highest since 2008 — tying housing costs as the second-biggest concern,” Gallup writes. “Healthcare ranks fourth at 8%, consistent with readings since 2020.”

Those price pressures are causing concerns about the larger issues in Americans’ lives. “Majorities worry about not having enough money for retirement (62%) and being unable to cover medical costs in the event of a serious accident or illness (60%),” Gallup reports. “Nearly half are concerned about routine healthcare costs (48%), while 41% worry about paying their normal monthly bills and 40% about affording college. Fewer worry about housing costs (35%) or making minimum credit card payments (28%).”

Consumer confidence has been steadily declining since the pandemic began, and that’s a big problem for the wider economy. After six years of continuous downward pressure on those confidence numbers, you can expect more and more Americans to pull back from spending, which will harm the entire economy, creating a negative feedback loop.

It’s now pretty clear that it’s not going to be just enough to flatten out the pricing pressures Americans are feeling on groceries, energy costs, health care, and housing to turn those negative feelings around. In order to truly break the fever of negative economic feelings, our leaders are also going to have to grow paychecks so that Americans feel as though they’re able to invest in their own futures again.

That’s why I’m confident that we’re approaching a new economic paradigm that could allow for the widespread adoption of middle-out economics. These weak consumer confidence numbers prove that it’s not going to be enough to return the economy to 2019 numbers for people to feel confident in the economy again. If we want to rebuild the American Dream so that it works for everyone, we’re going to have to upend the status quo and rebuild the great American worker’s confidence that the economy truly is created by and for them.

Admittedly, that’s a tall order. But I believe the conditions are right for the kind of huge, systemic change that we need. Paradigms don’t change when the majority of people are happy with the status quo. And status quos don’t stand when the majority of people are unhappy with them. It’s time for something new.

The Federal Reserve Continues to Argue that the Economy Is Strong

In Jerome Powell’s final press conference as Chair of the Federal Reserve yesterday, he announced that the Fed was keeping interest rates steady, “but the decision was the most highly divisive in decades,” the New York Times’s Colby Smith writes. “The central bank opted to keep rates unchanged at a range of 3.5 to 3.75 percent for the third meeting in a row.”

Powell is staying on as a Fed governor, potentially through the end of his term in 2028, but next month, Kevin Warsh will begin his term as the Fed Chair. Powell painted a relatively rosy picture of the economy, in part because “Consumer spending has been resilient,” while the Times’s Ben Casselman reports that Powell believes that “business investment has been solid as well.” Casselman explains that Powell acknowledges the “job market has slowed, but partly because of slower growth in the labor force — the unemployment rate has changed little.”

That last point is important because the Fed still operates under the mistaken assumption that higher wages for workers cause inflationary pressures that drive up prices. Nothing we’ve seen in the last six years of higher prices proves that point—in fact, as Groundwork Collaborative Executive Director Lindsay Owens argued in a recent episode of Pitchfork Economics, many of the price pressures we saw were due to corporate greed, with manufacturers and retailers driving prices up higher than costs and pocketing the rest in the form of record profit margins.

It all amounts to a trickle-down view of the economy that misses the real economic pain that the American people are experiencing. Paychecks aren’t growing, and prices are increasing. As Powell notes, American spending has been resilient, but those dollars aren’t going as far as they used to, and many people in the middle and lower end of the wealth scale are cutting back and making do with less.

Meanwhile, at the top of the K-shaped economy, wealthy Americans are spending lots of money, but their paychecks aren’t moving around the economy the way working Americans’ paychecks do—all that wealth stays floating up at the top as corporations target luxury expenditures and leave many American consumers out of the equation altogether.

And despite Powell’s enthusiasm for the health of the economy, the Fed showed major notes of concern. Smith explains that the Fed’s statement “acknowledged the recent uptick in inflation as a result of the war in Iran and stressed that there was a ‘high level of uncertainty about the economic outlook.’”

The biggest concern, Smith explains, “is that the longer the war with Iran drags on, the bigger the economic hit will be. What officials fear is a situation in which higher energy prices push up prices elsewhere, especially across the services sector, leading to a more persistent inflation problem that would be more difficult to address.”

At this stage in the Iran conflict, those higher prices almost seem like a foregone conclusion. Gas prices just hit another high for the year this week, and many people with a clear understanding of the conflict and its attendant shutdown of the Strait of Hormuz say that those elevated prices could persist for months—especially as we head into the summer next month, when gas prices traditionally rise as Americans go on vacation.

And the Strait of Hormuz’s shutdown continues to threaten other global commodities, as Mike Cherney and Regine Cabato write at the Wall Street Journal this week.

“The closure of the Strait of Hormuz, through which not only oil and natural gas but also fertilizer is shipped, is hitting global food production, particularly in poor countries where farmers are more vulnerable to sudden cost increases. That is raising fears of prolonged food price rises and could even lead to shortages if farmers abandon their fields or use less fertilizer,” they write. “The crisis is unspooling across Asia and the developing world. The price of Vietnamese rice exports, for instance, has surged as production costs rise. In Thailand, a big seafood exporter, fishing fleets have been idled because of rising fuel costs.”

While these pressures are predictably harming the poorest communities in the world first, there’s nowhere to hide in the modern world from these pressures. They will eventually impact even Americans at the very top of the global wealth scale. As we saw during the pandemic, the global supply chain is a delicate and complicated web woven through all parts of the world, and a failure in one part of the world has cascading effects everywhere. No matter who is in charge, the Fed will have to wrestle with these pricing pressures over the next few months as this shutdown continues.

This Week in Trickle-Down

• The Center on Budget and Policy Priorities reports that nearly 3.7 million Americans, including 1.9 million children, are at risk of losing rental assistance if a new rule proposed by the Trump administration goes into effect.

• In a new report, the Federal Reserve Board of Governors warns, “the pool of available workers in the U.S. could grow by less than 10,000 workers per month in 2026. Such a slowdown in potential labor force growth is unprecedented in recent history and would have significant implications for the U.S. economy.”

This Week in Middle-Out

• “Representatives in Congress are starting a new push to raise the federal minimum wage to $25 an hour,” writes Kamaron McNair at CNBC. “If enacted, the bill would require large employers (those with 500 or more employees nationwide or that have gross annual revenues of $1 billion or more) to bring their minimum wage to $25 by 2031, with smaller employers following by 2038,” she continues, adding, “From there, the federal minimum would rise periodically to ensure it is always equal to two-thirds of the national median wage, which is around $31 an hour as of the first quarter of 2026, according to Bureau of Labor Statistics data.”

• In this week’s episode of the Ezra Klein Show, the authors of Abundance and Marc Dunkelman, the author of Why Nothing Works, discuss what about their books has worked and what hasn’t worked since they were released a year ago. It’s an interesting conversation about how to get government to build big things quickly again, and I found Dunkelman’s commentary to be insightful throughout—especially when he correctly blames neoliberals for sabotaging government efficiency for the last five decades.

This Week on the Pitchfork Economics Podcast

We’re revisiting a great conversation this week with actor and cryptocurrency skeptic Ben McKenzie about his research into crypto and why he’s become one of the loudest voices decrying the technology as a scam masquerading as the money of the future.

Closing Thoughts

This month, OpenAI has earned some headlines by releasing economic papers looking into the potential impacts of artificial intelligence on the labor market. One paper in particular attempts to measure which jobs are most at risk of being replaced by AI.

The graph below, which shows how much “exposure” (read: layoffs and closures) AI has already caused per sector (the dark blue line) and the potential “exposure” that AI could cause (the light blue line), offers a good overview of the impacts:

What’s most interesting about the potential AI job losses described in this graph is that for the first time in living memory, this automation immediately threatens high-wage, highly educated workers more than it threatens so-called “unskilled” physical laborers without college diplomas. If these calculations prove to be true, we’ve never experienced anything like it before.

You could easily draw a number of thought experiments from this graph: Does this potentially mean that janitors, farm workers, and other non-college-educated workers will have more power to negotiate higher wages in the labor market than they have had for the past fifty years? Or would the exiled highly educated workers instead take jobs in physical labor, flooding the labor market and making it even harder to find jobs up and down the labor scale?

And it does seem as though the AI disruptions are coming quickly for some of us. OpenAI determines that “18% of jobs are at a relatively higher short-term automation risk,” while “24% of jobs may see declining employment as task composition shifts while workers remain necessary for key tasks,” and “12% of jobs could grow because of AI as lower effective cost may increase utilization, affordability, access, or quality-adjusted output.” Overall, OpenAI estimates that about half of all jobs are likely to be highly impacted by AI automation in the short term, meaning that some sectors will grow rapidly while others are laid off and others are reorganized dramatically, while just “46% of jobs are likely to see less change in the short term.”

Of course, you can’t really trust a corporation’s evaluation of the economic impacts of its own service. In fact, it’s very possible they are intentionally overestimating the impact of their product. That is to say, you have to think about these white papers as a kind of advertisement for the service (even while you consider the implications of their data). What better way to get attention to your product than claim over half of all jobs will be impacted? It’s a shrewd marketing move.

Another study jointly released earlier this year by University of Pennsylvania and Boston University researchers does an important job of making the middle-out case for why widespread AI automation would be dramatically bad for the economy: “If AI displaces human workers faster than the economy can reabsorb them, it risks eroding the very consumer demand firms depend on,” the researchers write.

That’s the essential middle-out truth that so many of these economic models fail to grasp: If all those hundreds of thousands of workers laid off by AI stop participating in the economy, we’ll see catastrophic job losses and that will slow the economy dramatically.

At the same time, the paper notes, “We show that knowing this is not enough for firms to stop it. In a competitive task-based model, demand externalities trap rational firms in an automation arms race, displacing workers well beyond what is collectively optimal. The resulting loss harms both workers and firm owners.” In other words, firms will continue to replace workers with AI because every other firm is replacing workers with AI, and they’ll fear being left behind in the competitive market.

This paper is interesting because it examines many of the policies that have been suggested to solve the AI job-replacement problem, including universal basic income, a tax on automated work, and increased worker bargaining power, and determines that only one solution is scalable to the size of the problem: “The classic remedy for a negative externality is a Pigouvian tax: a per-unit charge set equal to the marginal external cost, so that every agent’s private incentive aligns with the social cost.”

Pigouvian taxes, named after economist Arthur Pigou, have been used in the past to punish negative societal behavior and to promote healthier behavior from corporations and individuals. Other examples of successful Pigouvian taxes include “sin taxes” on cigarettes and alcohol, plastic bag taxes, congestion pricing in London and New York on excessive cars entering traffic-heavy downtown areas, and British Columbia’s carbon tax.

Taxing AI at a higher level would enable governments to increase the social safety net to keep laid-off workers contributing to the economy, slow down AI adoption by larger firms, and replace payroll tax revenue that might be lost if layoffs increase.

Those taxes would also discourage firms from adopting what economists Daron Acemoglu and Pascual Restrepo refer to as “so-so technology,” which is AI that is roughly equivalent to skilled human workers in both costs and outputs. In those edge cases, a higher tax on AI would push these edge cases out of the realm of possibility for businesses and encourage them to keep the human labor. This is important because the OpenAI report I referenced earlier implies that jobs in the so-so range account for roughly a quarter of all the potential job losses from AI.

A Pigouvian tax on AI isn’t a sure-fire economic solution to the problem of automation. For one thing, nobody knows exactly how such a tax would be levied, or even what a taxable unit of AI might be. And for another thing, states wouldn’t be able to lead on this particular issue—the only way to successfully tax AI would be on a federal level, and the federal government is unlikely to be in a position to take action until at least after the midterm elections.

So I don’t have any easy answers for you now. But it is heartening to see that economists are doing the research and investigating avenues of how to deal with the labor-market disruptions that AI seems likely to cause. AI is currently growing faster than the body of research, and it is certainly being adopted faster than our leaders’ ability to legislate. We’re going to have to make some big decisions in the coming months about the kind of world we want to live in and the policies we’re going to adopt to help us get there.

Be kind. Stay strong.

Zach

This week, we’re exploring new data that shows wages are falling behind price increases, examining how the new tariff refund system is a missed opportunity to invest in working Americans, and highlighting some exciting good news in the fight against corporate consolidation and monopoly power.

But first, we have to talk about the high cost of some big trickle-down changes to the tax code. Last year, the Trump administration passed a huge tax reform bill that enriched the wealthiest Americans. Those tax cuts for the wealthy and powerful were funded by huge cuts to Medicaid and Medicare, and food assistance programs.

We now have more data that shows the tax cuts come at a terrible cost: A new report from Eileen O’Grady at Public Citizen finds that 446 hospitals around the nation, many in poor and rural parts of the country, are now at risk of closure due to the Medicaid cuts that funded the Trump tax plan. That’s 6.6 million patients who could potentially lose healthcare coverage—an overwhelming percentage of whom are Black or Hispanic.

In order to win the mammoth tax cuts for the rich that they really wanted, the Trump administration also claimed that every working American household would see an average of one thousand dollars in additional tax refunds. Now that Tax Day has come and gone, we can finally see how that promise has worked out for the American people. For the Center for American Progress, Corey Husak reports that, actually, “refunds were only $346 higher than in the 2025 refund season.”

“Using trends from previous years, the Center for American Progress can now predict that the average tax refund in the IRS’ final May report will be about $3,274, or up $335—11 percent—above the 2025 level,” Husak writes. “This contrasts with the Trump administration’s promise of an average refund of $3,939—$1,000, or 34 percent, above 2025.”

And at the same time, the wealthiest Americans are walking away with a massive payday. Aditi Ganguli at MoneyWise writes that the Trump administration’s tax bill “disproportionately benefit the richest 5%, with the top 1% receiving $117 billion in tax cuts in 2026 — part of a $1 trillion reduction over the next 10 years.” Those refund checks aren’t going to create jobs or improve communities—instead, they’re going to stay up at the top of the economy, adding to the large and growing gap between the super-rich and everyone else.

Americans were underwhelmed with their refund checks, Husak reports at CAP: “Overall, about the same amount of Americans said that recent federal tax changes hurt them (24 percent) as said that federal tax changes helped them (27 percent), while a plurality said they saw no change,” he writes.

Crucially, Husak continues, “There was also a difference by income. Taxpayers making more than $150,000 were most likely to say they got a ‘significantly larger refund’ than last year. Taxpayers making less than $75,000 were more likely to say their refund was ‘significantly smaller’ than ‘significantly larger,’ though most didn’t notice a significant change.”

Obviously, wealthy taxpayers are reporting a significantly larger refund because they received a significantly larger refund. Since Trump’s tax bill was made up entirely of deductions, it only helped the people who had high tax bills—in other words, the super-rich.

And there’s a good reason why working Americans on the lower end of the income scale didn’t feel the benefits of those tax cuts: A new report from Goldman Sachs found that rising energy prices caused by the Trump administration’s war in Iran almost completely devoured those tax refunds. In fact, Lydia DiPillis writes that Goldman found “the combination of higher gas prices and a reduction in federal benefits will reduce real income [growth] for the bottom 20% of income earners to near zero in 2026.”

Given that inflation has risen by more than 3% in the last month and Goldman economists expect inflation to hit 4% as energy prices continue to feel the shocks due to the closure of the Strait of Hormuz, that means the paychecks of at least a fifth of all working Americans have shrunk this year.

After 40 years of trickle-down austerity, we now know that the American economy isn’t powered by tax cuts for the rich and corporate profit margins. Instead, it grows through the increased consumer demand created by the growing paychecks of working Americans. Paychecks are a much better mechanism to create economic growth than tax refunds because they’re reliable, consistent sources of prosperity rather than a fleeting sugar-rush created by starving the poorest Americans of important investments.

So to sum these three charts up: The Trump administration is actively eating away the most reliable job-creating source of economic prosperity that we have—the paychecks of American workers. Unless we grow those paychecks, the whole economy will feel the full impacts of these economic symptoms very soon.

The Latest Economic News and Updates

Digging Deeper Into Why Working Americans Are Struggling

In the opening of this newsletter, we talked about how the paychecks of the bottom fifth of all working Americans have basically flatlined. But it’s important to remember that everyone’s paychecks are hurting right now. For the New York Times, Ben Casselman appears in a video explaining that wage growth is declining rapidly and inflation is rising, meaning that everyone’s paychecks are on the verge of falling behind rising costs.

Because America’s economy grows and contracts based on the size of workers’ paychecks, that’s a very bad topline number for our nation’s economic health. But if you look deeper into the granular data surrounding the economic health of workers, you’ll see even more distressing data.

For the Times, Talmon Joseph Smith writes that the blue-collar job boom that we saw after pandemic lockdowns has gone bust over the last year, hurting job prospects for men and workers with less than a college degree.

“Jobs in sectors that include the trades, such as manufacturing and construction, have racked up roughly 150,000 net losses on an annual basis as of March,” Smith writes.

“Layoffs are low across the economy — and in the trades, too. But hiring rates have slumped to the drab pace of 2009, when the unemployment rate was 10 percent, twice as high as it is now,” Smith adds. “Hiring across the manufacturing sector, which encompasses the trades, has declined roughly 40 percent since 2022.”

As for the trades, it’s a more complicated picture. “Commercial activity has decelerated throughout the country. Immigration has tanked since Mr. Trump returned to office, halting a steady inflow of men willing to do entry-level, blue-collar work at relatively low incomes,” Smith writes. “And interest rates, which have risen again since the war with Iran, have frozen the housing market — the steadiest source of work for many tradesmen.”

Largely due to America’s aging population needing more medical care, care economy jobs have been created at a steady clip over the past few years. And because of gender dynamics, care economy jobs have largely been filled by women, while men trend toward the more traditionally masculine jobs like the trades. As a result, last year, employment gains among women grew at nearly three times the rate of men in the workforce.

And as always, when you dig deeper into specific demographic data, you start to see that the economic pain of the trickle-down era in general, and the last year in particular, has not been distributed evenly.

Russell Contreras notes at Axios that “Latinos contribute an estimated $4.1 trillion annually in economic output in the U.S. and are projected to make up nearly 28% of the U.S. population by 2060,” but Latino Americans aren’t included in the wealth that they’ve added to the economy.

In fact, even though they’re the fastest-growing demographic in the US, Latino households “have $.22 in household wealth for every $1 held by white households,” Contreras writes, adding, “This could limit consumer spending, business formation and long-term growth if unaddressed.”

All told, Contreras explains, “Median Latino household wealth sits at $62,000 vs. white household wealth of $284,000.” And Latino households aren’t taking part in the ways in which white households grow that wealth: “Only 28% of Latinos have retirement accounts compared to 62% of white Americans,” he writes, adding that “51% of Latinos own homes vs. 73% of white Americans.”

For most of the past century, homeownership has been the clearest path to economic strength for American households. The paths to homeownership have largely prioritized white working Americans, and the tax code has ensured that the wealth created by homeownership is protected and prioritized over renters. But a new narrowing trend in homeownership has emerged in recent years, according to a new report from the National Association of Realtors: Older homeowners now dominate the housing market.

Last year, the percentage of Gen Z and Gen X home buyers stayed roughly flat at 4% and 25% of all American home purchases, respectively. The percentage of Millennials buying homes dropped by three percent to 26% of all home purchases, while Baby Boomers dominated the market at 42% of all purchases.

“First-time buyers made up just 21% of all home buyers, down from 24% in the previous survey and the lowest share since NAR began collecting the data in 1981,” the Association reports.

Not only does this trend harm the accumulation of wealth for younger working families, but the decrease in home construction rates we’ve seen over the last year means that the existing home stock will only increase in value, putting additional pricing pressure on housing markets around the nation for younger workers.

So even as paychecks stay flat, the cost of housing continues to rise, and homeownership is increasingly out of reach for younger working Americans. That’s bad news for the whole economy.

The Tariff Refund Plan Is Trickle-Down at Its Worst

Earlier this year, the Supreme Court ruled that many of the tariffs that the Trump administration levied on imports were unconstitutional and needed to be refunded. All told, with interest, the Court ordered the administration to return some $166 billion in tariff revenue.

“On Monday, the Trump administration officially debuted the tariff refund portal to make that happen,” writes Sydney Carruth at MS NOW. “American importers can apply through the portal to get back the billions of dollars the U.S. illegally collected from them over the past year.”

The obvious problem with this refund portal is that it’s not refunding the money to the people who actually paid those higher tariffs—American consumers.

“Only parties formally designated as importers of record are eligible to seek a refund,” Carruth explains. “That means it’s highly unlikely American consumers, who paid higher prices for goods and services as businesses passed along tariff costs to customers, will see any of their money returned.”

There are a few avenues for Americans to see a bit of their tariff refunds. For NPR, Stephan Bishana reports that several of the shipping companies that directly charged tariff fees, including FedEx, DHL, and UPS, will offer refunds to consumers.

But most of us who paid higher prices at retailers for clothes, groceries like coffee and avocados, and electronic devices, are just out of luck. Large corporations paid those tariffs with the higher costs that we paid, and those same corporations are now getting those tariff costs refunded—essentially, it’s a free windfall to add to their profit margins.

In the sections above, I’ve shared the latest information on how American paychecks are shrinking and the wealth of working Americans is being drained, and I’ve explained how that economic pain is going to harm the entire economy by killing the source of economic growth.

It would have been a slam-dunk economic policy—not to mention a politically popular move—to send tariff rebate checks to all working American households, with bigger checks for the poorest households that spent more of their income, proportionally, on the higher prices caused by tariffs.

Those checks would have immediately been poured into the economy in the form of increased consumer spending, and that spending would have created jobs in communities around the country. Instead, the refunds are going to the biggest American corporations, where they’ll be stashed in profit margins, handed away to CEOs and executives, and an elite shareholder class in the form of bonuses and buybacks, and hoarded at the tippy-top of the economy. It’s a lost opportunity to recenter working Americans as the essential wealth-creators that they are.

This Week in Trickle-Down

• The Roosevelt Institute looks at the costs of long-term care for elderly family members for the long-term wealth of working Americans. The report finds that “middle-class individuals face permanent wealth reductions to just 42% of their original levels, whereas the top quartile of earners eventually recover 94% of their assets.”

• A new report from the Economic Policy Institute “estimates the cost to workers of being misclassified as an independent contractor for 11 commonly misclassified jobs.” The differences between independent contractors and full employees are massive: “a typical construction worker misclassified as an independent contractor would lose as much as $20,399 in annual income and job benefits compared with what they would have earned as an employee,” they report, adding, “A typical truck driver, if misclassified as an independent contractor, would lose as much as $23,266 annually.”

• We talked a lot in this newsletter about declining paychecks, and a new paper from Niklas Engbom, Aniket Baksy & Daniele Caratelli, published at NBER, offers some technical insight into why paychecks have stagnated over the last 40 years. Their paper examines “how structural changes in the U.S. labor market have contributed to wage stagnation over the past four decades by weakening the job ladder.” They find that “employed workers today are about half as likely to receive a better-paying outside offer as they were in the 1980s,” and the primary reason for that lack of job availability is “rising employer concentration and the growing use of noncompete agreements.” Remember, job-switching is one of the primary ways in which workers score significant raises, which partially explains why paychecks have stayed flat:

This Week in Middle-Out

• The Center for American Progress looks at the additional $70 billion allocated to ICE and Border Patrol in next year’s budget and explores what it would mean for the economy if that money was instead invested in working American families.

• A new nonprofit seeks to help American workers who want to improve their working conditions. “The Union Now fund will be a centralized, national clearinghouse to get money directly into the hands of workers,” reports Whitney Curry Wimbish at the American Prospect. “Too often, workers want to organize but can’t because of money. Some are working two jobs so don’t have the time; some get fired illegally for attempting to organize. Funds from Union Now will supplement the incomes of those still employed so they can spend time organizing rather than on that second job.”

This Week on the Pitchfork Economics Podcast

Jaime Keen, an equality and opportunity policy advisor in the Biden White House, joins Goldy and Paul this week to talk about her new report for the Roosevelt Institute, which is titled “From Safety Net to Power Base: Reimagining, Not Restoring, the US Antipoverty System.” It’s a refreshing conversation about the importance of not trying to fix systems that have been battered beyond repair after four decades of trickle-down sabotage, instead building a new program that invests in working Americans in a way that actually works for the 21st century.

Closing Thoughts

I wanted to call your attention to an excellent editorial from former Biden administration FTC head Lina Khan and former Justice Department antitrust attorney general Doha Mekki in the New York Times.

In the editorial, the authors spotlighted three important wins against monopolies and the consolidation of corporate power that happened in the last week: “On Wednesday, a jury found that the mega-concert promoter Live Nation and its ticket-selling subsidiary Ticketmaster had illegally monopolized the live music industry,” they write.

“Around the same time, a California judge moved forward with the claim that the e-commerce giant Amazon had strong-armed small businesses on pricing,” they continue, adding, “And on Friday, a federal judge halted the merger of two of the largest owners of local television stations in the country. A group of state attorneys general had argued that the merger would raise prices and overly concentrate control over local news.”

At a time when the federal government seems primed toward corruption and massive corporate consolidation, these three victories are notable. They’re a bracing reminder that public sentiment has started to shift against the monopoly power that has steadily been growing since the Reagan administration slashed antitrust laws in the 1980s.

You’ve likely heard of at least one of these three stories. Ticketmaster is one of the most unpopular corporations of our time, largely because most Americans have struggled with the entertainment monopoly’s frustrating system of opaque additional fees when buying tickets for live entertainment. The company that owns Ticketmaster, Live Nation, “manages artists, promotes tours, owns major concert venues and controls some 80 percent of primary concert ticketing at major venues,” the authors write, and it “has used this power to bully venues and coerce artists, as well as hike fees for fans.”

The Nexstar-Tegna television merger, which The Independent explains was “initially announced in 2025 and approved by the Federal Communications Commission in February, would have resulted in a single company owning 265 television stations across 44 states and the District of Columbia.”

The merger between Nexstar and Tegna was stopped by a Sacramento judge in an emergency order because “the merger would make Nexstar the owner of two or even three of the ‘Big Four’ local affiliates in 31 local television markets,” the Independent notes, after which “multichannel video programming distributors such as DirecTV would have to comply with Nexstar’s demands for higher broadcast fees or risk leaving subscribers potentially unable to watch broadcasts like Sunday NFL football games.”

The Reagan administration argued that corporate consolidation was good because it delivered lower prices and better services to more American consumers. But after 40 years of higher prices and worse customer service, Americans are no longer falling for the trickle-down idea that free markets automatically deliver the best products to the people.

And George Joseph at the Guardian explains that California’s attorney general shared emails showing that Amazon colluded with other suppliers to jointly raise prices on consumers.

In one case, “Amazon raised prices on a set of dog treats and worked with a pet treat manufacturer to convince Chewy, the pet supplies retailer, to follow its increases, effectively protecting its market share while sticking consumers with higher prices.” In another, Amazon put pressure on Levi’s to push up the price on certain pants sold through Walmart.

That’s not how markets are supposed to work. Any middle-school student knows that manufacturers and retailers are supposed to compete for the attention and buying power of working Americans by delivering the best product for the lowest cost. But when a handful of corporations control access to huge swaths of the population, they stop competing and start working together to jack up prices and rake in higher profits at the expense of everyone else.

Khan and Mekki point out that even though the trickle-downers in power are clearly willing to let corporations screw over American consumers in the name of record profit margins, the court system is serving as a defense against their inaction. “Juries do not systematically favor plaintiffs or defendants. They favor credible evidence, clear explanation and conduct that passes the test of basic fairness,” they write.

“Juries have returned verdicts in favor of home sellers who were being overcharged in Missouri, young social media users who were harmed by addictive algorithms and a Texas steel company that was the victim of an illegal boycott,” they explain. “When government officials fail to stop corporate abuse, jury trials can be a key catalyst to force real change.”

In other words, the American people can plainly see what their leaders either cannot or will not acknowledge: The playing field is tilted in favor of powerful corporations. “Too often, the information guiding government is overwhelmingly skewed toward those well-steeped in the power corridors of Washington,” they write. “Massive blind spots in the economic pain points that Americans face in their daily lives have contributed to the growing fecklessness of antitrust enforcement — and a lack of trust that the government is fighting for working people.”

The good news is that elected officials aren’t really the leaders of this nation—the American people are. And when enough people express dissatisfaction at corporate consolidation and its attendant high prices, fixed markets, and lack of choice, the elected officials will follow.

At a time when it’s easy to feel hopeless about the direction of the American government, these three cases are bright, hopeful reminders that these scams can’t just go on forever. The American people have had enough, and they will support leaders who respond to that dissatisfaction.

Be kind. Stay strong.

Zach

In 2021 and 2022, our leaders instituted policy reforms which, for the first time in a long time, began to improve the lives of working Americans. Paychecks were rising at record levels, stimulus checks increased bank accounts, unemployment benefits were meaningful enough to give people time to find the jobs that worked best for them (or even to start businesses and become their own bosses), children received free school lunches, student loan debts were forgiven, and we drove poverty down to record lows.

We made major advances in building public transportation, clean energy, and semiconductor manufacturing infrastructure that positioned America to lead the 21st century global economy by example.

Those early years of the Biden administration were unique. He was the first president in decades who managed to shake off neoliberalism and instead focus directly on improving the lives of American workers, because those workers are the true job creators, and when they do well the economy grows.

And then in 2023, things changed. Nearly all of those benefits for working Americans expired. Congress stalled, expenses increased, implementation slowed, bank accounts fell, and frustration skyrocketed. And of course the next year Trump was elected.

As we look forward to the 2026 and 2028 elections, we owe it to ourselves to understand what happened and plan for the future. That starts by looking back at this recent history. If we can’t figure out what policies worked, what didn’t—and, most importantly, why they worked or didn’t work—we won’t be ready the next time we wield power.

Why Middle-Out Economics Worked

For the American Prospect, Ryan Cooper published a piece that partially explains what Biden did right and tries to explain why his economic policies were either ignored or refuted by the American people in the 2024 election.

First, Cooper writes, “With the economy still coming out of a very severe recession from the pandemic, Biden met the challenge with a $1.9 trillion stimulus. Then he did one better with a trillion-dollar climate bill, a big package of subsidies for advanced manufacturing, and another for infrastructure upgrades.”

“All told,” Cooper summarizes, “it was probably the most significant set of economic reforms from a Democratic president since the 1960s.”

That is all true. But the sizes of those bills weren’t the most important part. Remember, the Obama administration passed a large stimulus package, too. While the recovery from the Great Recession was so sluggish that workers took nearly a full decade to recover all the jobs and wages lost during the 2008 financial crisis…

…America’s recovery from the pandemic surpassed every other nation on Earth in terms of speed and economic health:

What made Biden’s stimulus different from Obama’s? It was the fact that the Biden stimulus and climate bills were largely devoted to improving the lives of working Americans, not CEOs. Small businesses in communities around the nation were saved from bankruptcy and closure during lockdowns. People received stimulus checks, which they then spent at those businesses. And we reached the lowest level of child poverty ever recorded in America, thanks to an expanded Child Tax Credit that sent checks to American families, helping them weather the storm.

Then something changed. In 2023 and 2024, Americans told pollsters that they believed Biden was failing on the economy—and then they voted in Donald Trump and Republican majorities in the House and Senate in the 2024 elections.

In the year and a half since Trump won, progressives have struggled to explain why our economic agenda—one which finally, after over four decades, once again prioritized working Americans over the super-rich—didn’t result in victory at the polls.

You Can’t Let Your Wins Disappear

Thanks to trickle-down meddling in the Senate, many of the policies that the Biden administration and Congress passed came with a very limited timeline, and then they were set to expire.

“For about a year in 2020-2021, working-class Americans enjoyed a sort of functioning welfare state for the first time in U.S. history,” Cooper writes. “In some ways, it was much more generous than the response in Europe. We did three rounds of stimulus checks—an ersatz universal basic income, unbelievably—and set up an unemployment system that was incomparably generous to low-wage workers.”

And all of those policies had expiration dates written into them. The government delivered those investments. And then it ripped them away one year before the 2024 elections.

In retrospect, putting an expiration date on those policies didn’t just engender ill will with voters—it actively turned them against the policies because trickle-down opponents were able to capitalize on the sourness of that expiration and amplify it by relentlessly distorting the record. It’s easier for trickle-downers to convince voters that government doesn’t care about working people if investments into the economy are being cut across the board. Those expirations were rightfully perceived as a net loss, rather than a temporary gain.

You Have to Talk About Your Wins

There are two very important reasons why Biden’s working-Americans-first policies didn’t win over the American people. Cooper writes, “progressive policy does not automatically produce political benefits even if it works. Full employment can easily be taken for granted. Structural, supply-side reforms like Biden’s climate policy are particularly invisible to the layman and must be heavily promoted and advertised.”

This is true. When I talk to candidates or elected leaders, I often say that it’s not enough to craft winning economic policy—you also have to craft winning economic messaging.

Many of the Biden administration’s economic policies benefited everyone in America by centering American families and improving outcomes for workers. But there is no doubt the administration struggled to communicate what they did.

Inflation Was a Huge Problem

The public’s biggest discontent with President Biden’s economic legacy was not a part of his economic agenda at all—it was the rise of prices as a wave of inflation overtook global markets reawakening from pandemic-era lockdowns. Trickle-downers liked to pretend that inflation was a result of Biden’s economic programs, but there’s no evidence that that’s true.

In fact, corporate greedflation—meaning corporations taking advantage of inflation expectations by raising prices far above costs and pocketing those inflated profit margins—was a significant driver of American price increases. And while President Trump rode back into office on a wave of anti-inflation sentiment, he’s now pushing prices back up, with his inflationary tariffs and his war on Iran jacking up fuel costs around the globe. Just last month alone, inflation tripled due almost entirely to the Trump administration’s actions in the Middle East

Higher prices are roundly unpopular with Americans, and if they encounter rising prices in grocery stores and at gas pumps, they’re going to be unhappy with the economy as a whole.

Too many of our leaders regurgitate the trickle-down talking point that rising prices are the inevitable result of invisible market forces that automatically establish prices exactly where they need to be. But it’s possible for leaders to fight for lower prices. For instance, in Mexico, President Claudia Sheinbaum negotiated with nearly 20 corporations to establish a fixed price for “Mexico’s basic food basket, or the canasta básica, a total of 24 basic foods considered basic to every household,” reported Mexico News Daily in 2024. “The agreement limits the cost of the canasta básica to a total cost of 910 pesos (US $44.23), marking a considerable 12.4% price reduction from the previous year.”

As we’ve seen with the American people turning on President Trump’s economic agenda in the last year, prices continue to be a huge problem for both ends of the political spectrum. The party that offers the most straightforward, cogent policies for reducing prices and raising wages are likely to win the next election.

Neoliberal Sabotage Hurt the American People

I’ve talked about trickle-downers who picked apart the Biden agenda, and it’s important to remind you that trickle-downers are on both sides of the aisle. Two of the biggest impediments to President Biden’s economic agenda were Senators Joe Manchin and Kyrsten Sinema—Democrats who displayed a neoliberal devotion to CEOs and an unrepentant loathing of policies that improved outcomes for working people.

Some of the policies they torpedoed include:

• Manchin stripped universal pre-K and childcare plans from the Build Back Better plan—even though Manchin’s home state of West Virginia already offers its own universal pre-K plan.

• Manchin also wiped out a paid family and medical leave policy.

• A federal minimum wage increase to $15 per hour was passed in the House but failed in the Senate thanks to a thumbs-down vote from Sinema. This would have directly and almost immediately raised wages for roughly 33 million Americans.

• And lastly, Manchin refused to extend the Child Tax Credit. Thanks to him, America’s child poverty rate nearly doubled the month the CTC expired.

Manchin and Sinema were trickle-down saboteurs of common-sense economic plans that would have profoundly changed the lives of working Americans for the better—and quickly. Using the threat of the filibuster, they personally did more than any other individuals to damage the suite of middle-out policies that invested in the American people.

The structure of the Senate makes it easy for one or two ideological opponents, inside or outside the party, to hold the entire body hostage. If Democrats want to regain power and win real gains for the American people, it’s essential that they engage and promote candidates who are free from the neoliberal mind virus that held sway over the whole party for the last few decades.

The false doctrine of centrism claims that only a neoliberal like Sinema could have won in a purple state like Arizona, but Arizona Senator Ruben Gallego won office while promoting middle-out ideas like an affordable housing plan and a $20 federal minimum wage. Even deep-red congressional districts love middle-out champions who put working Americans first.

Deliver, Deliver, Deliver

So, with a midterm election on the horizon and a presidential election following quickly after, what can we learn from all this?

Middle-out economics did not fail, and the Biden administration didn’t fail middle-out economics. By putting American workers first, the Biden administration sped up what could have been a slow and painful economic recovery from the pandemic and instead propelled us to the forefront of the global economy.

The problem is that many of the middle-out policies that made it past Manchin and Sinema almost never reached working Americans where they were. Sweeping reinventions of the American economy were very slow to deliver. A new plan to make it free and easy for Americans to file taxes was underway, but it was set to arrive this year—before the Trump administration killed the program.

After four decades of trickle-down leaders gleefully tossing wrenches in the gears of policy, the American people have come to expect government to deliver results very slowly—if it delivers at all. It doesn’t have to be that way. During the pandemic, our leaders delivered an enhanced unemployment benefits system virtually overnight. We safely delivered a Covid vaccine in about a quarter of the time that scientists predicted would be possible.

It’s up to our leaders to reform the system so that government once again directs its benefits quickly and efficiently to the American people. (For ideas on how to do that, I recommend revisiting our Pitchfork Economics interview with Hannah Garden-Monheit.)

And our leaders also need to stop allowing trickle-downers to put an expiration date on those benefits. When pandemic-era direct supports arrived, American consumer sentiment soared. When those programs ended, that same sentiment collapsed, and then some. Americans felt like they had the rug pulled out from under them, increasing economic uncertainty and adding to the feeling that government isn’t interested in supporting them.

The lesson that our leaders should take is that middle-out economics is wildly popular. But you’ve got to deliver as many benefits as quickly as possible to the broadest swath of American workers possible, and you’ve got to be relentless in your storytelling about why those economic benefits will help grow the economy for everyone.

You should immediately deliver slam-dunk policies like raising the minimum wage and increasing overtime protections, and lowering costs for American consumers. You have to repeatedly talk about why you’re devoting so much time and effort to improving outcomes for millions of working Americans, and not a handful of CEOs, and you have to explain why these policies are good for everyone. And then you have to defend those benefits with every ounce of your power.

We’ve seen this happen with an upstart mayoral candidate in New York City who shocked the neoliberal pundit class with an overwhelming victory because he never wavered from his message of investing in working New Yorkers. And we saw James Talarico win an upset in the Democratic Senate primary with a campaign that championed working Texans with upbeat, explanatory, on-point middle-out messaging.

Once you’ve proven yourself as a champion for American workers, you can start the hard work of building the long-term strategies that will grow the economy for the future and dig us out of 40+ years of trickle-down economic policies.

Toward the Glorious Future

The good news is that Joe Biden was America’s first anti-trickle-down president in nearly 50 years. The great news is that he won’t be the last. The Biden administration was full of young and brilliant thinkers who fully grasped the failures of the neoliberal leaders who sold out American workers in exchange for the creation of a handful of centi-billionaires.

While staffers for past administrations quickly grabbed high-paying jobs for big corporations, those Biden administration officials who understand that investing in working Americans is the only way to grow the economy are staying deeply invested in the political world. They’ll continue to shape policy for decades to come.

It’s sometimes lonely being an optimist in the world of political economy, but I know that the future of middle-out economics is bright. As someone who led a successful initiative to legalize same-sex marriage in the state of Washington at a time when many elected leaders mistakenly believed the issue was equivalent to a political death sentence, I understand that most big changes happen from the ground up.

That’s what is happening now. The American people got to middle-out before their leaders. A federal $15 minimum wage proved to be incredibly popular in polling years before national candidates embraced it, for instance.

It takes time for politicians to grasp the change that’s happening around them, but that’s what’s starting to happen. Now we’re seeing that political candidates who run on middle-out issues tend to win big.

The stage is set for a new class of middle-out true believers to bring a new economic paradigm to the American people. Those leaders understand that their mission is to completely undo the old trickle-down paradigm and replace it with an economy that truly grows for everyone.

It won’t be easy work, but it will be fulfilling. Every morning I wake up excited to be doing this work with all of you.

Be kind. Stay strong.

Zach