Podcast Summary: The Money with Katie Show
Episode: How to End Low Wage Work—Forever
Date: December 3, 2025
Host: Katie Gatti Tassin
Guest: Ben Glassner, Economist, Economic Innovation Group
Episode Overview
Katie Gatti Tassin explores the entrenched issue of low-wage work in the United States and discusses innovative policy solutions with economist Ben Glassner. The central focus is on the concept of a wage subsidy, a policy that could uplift millions of low-wage workers and potentially reshape the American labor market. The conversation works through economic myths, policy failures, market limitations, and why previous solutions have fallen short—while highlighting Glassner’s new research proposal and its bipartisan appeal.
Key Discussion Points and Insights
The Myth and Reality of Low-Wage Work
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Demographics and Misconceptions
- Most low-wage workers are women in caregiving, education, and service roles—contrasting with the political mythos of blue-collar male workers.
- “Low wage labor is disproportionately done by women, especially in caregiving, education and service roles. Think like home health aides, childcare workers, restaurant and retail staff. Those jobs are absolutely essential to the functioning of our economy.” – Ben Glassner [16:31]
- The narrative of the white male factory worker as the typical working-class American is and always has been largely inaccurate.
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Changing Sectors
- The service sector dominated even in the 1950s; manufacturing was never the main employment source for most.
Wages, Cost of Living, and Economic Sentiment
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Do Wages Really Keep Up?
- Median wages are at historic highs even after cost-of-living adjustments, but this does not capture the complex reality people experience, especially regarding housing costs.
- “The state of wage labor is better than it has ever been and still nowhere close to how good it could have been.” – Ben Glassner [08:54]
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Why the Disconnect?
- The “vibescession”: People feel worse off due partly to salient, rising costs like housing, but also because of inaccurate nostalgia and media portrayals.
- “We've believed that things were easier back then because that's the image we have presented to ourselves, which is just a perpetuation of some of the myths of our economy.” – Ben Glassner [13:55]
Structural Limitations and Policy Failures
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Why Have Markets Not Fixed Wages?
- Markets act as tools for matching buyers and sellers but are not designed to ensure social welfare outcomes like living wages.
- Power dynamics (monopsony) and lack of competition depress wages.
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Poor Targeting in Policy
- Minimum wage raises and earned income tax credits (EITC) often miss the most vulnerable or have conflicting effects, like encouraging labor force entry while not guaranteeing higher pay.
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Cost Inefficiency
- Many job creation programs (e.g., steel tariffs, incentives) result in excessive costs per job, sometimes nearing $900,000 per job.
The Wage Subsidy Proposal
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Concept and Design
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Originated by economist Edmund Phelps; updated by Glassner and co-author to focus on directly boosting workers’ take-home pay.
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Would pay workers (not firms) a government subsidy to close the gap between their actual wage and a set target wage, e.g., $16/hr—roughly 80% of the national median.
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Why Not Just Raise the Minimum Wage?
- Minimum wage acts as a hard floor. Some firms (especially small ones) can’t afford to pay it, resulting in fewer job opportunities.
- A wage subsidy compresses the wage distribution and increases competition for workers, including those with higher barriers to employment (e.g., disabilities).
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Targeting and Incentives
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The subsidy covers 80% of the gap between paid wage and target wage; ensures employers still have ‘skin in the game’ and prevents pure wage offloading.
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“If we just covered the full gap, then functionally we'd be lifting the wage floor up... doing a full fill in. Or we can say let's cover some portion of that gap and move them up the distribution.” – Ben Glassner [45:41]
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Direct payment to worker’s paycheck means the benefit is both visible (unlike tax credits) and less prone to employer misuse.
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Bipartisan Support
- The structure, conditional on work, appeals to both sides: it helps families, supports labor, and doesn’t pay people for not working.
Policy Comparison and Implementation Concerns
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Wage Subsidy vs. EITC & Other Tax Credits
- EITC delivers a lump sum at year-end and is less salient to workers’ immediate financial decision-making.
- EITC and CTC mix worker and family policy, leading to complex, sometimes diluted outcomes.
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Fraud Concerns
- Design tweaks (e.g., baseline wage requirement, payment directly to workers, not firms) reduce opportunities for abuse.
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Inflation and Rent-Seeking
- Supply constraints (especially in housing) need to be addressed alongside increased wages.
- “I don't think any of those concerns are reasons for us to say I should be afraid of boosting the incomes of low income workers.” – Ben Glassner [76:09]
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Cost
- Estimated at ~$12,800/year for a full-time $8/hr worker—a fraction of traditional job creation programs.
- EITC and CTC cost far more and yet are less targeted at strictly raising low wages.
Notable Policy Trade-offs
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Large Firms vs. Small Businesses
- Wage subsidy boosts small firms’ competitiveness; large firms (e.g., Amazon, Walmart) already pay above the floor targeted by the subsidy.
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Pragmatic Progressivism
- Accepting that some big companies will also benefit is seen as a necessary trade to achieve substantial progress for the intended beneficiaries.
Notable Quotes & Memorable Moments
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On the Market-Policy Relationship:
- “Markets are a very, very useful tool... but functionally they are still a tool... The second part is that policy is really very important.” – Ben Glassner [05:30]
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On Economic Nostalgia:
- “We have real problems. We should actually address the reality of it.” – Ben Glassner [15:21]
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On Power in Labor Markets:
- “We can't forget about competition... The only way that [firms] could succeed in cutting down that wage or kind of racing to the bottom would be by underpaying relative to what another firm might value that worker at.” – Ben Glassner [51:10]
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On Policy Design:
- “You want to clean and clarify what's worker policy and what's family policy.” – Ben Glassner [66:03]
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Katie’s Warehouse Anecdote:
- “I got in some trouble when I was 17. And I had to do community service... packing boxes in this Amazon warehouse.” – Katie Gatti Tassin [61:03]
Timestamps for Important Segments
- Defining and Deconstructing Low-Wage Work: [16:31] – [19:03]
- The State of Wage Labor in the U.S.: [08:50] – [13:54]
- Policy Failures and Targeting: [27:13] – [31:26]
- Wage Subsidy Proposal & Rationale: [37:53] – [43:49]
- Implementation, Incentives, and Minimum Wage Comparison: [48:48] – [53:31]
- Cost Discussion: [68:30] – [69:17]
- Fraud and Inflation Concerns: [69:19] – [76:09]
- Wrap-Up and Philosophical Takes: [76:09] – [78:08]
Tone and Style
The episode is accessible and engaging, mixing economic wonkery with relatable humor and candid confessions. Both host and guest are collaborative and curious, openly acknowledging the limitations of their fields and the thorny realities of policymaking.
Final Thoughts
The discussion concludes with a recognition that while no solution is perfect, pragmatic and thoughtful policy—like the wage subsidy—can leverage the current market system to achieve greater social goals. Glassner’s optimism is clear: “There’s still a lot of really good space to make big changes that can actually help people’s lives.” [07:46]
For listeners interested in policy innovation, economic justice, or practical solutions to persistent poverty and wage stagnation, this episode offers a comprehensive, hopeful blueprint—nuanced by real-world trade-offs and the unvarnished realities of American work.
