June 12, 2025 • 34 mins
Some of the most important forces at work in the US economy can’t be captured by the data, at least not entirely. Take the contribution of undocumented workers—an estimated 5% of the US workforce is undocumented, many toiling in sectors of vital importance to the economy, such as construction, agriculture and food services. With Donald Trump’s immigration crackdowns on the rise, reports are coming in that immigrants (both documented and undocumented) are staying away from their jobs. If the trend continues, the economic consequences could bring this part of the economy to the fore in a big way.
The less-visible economy is the theme of this week’s episode of Everybody’s Business from Bloomberg Businessweek. Hosts Max Chafkin and Stacey Vanek Smith look at the economic impact of immigrants with economist Kathryn Anne Edwards. Edwards says more workers (documented or not) are almost always a net gain for an economy, causing it to grow, expand and become wealthier.
Then what is going on underneath the inflation numbers? The government’s Consumer Price Index for May came out this week and the numbers look good. Prices are rising at a rate of 2.4%, quite close to the central bank’s “ideal” inflation rate of 2%. Of course, to many of us, it doesn’t feel that way. Some prices, especially unavoidable prices, like food, have risen enormously since before the pandemic and continue to sting. Max and Stacey talk to Bloomberg Businessweek columnist Deena Shanker about how pizza is a perfect economic indicator for this moment, and a window into the profound changes happening in the food industry.
Finally, the hidden economy inside carry-ons surfaces in a recent seizure by border security in India, which caught a man trying to smuggle dozens of deadly pit vipers. Stacey and Max discuss the underground economy for exotic animals: Whether it’s spiders, parrots or poisonous snakes, the market is worth billions of dollars a year.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:10):
This is Everybody's Business from Bloomberg BusinessWeek. I'm Max Chafkins and.
Speaker 3 (00:13):
I'm Stacy Vanicksmith. And today, Max, our show is about
all the things in the economy we cannot see.
Speaker 4 (00:21):
Yeah, the unseen forces that aren't always easy spot in
the data. I'm talking about disruptions to the undocumented workforce,
the high price of food that exists despite the better
than expected inflation numbers, and the.
Speaker 3 (00:34):
Hidden economy inside of our carry on bags.
Speaker 2 (00:37):
Huh.
Speaker 3 (00:38):
I will give you a hint. How is your parcel?
Tom So? Max, We got new inflation numbers out this week,
and people were watching these really closely because of Trump's
tariffs and the idea that inflation was going to start
reflecting the tariffs. Prices are going to be potentially going up.
But that did not happen.
Speaker 4 (00:55):
No, And you said, people watch it closely. I think you,
Stacey wat it's very closely.
Speaker 2 (01:00):
Watch it very closely.
Speaker 4 (01:01):
But the consumer price Index does tell us how much
prices are going up. It is the measure that we're
talking about when we talk about inflation went up two.
Speaker 2 (01:08):
Point four percent.
Speaker 4 (01:09):
That is like pretty close to the ideal amount that
is the amount that allows Jerome pal to lay down
and sleep peacefully at night.
Speaker 3 (01:17):
It really is true, and it also feels very off
to me just as a person in the world, because
prices still feel really high, and it still does feel
like prices are rising, but a lot of that is
because certain things that we interact with a lot have
gone up more than other things, like food. Food has
risen a lot.
Speaker 4 (01:37):
And we have for you listeners and everybody's business investigation
of an important sector in the food economy, the pizza sector.
Speaker 3 (01:44):
It is all important deep.
Speaker 4 (01:46):
Slice Index, and we will talk to Dina Shanker, Bloomberg
Food columnist. She writes all about this and other aspects
of the food business. Later on the show.
Speaker 2 (01:55):
Also, Stacy, you and Dina went on a little field
trip we did.
Speaker 3 (01:58):
We went to check out some New York's shops of
different prices to see what people thought about the price
of food and things like that. One place in particular
is called Lendustree. It's a very fancy pizza place that's
very hip right now, big line down the block. The
slices there quite expensive, like they start at five dollars
and they go from there. So I thought it was
a good place to ask people like how do you
(02:19):
feel about paying this much for pizza and about food
prices in general? And here's what they said. We got
the big Jam pizza. We love things. How much is
the fig pizza? What was it about?
Speaker 5 (02:30):
Six? I think this is really expensive, but it's.
Speaker 3 (02:33):
Still lunch for under ten dollars. Yeah that's true.
Speaker 4 (02:35):
Yeah, I mean for average people coming in here, like
they would probably be taking aback a little bit.
Speaker 2 (02:40):
Seven eight dollars slices. It's a bit much.
Speaker 4 (02:43):
Maybe they could bring it down at least a buck more,
but I'll pay for something good.
Speaker 6 (02:47):
I'll pay a little extra.
Speaker 2 (02:48):
We just had pizza an hour back in line for
some more pizza.
Speaker 3 (02:51):
Oh you just ate pizza here and you got in
online again? Yeah, like it was that good?
Speaker 2 (02:55):
Yes?
Speaker 4 (02:56):
Or visiting from Texas so he's never had pizza from
this area?
Speaker 3 (03:00):
What did you think about five dollars a slice?
Speaker 5 (03:02):
Used to pain quote nine or ten dollars in Texas
for a Dominos people, it's Domino? Yeah?
Speaker 6 (03:08):
Yeah?
Speaker 3 (03:09):
What is your like? Go to cheap food?
Speaker 1 (03:11):
I really love on a gury like the rice triangle rolls.
I feel like you can get like a good on
a gurry for like three dollars.
Speaker 3 (03:18):
Do you have a go to cheap meal in New
York little.
Speaker 2 (03:21):
Towns good noodles, good noodles. You can get a good
meal for like eight ten bucks.
Speaker 5 (03:25):
You know, I mean, I still love a bagel and
cream cheese with tomato.
Speaker 3 (03:27):
I think that would be my go to cheap lunch.
Speaker 2 (03:31):
I don't know fig Jam Pizza is.
Speaker 4 (03:34):
I'm not sure I can endorse any part of this clip,
although I have to say some good ideas for inexpensive
for cheap food.
Speaker 3 (03:41):
It's an expensive city and eating particularly can get really expensive.
So as a New Yorker, you have to have little
hacks of like cheap meals that you can get.
Speaker 4 (03:48):
Yeah, and the bagel with cream cheese, right, although bagels
are getting more expensive.
Speaker 2 (03:52):
Too, Stacey.
Speaker 4 (03:56):
The big news this week are these protests in Los
Angeles and now have spread to other cities that are
in protests of the Trump administration's immigration policies.
Speaker 2 (04:05):
There are a lot of issues.
Speaker 4 (04:06):
Here, a lot of issues that are getting a lot
of media attention around Trump's calling in the military and
the Democratic response. But I wanted to talk about the
underlying issue, which is the Trump administration's immigration policy and
these raids and what it means for the economy and
to do that, we're bringing in Catherine Edwards. She is
(04:26):
a labor economist, a Bloomberg Opinion contributor, and a host
of the excellent podcast Optimist Economy. Catherine, thanks for being here,
Maudi All and good morning. Just to start and just
to create some context for this conversation, Catherine, how important
are immigrants to our labor market, whether we're talking about
immigrants who are documented or undocument or whatever, the people
(04:48):
that Donald Trump is sort of going after, what do
they mean to the economy?
Speaker 5 (04:52):
What in five workers in the US is foreign born?
And I think you might just let that statistic sit
with you for a second, that when we talk about
these type of discriminate and indiscriminate attacks on people who
were not born in the United States, you were talking
about roughly twenty percent of the US workforce. Now, of course,
they're not randomly distributed throughout the workforce. They're not randomly
(05:13):
distributed throughout the country. They're concentrated in certain cities and
certain sectors and in certain occupations. And that twenty percent
average can reach as high as fifty sixty eighty percent
in certain areas, and so you're basically risking parts of
our economy's ability to function by threatening its workforce.
Speaker 3 (05:32):
I think some of the industries you're talking about are construction, agriculture,
food service, especially things like meat processing, are like just
huge numbers of foreign born workers, most of them documented,
some undocumented too.
Speaker 5 (05:44):
Right. It's funny documented and undocumented isn't necessarily the right.
It gives you the wrong intuition. Even people who are
not do not have legal authority to be in the US,
have lots of documents, you know, they pay taxes, they
get pay stubbs, they pay into Social Security, A lot
of them own property and they pay property taxes, and
they contribute to the economy, and they have lots and
(06:05):
lots and lots of documents, but they do not have
legal permission to be in the United States at the
current moment, and so deciding what is the exact share
can be difficult. So we know, for example, that there
are a quarter of a million farm workers in California,
which is where we get a lot of our food,
and even the University of California and mer set has
(06:26):
really struggled to come up with a good estimating strategy,
but puts it around half would be not having legal
permission to be in the United States at least. Oh wow,
it's not easy for researchers to figure out which is
I think while you're seeing so much protests in response
to these arrests, because it's also not often easy for
ice officers to figure out. And so they have been
chastised for violating the civil rights of foreign born non
(06:49):
Americans with authority without authority, as well as Americans because
they're just indiscriminately picking up people.
Speaker 4 (06:55):
So Trump, of course, ran I think you said it
all the time. He's going to have the biggest mass deportation,
the most deportations in history. You're hearing Carolyn Levitt, the
Press secretary, repeat that even now, and it doesn't seem
like they were that effective at actually finding people who
were not here legally with legal status. They claim that
(07:16):
they had deported sixty six thousand people as of the
first hundred days. It's about six hundred people a day.
That's like not that different from where the Biden administration was.
And like, I think part of the context for these
protests is that the Trump administration, Stephen Miller in particular,
sort of got mad and told these ICE agents they
needed to start deporting more and more people. There was
(07:38):
a home depot raid in Westlake in Los Angeles, and
that was the kind of spark that spurred these particular protests.
This kind of like seemingly indiscriminate and not necessarily the
most competent approach to immigration enforcement.
Speaker 5 (07:52):
They're either going to miss by not arresting that many people,
or they're going to miss by arresting Americans. And you know,
the effect that this could all have on the labor
market is not going to be from not just where
they hit, but where they miss.
Speaker 2 (08:06):
Well.
Speaker 3 (08:06):
One I think consequence we're already seeing of this is
it seems like a lot of people are staying home,
like there's there is already apparently some evidence that absenteeism
at work, both from documented and undocumented workers is kind
of rising. I think people are afraid to go to
work in some instances. What kind of impact can we
expect that to have on the economy, on the workers themselves, Oh.
Speaker 5 (08:29):
It's going to be myriad, But it's worth noting that
we haven't really been in a place like this before,
and so we can follow our intuition of what we
think may happen, but it's all short of a prediction
because we're in such new territory. So how it'll affect
we don't know. But you know, a really good rule
of thumb is that the size of the US economy
is a function of the number of people working in it.
(08:50):
It's just number of workers time, their productivity equals economy.
So losing workers is not something we can necessarily shrug
off as like, oh, it's just a million immig it
doesn't matter. It matters. It always matters. Workers matter to
our economy, and it doesn't matter where they come from
if they're participating already.
Speaker 2 (09:08):
Catherine, what are we seeing actually in the numbers thus far?
I mean, it's not much, right.
Speaker 4 (09:13):
You're really having to like kind of squint and look
for clues of where this might be going exactly.
Speaker 5 (09:18):
It'll take a while to show up and it'll probably
be small. The golden rule when dealing with policy from
this administration is that they are much more bark than bite.
This is like the Department of Government Efficiency comes in
to destroy federal government and make it into the small
shop that it's meant to be. But of course government
spending goes up, and so they've fired tens of thousands
of federal workers. They're currently rehiring many of them. Like
(09:40):
this is a lot of pr campaign and get people mad,
and the impact of their policy ends up being muted
because it is in fact so weak and ineffectual, so
it's much louder than it is effective. I think that
that puts people like us who are trying to understand
what the effects of these policies are into a difficult
(10:01):
spot because of course, there's the effect of how grotesque
the policy is when announced, and there's the effect of
the policy as enacted, and you know, rather intentionally, there's
a massive amount of daylight between those two things. I
don't know how much it'll show up, because I don't
know how many people they're actually going to affect.
Speaker 3 (10:19):
I mean, as Max mentioned, this is something that Trump
really campaigned on. And I think one of the big
reasons behind this, and one of the reasons that this
is such an emotional issue for so many voters, I think,
is that there's a perception that immigrants take jobs that
it makes it harder for citizens to find a job,
especially in certain sectors. Can you talk a little bit
(10:40):
about that from an economics point of view, Like, what
happens when you do have let's say, you know a
lot of undocumented workers come into an economy.
Speaker 5 (10:49):
You know, even in the most kind of simple, primitive,
two dimensional version of an economic model that we learn
and undergraduate the effect of immigrants on economy, it's twofold one.
Speaker 3 (11:03):
They grow the economy, is that like by getting haircuts
and buying and paying rents and going out to eat
and stuff.
Speaker 5 (11:09):
Yeah, it's like, do you have more people in your
economy versus less? More people equals bigger economy almost every time.
More workers equals a bigger economy every time. So there
are more people, they're going to consume more, they're going
to demand more, they're going to spend more than it
would be without them. So just take twenty percent of
the US workforces is about thirty four million people, you know,
(11:30):
and just delete them from our economy. In like a
theoretical sense, the economy is much smaller.
Speaker 3 (11:36):
What happens if an economy gets smaller.
Speaker 5 (11:38):
Well, it depends on how you go from big to small. Typically,
when you have things like shortages you're not able to
produce goods, it can spiral in really bad ways like
For example, if a quarter of a million people, you know,
get food out of the ground in California and ship
it across the US and half of them are gone,
a lot of that food is going to become a
(11:58):
lot more expensive, and so you're shrinking the economy as
you're making certain key goods scarce. That's different from every
year a certain small share of workers retires and are
placed at a smaller rate because their consumption is changing
in a way that doesn't put pressure points on key
parts of the economy. So there are ways to have
an economy get smaller due to a smaller population that
(12:20):
aren't catastrophic. And yeah, then there are ways to really
just take a wrecking ball to some pretty key parts
of our economy that can be can be very bad.
But I would be remiss if I didn't say that
immigrants make the economy bigger. Bigger is better. That part
of economics is pretty easy to understand. The question of
where the deleterious consequences of immigration come in is not
(12:41):
through jobs but through wages. So you know, your regular
person on the street would say, oh, but they take
our jobs, and an economists would say no, if you're
growing the economy, you're creating more jobs.
Speaker 2 (12:53):
It's not.
Speaker 5 (12:54):
We don't have a fixed number of jobs in our economy.
It responds to the size of our population and the
demand of people inside of it. So where there's no
rationing of jobs, there's no like fixed number of slots.
The effect of immigrants could be their effect on wages,
where if you have a big supply of people who
are willing to take lower wages, they might drag down
wages for the bottom of workers. And this is something
(13:17):
that economists have really struggled to figure out whether or
not the boon to the economy that comes from immigration, essentially,
you know, outweighs the negative pressure on wages that come
from higher labor supply.
Speaker 4 (13:29):
So, Catherine, I just wanted to ask, we don't really
know what's going to happen, Like you said, often the
Trump administration is more bark than bite, very concerned about
like sort of spectacle and not not maybe to put
it generously, like not as concerned about execution, but a
course spectacle could scare people, right, like these images on
TV could be enough. What signs are you looking at
(13:51):
to see if these raids or even the threat of
raids are having an effect. I'm kind of curious, like
what you're going to be watched for over the next
you know, a couple months into the next year or so.
Speaker 2 (14:05):
Yeah.
Speaker 5 (14:05):
The chilling effect is what we call this where you
don't have to be affected directly by the implementation of
a policy to have it change your behavior. And we've
seen this a lot within immigrant households and things like
applying for Medicaid and applying for SNAP, Like you're eligible
for a benefit, but you're afraid to apply for it
because you think that maybe like your uncle would be deported.
(14:26):
This happens a lot in the public programs space, big
chilling effects. But at the same time, we need these workers,
and so the potential for a chilling effect to drive
them from the labor force and to keep them at
home I think is definitely palpable in the short term,
but in the long term, where there's demand, there's money,
and they can make money going to work, and so
(14:46):
it's hard to say that fear will keep them at
home and without income when there's income to be made,
and that's why a lot of people come to the
US anyways to work. So I think there could be
a chilling effect, but I guess I'm a little skeptical
that it would be massive because the need for income
on their hand is so high, and the need for
our economy to have those workers is also high, and
(15:09):
that will probably, you know, Trump, whatever noise is being
made from the White House.
Speaker 2 (15:15):
Catherine Edwards, thanks for being here.
Speaker 3 (15:17):
Thanks Catherine, tears.
Speaker 2 (15:22):
So Max.
Speaker 3 (15:22):
Earlier in the show, we were talking about food and
food prices and you know, some of our favorite cheap
foods and maybe aren't so cheap anymore.
Speaker 4 (15:30):
Yeah, and we have a great guest on to talk
about this. BusinessWeek columnist Dina Shanker.
Speaker 2 (15:35):
She is here.
Speaker 4 (15:36):
She's been doing some heavy duty reporting on the pizza economy. Dina,
thanks for being here. Why are we talking about pizza?
Speaker 1 (15:46):
Thanks so much, Max, So, to me, pizza is like
a go to meal for families, and it is quick,
it is easy, most people like it, kids eat it,
and it's cheap. And so if you're a pair and
you're scrambling and you got to get dinner on the table,
it really doesn't matter where you fall on the economic spectrum.
(16:06):
Sometimes you're like, I don't want to spend a whole
lot of money just on dinner and pizza.
Speaker 7 (16:11):
Is often the answer to that.
Speaker 4 (16:13):
Yeah, I mean, pizza is pretty much always the answer
for a while, I think it was like forty or
fifty percent of my total caloric intake. But Dina, you're
reporting shows that pizza prices, whether we're talking about slices
or paes, takeout or delivery, those prices are higher.
Speaker 7 (16:30):
So from Q three twenty twenty three to Q three
twenty twenty four, across the board, across restaurant segments, pizza
prices were up twelve percent, which was the biggest increase
from the different menu items that Data Central looked at.
Speaker 4 (16:43):
Data Essentral that's the data provider you side in the story.
But just to clarify, that twelve percent price increase is
just year over year, I assume it went up to
some degree from like twenty twenty to twenty twenty three.
Speaker 1 (16:55):
Yeah, I mean, pizza has gone up with everything else,
And of course, ever ingredient has its own set of complications.
Tomato paste, for example, has gone up a lot, partly
because pizza got so popular during COVID.
Speaker 3 (17:10):
Stretched thin the supply of tomato paste.
Speaker 1 (17:13):
Basically paste is like in every sauce, they all use paste,
So every tomato product outside of like an actual tomato
is probably going to have paste involved, and that supply
crunch during COVID force prices to go up and they
are still elevated.
Speaker 4 (17:30):
Yeah, you got the tomatoes getting more expensive. You got
imported dairy products, as you like to say, Stacy's kind
of all of the economic factors we talk about in
one bite.
Speaker 3 (17:41):
That's true because it has a lot of pizza has
a lot of different ingredients. You've got your grains, you've
got your meats, you've got your dairy. But Dina, you
were also looking at pizzas that were on the quite
less expensive end of things, specifically Papa John's. Why are
their sales down? Can you explain why they're not doing
well right now?
Speaker 1 (17:57):
Yeah, So that's what raised my eyebrows at first, was
seeing Papa John's sales go down, because that is like
a go to option for any parent, whatever income level
you are. And so Papa John's, Domino's, and Pizza Hutt
all saw.
Speaker 7 (18:13):
Their sales go down.
Speaker 3 (18:14):
The one little.
Speaker 1 (18:17):
Piece of good news was domino said that they saw
their carryout business actually go up a little bit, and
it's because it's less expensive, so you don't.
Speaker 7 (18:26):
Have to pay that delivery fee or.
Speaker 1 (18:28):
Any other fee of the tip, et cetera, and so
they saw an actual increase in their carryout. So what
we're seeing is people are making these decisions based on price,
and all the prices at all the restaurants have all
gone up. This is true and fast food, it's true
across the board, but pizza chain prices have gone up
a little bit more actually than the other fast food segments.
Speaker 3 (18:49):
Well. Interestingly, like here in New York, there's this culture
of the dollar pizza slice. This was a thing forever,
these little shops and they don't usually even have anywhere
to sit. You just walk in, you give them your dollar,
they hand you your pizza, and you like walk out
and eat it all over the place. In Midtown this
used to be. There aren't as many of them, I think,
maybe because a lot of the factories you're talking about,
But do you know, we went to one.
Speaker 1 (19:11):
We are standing outside of Percy's Pizza, one of the
last dollar slice pizzaias in the city.
Speaker 7 (19:17):
There are a dying breed.
Speaker 1 (19:19):
The truth is that food inflation has hit everything, and
so even if you're just a regular old slice joint,
your costs have gone up significantly in the past several years,
which makes a dollar slice very special.
Speaker 3 (19:33):
Yes, all right, let's go in and get a dollar slice.
Let's do it.
Speaker 1 (19:38):
Hello, Can I just get one plain slice?
Speaker 3 (19:41):
Please?
Speaker 7 (19:42):
Yes?
Speaker 1 (19:44):
How much dollars?
Speaker 3 (19:46):
I thought it was a dollar slice place? Okay, I
had a dollar slice place, so I had got like
tripled in price.
Speaker 1 (19:55):
I should also just add that, in addition to the
food costs going up, you know, they're lay costs have
gone up, their rent has gone up, So these places
are dealing with a whole bunch of costs that are
growing up.
Speaker 4 (20:06):
You know, I grew up in and around New York,
and dollar slices are not that old.
Speaker 2 (20:11):
They really date to like post Great Recession.
Speaker 4 (20:14):
Like when I was a kid, a piece slice pizza
cost like a dollar fifty, and they actually went down
in price as part of this marketing gimmick that these
pizza places started. You know, like I said, ten fifteen
years ago, it.
Speaker 3 (20:25):
Was a marketing gimmick that started a movement, that.
Speaker 2 (20:27):
Started a movement that obviously people got really excited about it.
Speaker 4 (20:29):
But it does make me feel like there are multiple
pizza markets right, and it's a little bit weird for
New Yorkers to talk about pizza, because like, we have
a lot of options, and I would never dream of
ordering from Papa John's or Dominoes because I have this place, Louise,
and I ordered a pizza deliver from Louis the other
day was eighteen dollars and it was freaking delicious, And
it might have been sixteen dollars a couple of years ago,
(20:51):
but still a very good value. And then you have
these kind of like super high end luxury pizza places.
Our pizza economy is much more diverse than in most
of the country.
Speaker 3 (21:01):
Yeah, it seems like the lower end pizza places that
are charging less. I don't know about where Louis falls
and this spectrum max, but it feels like they are
going to be especially squeezed. Is that right, because of
inflation and labor costs and everything. Yes, I think running
a restaurant.
Speaker 1 (21:18):
In this city is always really difficult, and I imagine
that every time you raise your prices, you know you're
going to lose some customers.
Speaker 7 (21:25):
And I mean three.
Speaker 1 (21:27):
Dollars from a dollar that was a shocking hike to me.
Speaker 3 (21:32):
Yeah, But then we went down the street. Dina had
found us another restaurant to your point, Max about fancy
pants pizza, and it was this very hip place that
you've heard about. Talk to us about where we went next.
Speaker 1 (21:46):
This place the industry, But it was recommended by the
Scott's Pizza Tour guide.
Speaker 3 (21:52):
Oh Scott himself. Yes, this is the very famous New
York pizza guide. He takes people on tours of pizza.
Speaker 1 (21:58):
Yes, it was in the New Times recently. Is one
of the best pizza places in the city. So we
went and I got two slices. I got the margarita,
which is essentially like the plane and the barada slice.
Speaker 3 (22:09):
And the margarita was good.
Speaker 1 (22:10):
I took a bite and yeah, that's good. But then
I took a bite of the barda. It was amazing.
Speaker 3 (22:16):
Yeah, you were having like a transcendent moment of barrata. Now,
to be clear, these piece of slices were a lot
more expensive.
Speaker 5 (22:24):
They were also very popular.
Speaker 3 (22:26):
We waited in line for like ten minutes before we
got in the shop. There was this big long rope
down the sidewalk and everything, okay.
Speaker 4 (22:32):
So cheap pizza, as we're hearing, not so cheap anymore,
and the fast food spots that sell it are seeing
sales declines are really struggling, but then expensive pizza is
doing really well.
Speaker 2 (22:44):
Can you explain this?
Speaker 1 (22:45):
No, that's actually what's happening. It's the expensive pizza is
doing well. This is what Mike Haalin of Bloomberg Intelligence
calls the K shaped economy. So people on the top
of the K are doing well, they're still spending, while
the bottom of the K is not. And I think
we'll have to just kind of wait and see how
this plays out considering tariffs and economic uncertainty.
Speaker 3 (23:10):
Do you feel like the K shaped model is something
you're seeing in other food categories? I mean, are we
seeing kind of a split of like either super high
end food or like extremely inexpensive. Is the middle disappearing?
Oh totally.
Speaker 1 (23:22):
We're seeing it in the supermarket across the board at
the top.
Speaker 7 (23:26):
It's called premiumization.
Speaker 1 (23:28):
So if you're looking for like a super fancy macaroni
and cheese, like Annie's mac and cheese used to be
like the fancy mac and cheese, but now there's good
Oles mac and cheese and they have fiber and high
protein and it's pretty good, but that costs more than Annie's,
or you're going all the way down to private.
Speaker 3 (23:44):
Label do not pass craft. Well, that's the.
Speaker 1 (23:47):
Thing is like, then Kraft mac and cheese sees sales
dip because they're certainly not high end and they're not
on the low enough end either, And so that's happening
across the supermarket. And I think as people are paying
more attention to health and what they eat and where
food comes from and all of that stuff, they're willing
to spend more on higher end foods. And some people
(24:10):
would even say, I will spend the extra on the
fancy mac and cheese, but then I will get the
private label cereal.
Speaker 7 (24:17):
People are being a lot choosier at the supermarket.
Speaker 2 (24:20):
Okay, back to pizza, sales are on the decline. It's
too expensive.
Speaker 4 (24:26):
What are people replacing, you know, the slice or the
delivery pie with. Are they just like cooking more at home?
Speaker 1 (24:33):
Generally speaking to people that we're eating fast food and
are trading down or eating at home more because it's
less expensive.
Speaker 4 (24:39):
It seems like there's an economic story here, maybe also
just a cultural story. And I feel like so many
of the weird trends that have happened over the last
couple of years, like you got to ask yourself, did
the pandemic somehow do this to us, Like did we
just eat too much in pizza from like twenty twenty
to twenty twenty two, and now we're just like all
sick of it and we're and they're like cooking chicken
(25:00):
nuggets or whatever or something else, just anything else other
than pizza, well unless it's really expensive pizza.
Speaker 3 (25:07):
Well exactly. I mean I got really sad about this
because when I first came to New York, I ate
a lot of dollar slices because you could kind of
turn them into a meal and like two dollars and
they were huge slices. So Dina, after we parted ways,
I went on this website called Slice Tracker that was
apparently a map of all the dollar slices in the city,
(25:29):
and it was apparently quite outdated, because I went to
several of them that were just closed, like out of
business closed, and I thought, this is it. The dollar
slice is dead, that it is no more. But then
I finally found one. It was my fourth try. It
was the space called two Bros. Pizza in Midtown, and
I think this is maybe the closest thing to the
(25:52):
last of the dollar slices. What are you eating right now. Sorry,
you're in the middle of eating a dollar fifty cheese
slice of pizza. Do you come here a lot? Yeah,
I work in the area. Do you remember when it
was a dollar?
Speaker 7 (26:04):
I do, yes, I was in school and up until
I think pre pandemic, it was a dollar.
Speaker 3 (26:08):
How did you feel that it's a dollar fifty? It
was a surprise.
Speaker 5 (26:12):
It's still a nice, quick, cheap meal, but it also
slightly makes it more inconvenient.
Speaker 3 (26:16):
Because I can't just like have the dollar bills. But
does it feel like a good deal too still?
Speaker 6 (26:21):
Or I think that convenience still makes it feel like
a good deal to me, especially when you are around the corner.
Speaker 4 (26:26):
The slices are like six dollars each, So yes, yes,
I do.
Speaker 5 (26:30):
It gonna tie me over until like ten o'clock tonight.
Speaker 3 (26:33):
Oh really, yes? Maybe the protein bar in my bag concluded.
Speaker 2 (26:37):
Oh god, that's bleak.
Speaker 3 (26:39):
There's nothing bleak about that. I was thrilled. I mean,
And also she said the six dollars slices around the corner.
I mean, but that was the closest thing I could find.
I think the dollar slice might be dead. So Max,
we talk a lot about parts of the economy that
I think are pretty visible job market prices things like that,
But there are whole economies that you and I never
(27:01):
really see.
Speaker 2 (27:03):
Yes, I have no doubt that that's true. And that
seems like a great segue to our underrated story, Stacy,
I think, So what is it? Here? We go?
Speaker 3 (27:10):
Max are entrain to This economy begins at an airport
in Mumbai where a man is pulled aside because in
the bag he is trying to check it is discovered
to be full of snakes. Forty seven venomous vipers were
concealed in his luggage, and not just that, also some
(27:33):
Asian leaf turtles and like some other animals as well,
hidden in this man's carry on bag. Okay, he was
smuggling it from Thailand.
Speaker 4 (27:41):
Carry on bag. Yes, Okay. My first thought was, how
are they in there? Are they just in there kind
of wiggling around with his underwearments?
Speaker 2 (27:51):
Are they like each like a little reptile cage?
Speaker 3 (27:54):
Are like twentle bags and like sticks stowed in Yes,
from what I could tell. But this is part of
this whole economy that's estimated to be worth like almost
potentially ten billion dollars a year. They don't know because
a lot of it's underground, but people smuggling animals, especially
birds are a big one, but also reptiles, insects like
poisonous spiders gets smuggled. A lot of them are endangered.
(28:16):
You can't take them out of the country, but there's
a big black market for them, and so these things
are getting taken over the borders all the time. The
stories they are wild stacy.
Speaker 4 (28:26):
What is driving this industry? I mean, I can think
of a few different potential markets. I guess for rare
exotic animals. If you want a pet viper, I suppose
could be a possibility. Skins I think sometimes these snakes
are smuggled for that. But also like traditional medicine, Chinese
medicine seems like a big part of the exotic animal trades.
Speaker 3 (28:48):
Yeah, pangle ins especially, that's one of the top smuggled animals,
and they are not alive usually when they're smuggled in.
There really are kind of two branches of this of
this economy. One is for pets and sort of the
exotic animal trade, and the other one is medicinal for
traditional healing remedies and things like that. But it is
(29:08):
a booming business. People want this stuff.
Speaker 2 (29:11):
I have two thoughts on this.
Speaker 3 (29:13):
Yeah, one is what are your thoughts?
Speaker 4 (29:14):
It's so impressed by the Mumbai Customs authorities that they
were able to get this guy because like, how did.
Speaker 2 (29:20):
You read that they.
Speaker 3 (29:24):
Pulled me aside every single time because of my microphone
looks weird?
Speaker 2 (29:28):
All right?
Speaker 3 (29:28):
Is the guy threw it with forty snakes?
Speaker 2 (29:30):
I read that they pulled him aside because he looked nervous.
Speaker 4 (29:33):
Second thing, and this is I guess also related to
my general sense of admiration for the people who serve
us and the Mumbai Customs authorities. You know how in
the wire when when police do a big drug bust
they put like the dope on the table, you see,
like a big pilot cocaine and the drug. It's like
like shows that the police are doing their job, like
we've got the center control the Mumbai Customs Authority on
(29:54):
their ex account.
Speaker 3 (29:55):
Yeah, they tweeted it.
Speaker 6 (29:56):
Tweeted like a bit like a bunch of photos of
this snakes and like one of them is just like
a glass bowl or maybe it's plastic and it's just
like a bunch of green snakes like wriggling around like
as if it were like a bag of drugs or
something you brought.
Speaker 2 (30:09):
Up the money.
Speaker 4 (30:10):
But also like this is just like one of the
many ways that like, I don't know, globalization gets weird,
Like you get a lot of people with more money,
easy cheaper air travel, innovations in luggage I suppose to allow.
Speaker 2 (30:22):
You more reasonly, Yes, an ailer thing, yeah.
Speaker 3 (30:25):
But also because of the Internet and things like that,
it's so much easier to advertise and to find a
market for that. Like you, I think it sort of
widens the demand for something like this and enables people
who aren't you know, super connected into some whatever mafia
network to be able to sell these things too. And
from what I can tell, some of these operations are
kind of fly by night. And anyway, it is sad
(30:47):
because you know, there are people working so hard to
protect these animals, to preserve their habitats, and then you've got,
you know, some guy with forty snakes in his pants.
Speaker 4 (30:55):
All right, listeners, if you have any thoughts about smuggling
rare wildlife, or about other underrated stories that we should
be talking about, really anything we should be talking about
on this podcast, send us an email. Everybody's at Bloomberg
dot net. Everybody's with an s at Bloomberg dot net.
We're beginning a lot of notes from readers, and it's
(31:15):
really awesome to see the things that you're kind of
interested in. We're definitely going to hit some of these
as we go forward. Just want to shout out Rudy
from Omaha send us a really great note Stacy about
kind of the way the tax cuts would impact his family,
and just pointing out that like when you get rid
of the child tax credit and the increase in the
(31:37):
standard deduction for married couples, those are two parts if
it weren't renewed, that would expand his tax bill by
like five thousand dollars or the tax bill for his.
Speaker 2 (31:45):
Family, which you know is significant.
Speaker 4 (31:47):
I think helps explain why people feel like this thing needs.
Speaker 3 (31:51):
To the tax us need to be extended, even if.
Speaker 4 (31:53):
They're worried about the deficit. Now, I want to say
one other thing, which is that last week, Stacy, you
made this like last minute poetry challenge, tree reward or
whatever for people who left a review I did.
Speaker 3 (32:06):
Max will send you a personalized haiku on the economic
and business topic of your choice. We need to offer
this as an economic show. We have to offer people
an economic incentive, and.
Speaker 4 (32:17):
I'm happy to say critically minded that is your username.
Speaker 3 (32:21):
The show, critically mind. It doesn't sound like critical positive reviews.
Speaker 4 (32:27):
Critically minded, and I hope that people are listening to
the show will follow critically minded as example and leave
us five star reviews either on Apple or Spotify or
anywhere else.
Speaker 2 (32:36):
Tell your friends here it is. You're ready to say something?
Speaker 3 (32:38):
Okay, yeah, because I challenge you to write a haikup
based on this review.
Speaker 4 (32:41):
This is so bad and I swear I did not
use chat GPT for this. Okay, critically minded with the underscore,
you came here for the banter like wind through the Trees.
Speaker 3 (32:55):
That I'm actually like, kind of chills, Max got chills.
Speaker 4 (32:59):
You have to look at the review to see what
I was doing there. But critically Minded came for the
banter and critically minded.
Speaker 3 (33:06):
And stayed for the trees.
Speaker 4 (33:08):
Well that I just made up because I read that
Hai Koozer supposed to have nature in them.
Speaker 3 (33:11):
That's true, that is true. I'm actually very impressed. Is
this something that you will continue to do if people
write reviews? Will you be willing to write? Should we
switch to a lot?
Speaker 2 (33:21):
I'm happy.
Speaker 4 (33:21):
I think limericks are fun, although this is a family
show and so I think.
Speaker 3 (33:26):
Not everyone has to be from Nantucket. The show is
produced by Stacy Wong. Magnus Hendrickson is our supervising producer,
Amy Kean is our editor, and Brendan Francis Noonham is
our executive producer. We get engineering help from Blake Maples
(33:48):
and Dave Percelf fact.
Speaker 2 (33:49):
Checks, and Jeff Muscus provides us with other help.
Speaker 3 (33:52):
Yes, very valuable editorial insights. Thank you Jeff and Sage
Bauman is the head of Bloomberg Podcast. Thank you, Sage.
And if you have a minute, please rate and review
the show. It means a lot to us. Max will
write you an ode Critically Minded.
Speaker 2 (34:06):
You can leave reviews on other platforms as well.
Speaker 4 (34:08):
Feel free to go to Spotify and give us some
stars after you've done it on Apple.
Speaker 3 (34:12):
Critically Minded has done so much already. This wrote them
a poem that's true.
Speaker 4 (34:17):
If you have a story that should be our business,
email us at Everybody's at Bloomberg dot net. That's everybody
with an s at Bloomberg dot net. Thank you for listening,
and we'll see you next week.
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:10):
This is Everybody's Business from Bloomberg BusinessWeek. I'm Max Chafkins and.
Speaker 3 (00:13):
I'm Stacy Vanicksmith. And today, Max, our show is about
all the things in the economy we cannot see.
Speaker 4 (00:21):
Yeah, the unseen forces that aren't always easy spot in
the data. I'm talking about disruptions to the undocumented workforce,
the high price of food that exists despite the better
than expected inflation numbers, and the.
Speaker 3 (00:34):
Hidden economy inside of our carry on bags.
Speaker 2 (00:37):
Huh.
Speaker 3 (00:38):
I will give you a hint. How is your parcel?
Tom So? Max, We got new inflation numbers out this week,
and people were watching these really closely because of Trump's
tariffs and the idea that inflation was going to start
reflecting the tariffs. Prices are going to be potentially going up.
But that did not happen.
Speaker 4 (00:55):
No, And you said, people watch it closely. I think you,
Stacey wat it's very closely.
Speaker 2 (01:00):
Watch it very closely.
Speaker 4 (01:01):
But the consumer price Index does tell us how much
prices are going up. It is the measure that we're
talking about when we talk about inflation went up two.
Speaker 2 (01:08):
Point four percent.
Speaker 4 (01:09):
That is like pretty close to the ideal amount that
is the amount that allows Jerome pal to lay down
and sleep peacefully at night.
Speaker 3 (01:17):
It really is true, and it also feels very off
to me just as a person in the world, because
prices still feel really high, and it still does feel
like prices are rising, but a lot of that is
because certain things that we interact with a lot have
gone up more than other things, like food. Food has
risen a lot.
Speaker 4 (01:37):
And we have for you listeners and everybody's business investigation
of an important sector in the food economy, the pizza sector.
Speaker 3 (01:44):
It is all important deep.
Speaker 4 (01:46):
Slice Index, and we will talk to Dina Shanker, Bloomberg
Food columnist. She writes all about this and other aspects
of the food business. Later on the show.
Speaker 2 (01:55):
Also, Stacy, you and Dina went on a little field
trip we did.
Speaker 3 (01:58):
We went to check out some New York's shops of
different prices to see what people thought about the price
of food and things like that. One place in particular
is called Lendustree. It's a very fancy pizza place that's
very hip right now, big line down the block. The
slices there quite expensive, like they start at five dollars
and they go from there. So I thought it was
a good place to ask people like how do you
(02:19):
feel about paying this much for pizza and about food
prices in general? And here's what they said. We got
the big Jam pizza. We love things. How much is
the fig pizza? What was it about?
Speaker 5 (02:30):
Six? I think this is really expensive, but it's.
Speaker 3 (02:33):
Still lunch for under ten dollars. Yeah that's true.
Speaker 4 (02:35):
Yeah, I mean for average people coming in here, like
they would probably be taking aback a little bit.
Speaker 2 (02:40):
Seven eight dollars slices. It's a bit much.
Speaker 4 (02:43):
Maybe they could bring it down at least a buck more,
but I'll pay for something good.
Speaker 6 (02:47):
I'll pay a little extra.
Speaker 2 (02:48):
We just had pizza an hour back in line for
some more pizza.
Speaker 3 (02:51):
Oh you just ate pizza here and you got in
online again? Yeah, like it was that good?
Speaker 2 (02:55):
Yes?
Speaker 4 (02:56):
Or visiting from Texas so he's never had pizza from
this area?
Speaker 3 (03:00):
What did you think about five dollars a slice?
Speaker 5 (03:02):
Used to pain quote nine or ten dollars in Texas
for a Dominos people, it's Domino? Yeah?
Speaker 6 (03:08):
Yeah?
Speaker 3 (03:09):
What is your like? Go to cheap food?
Speaker 1 (03:11):
I really love on a gury like the rice triangle rolls.
I feel like you can get like a good on
a gurry for like three dollars.
Speaker 3 (03:18):
Do you have a go to cheap meal in New
York little.
Speaker 2 (03:21):
Towns good noodles, good noodles. You can get a good
meal for like eight ten bucks.
Speaker 5 (03:25):
You know, I mean, I still love a bagel and
cream cheese with tomato.
Speaker 3 (03:27):
I think that would be my go to cheap lunch.
Speaker 2 (03:31):
I don't know fig Jam Pizza is.
Speaker 4 (03:34):
I'm not sure I can endorse any part of this clip,
although I have to say some good ideas for inexpensive
for cheap food.
Speaker 3 (03:41):
It's an expensive city and eating particularly can get really expensive.
So as a New Yorker, you have to have little
hacks of like cheap meals that you can get.
Speaker 4 (03:48):
Yeah, and the bagel with cream cheese, right, although bagels
are getting more expensive.
Speaker 2 (03:52):
Too, Stacey.
Speaker 4 (03:56):
The big news this week are these protests in Los
Angeles and now have spread to other cities that are
in protests of the Trump administration's immigration policies.
Speaker 2 (04:05):
There are a lot of issues.
Speaker 4 (04:06):
Here, a lot of issues that are getting a lot
of media attention around Trump's calling in the military and
the Democratic response. But I wanted to talk about the
underlying issue, which is the Trump administration's immigration policy and
these raids and what it means for the economy and
to do that, we're bringing in Catherine Edwards. She is
(04:26):
a labor economist, a Bloomberg Opinion contributor, and a host
of the excellent podcast Optimist Economy. Catherine, thanks for being here,
Maudi All and good morning. Just to start and just
to create some context for this conversation, Catherine, how important
are immigrants to our labor market, whether we're talking about
immigrants who are documented or undocument or whatever, the people
(04:48):
that Donald Trump is sort of going after, what do
they mean to the economy?
Speaker 5 (04:52):
What in five workers in the US is foreign born?
And I think you might just let that statistic sit
with you for a second, that when we talk about
these type of discriminate and indiscriminate attacks on people who
were not born in the United States, you were talking
about roughly twenty percent of the US workforce. Now, of course,
they're not randomly distributed throughout the workforce. They're not randomly
(05:13):
distributed throughout the country. They're concentrated in certain cities and
certain sectors and in certain occupations. And that twenty percent
average can reach as high as fifty sixty eighty percent
in certain areas, and so you're basically risking parts of
our economy's ability to function by threatening its workforce.
Speaker 3 (05:32):
I think some of the industries you're talking about are construction, agriculture,
food service, especially things like meat processing, are like just
huge numbers of foreign born workers, most of them documented,
some undocumented too.
Speaker 5 (05:44):
Right. It's funny documented and undocumented isn't necessarily the right.
It gives you the wrong intuition. Even people who are
not do not have legal authority to be in the US,
have lots of documents, you know, they pay taxes, they
get pay stubbs, they pay into Social Security, A lot
of them own property and they pay property taxes, and
they contribute to the economy, and they have lots and
(06:05):
lots and lots of documents, but they do not have
legal permission to be in the United States at the
current moment, and so deciding what is the exact share
can be difficult. So we know, for example, that there
are a quarter of a million farm workers in California,
which is where we get a lot of our food,
and even the University of California and mer set has
(06:26):
really struggled to come up with a good estimating strategy,
but puts it around half would be not having legal
permission to be in the United States at least. Oh wow,
it's not easy for researchers to figure out which is
I think while you're seeing so much protests in response
to these arrests, because it's also not often easy for
ice officers to figure out. And so they have been
chastised for violating the civil rights of foreign born non
(06:49):
Americans with authority without authority, as well as Americans because
they're just indiscriminately picking up people.
Speaker 4 (06:55):
So Trump, of course, ran I think you said it
all the time. He's going to have the biggest mass deportation,
the most deportations in history. You're hearing Carolyn Levitt, the
Press secretary, repeat that even now, and it doesn't seem
like they were that effective at actually finding people who
were not here legally with legal status. They claim that
(07:16):
they had deported sixty six thousand people as of the
first hundred days. It's about six hundred people a day.
That's like not that different from where the Biden administration was.
And like, I think part of the context for these
protests is that the Trump administration, Stephen Miller in particular,
sort of got mad and told these ICE agents they
needed to start deporting more and more people. There was
(07:38):
a home depot raid in Westlake in Los Angeles, and
that was the kind of spark that spurred these particular protests.
This kind of like seemingly indiscriminate and not necessarily the
most competent approach to immigration enforcement.
Speaker 5 (07:52):
They're either going to miss by not arresting that many people,
or they're going to miss by arresting Americans. And you know,
the effect that this could all have on the labor
market is not going to be from not just where
they hit, but where they miss.
Speaker 2 (08:06):
Well.
Speaker 3 (08:06):
One I think consequence we're already seeing of this is
it seems like a lot of people are staying home,
like there's there is already apparently some evidence that absenteeism
at work, both from documented and undocumented workers is kind
of rising. I think people are afraid to go to
work in some instances. What kind of impact can we
expect that to have on the economy, on the workers themselves, Oh.
Speaker 5 (08:29):
It's going to be myriad, But it's worth noting that
we haven't really been in a place like this before,
and so we can follow our intuition of what we
think may happen, but it's all short of a prediction
because we're in such new territory. So how it'll affect
we don't know. But you know, a really good rule
of thumb is that the size of the US economy
is a function of the number of people working in it.
(08:50):
It's just number of workers time, their productivity equals economy.
So losing workers is not something we can necessarily shrug
off as like, oh, it's just a million immig it
doesn't matter. It matters. It always matters. Workers matter to
our economy, and it doesn't matter where they come from
if they're participating already.
Speaker 2 (09:08):
Catherine, what are we seeing actually in the numbers thus far?
I mean, it's not much, right.
Speaker 4 (09:13):
You're really having to like kind of squint and look
for clues of where this might be going exactly.
Speaker 5 (09:18):
It'll take a while to show up and it'll probably
be small. The golden rule when dealing with policy from
this administration is that they are much more bark than bite.
This is like the Department of Government Efficiency comes in
to destroy federal government and make it into the small
shop that it's meant to be. But of course government
spending goes up, and so they've fired tens of thousands
of federal workers. They're currently rehiring many of them. Like
(09:40):
this is a lot of pr campaign and get people mad,
and the impact of their policy ends up being muted
because it is in fact so weak and ineffectual, so
it's much louder than it is effective. I think that
that puts people like us who are trying to understand
what the effects of these policies are into a difficult
(10:01):
spot because of course, there's the effect of how grotesque
the policy is when announced, and there's the effect of
the policy as enacted, and you know, rather intentionally, there's
a massive amount of daylight between those two things. I
don't know how much it'll show up, because I don't
know how many people they're actually going to affect.
Speaker 3 (10:19):
I mean, as Max mentioned, this is something that Trump
really campaigned on. And I think one of the big
reasons behind this, and one of the reasons that this
is such an emotional issue for so many voters, I think,
is that there's a perception that immigrants take jobs that
it makes it harder for citizens to find a job,
especially in certain sectors. Can you talk a little bit
(10:40):
about that from an economics point of view, Like, what
happens when you do have let's say, you know a
lot of undocumented workers come into an economy.
Speaker 5 (10:49):
You know, even in the most kind of simple, primitive,
two dimensional version of an economic model that we learn
and undergraduate the effect of immigrants on economy, it's twofold one.
Speaker 3 (11:03):
They grow the economy, is that like by getting haircuts
and buying and paying rents and going out to eat
and stuff.
Speaker 5 (11:09):
Yeah, it's like, do you have more people in your
economy versus less? More people equals bigger economy almost every time.
More workers equals a bigger economy every time. So there
are more people, they're going to consume more, they're going
to demand more, they're going to spend more than it
would be without them. So just take twenty percent of
the US workforces is about thirty four million people, you know,
(11:30):
and just delete them from our economy. In like a
theoretical sense, the economy is much smaller.
Speaker 3 (11:36):
What happens if an economy gets smaller.
Speaker 5 (11:38):
Well, it depends on how you go from big to small. Typically,
when you have things like shortages you're not able to
produce goods, it can spiral in really bad ways like
For example, if a quarter of a million people, you know,
get food out of the ground in California and ship
it across the US and half of them are gone,
a lot of that food is going to become a
(11:58):
lot more expensive, and so you're shrinking the economy as
you're making certain key goods scarce. That's different from every
year a certain small share of workers retires and are
placed at a smaller rate because their consumption is changing
in a way that doesn't put pressure points on key
parts of the economy. So there are ways to have
an economy get smaller due to a smaller population that
(12:20):
aren't catastrophic. And yeah, then there are ways to really
just take a wrecking ball to some pretty key parts
of our economy that can be can be very bad.
But I would be remiss if I didn't say that
immigrants make the economy bigger. Bigger is better. That part
of economics is pretty easy to understand. The question of
where the deleterious consequences of immigration come in is not
(12:41):
through jobs but through wages. So you know, your regular
person on the street would say, oh, but they take
our jobs, and an economists would say no, if you're
growing the economy, you're creating more jobs.
Speaker 2 (12:53):
It's not.
Speaker 5 (12:54):
We don't have a fixed number of jobs in our economy.
It responds to the size of our population and the
demand of people inside of it. So where there's no
rationing of jobs, there's no like fixed number of slots.
The effect of immigrants could be their effect on wages,
where if you have a big supply of people who
are willing to take lower wages, they might drag down
wages for the bottom of workers. And this is something
(13:17):
that economists have really struggled to figure out whether or
not the boon to the economy that comes from immigration, essentially,
you know, outweighs the negative pressure on wages that come
from higher labor supply.
Speaker 4 (13:29):
So, Catherine, I just wanted to ask, we don't really
know what's going to happen, Like you said, often the
Trump administration is more bark than bite, very concerned about
like sort of spectacle and not not maybe to put
it generously, like not as concerned about execution, but a
course spectacle could scare people, right, like these images on
TV could be enough. What signs are you looking at
(13:51):
to see if these raids or even the threat of
raids are having an effect. I'm kind of curious, like
what you're going to be watched for over the next
you know, a couple months into the next year or so.
Speaker 2 (14:05):
Yeah.
Speaker 5 (14:05):
The chilling effect is what we call this where you
don't have to be affected directly by the implementation of
a policy to have it change your behavior. And we've
seen this a lot within immigrant households and things like
applying for Medicaid and applying for SNAP, Like you're eligible
for a benefit, but you're afraid to apply for it
because you think that maybe like your uncle would be deported.
(14:26):
This happens a lot in the public programs space, big
chilling effects. But at the same time, we need these workers,
and so the potential for a chilling effect to drive
them from the labor force and to keep them at
home I think is definitely palpable in the short term,
but in the long term, where there's demand, there's money,
and they can make money going to work, and so
(14:46):
it's hard to say that fear will keep them at
home and without income when there's income to be made,
and that's why a lot of people come to the
US anyways to work. So I think there could be
a chilling effect, but I guess I'm a little skeptical
that it would be massive because the need for income
on their hand is so high, and the need for
our economy to have those workers is also high, and
(15:09):
that will probably, you know, Trump, whatever noise is being
made from the White House.
Speaker 2 (15:15):
Catherine Edwards, thanks for being here.
Speaker 3 (15:17):
Thanks Catherine, tears.
Speaker 2 (15:22):
So Max.
Speaker 3 (15:22):
Earlier in the show, we were talking about food and
food prices and you know, some of our favorite cheap
foods and maybe aren't so cheap anymore.
Speaker 4 (15:30):
Yeah, and we have a great guest on to talk
about this. BusinessWeek columnist Dina Shanker.
Speaker 2 (15:35):
She is here.
Speaker 4 (15:36):
She's been doing some heavy duty reporting on the pizza economy. Dina,
thanks for being here. Why are we talking about pizza?
Speaker 1 (15:46):
Thanks so much, Max, So, to me, pizza is like
a go to meal for families, and it is quick,
it is easy, most people like it, kids eat it,
and it's cheap. And so if you're a pair and
you're scrambling and you got to get dinner on the table,
it really doesn't matter where you fall on the economic spectrum.
(16:06):
Sometimes you're like, I don't want to spend a whole
lot of money just on dinner and pizza.
Speaker 7 (16:11):
Is often the answer to that.
Speaker 4 (16:13):
Yeah, I mean, pizza is pretty much always the answer
for a while, I think it was like forty or
fifty percent of my total caloric intake. But Dina, you're
reporting shows that pizza prices, whether we're talking about slices
or paes, takeout or delivery, those prices are higher.
Speaker 7 (16:30):
So from Q three twenty twenty three to Q three
twenty twenty four, across the board, across restaurant segments, pizza
prices were up twelve percent, which was the biggest increase
from the different menu items that Data Central looked at.
Speaker 4 (16:43):
Data Essentral that's the data provider you side in the story.
But just to clarify, that twelve percent price increase is
just year over year, I assume it went up to
some degree from like twenty twenty to twenty twenty three.
Speaker 1 (16:55):
Yeah, I mean, pizza has gone up with everything else,
And of course, ever ingredient has its own set of complications.
Tomato paste, for example, has gone up a lot, partly
because pizza got so popular during COVID.
Speaker 3 (17:10):
Stretched thin the supply of tomato paste.
Speaker 1 (17:13):
Basically paste is like in every sauce, they all use paste,
So every tomato product outside of like an actual tomato
is probably going to have paste involved, and that supply
crunch during COVID force prices to go up and they
are still elevated.
Speaker 4 (17:30):
Yeah, you got the tomatoes getting more expensive. You got
imported dairy products, as you like to say, Stacy's kind
of all of the economic factors we talk about in
one bite.
Speaker 3 (17:41):
That's true because it has a lot of pizza has
a lot of different ingredients. You've got your grains, you've
got your meats, you've got your dairy. But Dina, you
were also looking at pizzas that were on the quite
less expensive end of things, specifically Papa John's. Why are
their sales down? Can you explain why they're not doing
well right now?
Speaker 1 (17:57):
Yeah, So that's what raised my eyebrows at first, was
seeing Papa John's sales go down, because that is like
a go to option for any parent, whatever income level
you are. And so Papa John's, Domino's, and Pizza Hutt
all saw.
Speaker 7 (18:13):
Their sales go down.
Speaker 3 (18:14):
The one little.
Speaker 1 (18:17):
Piece of good news was domino said that they saw
their carryout business actually go up a little bit, and
it's because it's less expensive, so you don't.
Speaker 7 (18:26):
Have to pay that delivery fee or.
Speaker 1 (18:28):
Any other fee of the tip, et cetera, and so
they saw an actual increase in their carryout. So what
we're seeing is people are making these decisions based on price,
and all the prices at all the restaurants have all
gone up. This is true and fast food, it's true
across the board, but pizza chain prices have gone up
a little bit more actually than the other fast food segments.
Speaker 3 (18:49):
Well. Interestingly, like here in New York, there's this culture
of the dollar pizza slice. This was a thing forever,
these little shops and they don't usually even have anywhere
to sit. You just walk in, you give them your dollar,
they hand you your pizza, and you like walk out
and eat it all over the place. In Midtown this
used to be. There aren't as many of them, I think,
maybe because a lot of the factories you're talking about,
But do you know, we went to one.
Speaker 1 (19:11):
We are standing outside of Percy's Pizza, one of the
last dollar slice pizzaias in the city.
Speaker 7 (19:17):
There are a dying breed.
Speaker 1 (19:19):
The truth is that food inflation has hit everything, and
so even if you're just a regular old slice joint,
your costs have gone up significantly in the past several years,
which makes a dollar slice very special.
Speaker 3 (19:33):
Yes, all right, let's go in and get a dollar slice.
Let's do it.
Speaker 1 (19:38):
Hello, Can I just get one plain slice?
Speaker 3 (19:41):
Please?
Speaker 7 (19:42):
Yes?
Speaker 1 (19:44):
How much dollars?
Speaker 3 (19:46):
I thought it was a dollar slice place? Okay, I
had a dollar slice place, so I had got like
tripled in price.
Speaker 1 (19:55):
I should also just add that, in addition to the
food costs going up, you know, they're lay costs have
gone up, their rent has gone up, So these places
are dealing with a whole bunch of costs that are
growing up.
Speaker 4 (20:06):
You know, I grew up in and around New York,
and dollar slices are not that old.
Speaker 2 (20:11):
They really date to like post Great Recession.
Speaker 4 (20:14):
Like when I was a kid, a piece slice pizza
cost like a dollar fifty, and they actually went down
in price as part of this marketing gimmick that these
pizza places started. You know, like I said, ten fifteen
years ago, it.
Speaker 3 (20:25):
Was a marketing gimmick that started a movement, that.
Speaker 2 (20:27):
Started a movement that obviously people got really excited about it.
Speaker 4 (20:29):
But it does make me feel like there are multiple
pizza markets right, and it's a little bit weird for
New Yorkers to talk about pizza, because like, we have
a lot of options, and I would never dream of
ordering from Papa John's or Dominoes because I have this place, Louise,
and I ordered a pizza deliver from Louis the other
day was eighteen dollars and it was freaking delicious, And
it might have been sixteen dollars a couple of years ago,
(20:51):
but still a very good value. And then you have
these kind of like super high end luxury pizza places.
Our pizza economy is much more diverse than in most
of the country.
Speaker 3 (21:01):
Yeah, it seems like the lower end pizza places that
are charging less. I don't know about where Louis falls
and this spectrum max, but it feels like they are
going to be especially squeezed. Is that right, because of
inflation and labor costs and everything. Yes, I think running
a restaurant.
Speaker 1 (21:18):
In this city is always really difficult, and I imagine
that every time you raise your prices, you know you're
going to lose some customers.
Speaker 7 (21:25):
And I mean three.
Speaker 1 (21:27):
Dollars from a dollar that was a shocking hike to me.
Speaker 3 (21:32):
Yeah, But then we went down the street. Dina had
found us another restaurant to your point, Max about fancy
pants pizza, and it was this very hip place that
you've heard about. Talk to us about where we went next.
Speaker 1 (21:46):
This place the industry, But it was recommended by the
Scott's Pizza Tour guide.
Speaker 3 (21:52):
Oh Scott himself. Yes, this is the very famous New
York pizza guide. He takes people on tours of pizza.
Speaker 1 (21:58):
Yes, it was in the New Times recently. Is one
of the best pizza places in the city. So we
went and I got two slices. I got the margarita,
which is essentially like the plane and the barada slice.
Speaker 3 (22:09):
And the margarita was good.
Speaker 1 (22:10):
I took a bite and yeah, that's good. But then
I took a bite of the barda. It was amazing.
Speaker 3 (22:16):
Yeah, you were having like a transcendent moment of barrata. Now,
to be clear, these piece of slices were a lot
more expensive.
Speaker 5 (22:24):
They were also very popular.
Speaker 3 (22:26):
We waited in line for like ten minutes before we
got in the shop. There was this big long rope
down the sidewalk and everything, okay.
Speaker 4 (22:32):
So cheap pizza, as we're hearing, not so cheap anymore,
and the fast food spots that sell it are seeing
sales declines are really struggling, but then expensive pizza is
doing really well.
Speaker 2 (22:44):
Can you explain this?
Speaker 1 (22:45):
No, that's actually what's happening. It's the expensive pizza is
doing well. This is what Mike Haalin of Bloomberg Intelligence
calls the K shaped economy. So people on the top
of the K are doing well, they're still spending, while
the bottom of the K is not. And I think
we'll have to just kind of wait and see how
this plays out considering tariffs and economic uncertainty.
Speaker 3 (23:10):
Do you feel like the K shaped model is something
you're seeing in other food categories? I mean, are we
seeing kind of a split of like either super high
end food or like extremely inexpensive. Is the middle disappearing?
Oh totally.
Speaker 1 (23:22):
We're seeing it in the supermarket across the board at
the top.
Speaker 7 (23:26):
It's called premiumization.
Speaker 1 (23:28):
So if you're looking for like a super fancy macaroni
and cheese, like Annie's mac and cheese used to be
like the fancy mac and cheese, but now there's good
Oles mac and cheese and they have fiber and high
protein and it's pretty good, but that costs more than Annie's,
or you're going all the way down to private.
Speaker 3 (23:44):
Label do not pass craft. Well, that's the.
Speaker 1 (23:47):
Thing is like, then Kraft mac and cheese sees sales
dip because they're certainly not high end and they're not
on the low enough end either, And so that's happening
across the supermarket. And I think as people are paying
more attention to health and what they eat and where
food comes from and all of that stuff, they're willing
to spend more on higher end foods. And some people
(24:10):
would even say, I will spend the extra on the
fancy mac and cheese, but then I will get the
private label cereal.
Speaker 7 (24:17):
People are being a lot choosier at the supermarket.
Speaker 2 (24:20):
Okay, back to pizza, sales are on the decline. It's
too expensive.
Speaker 4 (24:26):
What are people replacing, you know, the slice or the
delivery pie with. Are they just like cooking more at home?
Speaker 1 (24:33):
Generally speaking to people that we're eating fast food and
are trading down or eating at home more because it's
less expensive.
Speaker 4 (24:39):
It seems like there's an economic story here, maybe also
just a cultural story. And I feel like so many
of the weird trends that have happened over the last
couple of years, like you got to ask yourself, did
the pandemic somehow do this to us, Like did we
just eat too much in pizza from like twenty twenty
to twenty twenty two, and now we're just like all
sick of it and we're and they're like cooking chicken
(25:00):
nuggets or whatever or something else, just anything else other
than pizza, well unless it's really expensive pizza.
Speaker 3 (25:07):
Well exactly. I mean I got really sad about this
because when I first came to New York, I ate
a lot of dollar slices because you could kind of
turn them into a meal and like two dollars and
they were huge slices. So Dina, after we parted ways,
I went on this website called Slice Tracker that was
apparently a map of all the dollar slices in the city,
(25:29):
and it was apparently quite outdated, because I went to
several of them that were just closed, like out of
business closed, and I thought, this is it. The dollar
slice is dead, that it is no more. But then
I finally found one. It was my fourth try. It
was the space called two Bros. Pizza in Midtown, and
I think this is maybe the closest thing to the
(25:52):
last of the dollar slices. What are you eating right now. Sorry,
you're in the middle of eating a dollar fifty cheese
slice of pizza. Do you come here a lot? Yeah,
I work in the area. Do you remember when it
was a dollar?
Speaker 7 (26:04):
I do, yes, I was in school and up until
I think pre pandemic, it was a dollar.
Speaker 3 (26:08):
How did you feel that it's a dollar fifty? It
was a surprise.
Speaker 5 (26:12):
It's still a nice, quick, cheap meal, but it also
slightly makes it more inconvenient.
Speaker 3 (26:16):
Because I can't just like have the dollar bills. But
does it feel like a good deal too still?
Speaker 6 (26:21):
Or I think that convenience still makes it feel like
a good deal to me, especially when you are around the corner.
Speaker 4 (26:26):
The slices are like six dollars each, So yes, yes,
I do.
Speaker 5 (26:30):
It gonna tie me over until like ten o'clock tonight.
Speaker 3 (26:33):
Oh really, yes? Maybe the protein bar in my bag concluded.
Speaker 2 (26:37):
Oh god, that's bleak.
Speaker 3 (26:39):
There's nothing bleak about that. I was thrilled. I mean,
And also she said the six dollars slices around the corner.
I mean, but that was the closest thing I could find.
I think the dollar slice might be dead. So Max,
we talk a lot about parts of the economy that
I think are pretty visible job market prices things like that,
But there are whole economies that you and I never
(27:01):
really see.
Speaker 2 (27:03):
Yes, I have no doubt that that's true. And that
seems like a great segue to our underrated story, Stacy,
I think, So what is it? Here? We go?
Speaker 3 (27:10):
Max are entrain to This economy begins at an airport
in Mumbai where a man is pulled aside because in
the bag he is trying to check it is discovered
to be full of snakes. Forty seven venomous vipers were
concealed in his luggage, and not just that, also some
(27:33):
Asian leaf turtles and like some other animals as well,
hidden in this man's carry on bag. Okay, he was
smuggling it from Thailand.
Speaker 4 (27:41):
Carry on bag. Yes, Okay. My first thought was, how
are they in there? Are they just in there kind
of wiggling around with his underwearments?
Speaker 2 (27:51):
Are they like each like a little reptile cage?
Speaker 3 (27:54):
Are like twentle bags and like sticks stowed in Yes,
from what I could tell. But this is part of
this whole economy that's estimated to be worth like almost
potentially ten billion dollars a year. They don't know because
a lot of it's underground, but people smuggling animals, especially
birds are a big one, but also reptiles, insects like
poisonous spiders gets smuggled. A lot of them are endangered.
(28:16):
You can't take them out of the country, but there's
a big black market for them, and so these things
are getting taken over the borders all the time. The
stories they are wild stacy.
Speaker 4 (28:26):
What is driving this industry? I mean, I can think
of a few different potential markets. I guess for rare
exotic animals. If you want a pet viper, I suppose
could be a possibility. Skins I think sometimes these snakes
are smuggled for that. But also like traditional medicine, Chinese
medicine seems like a big part of the exotic animal trades.
Speaker 3 (28:48):
Yeah, pangle ins especially, that's one of the top smuggled animals,
and they are not alive usually when they're smuggled in.
There really are kind of two branches of this of
this economy. One is for pets and sort of the
exotic animal trade, and the other one is medicinal for
traditional healing remedies and things like that. But it is
(29:08):
a booming business. People want this stuff.
Speaker 2 (29:11):
I have two thoughts on this.
Speaker 3 (29:13):
Yeah, one is what are your thoughts?
Speaker 4 (29:14):
It's so impressed by the Mumbai Customs authorities that they
were able to get this guy because like, how did.
Speaker 2 (29:20):
You read that they.
Speaker 3 (29:24):
Pulled me aside every single time because of my microphone
looks weird?
Speaker 2 (29:28):
All right?
Speaker 3 (29:28):
Is the guy threw it with forty snakes?
Speaker 2 (29:30):
I read that they pulled him aside because he looked nervous.
Speaker 4 (29:33):
Second thing, and this is I guess also related to
my general sense of admiration for the people who serve
us and the Mumbai Customs authorities. You know how in
the wire when when police do a big drug bust
they put like the dope on the table, you see,
like a big pilot cocaine and the drug. It's like
like shows that the police are doing their job, like
we've got the center control the Mumbai Customs Authority on
(29:54):
their ex account.
Speaker 3 (29:55):
Yeah, they tweeted it.
Speaker 6 (29:56):
Tweeted like a bit like a bunch of photos of
this snakes and like one of them is just like
a glass bowl or maybe it's plastic and it's just
like a bunch of green snakes like wriggling around like
as if it were like a bag of drugs or
something you brought.
Speaker 2 (30:09):
Up the money.
Speaker 4 (30:10):
But also like this is just like one of the
many ways that like, I don't know, globalization gets weird,
Like you get a lot of people with more money,
easy cheaper air travel, innovations in luggage I suppose to allow.
Speaker 2 (30:22):
You more reasonly, Yes, an ailer thing, yeah.
Speaker 3 (30:25):
But also because of the Internet and things like that,
it's so much easier to advertise and to find a
market for that. Like you, I think it sort of
widens the demand for something like this and enables people
who aren't you know, super connected into some whatever mafia
network to be able to sell these things too. And
from what I can tell, some of these operations are
kind of fly by night. And anyway, it is sad
(30:47):
because you know, there are people working so hard to
protect these animals, to preserve their habitats, and then you've got,
you know, some guy with forty snakes in his pants.
Speaker 4 (30:55):
All right, listeners, if you have any thoughts about smuggling
rare wildlife, or about other underrated stories that we should
be talking about, really anything we should be talking about
on this podcast, send us an email. Everybody's at Bloomberg
dot net. Everybody's with an s at Bloomberg dot net.
We're beginning a lot of notes from readers, and it's
(31:15):
really awesome to see the things that you're kind of
interested in. We're definitely going to hit some of these
as we go forward. Just want to shout out Rudy
from Omaha send us a really great note Stacy about
kind of the way the tax cuts would impact his family,
and just pointing out that like when you get rid
of the child tax credit and the increase in the
(31:37):
standard deduction for married couples, those are two parts if
it weren't renewed, that would expand his tax bill by
like five thousand dollars or the tax bill for his.
Speaker 2 (31:45):
Family, which you know is significant.
Speaker 4 (31:47):
I think helps explain why people feel like this thing needs.
Speaker 3 (31:51):
To the tax us need to be extended, even if.
Speaker 4 (31:53):
They're worried about the deficit. Now, I want to say
one other thing, which is that last week, Stacy, you
made this like last minute poetry challenge, tree reward or
whatever for people who left a review I did.
Speaker 3 (32:06):
Max will send you a personalized haiku on the economic
and business topic of your choice. We need to offer
this as an economic show. We have to offer people
an economic incentive, and.
Speaker 4 (32:17):
I'm happy to say critically minded that is your username.
Speaker 3 (32:21):
The show, critically mind. It doesn't sound like critical positive reviews.
Speaker 4 (32:27):
Critically minded, and I hope that people are listening to
the show will follow critically minded as example and leave
us five star reviews either on Apple or Spotify or
anywhere else.
Speaker 2 (32:36):
Tell your friends here it is. You're ready to say something?
Speaker 3 (32:38):
Okay, yeah, because I challenge you to write a haikup
based on this review.
Speaker 4 (32:41):
This is so bad and I swear I did not
use chat GPT for this. Okay, critically minded with the underscore,
you came here for the banter like wind through the Trees.
Speaker 3 (32:55):
That I'm actually like, kind of chills, Max got chills.
Speaker 4 (32:59):
You have to look at the review to see what
I was doing there. But critically Minded came for the
banter and critically minded.
Speaker 3 (33:06):
And stayed for the trees.
Speaker 4 (33:08):
Well that I just made up because I read that
Hai Koozer supposed to have nature in them.
Speaker 3 (33:11):
That's true, that is true. I'm actually very impressed. Is
this something that you will continue to do if people
write reviews? Will you be willing to write? Should we
switch to a lot?
Speaker 2 (33:21):
I'm happy.
Speaker 4 (33:21):
I think limericks are fun, although this is a family
show and so I think.
Speaker 3 (33:26):
Not everyone has to be from Nantucket. The show is
produced by Stacy Wong. Magnus Hendrickson is our supervising producer,
Amy Kean is our editor, and Brendan Francis Noonham is
our executive producer. We get engineering help from Blake Maples
(33:48):
and Dave Percelf fact.
Speaker 2 (33:49):
Checks, and Jeff Muscus provides us with other help.
Speaker 3 (33:52):
Yes, very valuable editorial insights. Thank you Jeff and Sage
Bauman is the head of Bloomberg Podcast. Thank you, Sage.
And if you have a minute, please rate and review
the show. It means a lot to us. Max will
write you an ode Critically Minded.
Speaker 2 (34:06):
You can leave reviews on other platforms as well.
Speaker 4 (34:08):
Feel free to go to Spotify and give us some
stars after you've done it on Apple.
Speaker 3 (34:12):
Critically Minded has done so much already. This wrote them
a poem that's true.
Speaker 4 (34:17):
If you have a story that should be our business,
email us at Everybody's at Bloomberg dot net. That's everybody
with an s at Bloomberg dot net. Thank you for listening,
and we'll see you next week.
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