Flat pay raises are a sign o' the times
Marketplace All-in-One
Marketplace
4.8 • 1.3K Ratings
🗓️ 19 August 2025
⏱️ 26 minutes
🧾️ Download transcript
Summary
In this uncertain economy, employers want to save where they can. That’s likely why Starbucks just joined a growing list of companies to shift from merit-based raises to a flat percentage raise. In this episode, why a flat raise structure tends to be cheaper and less time consuming than merit increases — even though everyone gets ‘em. Plus: China leans into trade with developing nations, President Trump wants to cut funding for flights to rural airports, and homebuilder sentiment stays low.
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Transcript
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| 0:00.0 | In no particular order, tariffs, airplanes, education, and then sorry, tariffs again. |
| 0:11.0 | From American public media, this is Market Class. I'm Kai Rizdaal. It is Tuesday, today 19 August. |
| 0:28.1 | Good as always to have you along, everybody. |
| 0:30.7 | Nature, as we know, abhors a vacuum. |
| 0:34.5 | So, too, does the global economy. |
| 0:37.3 | We're at a point in President Trump's tariff regime. |
| 0:40.1 | Most of the chaos is behind us. His import taxes seem to be set, emphasis there on seam. |
| 0:45.9 | The American economy is adjusting to life less welcoming to the outside world. We're at a point |
| 0:51.2 | where there's a vacuum to be filled. And China is doing it. |
| 0:55.6 | Beijing is lowering some of its trade barriers for developing countries in particular, |
| 0:59.4 | and it's ramping up its overseas investments. |
| 1:02.4 | Marketplace is Subri Beneshire gets us going today. |
| 1:05.5 | China's growing trade with developing countries did not start this year. |
| 1:09.4 | This has been going on for more than 20 years. |
| 1:12.2 | John Alterman is with the Center for Strategic and International Studies. |
| 1:15.7 | And as poorer countries get wealthier, they're interested in importing more manufactured goods. |
| 1:22.7 | The cheapest place for a lot of countries to get manufactured goods is China. |
| 1:27.0 | But U.S. tariffs and unpredictable trade policy have lit a fire under developing countries |
| 1:32.4 | to deepen their ties with China and do it quickly. |
| 1:35.9 | Just as a business proposition, if your trade with the United States is going to be |
| 1:41.0 | heavily taxed, then countries want an alternative to trading with the United |
| 1:46.9 | States. China's imports from developing countries and exports to them have doubled since 2015, |
... |
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