This is the Cato Daily Podcast for Friday, December 9th, 2022. I'm Caleb Brown.

For the benefit of American workers, it may not be enough to prioritize policies that boost wages or worker flexibility, but also addressing

the costs of basic goods for whom lower income workers must spend the largest shares of their budgets.

Gabriella Beaumont Smith authored a chapter in Cato's Empowering the New American Worker Book,

we spoke last week.

The government tries to alleviate poverty by trying to directly increase people's incomes and they try to do this using things like subsidies and transfers and minimum wage laws.

But these measures aren't that effective and they're definitely not sustainable.

Instead, our colleague Ryan Bourne proposed a cost-based approach to reforming existing government interventions.

And I use this approach in my chapter of the Empowering the American Worker book to expensive. So by reforming these programs, we would make

people's lives cheaper and therefore they would have more money to use to spend on their lives.

So to reiterate here, we're not talking about raising incomes, we're not talking about trying to get increased benefits or things like that.

We're talking about making the cost of living lower so that the same salary can carry you further.

Exactly, and it's about providing American so that the same salary can carry you further.

Exactly, and it's about providing Americans with more autonomy over their money

and giving them the choice of how they want to spend their disposable income.

Because at the end of the day all American workers are consumers and all

American consumers spend a significant portion of their paychecks on essential goods

like food, clothing and energy.

And these necessities constitute the largest portion of lower income households spending.

In fact, based on 2019 data, which we use because the pandemic has skewed everything.

Shelter, food, transport, utilities, and transport accounted for approximately 68% of the poorest

U.S. households annual expenditures compared to 52% for the richest households.

...