Trump’s trade war doomed workers to ‘a whole career’ without a raise: economist

President Donald Trump’s tariffs could leave American workers paying higher prices without the wage increases needed to keep up, according to economist Justin Wolfers, who warned that the financial damage could last an entire career.

In his “Platypus Economics” Substack newsletter, Wolfers explained why Trump’s trade policies could have lasting consequences for workers even if they don’t trigger runaway inflation.

“Being 2% poorer for a year is a bad thing, but being 2% poorer for a whole career is far worse,” Wolfers said Friday.

The University of Michigan economist made the argument in a post titled, “The $7.26 Cappuccino Problem,” examining why inflation feels worse than official figures suggest.

Consumer prices rose 3.7% over the past year, while producer prices climbed 6.3%, according to figures Wolfers cited.

But he argued that Trump’s tariffs have created a different problem from ordinary inflation.

“With tariffs, your boss’s costs rise,” Wolfers explained. “It’s a different kind of shock. Economists call it a supply shock.”

Businesses may raise prices to cover those costs, he said, but that doesn’t mean they’re making more money.

“There’s no extra money to go around,” Wolfers said. “It’s a cost-driven shock.”

His conclusion was straightforward.

“So now what happens is prices rise, and wages don’t rise,” he said.