transcript
Speaker 1:
[00:00] Running a business is hard enough, so why make it harder with a dozen different apps that don't talk to each other? Introducing Odoo, the only business software you'll ever need. It's an all-in-one, fully integrated platform that makes your work easier, from CRM, accounting, inventory, e-commerce, and more. And the best part, Odoo replaces multiple expensive platforms for a fraction of the cost. This is why over thousands of businesses have made the switch. So why not you? Try Odoo for free at odoo.com. That's odoo.com.
Speaker 2:
[00:30] At Radiolab, we love nothing more than nerding out about science, neuroscience, chemistry.
Speaker 3:
[00:37] But, but, we do also like to get into other kinds of stories, stories about policing or politics, country music, hockey, sex of bugs.
Speaker 2:
[00:46] Regardless of whether we're looking at science or not science, we bring a rigorous curiosity to get you the answers.
Speaker 3:
[00:53] And hopefully make you see the world anew.
Speaker 2:
[00:55] Radio Lab, Adventures on the Edge of what we think we know.
Speaker 3:
[00:58] Wherever you get your podcasts.
Speaker 4:
[01:01] Marijuana gets a tax break from Marketplace. I'm Sabri Banishwar. The Justice Department is changing its classification for some marijuana products, downgrading them from schedule one drugs, which is the same level as heroin and LSD, to schedule three, which is the same as drugs like testosterone or ketamine. The change applies to medical marijuana regulated under state licenses, and it could mean a major tax break for some cannabis businesses, as Marketplace's Henriette reports.
Speaker 5:
[01:32] Anyone who sells schedule one substances can't deduct business expenses from their taxable income, and that's had a big impact on cannabis companies, says Victoria Litman, a visiting professor of law at Roger Williams University.
Speaker 6:
[01:45] So you can't deduct the rent or the salaries of your employees or most of the things you need to run your business.
Speaker 5:
[01:51] Cannabis businesses often end up with a really high effective tax rate, upwards of 70%, Litman says. But now medical cannabis companies may be able to deduct their business costs, and that could free up a lot of cash, says Scott Greiper, CEO of Viridian Capital Advisors.
Speaker 7:
[02:08] You're able to redeploy that form of tax payment into scaling your business, hiring more people, standing up another store.
Speaker 5:
[02:17] But things could get complicated, Litman says, because many cannabis retailers have licenses for both medical and recreational sales.
Speaker 6:
[02:26] And so this creates sort of like an accounting headache, where they're trying to separate out, oh, these expenses are related to my medical program, these expenses are related to my adult use program, I can deduct the ones related to medical.
Speaker 5:
[02:37] The industry and consumers may get more clarity in a few months. The Justice Department has scheduled a hearing for late June, when it says it will, quote, evaluate broader changes to marijuana status under federal law. I'm Henry App for Marketplace.
Speaker 4:
[02:51] The White House is accusing China of industrial scale IP theft of USAI technology. That is according to the Financial Times. The director of the White House Office of Science and Technology Policy reportedly said entities based in China have been using USAI models to train unauthorized models abroad. The Chinese Embassy in DC said the accusations were pure slander.
Speaker 2:
[03:27] At Radiolab, we love nothing more than nerding out about science, neuroscience, chemistry.
Speaker 3:
[03:33] But, but, we do also like to get into other kinds of stories, stories about policing, or politics, country music, hockey, sex, of bugs.
Speaker 2:
[03:43] Regardless of whether we're looking at science or not science, we bring a rigorous curiosity to get you the answers.
Speaker 3:
[03:50] And hopefully make you see the world anew.
Speaker 2:
[03:51] Radiolab, adventures on the edge of what we think we know.
Speaker 3:
[03:55] Wherever you get your podcasts.
Speaker 4:
[03:57] When we talk about who makes up the economy, we're often talking about workers who are formally employed within a company, receiving a traditional paycheck of some kind, sometimes with employer-provided benefits and W-2s. But a lot of people find themselves working outside of formal employment, in a different part of the economy, the informal economy. That is generally defined as economic activity that falls outside of official regulation. It's not taxed, it's not tracked, and it's mostly invisible to official statistics. It also doesn't come with labor laws or protections. For more on what we mean when we refer to the informal work economy, we're joined by Shelly Stewart. She's Chief Research Officer at the Workers Lab in Oakland, California. Shelly, good morning.
Speaker 8:
[04:44] Good morning.
Speaker 4:
[04:45] Okay, so informal economy, what are some examples you can give us of that?
Speaker 8:
[04:49] There's a huge range of activities. People who are paid in cash, a lot of work that happens in people's homes, things like cleaning work, babysitting, dog walking, street vending. If you've bought or sold something on Facebook Marketplace, you're probably participating in the informal economy. There's informal arrangements in landscaping, construction, agriculture. All of that are just some of the examples of informal work.
Speaker 4:
[05:17] Now, I know literally part of the definition is that we can't see it, but how big is that economy here in the US?
Speaker 8:
[05:25] There are a few different ways that folks measure it, that we try to estimate it. One of those is that the IRS estimates a tax gap, a difference between what should be paid versus what is paid. And that's estimated to be about $600 billion. There's also measures that rely on surveys. The Federal Reserve does a survey of household economic decision making that shows about 20% of people responding work outside of formal employment.
Speaker 4:
[05:57] Who tends to participate in the informal economy?
Speaker 8:
[06:00] Many, many people do. The makeup of the informal economy workforce is really diverse, and it includes folks from all backgrounds and all income levels. That said, women are more likely to participate than men. Black and Hispanic individuals and folks without immigration documentation are much more likely to do these types of work. It's also more common among younger workers, and increasingly we're seeing among retired workers largely out of economic need.
Speaker 4:
[06:32] All of this is very important work that has to be done in this economy. Does it matter that it's informal?
Speaker 8:
[06:38] It's an important question. You know, there are very real risks for people engaged in this work. There's a high risk of exploitation. These are folks not covered by any labor protections. There's no benefits. There's no access to health insurance or time off. People are not participating in social insurance programs. They're not accruing social security points. And so, there's a lot of potential for people to be really taken advantage of.
Speaker 4:
[07:06] What would it take to bring more workers into the formal economy? But also, do we want to do that?
Speaker 8:
[07:14] To bring more people into the formal economy, we need to make formal work more accessible. So that means having pathways for immigrants to get jobs. We need benefits available to workers, including those who need a lot of flexibility and agency over their time. And we need a system that is not so complicated, both for workers and for businesses, especially small businesses, to do things above the table, to file taxes. The question of if formalization is a goal is an important one. Right now, there are a lot of people who really need informal work. And if we kind of just put all the efforts into formalizing work without really examining what barriers exist, we'd be leaving a lot of people behind.
Speaker 4:
[08:05] Shelley Stewart is chief research officer at the Workers Lab based in Oakland, California. Shelley, thank you so much.
Speaker 8:
[08:12] Thank you.
Speaker 4:
[08:14] In New York, I'm Sabri Benishor with the Marketplace Morning Report. From APM, American Public Media.
Speaker 9:
[08:30] Hey, David Brancaccio here. I hope you're well, and that your passport is up to date, because I am hosting a trip to Italy this fall, and you, you are invited. Stay at a world-class Tuscan villa, and step into the world of the Medici, the formidable family whose influence and power helped give rise to the Renaissance and the art we still celebrate today, and not to mention the banking system. We're gonna visit the world's oldest bank, to swim in the thermal spa waters in Monte Cattini, and take in the art of the Uffizi. All of this, and then we'll try to put it all into context with great conversation over even better meals and wine tasting. Please join me and know this, buying into this trip will provide essential support for public media. Discover more about this fall's Tuscany adventure at marketplace.org/travel to reserve your spot today. That's marketplace.org/travel.