You’ve probably heard rabble-rousing venture capitalist Nick Hanauer talk about the economic benefits of a $15 minimum wage. But the early investor in Amazon.com and co-founder of aQuantive doesn’t think that goes far enough. In fact, the co-founder of Second Avenue Partners and Civic Ventures says our economy and society would be far better if the minimum wage was nearly double $15.
In remarks today at Seattle’s Museum of History & Industry, Hanauer noted that the minimum wage today for workers would be $28 had it tracked to what the top one percent of earners made.
“People think I am insane, but I would argue that if the minimum wage had tracked what the top one percent made — and it was $28 today — we would have an unbelievably robust economy,” said Hanauer. While there would be unemployment, Hanauer said “I bet you, it would work out really, really well.”
Hanauer said that capitalism is the “greatest social technology ever invented” since it permits and incentivizes people to innovate, which raises standards of living. But he says there is just too much inequality in the system, supported by broken political concepts.
“We need some inequality in our society, and every human society has always had some kind of inequality,” he said. “It has never been an equal thing ever, and it is ludicrous to think it would, but the question is how much economic inequality do we want?”
Hanauer’s comments come amid a tumultuous political climate in which disaffected Americans — largely in the U.S. middle class — are flocking to economic ideas supported by presidential contenders Bernie Sanders and Donald Trump.
Hanauer, who over the years has warned of this rising tide of resentment among the middle class, called the current political situation a “s**t show” which was spawned by failed trickle-down economic theories which in his view simply do not work.
“The anger is valid, these people got screwed,” said Hanauer, who noted that the most economically robust societies are those that support inclusion. “The more you include people in your society — as innovators as consumers as workers as civic participants — the better things get,” said Hanauer, adding that political inclusion is the cornerstone of that belief.
If things do not change and life does not improve for the majority of Americans, Hanauer warned that our society will deteriorate.
“I am very concerned,” he said.
An early investor in companies such as Insitu, Seeq and Modumetal, Hanauer added that some measures of economic success are bogus, noting that Gross Domestic Product is a worthless measure since it only tracks how much stuff is moving around. It does not track whether people’s lives are improving, noting that a company that causes cancer and a company that cures cancer get the same equal weight.
Hanauer’s comments typically enrage and inflame conservative thinkers, and his thoughts on economic inequality have led to many “difficult conversations” with his peer group of wealthy tech leaders and CEOs. But Hanauer said he’s noticed some of those folks — who he said are “good people” who did not “set out to create inequality” — have come around, or at least have become more tolerant of the theories he espouses.
“I used to get a lot of hate mail, I get far less today,” he said.