Nick Hanauer has gotten rich because of an uncanny ability to predict where things are headed. He was the first early investor in Amazon; he bet on drone company Insitu before its sale to Boeing; and he backed biotech company Juno Therapeutics before its meteoric rise.
Now he has another prediction, one he thinks his fellow members of the elite should mind.
In a Politico essay titled, “To My Fellow Plutocrats: You Can Cure Trumpism,” Hanauer warns that economic inequality could destabilize our democracy to the point of civil war. His solution? Pay workers fair wages so they don’t come for the rich with pitch forks in hand.
Hanauer calls the growing wealth gap in the U.S. a “civic sickness” that led so many long suffering Americans to elect Donald Trump to the presidency.
“Yes, Trump is a manifestation of a serious civic sickness,” he writes. “But treating the symptom by removing Trump won’t cure the disease, even if it temporarily makes us feel better. No, to heal the body politic we must confront the disease itself.”
Hanauer is the co-founder of tech venture capital firm Second Avenue Partners and progressive policy group Civic Ventures. He’s spent years building a reputation as a political rabble rouser and championed Seattle’s move to the $15 minimum wage.
In the Politico piece, Hanauer addresses two recent studies of Seattle’s landmark law that are fanning the flames of the minimum wage debate nationwide. A study from the University of Washington concluded that low-wage workers are negatively impacted by the increased minimum wage. Another report from the University of California Berkeley claims the law had its intended effect.
“Given the obvious limitations of the UW study and the contradictory results from the economists at Berkeley, it is too soon to reach a firm conclusion on the theoretical impact of Seattle’s minimum wage,” Hanauer writes. “On the other hand, in practice, in real life here on planet earth, Seattle’s economy is kicking ass.”
Hanauer has made it clear that he has no qualms about being a polarizing figure in the Seattle tech world.
“The truth is that all civic and social change is friction,” he said on stage at the 2015 GeekWire Summit. “Politics is friction. The only way you can bend the arc of history is to create that kind of friction.”
Hanauer’s Politico essay undoubtedly serves that goal. Below are some highlights from the piece, which is available in full here.
On Seattle’s $15 minimum wage: “Of the 10 largest counties in the nation, King County, Washington had the largest year over year job growth in 2016 (3.8 percent), and was the only one of the 10 counties to see over-the-year growth in wages (3.5 percent). How can this be? Because that is how capitalism works. Because when workers earn more money, businesses have more customers and hire more workers. Because a thriving middle class is the source and cause of growth in capitalist economies. Because when restaurants pay restaurant workers enough so that even they can afford to eat in restaurants, it’s great for restaurants!”
On the job impact of technological innovation: “Many of my peers prefer to hide behind the enduring myth that today’s crisis of economic inequality and insecurity is the result of forces unleashed by unstoppable trends in technology and globalization. ‘It’s not my fault I have so much while others have so little,’ we comfort ourselves, ‘it’s the economy.’ That is nonsense. There’s no intrinsic reason why the social and political changes delivered by technological advances and globalization have to massively concentrate wealth in the hands of the few. We simply exploited changing circumstances to take advantage of people with less power than us.”
On ways the wealthy can help: “Plenty of opportunities exist for wealthy folks to get involved in state based efforts like minimum wage campaigns, the fight to increase the overtime threshold upon which so many middle-class people depend, or the fight for portable, pro-rated and universal benefits. If just 10 percent of you, my fellow plutocrats, got behind these campaigns, the anger and resentment that nurtures Trumpism would quickly dissipate as standards were raised, people’s lives improved, and inequality diminished. When you’re filthy rich like us, donating a million bucks to a minimum wage campaign is chump change. I do it. So should you.”