A Seattle millionaire is urging his super-rich peers to support a $15 minimum wage or face the possibility of a devastating populist revolt.
In an essay published this week by Politico Magazine, venture capitalist Nick Hanauer warned that the widening income gap in the U.S. would eventually spark a violent revolution.
“No society can sustain this kind of rising inequality,” Hanauer wrote in the piece, shared nearly 200,000 times on Facebook by Tuesday afternoon. “In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out.”
Hanauer, whose fortune ballooned thanks to an early investment in Amazon, first suggested raising the minimum wage to $15 last year in an op-ed published by Bloomberg View.
A February profile in the Seattle Times said he first became “obsessed” with the $15-an-hour figure in late 2012. Last month, with Hanauer’s blessing, Seattle’s city council unanimously passed an ordinance enshrining that wage -- the nation’s highest guaranteed minimum pay -- in law.
Hanauer has faced criticism from conservatives and business pundits. In 2012, his TED talk about imposing more taxes on the wealthy was banned from the conference's site after it was deemed "too political."
Economics is a tool humans use to encode social and moral preferences about status and power.
— Nick Hanauer (@NickHanauer) June 30, 2014
Hanauer argues in the Politico essay that the trickle-down economics evangelized by conservatives since President Ronald Reagan is “idiotic” and compared it to the way medieval monarchs and rulers claimed their fortune and power was bestowed by higher powers.
“Historically, we called that divine right,” he wrote. “Today we have trickle-down economics.”
That philosophy makes it difficult for middle-class customers to earn enough money to spend on the products people get wealthy selling, Hanauer writes.
“The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren’t only cheap labor to be exploited; they were customers, too,” he writes. “Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able to afford his Model Ts.”
Hanaeur said inaction by larger companies like Walmart and McDonald’s prove that “we should compel retailers to pay living wages – not just ask politely.”
This year has given Hanauer reasons to feel emboldened. French economist Thomas Piketty struck a nerve with his book on the widening wealth gap, Capital In The Twenty-First Century which skyrocketed to No. 1 on Amazon. Further fueling the fire, the International Monetary Fund last month urged the United States to raise the minimum wage or risk even slower economic growth.
"If workers have more money, businesses have more customers," Hanauer wrote. "The middle class creates us rich people, not the other way around."