Back in 2014 the billionaire Nick Hanauer appealed to other 0.01%ers to support raising the minimum wage to $15/hour because it would promote equality. Sitting 10-years later I can’t look at the article as anything but laughable in that it tries to sound reasonable and appeal to rich people and at the same time sound like a decent proposal to anyone not in the 0.01%.

Because here’s an odd thing. During the past three decades, compensation for CEOs grew 127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has increased 1,000 percent, and that is not a typo. CEOs used to earn 30 times the median wage; now they rake in 500 times. Yet no company I know of has eliminated its senior managers, or outsourced them to China or automated their jobs. Instead, we now have more CEOs and senior executives than ever before. So, too, for financial services workers and technology workers. These folks earn multiples of the median wage, yet we somehow have more and more of them.

What strikes me about this paragraph is lumping in financial service managers and tech workers with the C-Suite millionaires and billionaires. As if these people that only make 490x less than the C-Suite are closer to those extremely rich people than the worker making $10/hour that cleans the desks overnight.

This is a very common tactic, get the 99.99% to fight each other for the scraps that are left so that they turn against each other and don’t fight the real villains at the top.

Then this paragraph shows just how far out of touch Nick is with what $15/hour means for a small family.

Republicans and Democrats in Congress can’t shrink government with wishful thinking. The only way to slash government for real is to go back to basic economic principles: You have to reduce the demand for government. If people are getting $15 an hour or more, they don’t need food stamps. They don’t need rent assistance. They don’t need you and me to pay for their medical care. If the consumer middle class is back, buying and shopping, then it stands to reason you won’t need as large a welfare state. And at the same time, revenues from payroll and sales taxes would rise, reducing the deficit.

I make about $120/hour USD (which converts to CAD very well I admit) and have a family of 5. We have 2 kids in figure skating and 1 kid in dance. My wife makes around $38/hour CAD as a skating coach, which also saves us some money on the coaching fees for 2 kids because she coaches them for free, though there is income lost when we don’t pay for her time.

I have a house built in 1964 that’s probably one step up from a starter home, but it’s not a McMansion. It’s a modest house with decent backyard.

Canada has some national health care, but I still paid around $6000 last year for random medications and other stuff not covered by the health care system.

They idea that I could do anything but barely survive on $15/hour or even if we both made $38/hour like my wife is laughable. I’d have to work far more than I do, not see my kids much, likely couldn’t afford the house I live in. I wouldn’t have time for recreation because I’d have to go to work more. My kids wouldn’t skate, or dance because there is no way we could afford it, heck it’s tight now.

I wouldn’t save for retirement and would have to rely on government assistance.

And things are far worse south of the border where health care is way more expensive and the outcomes are worse.

Interventions?

I’m almost finished Democracy at Work which advocates for a radical enlargement of democracy so that the workers that produce the services/goods own all the surpluses that currently owners (the book uses the term capitalists) currently use to enrich themselves. In this model every worker gets an equal vote on how to distribute surplus from their labour and gets a share of that surplus on top of the wage they get paid to labour.

There is far more structurally that needs to change to make the above system work, from max/min total wages so that inequality doesn’t balloon, to various businesses working together when they find new technology that reduces the need for labour so that employees no longer needed can volunteer to retrain and move to a new type of work without income interruption.

I have no idea if this is the right solution, but I do know the solution is far more than a minor increase in minimum wage. It will have to be hugely painful for billionaires and likely mean the end of a class of people that hold this much wealth¹. The suggestions by Nick merely try to appease the 99.99% while changing almost nothing.

1. I’m not advocating for their death, just that no one should have that much wealth. ↩︎