Speaking to Gawker’s Hamilton Nolan, venture capitalist, billionaire and civic activist Nick Hanauer dismissed the right wing theory that when wages go up, employment goes down.
“My message is that the counterclaim,” said Hanauer, who was one of the initial investors in Amazon, “which is that if wages go up, employment will go down—is a scam. It’s a con job. It’s an intimidation tactic. There is absolutely no evidence anywhere that it’s true. On the contrary, where you find high wages you usually find low unemployment. “
For those of you predisposed to libertarian economics, pay attention. This is a rich dude talking who knows exactly how he built his wealth and exactly why the current economic system is built to benefit people just like him. Continued Hanauer:
The fundamental law of capitalism is: when workers have more money, businesses have more customers, and need more workers. The idea that high wages equals low employment, it’s absurd. And you have to understand that when somebody like me tells somebody like you that [high wages equals low employment] is the case, the only thing that’s true about that statement is that if I can get you to believe it, it would be very good for me.
This is almost like Mitt Romney telling the public he only got the GOP nomination in 2012 because he had more money than everyone else – a fact collectively ignored, but entirely self evident. Sadly, the self evident nature of the Billionaire’s Economy isn’t quite so self evident to those indoctrinate with Randian economics who still seem to think that a free market knows best. Perhaps Hanauer’s statement could make a difference. Perhaps all isn’t lost, after all.
Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.