Tags: Hanauer | income | inequality | wage

Entrepreneur Hanauer: Income Inequality to Prompt Revolt

By    |   Monday, 07 July 2014 03:07 PM

Nick Hanauer, a Seattle-based venture capitalist, is warning that rising inequality will lead to a French Revolution-style popular revolt.

Get ready for the pitchforks, Hanauer writes in an article for Politico.

"Inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution."

Editor’s Note:
New Warning - Stocks on Verge of Major Collapse

In 1980, the top 1 percent took in about 8 percent of U.S. national income, while the bottom 50 percent had about 18 percent, says Hanauer, a self-identified "0.1 percenter" who's been involved in founding or funding more than 30 companies. Today the top 1 percent has about 20 percent of the income, and the bottom 50 percent has 12 percent.

His super wealthy comrades had better wake up and wake up soon, he warns.

"No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out."

Those who believe that can't happen in America are "living in a dream world," Hanauer argues.

The solution is to raise workers' pay. With more money, they'll buy more and create more jobs.

He scoffs at arguments that increasing the minimum wage will increase unemployment. Strangely, executive compensation has skyrocketed in recent decades yet no company has eliminated its senior managers, Hanauer notes. In fact, there are more senior executives than ever. Pay for financial services and technology workers has increased while more are hired.

"So for as long as there has been capitalism capitalists have said the same thing about any effort to raise wages," he writes.

"The data show that when workers are better treated, business gets better. The naysayers are just wrong."

States that raised their minimum wages on Jan. 1 have seen higher employment growth than have states that kept theirs the same, according to a Center for Economic and Policy Research study. The 13 states that raised their minimum wages had average employment growth of 0.99 percent, compared with a 0.68 percent increase for other states.

The research doesn't prove that higher wages create jobs, but does provide evidence against the argument that minimum-wage increases cause job losses, the report says.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

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Nick Hanauer, a Seattle-based venture capitalist, is warning that rising inequality will lead to a French Revolution-style popular revolt.
Hanauer, income, inequality, wage
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2014-07-07
Monday, 07 July 2014 03:07 PM
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