The intensity Hanauer brings to his case has not always been well received: A 2012 TED talk—in which he proclaimed, “Rich people don’t create jobs”—was briefly deemed too “partisan” for the conference’s organizers to post on their Web site. But although his attacks have cost him a few wealthy friends, he is quick to point out that his views no longer seem as outré as they once did.
Hanauer has been called “America’s premier self-loathing plutocrat,” a description he relishes, though he is not embarrassed by his wealth. (He has, in addition to his jet—a Dassault Falcon—multiple yachts and vacation houses, none of which he hesitates to discuss.) His tone is blithely optimistic, in the West Coast techno-utopian vein, and he has little patience for people he perceives to be Luddites. “In a sufficiently prosperous society where people specialize sufficiently, and where enough of the crappy work is done by machines, all work becomes art,” he told me at one point. Earlier in the day, I’d seen him engage in a heated discussion at the Brookings Institution over whether robots threaten employment, a concern that he said reflected “this idiotic fear of technology.”
Hanauer first proposed a serious push for a $15 minimum wage in a presentation to the Democracy Alliance in 2012. At the time, many Democrats and union heads were busy debating whether $10 was too high a goal. But he was onto something: As striking fast-food workers across the country began rallying around calls for $15 an hour, Hanauer and David Rolf, a labor leader, kicked off an organizing drive in the small airport community of SeaTac, Washington, that resulted in the country’s first law mandating a $15 minimum wage. Seattle followed suit, as did Los Angeles and San Francisco; other cities and states, including New York, are now considering $15.
At the same time, he launched a media campaign to get the Obama administration to raise the threshold below which salaried workers must be paid overtime. (For years it had been stuck at $23,600.) “When we realized that the Labor Department had the ability to raise it, we also knew that, given the dynamics of the Obama administration, they were going to negotiate with themselves and talk themselves into raising it to, you know, $25,300. Because ‘businesses will be mad,’ ” he said with an eye roll. Hanauer decided to go big, joining forces with liberal think tanks to advocate a jump to $69,000 (a threshold calculated to extend overtime rates to the same share of the workforce that received them in 1975). In June, the White House announced that it would raise the cutoff to $50,440, which Hanauer calls “a miracle.” Once the regulations are finalized, the move could increase the income of nearly 5 million workers.
Dramatically raising workers’ wages, Hanauer argues, won’t lead to fewer jobs, as his opponents claim. It will lead to more jobs, because workers who have more money will create demand for more products and services, thereby creating a “positive feedback loop” of prosperity. He and Liu call their theory “middle-out economics,” a term President Obama began using during his 2012 campaign, juxtaposing it with the “trickle-down” ideas of the right. In this, they are appealing to the self-interest, rather than the charitable sense, of the rich. “It is not a case based on niceness and compassion; it is a case based on winning,” Liu told me.