On his podcast Yang Speaks, former Democratic presidential candidate Andrew Yang asks Nick about pervasive economic myths, the next big labor standards fight (the overtime threshold), and the early days of the Fight for $15. Plus, they debate whether a higher minimum wage or a universal basic income would be better for society.
The episode from Yang Speaks: https://shows.cadence13.com/podcast/yang-speaks/episodes/f017e270-cc82-40ab-b4a2-6b90b1a564e0
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Nick Hanauer:
Hey, gang. Today on Pitchfork Economics, I get to speak to Andrew Yang, former presidential candidate and current candidate for mayor of the city of New York. Andrew’s an old friend and a big UBI supporter. He and I are going to get to talk about that and the alternatives that we mostly work on, which is raising wages, and all other aspects of political economy.
I’m really excited to talk to him. This podcast will be both posted here at Pitchfork Economics, but also on his podcast Yang Speaks. So I hope you enjoy it, and let’s talk to Andrew.
Andrew Yang:
It is my pleasure and thrill to welcome to the podcast someone I’ve been wanting to get on here for a while. Serial entrepreneur, civic activist, founder of Civic Ventures, Pitchfork Economics, rabble-rouser extraordinaire, Nick Hanauer. Nick, welcome.
Nick Hanauer:
Thank you, Andrew. It’s so great to catch up with you.
Andrew Yang:
Seriously. So, Nick, I became a fan of yours when you wrote that piece in Politico that I guess ended up kicking off the term Pitchfork Economics, where you were like, “Hey, FYI, the pitchforks are coming for us.”
Nick Hanauer:
Yes, and it came.
Andrew Yang:
I was like, “Holy crap. Somebody said it,” and it had to be someone like you who had had incredible business success, founded and invested in name brand companies. And so, at one point you were like … I remember that article so well. You were like, “Look, guys. I’m in the top 1%, and there are only so many pants I can buy.”
Nick Hanauer:
Yeah. No, for sure. Andrew, when I wrote that article, I’d had a longterm interest in the issue of inequality that was spurred by this incredibly wonky thing that I know you’ll appreciate, because you’re a little bit of a wonk yourself. So I got a look at the income shares that the IRS captures that had gone back a long time, and what I discovered … I got a good look at those in 2006 or 2007, or around then.
What you discovered when you look at those income share numbers was that in 1980, the top 1% of Americans shared about 8% of national income. The bottom 50% of Americans shared about 18%. That was in 1980. In 2007, the share of income for the top 1% had risen to something like 22% or 23% while the share of income for the bottom 50% of Americans had fallen from 18% to 12%.
I simply took those numbers and stuck them in a spreadsheet and said, “What happens if this happens for another 30 years?” The answer was Armageddon. The problem is that if the income for the top 1% goes from 23% to 45% and the income for the bottom 50% goes from 12% to 6% or 5%, which is where I think the numbers took you, it’s really super clear that you’re not living in a capitalist democracy anymore. You’re living in some sort of feudal police state.
I was just like holy shit. If this doesn’t change, we’re in deep, deep, deep trouble. Of course, from 2007 on, things didn’t get better, they got worse. And here we are.
Andrew Yang:
Oh, yeah. It got dramatically worse. One thing that was so powerful about that article, which in my mind was like this opening salvo, because you’ve done all of this incredible work since then making the same case, but you were one of the first people to just come out and debunk the entire, hey, the top slice of taxpayers are enormous job creators.
Nick Hanauer:
Yeah. And so, at the same time, sort of like you, I got this terrible urge to understand where economics had gone wrong, because up to that point, the economic profession had been saying that all of the policies that had led to this enormous amount of concentration of wealth at the top were good for everybody. That’s-
Andrew Yang:
Rising tide, lifting all boats.
Nick Hanauer:
Yeah. That’s right, like raising wages kills jobs. Therefore, we shouldn’t raise the minimum wage. Rich people are job creators. The more money we have, the more jobs we create. People are paid their marginal product, which is to say if you make $7.25 an hour, that’s because you’re only worth $7.25 There’s always a trade off in economic efficiency if you increase justice or fairness in human societies, sort of the canon of neoliberalism.
My intuition was that this was all nonsense, because when you look at neoliberalism for what it is, it effectively amounts to a protection racket for the very rich. If you take neoclassical economics in neoliberalism seriously, there’s only one thing that can happen is that the rich will get richer and everybody else will get poorer. And so, like you, I began a journey to try to essentially figure out where we went wrong and to try to do things that could get us back on track.
Andrew Yang:
Yeah. So the big theme for this conversation, and you are the perfect person to have it with, is what the fuck do we do? Because here you are, you’re like a business titan. You have a platform. You make a very clear rational case, which is correct. You point out some of the flawed ideological defense mechanisms that people have around the current winner-take-all economy and its extremity.
So you come out and you say these things that … Just about everything out of your mouth, I’ve always agreed with. You fight for a higher minimum wage in your own city that ends up helping to kick off a movement around the country. But I think you would agree with me, particularly during this pandemic, that the extremity is accelerating and getting worse and not somehow getting any better.
And so, you know, and you and I connected on this early on when I decided to run for president, I was like, “Okay, here’s my approach. Here’s my plan. Let’s start giving everyone a certain amount of money to meet their basic needs,” and we had some degree of success. But I’m really interested in what the heck you found while you’ve been pushing these causes through Civic Ventures and other measures. How the heck can we turn things around?
Nick Hanauer:
To be clear, the answer to do … Of what to do to turn things around is very, very simple. Getting it done politically is very, very hard. So in my humble opinion, the answer is simply to require companies to pay their workers enough to live in security and dignity and for rich people to pay enough tax to sustain the investments that make a democracy go. It is not complicated.
The thing that I want to emphasize is that if you take neoclassical economics seriously, then you also believe that all of the policies that you would impose to do these things are these efficiency killing job killers. I mean if there’s a theme to what I want to say today on this podcast is that is a lie. All of that is utter nonsense, that the neoclassical economic models are rooted in assumptions about human behavior and the dynamics of human social systems. They are just objectively false.
Andrew Yang:
Nick, I’m just going to entertain you for a minute. I studied economics in college, and this is what I remember. Hang on. Hang on a second.
Nick Hanauer:
Yeah, exactly. Supply and demand. So, Andrew-
Andrew Yang:
[crosstalk 00:08:39].
Nick Hanauer:
Yeah, exactly. Supply and demand.
Andrew Yang:
[crosstalk 00:08:40] remembering that one.
Nick Hanauer:
Yeah, exactly. As wages go up, employment must come down. This is just utter nonsense. So if you accept the idea that the economy is this closed equilibrium Pareto optimal system, then anything you do to it actually decreases welfare for everybody. But the problem is the economy isn’t that kind of system.
Andrew Yang:
The invisible hand is not somehow omniscient and omnipotent and making it all happen.
Nick Hanauer:
No. No. If there is an invisible hand, it has to do with cooperation, not competition. But the truth is that claiming that when wages rise, jobs have to fall would be equivalent of claiming that when plants grow, animals shrink. This is obviously nonsense. It’s not the way it works. In fact, when plants grow, so do animals. Then plants, right?
Andrew Yang:
Yeah, more food. For sure.
Nick Hanauer:
Because it’s an ecology. There is an ecological relationship between wages and business growth and hiring. When workers have more money, businesses have more customers and hire more workers.
Andrew Yang:
You had empirical experience with this, obviously, in that you kicked off the $15 an hour minimum wage in Seattle and then got data. So can you tell us about how that movement has gone and grown? I know it seemed like we were this close to widespread adoption.
Nick Hanauer:
[crosstalk 00:10:10].
Andrew Yang:
You got closer to it than I am in terms of what that building looked like in the Senate it seemed.
Nick Hanauer:
Yeah. So I just want to emphasize that we’ve been raising the minimum wage in the United States of America since 1938. We’ve done it federally 22 times. In zero of those cases, did jobs go down? Unless the country was in recession. We’ve also raised the minimum wage hundreds of times in cities and states over the last 80 or 90 years. In zero of those cases, did jobs go down?
The thing that’s remarkable is that because of this economic theory, because of this academic economic theory that sees the economy in this zero-sum relationship, it was not until 1994 that economists even bothered to check to see if jobs went down after wages went up.
Andrew Yang:
There’s a lot of very strange group thing.
Nick Hanauer:
Yeah. So it’s just astonishing. Then this marvelous guy named Alan Krueger and his friend David Card did a study comparing New York to New Jersey, where New Jersey raised wages and New York didn’t. Their intent in doing this empirical analysis was to characterize how much raising the minimum wage killed jobs.
They discovered, to their horror, that not only didn’t jobs go down, they may have gone up. This kicked off a giant kerfuffle in the academic economics profession, where a Nobel Prize-winning economist named James Buchanan in the Wall Street Journal referred to Card and Krueger as “a bevy of camp-following whores”-
Andrew Yang:
Wow!
Nick Hanauer:
… for having the temerity to challenge what he called the bedrock principle of economics, that if wages rise, employment must fall. If you can get the world to believe that when you raise wages for workers, employment falls and you are to “harming” the very people you’re intending to help, then you are given both practical and moral permission to keep wages low and profits high.
Andrew Yang:
You realize that there truly are these ideological bullworks or defense mechanisms [crosstalk 00:12:33] people.
Nick Hanauer:
Absolutely.
Andrew Yang:
I ran into versions of it over and over again all over the country. If I had a choice between something like universal basic income and higher minimum wage, I would choose universal basic income. But if I don’t get universal basic income and the choice is raise the minimum wage, then I’m all for raising the minimum wage.
Nick Hanauer:
I’m on exactly the other side of that trade, mostly because I’m a serial entrepreneur and capitalist. So I really do believe in capitalism. I do believe that it is a great economic system, the best ever devised. But I also simultaneously believe that it is ridiculous and unforgivable to believe that and also believe that the whole system will come tumbling down if companies are required to pay their workers enough to live in dignity without food stamps. It’s nuts. There is zero, there is nothing that prevents every company in America, particularly every big company, from paying their workers enough to get by without food stamps.
Andrew Yang:
I mean, hey, because some of these companies are then just turning to public subsidies and food stamps. They’re like, “Hey, you are exploiting workers. But don’t worry, here’s a phone number for food stamps.” I mean it’s very dark. It’s very dark.
Nick Hanauer:
That’s right. It’s terribly dark, and we don’t really have capitalism, true capitalism, in this country. We effectively have socialism for the rich. Most people who get government assistance aren’t unemployed. They’re employed. They have jobs. Their employers just don’t pay them enough money.
Why don’t they pay them enough money? Because we collectively have left them off the hook, because we have been persuaded by this neoliberal nonsense that if Walmart was forced to pay their workers enough to get by without food stamps, somehow the whole system will come tumbling down. Meanwhile, Walmart, to use but one example, spends approximately as much, about $6 billion a year, just on stock buybacks as their employees receive in public assistance.
Andrew Yang:
Wow!
Nick Hanauer:
It’s just crazy. It’s nuts. And so, the thing about UBI, I’ve no problem with UBI, I just think that the … And I can’t defend this. It just pisses me off. I just think that the easier and quicker path to get America back on track are a set of labor standards that require companies to pay people enough to get by. If we did that, almost all of this problem would go away. That’s my view.
Andrew Yang:
I think one of the reasons why I’m on the other side of that was that I looked at the political possibility of changing the labor standards along the way you suggest, and reforming what I see is, as you suggest, like a very, very deranged version of capitalism. I thought, “Which of these two things do I think we can make happen?”
You’ve been working on one for quite some time and it’s one reason why I want to hear from you how we move that forward. Then I jumped in with this other version, in part because … But I’m with you in the sense that we are living in a world where very large corporations and certain types of individuals are being treated incredibly favorably and generously by our system. Then we’re looking around, saying, oh, rugged individualism for folks who are working at Walmart and the rest of it.
Nick Hanauer:
That’s right. It’s just crazy. Here’s another canonical example that people are using right now, is the bailout of the airline industry in the pandemic. So the public, taxpayers effectively, gave the airline industry $50 billion to help tide them through this difficult circumstance. But in the prior five years, the airline industry spent collectively about $65 billion on their own stock, returning money to shareholders and to themselves. So maybe-
Andrew Yang:
In a way, we’re just pumping all this money essentially to shareholder buybacks.
Nick Hanauer:
That’s right. We subsidized these selfish, short-sighted shitbags because, well, we’ve got to save the industry and protect the workers.
Andrew Yang:
You could’ve protected the workers by sending the workers money.
Nick Hanauer:
Exactly.
Andrew Yang:
You could’ve done that, [inaudible 00:17:09].
Nick Hanauer:
No, exactly. Exactly. Scott Galloway points out frequently we should be kind to people and merciless to companies.
Andrew Yang:
Part of the problem here, Nick, is that we find it much easier to find the companies and shove money into their hands than we do finding the people.
Nick Hanauer:
Yeah. But all of that is a consequence of 45 years of neoliberal policy, of getting effectively economics upside down by mistaking who the true job creators in a market economy are. It’s middle and working-class people who earn enough to get by and thrive and consume, but also have the economic security to improve their circumstances, to get good educations, to effectively raise kids. When I consider how hard it was for me and my wife to raise functioning kids given our circumstances-
Andrew Yang:
That’s actually what got me to run for president, Nick. When my wife and I had our first son and it just beat the shit out of us so bad, and I was just like, “There are two of us.” We’re like competent, we have resources, and this kid is kicking our ass.
Nick Hanauer:
I know.
Andrew Yang:
I was like, “How the heck does a single mom do this?” Then that’s actually what made me run for president.
Nick Hanauer:
The only reason it requires superherodom to do that is because we have let these giant corporations off the hook, because if those companies were required to pay those folks enough to live in security with one job, it would be possible.
Andrew Yang:
So you’re talking about this economic orthodoxy of neoliberalism, that I agree there has been some very strange, almost cultish acceptance of certain ideas, and you yourself got a philosophy degree, I want to say, at a college. You did not get an MBA or any of that jazz. Is that correct?
Nick Hanauer:
Yes, correct.
Andrew Yang:
Yeah, then you had-
Nick Hanauer:
But I did read all the books, just to be clear.
Andrew Yang:
Oh, no, no. No, don’t worry about it. But I’m just suggesting this in part because I feel like you weren’t acculturated in a particular way.
Nick Hanauer:
Correct.
Andrew Yang:
It’s like a lot of the folks that end up just imbibing this stuff.
Nick Hanauer:
Correct.
Andrew Yang:
Like studied maybe economics college, maybe they got an MBA at Harvard, maybe they went out … There’s a lot of that. Whereas you were studying Kant and [crosstalk 00:19:25] people.
Nick Hanauer:
That’s right. No, and I think you’re really right. If you go to Harvard Business School or Stanford Business School, they teach you from day one that the only purpose of the corporation is to enrich shareholders.
Andrew Yang:
Maybe one of the most destructive ideas in human history that one.
Nick Hanauer:
Yeah, that’s right. For folks listening to the podcast, what’s really important to remember about that claim is that it wasn’t … Milton Friedman first made that claim in 1972 and it got enshrined into policy and culture and everything else, and certainly corporate behavior.
But Milton Friedman was making a much broader claim than it sounds. He wasn’t effectively saying screw working people. The only thing you have to worry about is enriching yourselves. He made a much broader claim, which is if you screw working people and only worry about yourselves, that will be good for everyone, including working people. That was the big claim, is that his claim was that by maximizing value for shareholders, the entire society would benefit, including the workers who got screwed. And people bought it. I mean it’s hard to believe, but they bought it.
Andrew Yang:
Very pervasive.
Nick Hanauer:
That’s right.
Andrew Yang:
I mean it came out of Harvard Business School, and everyone was like, “Well, the Harvard people are saying this.”
Nick Hanauer:
Yeah. “Sounds good to me. Will my bonus we better?”
Andrew Yang:
Talk about your engagement with policy, because I’m really curious myself really, because I think that you and I have a lot in common.
Nick Hanauer:
So as you know, I run an enterprise called Civic Ventures, which is my version, my wife and my … Our version of philanthropy. Instead of just giving dough away to the United Way or the local hospital, what we try to do is create structural change at the intersection of policy and politics.
One of the anchor strategies or assumptions that we make about social change in America is that all important big change starts locally. So whether it was the eight-hour day or marijuana legalization or given what … You pick the big policy, it started in a city or state, established the policy, proved that it worked, then it went bigger. And so, what we do is look for transformational opportunities that can catalyze national action, but that we can try first in either our city or state or another.
Andrew Yang:
So fun. You’re like the Civic Innovation Lab-
Nick Hanauer:
Correct. Correct.
Andrew Yang:
… and you look around and say, “All right. We’re going to rollout a $15 an hour minimum wage,” which you did in Seattle what year?
Nick Hanauer:
That was in 2013. In 2012, our partners at SEIU had workers go on strike for $15 around the country. At the same time, we started a campaign to raise the minimum wage to $15 an hour in a small town called SeaTac just out of Seattle. And so, we pioneered the idea, ran the initiative campaign, and won by 60 votes or something like that in this small town.
But that effort completely transformed the mayor’s race that was happening at the same time in Seattle. And so, the guy that got elected mayor got elected on a platform of raising the minimum wage to $15 in Seattle. He created a working group that I was a part of, there were 20 people, and my colleague David Rolfe co-chaired it. He co-chaired it. We pushed through $15, I don’t know, 90 days later or something like that in Seattle.
Andrew Yang:
Wow!
Nick Hanauer:
Yeah. Then it turned out that Seattle did not slide into the ocean and it did not rain cats and dogs and stuff like that.
Andrew Yang:
It actually did quite well, didn’t it?
Nick Hanauer:
That’s right. Then unemployment fell from 5.9% to 3.9% the following two years. Then it went to San Francisco and then around the country, which is how social change happens. David and I cooked up this idea for $15 in response to the Obama administration calling for raising the minimum wage to $9 an hour from $7.25. We were like if these are our friends, who needs enemies?
Andrew Yang:
Wow! I love it.
Nick Hanauer:
Like if this is the best the President of the United States can do, we need a new plan. And so, I mean just between us chickens … Well, I guess this is a podcast, so everybody will know. We never expected to win. So the number 15 sounds like a lot to people, but if the minimum wage had tracked productivity gains-
Andrew Yang:
Oh, yeah, yeah. It’d be-
Nick Hanauer:
… it would be 22 or something like that.
Andrew Yang:
Yeah, it’s crazy if you look at those curves.
Nick Hanauer:
That’s right. And so, we knew that 15 was a relatively conservative number on a historical basis. It’s actually half way between the inflation number and the productivity number, and that’s how we picked it.
Andrew Yang:
But it seems like a very significant leap forward because at the time-
Nick Hanauer:
Oh, yeah.
Andrew Yang:
Yeah.
Nick Hanauer:
But by rights, it should be $25 nationally today.
Andrew Yang:
Yes.
Nick Hanauer:
To be clear, Andrew, if it was, we would live in a very different country.
Andrew Yang:
Very different.
Nick Hanauer:
Wouldn’t we? Yeah. We’d live in a very different country, both economically and politically, because a lot of the economic division that we’re experiencing is a consequence of the anger that has been created by the just objective truth of most people getting screwed over the last 40 years. Some people lean left and some people lean right, but the anger is totally valid, and we have to deal with it.
Andrew Yang:
Well, I love the vision. One of the reasons why I love it is that it just values people’s time at a more appropriate rate. One of the reasons why I’m pro-universal basic income relative to other measures is that it values some of the time that right now doesn’t get considered as employment. For example, my wife is at home with our boys and that doesn’t count. But-
Nick Hanauer:
Zero in GDP calculation.
Andrew Yang:
Yeah, zero GDP.
Nick Hanauer:
Zero.
Andrew Yang:
But the same principle applies where if you were elevating people’s wages, you’re just valuing people’s time more.
Nick Hanauer:
100%.
Andrew Yang:
One of the reasons I’m pro-UBI is you just value people’s time intrinsically. But the principle is very similar. It’s one reason why when you talk about elevating these things, I just imagine more human dignity, which there is immediately. So you surprised yourself and win. Then you’re like, “Oh, my gosh. We’re getting this done in Seattle.” Then that happens 90 days later.
Nick Hanauer:
That’s right.
Andrew Yang:
Then what happens next?
Nick Hanauer:
Then SEIU drove it super hard and super successfully around the country.
Andrew Yang:
Fight for $15.
Nick Hanauer:
That’s right. Mary Kay Henry did an extraordinary job in leadership there. CJ Grimes, who ran the national Fight for $15, was amazing, and a bunch of other people who I could mention. But then the question, to your point, is, Andrew, what’s next, because the minimum wage is … Like it’s a start, but there’s a thousand things that you can do.
I will tell you, in my opinion, what the second most important thing is that we have been fighting since 2014, I think, is the overtime threshold, speaking of time. So the overtime threshold is a threshold below which if you work for more than 40 hours a week, they have to pay time and a half.
In the day, when we used to have a thriving middle class 40 years ago, that threshold covered not just 100% of hourly workers, but it also covered 62% of salaried workers-
Andrew Yang:
Wow!
Nick Hanauer:
… which means, effectively, it covered almost everybody except the big bosses. What happened over 45 years of neoliberalism is that that … So, a, people like me turned hourly workers into salaried workers and pitched them fake titles like assistant manager or director of-
Andrew Yang:
You’re on your way.
Nick Hanauer:
… filing. Yes. You get a business card. Then that standard fell … It just got updated, but as of last year, if you earned $23,600 a year or less, you got overtime. But that means if you were in $23,700 federally and I call you assistant manager, I can make you work 70 hours a week and not pay you one more dollar than it was.
Andrew Yang:
Keynes projected that we’d have a 15-hour workweek by now because we’re so productive. Then he got the productivity number right, but our workweek has gotten longer and longer because of some of the thing you’re describing-
Nick Hanauer:
Exactly.
Andrew Yang:
… because it was like, “Oh, you’re there,” work expands.
Nick Hanauer:
Yes, it does. It does. And because people like me employing other people had this enormous incentive to turn three 40-hour a week jobs into two 60-hour a week jobs. If I don’t have any limit on how hard I can press people to work, then what I want to do is get two people to work as much as three are used to and pocket the difference.
Imagine how profitable that is. Imagine how profitable that is. You have a thousand people working 40 hours a week and then, presto magico, now you have 650 people working 60 hours a week for the same price. Yikes!
Andrew Yang:
I remember one of the things that expanded the workweek … This is going to date me a little bit, but whatever. It was Blackberries. As soon as you have a Blackberry, then people can get you anytime. Obviously, that morphed into smartphones, and people can get people anytime.
Nick Hanauer:
No, for sure.
Andrew Yang:
Now the workweek goes on forever.
Nick Hanauer:
But one of the reasons the workweek goes on forever is all those people with Blackberries were not protected by this labor standard, because in the day, you couldn’t get people to work at home. They’d be like, “Well, now you have to pay me overtime.”
Andrew Yang:
So is the plan to have the overtime threshold applied to salaried workers as well as wage workers?
Nick Hanauer:
Well, it is presently applied to salaried workers at $32,000 a year, which effectively is almost no salaried workers. But, again, using this theory of local first change, in Washington State last year, we pushed through the nation’s highest overtime threshold I believe it is.
Andrew Yang:
Tell us more. Tell us more.
Nick Hanauer:
At full implementation, it will be at about $83,000. So what we are presently doing is putting pressure on the Department of Labor and the Biden administration to either enact a law or change the labor standard, so that if you earn $83,000 a year or less, you are automatically entitled to overtime pay, time and a half, if you work more than 40 hours a week.
Andrew Yang:
This would be transformative, and I will say it would be a job creator in many, many context-
Nick Hanauer:
Huge.
Andrew Yang:
… because someone would wake up and say, “Wait a minute. I’m going to have to pay my workers overtime because right now they’re working 55 hours a week, and that’s time and a half. So how about I go employ another set of people to try and keep everyone at 40?”
Nick Hanauer:
That’s right. And so, one of the secrets to understanding why wages have not risen for a really long time is that if you can 40 million times across the economy turn three jobs into two, well, you’ve taken 15 million jobs out of the economy, plus or minus, or 12 million jobs or whatever it is.
This is why structural unemployment is so high is because companies can get workers to work more hours without being forced to hire more people. And so, everybody’s just on this treadmill.
Andrew Yang:
So when you say that you launched this initiative in Washington State, what does that process look like?
Nick Hanauer:
On this particular policy change, we didn’t have to pass an initiative. We simply had to persuade the Labor Department to change the standard.
Andrew Yang:
In the state of Washington. Wow!
Nick Hanauer:
In the state of Washington. So it took us about a year of strategizing, organizing, and political pressure and narrative in the press. But the last time we raised the minimum wage in the state of Washington, we did it via an initiative.
Among other things that my team does is we run all the gun violence politics in the state. We stood up an organization called the Alliance for Gun Responsibility, and we have now passed four statewide initiatives and probably 25 laws to make the state safer from gun violence.
But to pass an initiative, you need to write the law. You need to get the attorney general to essentially say it’s okay and to assign it a ballot title. Then you need to collect about 350,000 signatures. Then you need to win the campaign. Civic Ventures is a team of 90 political professionals-
Andrew Yang:
That’s cool.
Nick Hanauer:
… that are absolutely world class at doing all of those things. And so, we write the law, collect the signatures, run the campaign, raise the money-
Andrew Yang:
So awesome.
Nick Hanauer:
… then do it again.
Andrew Yang:
So you got a version of this passed in Washington State, where the overtime threshold changed. What year was that?
Nick Hanauer:
Last January. It went into effect, but-
Andrew Yang:
It’s so recent.
Nick Hanauer:
Oh, yeah, yeah, yeah. So, overtime, we put a full-court press on the Obama administration to change the overtime threshold. To make an extraordinarily long story short, they came up short, that they went about half as far as they should have and they did it at the very last minute of the second term, and they didn’t fully implement it. So as soon as the Republicans came into power, they killed it.
Andrew Yang:
The Obama White House issued a report on the automation of labor, and they literally issued it … It was something like December 29th, 2016 or whatever. It’s like the last day in office. They sent out a report being like, “And- “
Nick Hanauer:
And you’re screwed.
Andrew Yang:
Yeah, the report was very frightening. The report was like, “And we’re going to automate away 83% of jobs where people get paid $20 or less at present,” and it was like turn the lights out.
Nick Hanauer:
“See you.”
Andrew Yang:
Yeah.
Nick Hanauer:
“Have fun.”
Andrew Yang:
That was one of my experiences where I was like, “Whoa! They dropped this Obama report on their way out of the office.” So that stinks that, obviously, after Trump takes office, they’re not going to adopt the changes.
Nick Hanauer:
Yeah, correct. It has not gone all the way to 83%. It takes four years more, I think. It’s a phase in thing in Washington State, as it probably should be everywhere, just to give people a chance to accommodate it. But now we’re driving hard to try to get the administration to adopt that standard nationally.
Andrew Yang:
Wow! So is this a Marty Walsh thing or is this a Joe Biden thing, or who [crosstalk 00:35:14] this one?
Nick Hanauer:
Yeah, both. Both. I mean we’re talking to the folks who work for Marty Walsh in the Labor Department, but we’re also circulating the idea of actually passing this legislatively. Between you and me, if I was Biden, I would want to try to pass this legislatively because just politically and economically, there is no policy that is available to Democrats that more directly benefits middle-class people. Do you know what I mean? The minimum wage is fantastic.
Andrew Yang:
Yeah, I know. This would be a big deal for a lot of people.
Nick Hanauer:
Right. But it would be a huge transformative deal for tens of millions of Americans, many of whom voted for Donald Trump in the last election, right?
Andrew Yang:
Sure. Okay, Nick. So what is the catchy name for this measure?
Nick Hanauer:
Oh, fuck. Well, it’s the overtime. I guess what you’re saying to me is that’s a really crappy, not very catchy name …
Andrew Yang:
So I am guessing at it, Nick, because-
Nick Hanauer:
… which I’m admitting.
Andrew Yang:
… right now, I’ll be like, “Let’s check in overtime report.” People are like, “Huh?”
Nick Hanauer:
“What? What is that?”
Andrew Yang:
Though I understand how incredibly transformative it would be positively.
Nick Hanauer:
[crosstalk 00:36:39].
Andrew Yang:
Wait, wait, wait. I’ve got it. I’ve got it. I’ve got it. I’ve got it. I’ve got it. I’ve got it.
Nick Hanauer:
Okay.
Andrew Yang:
All right. Fight for 40.
Nick Hanauer:
Fight for 40. That’s a good … You know what? That’s pretty goddamn good.
Andrew Yang:
That’s not bad, right?
Nick Hanauer:
No.
Andrew Yang:
Because Fight for $15 was very, very successful and alliterative and you hear it.
Nick Hanauer:
Holy crap.
Andrew Yang:
So you say Fight for 40.
Nick Hanauer:
A star is born. I think it’s pretty good.
Andrew Yang:
It’s pretty good, right?
Nick Hanauer:
It is pretty good.
Andrew Yang:
Because you hear it and you’re like, “Fight for 40?” You’re like, “40 an hour?” It’s like, “No, 40 hours a week.” Then you’re like, “Oh, shit. 40 hours a week?” Then it’s like, “Yeah. If you’re working for more than that, then you should get paid overtime.” Everyone will be like, “Hell yeah.” Fight for 40, Nick.
Nick Hanauer:
I think that is absolutely terrific. Well, more to come. On all the little buttons, we’re going to have a little asterisks that say, “By Andrew Yang.”
Andrew Yang:
No, no. No, no. No credit necessary. Just speaking … As long as it happens, I’ll be very, very glad.
Nick Hanauer:
One of the most encouraging things going is the Biden administration’s, and I think the Democratic Party’s, acknowledgment generally that this is a time for bold action.
Andrew Yang:
Yeah, that’s been what my conversations with them have also indicated.
Nick Hanauer:
Yeah. They need to deliver the goods to people.
Andrew Yang:
They have a window of time where the government has to demonstrate that it can actually improve [crosstalk 00:38:00].
Nick Hanauer:
Do shit.
Andrew Yang:
Yeah, yeah, totally.
Nick Hanauer:
Yeah. Yeah. And so, the time is right for I think a much more constructive dialogue about this particular thing. But, anyway, I mean there’s a thousand little things. I’m not sure how you feel about this, but one of my little bug-a-boos is noncompete. If you’re earning $65,000 a year and hanging on by your fingernails, the last thing you’re going to do is go to war with a lawyer over whether you’re noncompete is enforceable.
Andrew Yang:
That’s true.
Nick Hanauer:
Until recently, places like Jimmy John’s were forcing people who made sandwiches for $7 an hour into signing noncompetes, too. But the thing about noncompete is it’s just a way to move power from individuals to corporations. So imagine a world in which nobody ever had to sign a noncompete except maybe the CEO, which meant that at any point you could offer your services and skills to the people across the street who are competing. Well, guess what happens to wages? They go up a lot for a lot of people.
Andrew Yang:
For the vast majority of workers, the noncompete should not be appropriate. I totally agree with this. So keep going. We’ve got those three … Because I personally think the Fight for 40 is something that we really should be driving hard, because that would be a game-changer, would create millions of jobs around the country, I’m thinking, or would see a lot more money going into people’s hands.
Nick Hanauer:
100%.
Andrew Yang:
It’s so benign. Most people looking up would be like-
Nick Hanauer:
Sure.
Andrew Yang:
… “Fight for 40. Who’s not going to be for that?”
Nick Hanauer:
Yeah. Yeah, yeah, yeah. No, you’re absolutely. It does two things. It creates millions of jobs, but it also increases millions and millions and millions of people’s wages, not just, Andrew, because they all of a sudden earn overtime but even more because their employers are like, “Look, it is too complicated to track this. You make $70. I’m raising you at $83 just so I don’t have to deal with this.”
Andrew Yang:
Yeah, a lot of people would be making $83.
Nick Hanauer:
Exactly. There’d be a lot of people in America … Anybody between $65 and $83 would probably all of sudden be making $83 or $83,001 or whatever. And that’s to the good. That’s an amazing-
Andrew Yang:
[crosstalk 00:40:28].
Nick Hanauer:
Yeah.
Andrew Yang:
I think the threshold at which people’s happiness reaches near optimal level is like $75,000. So you’re trying to land at $83 actually makes a lot of sense from a human perspective. Just saying. Just sharing.
Nick Hanauer:
Yeah. As you know, Andrew, there’s so many things that we have to do to get the country back on track. We have to find a way to properly tax the very wealthy and use that money to make investments in the country. We have to pay people fairly and we have to reform our democracy and make sure that this insane amount of voter suppression that the [crosstalk 00:41:10] is engaging in right now.
Andrew Yang:
Terrible.
Nick Hanauer:
It’s headed off at the pass. It’s super embarrassing.
Andrew Yang:
Well, Nick, talking to you is very, very uplifting, which I knew it would be. I was very excited for a reason. If someone wants to follow you, support your work, hear your thoughts … You have written a couple of books, but your podcast is Pitchfork Economics … how else can someone keep track of you and lend a hand to Civic Ventures or anything you’re doing?
Nick Hanauer:
Yeah. Well, I mean Civic Ventures is on the internet. I’m @NickHanauer on Twitter if you’re interested in a sometimes profane and-
Andrew Yang:
I use the F-word on this podcast, so don’t worry about it. It’s all good. Let the Fight for 40 commence. If that becomes a thing, I’m going to be so proud, Nick. I’m not going to lie.
Nick Hanauer:
It’s a really good idea.
Andrew Yang:
Well, Nick, so glad to connect. Let’s keep in touch. All the best in your quest to help people and families and workers get more of what they deserve in this economy. Hopefully we’ll be able to celebrate some victories some time soon.
Nick Hanauer:
I love it. I love it. Well, thank you for having me, Andrew. It’s always so great to connect.
Speaker 3:
Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to subscribe, rate, and review us wherever you get your podcasts. Find us on Twitter and Facebook at Civic Action and Nick Hanauer. Follow our writing on Medium at Civic Skunk Works and peek behind the podcast scenes on Instagram, @pitchforkeconomics. As always, from our team at Civic Ventures, thanks for listening. See you next week.