But within Hanauer’s own investment portfolio, his record is spotty. Some companies he’s backed, such as Amazon, have driven middle-class workers to unemployment. Pacific Feather Pillow, where Hanauer remains chairman of the board, recently closed plants in Illinois and Pennsylvania to cut costs. For all his money, Hanauer isn’t going out of his way to overpay workers or to create a bunch of extraneous jobs just to prop up the middle class that holds his future earnings in its hands.
After all, he’s not in it to lose. His fellow entrepreneurs and CEOs share this conflict, the tension between competitiveness today and sustainability long term.
Henry Ford famously paid his workers enough to be able to afford a Model T. But he wasn’t competing against imports from Japan and South Korea and the onset of cheap labor from China. Today, Ford Motor pays new workers about half of what longer-tenured employees make, as part of a new union contract designed to boost competitiveness. No single business leader has the power to alter the trajectory of the middle class simply by sacrificing profits, Hanauer says. Which is why society needs to decide to do it, all at once, at the highest levels.
He pauses to reference a Business Insider column he read earlier this year that urged the heads of Wal-Mart Stores, McDonald’s, and Starbucks to boost the middle class by paying their service employees more. “Here’s the thing: I know Howard Schultz,” the Starbucks CEO, Hanauer says. “He’s a nice man. He’s never going to do this on his own.”
Nor, by extension, will Nick Hanauer. He’s simply the alarm, the Lorax warning of the dangers that lie ahead.
Courtney Carbone, she’s already navigating them. She sees the years without a teaching position piling up on her résumé. She knows the longer she looks for a job, the harder it will be to find one.
If she landed a teaching gig tomorrow, she’d return to boosting the economy in all the ways the middle class does. Carbone would maximize her talent and production, help cultivate the entrepreneurs of tomorrow, and pay more taxes for roads and schools. She’d buy more stuff, possibly from one of Hanauer’s companies. Maybe even a new pillow.
Carbone knows that to beat the odds and find a position, she needs any extra advantage she can find. So, this summer, when her nannying stint ends, she will return to Connecticut to attend a nine-week certificate course that will help her teach in 42 states. She will also be $4,000 in debt. After three years of job-seeking, the only way she can come up with the $4,000 is to borrow it.
This, Carbone says, is probably her last shot before she’s forced to give up her dream.
“I do see myself as a teacher still,” she says. “There’s nothing else I’d rather do.”
She is 31 years old. Her whole future could depend on whether this works out.
In a way, all of ours could, too.
This story is part of a yearlong series that examines America’s crumbling foundations and how to rebuild them. Find more on the Web at nationaljournal.com/restoration-calls.