Pitchfork Economics with Nick Hanauer

Episode: Listener Voicemails! (with Nick and Goldy)

Date: November 15, 2019
Host: Civic Ventures
Guests: Nick Hanauer, David "Goldy" Goldstein

Episode Overview

In this interactive episode, Nick Hanauer and David Goldstein ("Goldy") answer listener voicemails, tackling big questions on economic representation in Congress, the true impact of minimum wage hikes on prices, and the nature of corporate growth in capitalism. The hosts blend empirical research, accessible explanations, and their signature irreverence to clarify complex economic debates for their audience.

Key Discussion Points & Insights

1. Congressional Self-Interest vs. Public Good

Listener Question by Brad from Toledo (00:48)

• Congress Is Not Representative
  • Statistics: About 35% of Congress members are millionaires, compared to less than 6% of the general US population.

    "So six times as many people in Congress are millionaires as the general population." — Nick Hanauer (01:39)

  • Implication: This wealth gap means Congress may not relate to or prioritize middle-class needs.

    "It tells you that our representatives are not very representative." — Goldy (01:48)

• Disconnect vs. Self-Interest
  • Congress' lack of action on middle-class economic interests is attributed more to a disconnect than explicit self-interest.

    "You can't say whether it's naked self interest or just simply a total disconnect from the reality that faces most Americans." — Goldy (02:05)

• Missed Opportunities
  • Obama-era Democrats held super-majorities but failed to enact significant measures like a minimum wage hike.

    "They could have chosen to raise the minimum wage, but they didn't." — Nick Hanauer (02:47)

• Civic Responsibility
  • The public is partly culpable for not holding elected officials accountable.

    "We have not collectively held them to account in the way that we should." — Nick Hanauer (04:03)

• Potential Reforms
  • Suggests public financing of campaigns as a way to increase diversity and representation, though cautions that even "average" legislators can be co-opted by business interests.

    "One solution might be to elect a more representative Congress...through public financing of congressional campaigns." — Goldy (04:27) "There's no guarantee that you'd get a better government that way." — Goldy (05:15)

Memorable Moment (Summed Up):
The frustration that, despite being a democracy, Americans have not done enough to demand or secure economic reform from their representatives.

2. Minimum Wage Hikes and Price Inflation

Listener Question by Heidi from Denver (05:17)

• Empirical Research Overwhelmingly Refutes Job Loss Claim
  • Decades of studies, including prominent ones by Ben Zipperer and Arin Dube, show no meaningful job loss from higher minimum wages.

    "...basically there are no instances where raising the minimum wage creates any negative effect on jobs." — Nick Hanauer (05:54)

• Do Prices Go Up?
  • Wages are a small part of business costs—e.g., only 10% of Walmart’s costs.

    "Out of a dollar that you pay Walmart, wages comprise only about 10% of that price." — Nick Hanauer (06:11)

  • Even significant wage increases barely impact retail prices—“pennies on the dollar.”
• Direct Study Evidence
  • University of Washington found no increase in supermarket prices after Seattle’s minimum wage hike:

    "There were no overall market basket price changes attributable to Seattle's minimum wage policy...low income workers may be able to afford higher quality diets if wages increase, yet supermarket prices stay the same. Yes, that seems like a win, win, win, right?" — Goldy (07:10)

• Profits vs. Prices
  • Companies’ profits have doubled as a share of GDP; higher wages could be paid by reducing excess profits instead of increasing prices.

    "Over the last 40 years, profits have effectively doubled as a percent of GDP. So one of the ways that you can drive wages up, but not prices, is by collapsing the amount of profit that companies take on each transaction back to normalized levels." — Nick Hanauer (08:45)

• Bottom Line
  • Raising the minimum wage often comes out of corporate profits, not higher consumer prices.

    "Even if raising the minimum wage increase costs, that doesn't necessarily mean it will increase prices to consumers...Because there's plenty of margin left." — Goldy (09:37)

Notable Exchange (08:38–09:58):
Goldy and Nick jointly debunk the myth that higher minimum wages drive up prices, stressing that companies can absorb costs with their abundant profits.

3. Corporate Growth and Capitalist Demands

Listener Question about Growth Pressure (10:01)

• Firm vs. Market Dynamics
  • Individual companies face relentless pressure for quarterly growth, but what’s good for the market overall isn’t always good for a single business.

    "There's often this disconnect between the market as a whole and the individuals and firms that are competing against each other within the market." — Goldy (10:33)

• Growth Without Extra Resource Use
  • Economic growth can happen via innovation and dematerialization (more value from knowledge, not more consumption of resources).

    "We can dematerialize a lot of growth so that you can continue to have economic growth without continuing exponentially to consume resources..." — Goldy (11:06)

• Adaptation is Essential
  • Using Verizon as an example, the hosts illustrate how companies must innovate to survive—Verizon pivoted from landlines to wireless and broadband.

    "So Verizon adapted to the changing technologies and the changing market and it's done great." — Goldy (12:40)

• Possibility of Better Systems
  • Market-based systems will always carry growth pressures, but policy and public accountability can steer outcomes toward broader welfare.

    "...we can certainly rearrange the system in a way which makes the outcome of that competition both consistent with increasing the welfare of workers and increasing the welfare of the planet, ideally." — Nick Hanauer (12:05)

Memorable Quote:
"Verizon innovated, adapted and grew. So there are opportunities even for companies who are seeing their monopolies being destroyed." — Goldy (12:46)

Notable Quotes & Moments

• On Representation:
  "It tells you that our representatives are not very representative." — Goldy (01:48)
• On Minimum Wage Myths:
  "There were no overall market basket price changes attributable to Seattle's minimum wage policy." — Goldy (07:10)
• On Demanding More:
  "...we have not collectively held them to account in the way that we should." — Nick Hanauer (04:03)
• On Corporate Adaptation:
  "Verizon innovated, adapted and grew..." — Goldy (12:46)

Timestamps for Important Segments

• 00:48 — Congressional self-interest and representation
• 05:17 — Impact of minimum wage on jobs and prices
• 10:01 — Corporate growth pressure under capitalism

Tone and Style

The episode is conversational, witty, and sharply critical of neoliberal assumptions, maintaining warmth and approachability for a general audience. The hosts frequently use humor and plain language to discuss complex economic issues and are unafraid to challenge prevailing myths with both data and common sense.

Summary

This listener Q&A episode of Pitchfork Economics tackles foundational economic debates using plain language, real-world research, and characteristic irreverence. Hanauer and Goldy take on the lack of representation in Congress, dismantle fears of price spikes from raising the minimum wage, and clarify growth pressures in a capitalist system—arguing for policy reforms and more engaged civic action at every turn. For listeners, it’s a fast-paced, myth-busting session with evidence and heart.