The founder, chairman, and CEO of Blackstone, Stephen Schwarzman, is advocating for immediate legislative action to improve the lives of struggling Americans, including a substantial increase in the minimum wage.
Schwarzman is pushing for what he calls “Marshall Plan for the Middle Class,” named for the American-led fund that rebuilt Europe from rubble after World War II.
In a CNBC interview, the multi-billionaire stresses that income inequality is a social problem that must be dealt with now. “I look at this as a systemic problem. This is not anecdotal,” said Schwarzman.
“What we have is less an issue of income inequality than income insufficiency for the bottom 50% of the society,” he said.
“This is like half of our society is severely disadvantaged. We can’t allow that to continue, so that means you need policy solutions.”
Schwarzman, whose company manages more than half a trillion dollars in assets, offers three starting points for his middle-class Marshall Plan.
The business titan believes that technical training schools should have more funding, that teachers shouldn’t pay taxes, and that the federal minimum wage should be increased.
Schwarzman believes that successful American companies should help high schools and training schools prepare the employees of tomorrow.
He suggests that local businesses in each state collaborate with high schools and training schools to coordinate mutually beneficial job training program initiatives. Participating states should then receive federal funding for such programs.
Next, Schwarzman thinks that teacher salaries shouldn’t be taxed. “We have now slipped from number one in primary, secondary education. … We’re now down, depending upon who’s measuring, to number 30 to 35 in the world,” he said.
“Our graduates simply aren’t competitive on a global basis,” said Schwarzman. “I think teachers is where the key is … We also have to make teachers a special class in our society.”
Schwarzman suggests a higher federal minimum wage to combat severe income inequality. The current federal minimum is $7.25 an hour.
Twenty-nine states, including the District of Columbia, now have state minimum wages ranging from $11 to $16 an hour.
Some experts believe that a higher minimum wage will not close the income inequality gap but exacerbate it.
There are studies that suggest higher minimum wages will only benefit workers with in-demand skills and leave workers with basic skills bereft of opportunities.