Blackstone Group (BX) CEO Steve Schwarzman, a Republican megadonor, said in a new interview that the United States should hike its minimum wage as well as make a large investment to improve its education system and raise teacher pay.
The policy proposals, in line with those put forward by Democratic members of Congress, may seem surprising coming from Schwarzman, a confidante of President Donald Trump.
“Minimum wage only applies to 15% of the people in the country,” Schwarzman says. “But if you did something in that area it will force up the income for other people in that company.”
The left-leaning Economic Policy Institute found the Raise the Wage Act, a bill to raise the minimum wage to $15 an hour by 2024, would increase the pay for nearly 40 million workers, about 26% of the U.S. workforce. The bill has 32 backers in the U.S. Senate—all Democrats.
Schwarzman did not specify a target rate for the minimum wage, but he affirmed his support for a wage hike despite acknowledging that “in effect, it’s a tax on the business community.”
In January, a Hill-HarrisX survey of 1,000 registered voters found that 70% of Republican voters want a higher federal minimum wage, with 36% supporting $15 per hour.
Schwarzman made the remarks to Editor-in-Chief Andy Serwer in a conversation that aired on Yahoo Finance in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
After he graduated from Harvard business school, Schwarzman joined Lehman Brothers, where he rose to managing director at age 31. In 1985, he co-founded the private equity firm Blackstone Group, which raised $830 million for its first fund. The company currently has $512 billion in assets under management and 23 offices worldwide.
We need a ‘Marshall Plan’ for education
Schwarzman called income inequality “an important subject,” noting that many Americans “live paycheck to paycheck, they have no savings, and their net worth per capita is about the same as the bottom 50% of the population of Greece.”
To address the problem, he called for a large investment aimed at improving the American education system.
“There’s a whole way of reorganizing education, paying more money to teachers, getting other people in the classroom,” he adds. “We need some type of Marshall Plan to address this issue.”
The demand for an increase in teacher pay is in line with a proposal put forward by California Senator Kamala Harris, a 2020 presidential candidate, who vowed to give teachers an average raise of $13,500, which would amount to a 23% average increase in salary. The cost of the plan would total $315 billion over 10 years, according to an outline of the policy.
Schwarzman did not comment directly on the Harris plan.
“Our country can't deliver the promise that people of my generation had unless we dramatically improve,” Schwarzman says. “We can educate everybody here.”
Andy Serwer is editor-in-chief of Yahoo Finance.