We Need More Billionaires

The case for an endangered species.

There are roughly 750 billionaires in the United States. The national pastime, lately, is hating them. Eat the rich. Make ‘em pay their fair share. No one needs that much money. The sentiment is understandable. It’s also unfair—it treats “billionaire” as a single category, and it isn’t. There are at least three distinct species of billionaire, and confusing them is costing us money.

The first kind inherits it. Roughly a quarter of American billionaire wealth is inherited. Dead people don’t own things. Dead people are things. Whatever you believe about the moral right to pass wealth to your children, the economic question is different: did the transfer create anything? Inherited billions are economically inert. They employ wealth managers and tax attorneys. The argument for taxing them more aggressively than earned wealth isn’t about envy—it’s that this money isn’t doing for the economy what money is supposed to do.

The second kind makes it through finance—trading, investing, leveraging assets into more assets. This one is harder to judge. There’s nothing inherently wrong with someone trading their way to a billion dollars. The world’s most sophisticated version of the paperclip game, where over the course of a career you iteratively trade your way up from a silver spoon to a private island. But a lot of what constitutes making money in finance is gating access—charging tolls on bridges that other people should be allowed to cross on their own.

The third kind builds something. They start a company, hire people, make a product, sell it to willing buyers, and do this at such a scale that the byproduct is a billion dollars. This is the kind we need more of. Not because billionaires are virtuous. Because the process of becoming one—through entrepreneurship—is the single most powerful force¹ for raising the wages of everyone who isn’t one.

And wages need raising.

The Only Thing That Raises Wages

The Bureau of Labor Statistics tracks real wages for production and nonsupervisory workers—roughly 80% of the American workforce. In 1973, adjusted for inflation, those workers earned roughly what they earn today. Half a century. Functionally zero real growth. Meanwhile, productivity per worker roughly doubled. The economy got twice as efficient at producing output. The people who made it happen saw almost none of it.

From the Industrial Revolution through the early 1970s, wages rose almost every year—not just cost-of-living adjustments or the occasional promotion, but genuine upward price pressure on labor across the board. That era lasted a century. Then it stopped. The plateau has now lasted long enough that essentially no worker in the labor force today has ever experienced a sustained rising-wage economy. Entire careers have started and ended within the flatline. We’re losing sight of what wages are supposed to do as productivity improves.

The standard explanations—globalization, automation, declining unions—all contain some truth. They also all point in the same direction once we stop treating them as buzzwords. Globalization expanded labor supply beyond domestic borders. Automation reduced labor demand by replacing workers with machines. Declining unions weakened labor’s pricing power. That’s three ways of saying the same thing: labor is not a special product. It follows the same laws of supply and demand to set prices as copper, oil, or soybeans. More supply, less demand: price stays flat or drops. More demand, less supply: prices rise. For fifty years, labor supply has expanded while the creation of new enterprises—new sources of labor demand—has not kept pace. The result is printed on every paycheck in the country.

Every entrepreneur who steps out of the job market does two things simultaneously. First, they remove themselves from the supply side. One fewer person competing for a job. Second, if they’re even modestly successful, they start creating demand—hiring people, contracting services, buying supplies. One person shifts from a net seeker of jobs to net creator of them.

Even the entrepreneur who fails does this. Start a company, hire twelve people, run it for eighteen months, and fold. That’s twelve jobs that didn’t exist before—twelve units of labor demand that one person generated by stepping out of the labor supply. And here’s the part that matters: wages are sticky. When’s the last time you took a pay cut? When the market raises wages, those wages tend to stay raised. So every burst of labor demand ratchets wages up, and the ratchet doesn’t fully unwind when the company does.

Now scale it. Imagine 2% of the working population did this—roughly three million people. Not became billionaires—just started businesses. Three million people moving from the supply side of the labor market to the demand side. Tens of millions of new positions being created, even temporarily, putting durable upward pressure on wages for everyone.

The entire negotiation shifts, because employers can no longer rely on a surplus of applicants. Now we start interviewing them.

What a Billion Dollars Actually Takes

So what’s special about the billionaires specifically?

Scale. Getting three million people to start businesses would transform the labor market. It would also require convincing three million people to do one of the hardest jobs in the economy. A single founder building a company at billionaire scale creates the labor demand of thousands of ordinary entrepreneurs combined.

The arithmetic is concrete. To accumulate a billion dollars as a founder, you generally need to build a company worth at least $5 billion—after dilution, taxes, and the long road of funding rounds. To sustain a $5 billion valuation, you’re generating somewhere in the range of $500 million to a billion in annual revenue. And to generate that kind of revenue, you need a lot of people. Revenue per employee has a practical ceiling in most industries—roughly $300,000 to $500,000 at mature companies outside of pure software. A billion in revenue at $400,000 per head is 2,500 workers at minimum and usually far more, because the ratio includes every employee, not just the ones touching revenue.

The actual numbers are bigger. Microsoft employs 220,000 people. Google, 180,000. Oracle, 160,000. Amazon, 1.5 million. Meta runs leaner than most—about 70,000—and even that is the labor demand equivalent of 35,000 entrepreneurs each hiring one person². At the other end of the spectrum, one Jeff Bezos created more labor demand than the entire small-business sector of most mid-sized American cities.

That’s what a billion-dollar fortune actually represents. Not wealth extracted from the economy. A receipt for the creation of massive labor demand that didn’t exist before one person decided to build something. The billions are a byproduct of all that activity. Not the cause of it—the receipt.

Not Trickle-Down

This doesn’t require any trickle-down economics to work.

Trickle-down says: enrich the people at the top, and the benefits will eventually flow downward. That’s a hope about second-order effects. Entrepreneurship creates first-order labor demand. It doesn’t trickle. It hires.

A company at billionaire scale doesn’t just hire executives. It hires warehouse workers, drivers, software engineers, HR managers, accountants, janitors, graphic designers, and a small army of people whose job titles didn’t exist ten years ago. When a company like that is growing, it’s competing for workers across the entire labor market simultaneously. Every position it fills is one more employer bidding for someone’s time, at every rung of the ladder at once.

And the pressure ripples. A warehouse worker who can get $22 an hour at Amazon won’t accept $16 down the street. The other warehouse raises its wages or loses its workers. A software engineer fielding three offers pushes all three companies to bid higher. When demand rises in one part of the labor market, it raises wages in adjacent parts too, because workers have options and employers have to compete. That kind of broad-spectrum pressure is something no minimum wage law or policy initiative can replicate. Not because policy is bad. Because policy targets one rung at a time, and demand hits all of them at once.

Why We Don’t Have More

If entrepreneurship is this good for the labor market, the obvious question is: why isn’t it happening more?

The U.S. startup rate has been declining for decades. The Census Bureau’s Business Dynamics Statistics show new firms as a share of all firms dropped from roughly 12–13% in the late 1970s to about 8% by the 2010s. Adjusted for population, fewer Americans start businesses today than in the 1980s. Something is actively suppressing the thing that would raise everyone’s wages.

Some barriers are structural. Entrepreneurs don’t qualify for unemployment insurance—leave a job to start a company and if you fail, you get nothing. The safety net offered to every other worker is null and void for entrepreneurs. Young Americans graduate with six figures of student debt and need a reliable paycheck just to make their monthly payments. The very population most likely to start businesses—young, energetic, willing to take risks—is entering the workforce pre-loaded with a financial constraint that pushes them toward the relative safety of the job queue and away from entrepreneurship.

And the dominant funding mechanism makes it worse. Most people imagine that starting a business means “raising money,” but the math of venture capital excludes most of the businesses the economy actually needs. A VC fund raises $100 million from institutional investors. The managers invest a couple million each into ten companies. Eight go to zero. One breaks even. They pour the remaining capital into the last one—which now has to return enough to make the whole fund profitable. The fund needs to return $200 to $250 million in seven years, so the managers can raise their next fund. Run the math backward and you land on a simple filter: unless a company has a plausible path to a billion-dollar valuation, it doesn’t get past the associate screening the pitch deck.

Think about what that excludes. An HVAC company doing $5 million a year and employing 40 people. A regional restaurant chain clearing $2 million in profit and creating 200 jobs. A SaaS company serving a niche market, making its founders wealthy, and employing 500 people. These are exactly the businesses the economy needs—profitable, stable, creating real labor demand across the entire spectrum—and the dominant funding mechanism won’t touch them. Not because VCs are snobs. Because the fund math doesn’t work unless the company can 100x in less than a decade.

But the other barrier isn’t structural. It’s cultural. In Japan, sumo wrestlers are revered. Boys dream of entering the dohyō. Grand champions are household names—treated the way Americans treat LeBron James. And Japan gets extraordinary sumo wrestlers. Societies produce what they celebrate. America doesn’t celebrate the founder who creates 50,000 jobs. It resents “billionaires”—undifferentiated, no modifier. A culture that can’t distinguish between an heir, a trader, and someone who just created tens of thousands of jobs is not going to produce more of the third one.

But we don’t just suppress billionaires, an outcome many may count as a moral victory. We suppress many of the attempted billionaires, too. The men and women who “only” create 100 jobs, instead of 100,000. Which is a shame, because the economy doesn’t just need more unicorns. It needs more horses, too.

Ask Which Kind

The next time someone tells you billionaires are the problem, ask them which kind. The heir who did nothing? Tax the estate. The financier who gated access to capital markets? Worth a conversation. But the founder who built a company, hired tens of thousands of people, and created billions in economic activity through voluntary exchange?

That person didn’t take anything from you. They made the thing that makes your wages go up. And the economy—your paycheck, specifically—needs about a thousand more of them.

1. The most powerful humane force. You can also raise wages by dramatically reducing the number of workers. The Black Death did this in 1347 and real wages across Europe roughly doubled. Entrepreneurship gets there from the demand side without the body count.

2. And employing themselves.