This meme has made its way around Facebook the last couple of days:
The speaker confuses cause and effect. He makes a simple mistake, as Scott Sumner puts it: reasoning from a price change.
You see, Mr. Hanahuer looks at high wages, sees low unemployment and (incorrectly) concludes that the high wages cause low unemployment. In actuality, it is the other way around: low unemployment cause high wages. When a good/service is relatively scarce (in this case, labor), it means the price (wages) for the good will rise. Likewise, if demand is high, so will be prices.
John Maynard Keynes noted this. It’s one of the reasons he suggests recessions can take a while to recover from and government is necessary: wages are “sticky” he says, which prevents them from falling during a recession to allow for the now glut of workers. Since wages are too high, businesses don’t hire, perpetuating the problem. That is why Keynes calls for government spending and hiring: to stimulate demand that is too low for prices.
I guess there is a second lesson here too: not all businessmen understand economics.