The billionaire private equity titan and supporter of President Donald Trump pointed to three main pillars of the plan: a higher minimum wage, more resources for technical training programs in schools and the elimination of taxes for teachers.
"What we have is less an issue of income inequality than income insufficiency for the bottom 50% of the society," he said on CNBC's "Squawk Box."
"I look at this as a systemic problem. This is not anecdotal," 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 $512 billion in assets, suggested that business communities in each state should connect with high schools to start job training early. Each state, he said, would receive money from the federal budget to advance training programs.
"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. You can't be in a knowledge economy, can't do all the tasks you need to do, if you're number 30 or 35."
He also said teachers should not pay taxes to help improve education levels in America.
"I think teachers is where the key is. We have to address getting the best people. It's not just money. We also have to make teachers a special class in our society," he said.
Schwarzman also said the stock market has had a "good run" this year, but its rate of increase may slow down.