Warren Buffett Says Millions Are Trapped Living An 'American Nightmare' — But Proposes A Tool 'Far More Useful' Than Raising Minimum Wage

Housing is unaffordable. Essentials cost more than ever. And despite working full time — sometimes more — millions of Americans still feel like they're one flat tire away from financial disaster.

Warren Buffett talked about this exact problem 10 years ago. Not as a warning about what might happen — but as a plain description of what already was.

"There's been millions that have lived the dream," he said during a 2015 interview with PBS NewsHour. "But there's been an American nightmare that has accompanied that."

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Buffett wasn't describing people who gave up or checked out. He was talking about the ones who did everything society told them to do and still couldn't get ahead.

"That's where people that equally have tried to get education and worked hard and had good habits have found themselves living a life that's been on the edge throughout their entire lives — and the same for their children."

It was an election year, and Buffett said he wanted candidates to address it — not in theory, but in concrete action.

"I would like to hear any candidate say they felt about that and what they intended to do about it. It's got to be a big issue."

In Buffett's view, one of the best tools wasn't a minimum wage hike. It was the Earned Income Tax Credit, a benefit that boosts pay for low- to moderate-income workers through the tax system.

"I think the Earned Income Credit is by far the most useful tool to really minimize poverty in this country," he said. "It does not interfere with the market system, and it could be geared in various ways to reward work."

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His logic was simple: if someone's working a full-time job, they shouldn't be living in poverty. The EITC, he believed, was the best way to ensure they wouldn't — without putting pressure on employers to solve it alone.

"You want people to feel good about what they do in life," Buffett said. A "reasonable job," paired with a substantial tax credit, was the combination he backed.

He also pointed out that economic mobility doesn't start in adulthood. According to him, it starts in preschool. "In many cases, people don't have a fair shot by the time they're four or five years old."

At the time, he called the wealth imbalance "out of whack." While the Forbes 400 had seen their collective net worth surge by 2,300% since the 1980s, Buffett noted that the bottom 20% of Americans had barely seen income grow at all — less than 1%.

"You expect unequal results in a market economy, very unequal," he said. "But you really shouldn't have an economy with over $50,000 in GDP per person and have lots of people living in poverty who are willing to work. I mean, that does not make sense." 

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A decade later, it still doesn't. GDP per capita is pushing $90,000 and yet, the bottom half of Americans still hold just 2.5% of the country's wealth.

Despite the passage of time, the central issue Buffett laid out remains largely untouched. The tax credit he described as "by far the most useful tool" continues to fly under the radar, while the structural problems he highlighted — from wages to early childhood gaps — still show up in headlines and household budgets.

The nightmare didn't disappear. If anything, people just stopped calling it that out loud.

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