Warren Buffett Proposed A Way To Ensure 'Anybody Who's Willing To Work 40 Hours A Week Has A Decent Living' — And It Wouldn't Cost Employers Anything

In a 2016 interview with CNN, famed investor Warren Buffett shared insightful views on the state of the economy, the distribution of wealth and the mechanisms through which a fairer economic system could be achieved. Buffett’s observations came years before concerns over inflation intensified. Given that the federal minimum wage has remained unchanged at $7.25 since 2009, his proposals for ensuring a livable wage have become increasingly relevant today.

Buffett emphasized the disparity within the American economy, noting, “We’re in an economy where specialized talents bring incredible sums and where if you’re a little bit where you don’t fit well into the market system you are left behind.” 

This statement underscores the growing divide between the highly skilled and those struggling to find their place in the economy.

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When asked about the need for a more inclusive form of capitalism, Buffett pointed to the Earned Income Tax Credit (EITC) as a vital tool for economic adjustment. He advocated for a significant expansion of the EITC, suggesting that while no single measure can solve all problems, targeted adjustments can alleviate economic disparities. Buffett’s stance highlights a preference for government intervention over wage adjustments by businesses, arguing that meddling with the market system through enforced wage increases could lead to decreased employment.

Buffett’s insights on the minimum wage debate are particularly notable. He argued against the necessity of a higher minimum wage, instead proposing a minimum income achieved through a combination of employer wages and government supplements like the EITC. 

"We have to make sure that in a super-rich country, anybody who’s willing to work 40 hours a week has a decent living,” Buffett said. He cautioned against setting unrealistic wage floors that could exclude millions from the workforce because of a lack of necessary skills.

When probed on why the responsibility for ensuring a minimum income should fall on the government rather than on businesses, Buffett offered a pragmatic perspective. He explained that imposing higher wage requirements on businesses could disrupt the market system and lead to a reduction in employment. 

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"If you tell me I’ve got to run a business that pays $15 an hour in many industries, I’m going to employ fewer people than before," he said. "I don’t want to employ fewer people; I just want that person to make $15 an hour." 

This view suggests that while businesses play a critical role in the economy, government intervention through mechanisms like the EITC could provide a more effective and less disruptive means of ensuring that workers achieve a decent living without compromising employment levels.

The crux of Buffett’s argument is not against capitalism or the market system but rather on how the benefits of economic growth are distributed. He acknowledged the efficiency of the market system in generating wealth but called for adjustments to ensure fairer distribution. This vision involves not a fundamental overhaul of capitalism but targeted reforms to address specific inequities.

Buffett’s perspective on economic reform, focusing on the EITC rather than mandated wage increases, offers a nuanced approach to addressing income inequality. It underscores the importance of balancing market dynamics with social policies to ensure that economic growth benefits a broader section of society. As discussions on economic policy continue, Buffett’s 2016 interview remains a compelling point of reference for understanding the challenges and potential solutions in creating a more inclusive economy.

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