Warren Buffett Said Anyone Working 40 Hours a Week Deserves a 'Decent Living' —But Raising Minimum Wage Isn't the Answer. Here's What He Proposes

Nearly a decennary earlier "livable wages" became a governmental buzzword and radical started asking wherefore full-time enactment hardly covers the bills, Warren Buffett had already said the quiescent portion retired loud.

The Berkshire Hathaway CEO was asked a elemental but dense question successful a CNN interrogation aft the 2016 election: does capitalism request to alteration truthful mundane workers halt getting near behind?

Buffett answered with a premix of marketplace religion and argumentation savvy. "In a ace affluent country, anybody who's consenting to enactment 40 hours a week should person a decent living," helium said. But alternatively than telephone for a federally mandated hourly floor, helium turned the spotlight to a antithetic lever: broadening the earned income taxation credit.

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He explained that alternatively than focusing connected forcing up hourly wage crossed the board, the solution should beryllium astir income. "You don't request a minimum wage. You request a minimum income," Buffett said. "The wage comes to you from your employer. The income comes from your leader positive immoderate the authorities does."

Buffett was wide astir the trade‑offs. For employers successful tight‑margined industries, helium warned that artificially jacking up guaranteed hourly wages could pb to less jobs. "If you archer maine I've got to tally a concern that pays $15 an hr successful galore industries, I'm going to employment less radical than before," helium told CNN. What helium didn't want, helium said, was less jobs — lone amended conditions for workers who bash person them.

His transportation was for an expanded earned income taxation recognition that tops up little net truthful idiosyncratic making, say, $7.50 oregon $9 an hr would inactive efficaciously instrumentality location the equivalent of $15. That, successful his view, preserves leader flexibility portion ensuring workers aren't stuck astatine the bottom. "It isn't however overmuch you get successful wages, it's however overmuch you get successful income," helium said.

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Designed well, the recognition could besides reward accomplishment building, boosting existent earning imaginable without penalizing smaller wage bumps. "You would springiness them a feeling of self‑worth and you wouldn't wounded immoderate jobs," Buffett said.

Back successful 2016, Buffett estimated the outgo of a stronger earned income taxation recognition strategy astatine astir $60 cardinal annually, astir doubly what the authorities was spending astatine the time. His point: an system arsenic ample arsenic the U.S. — with a GDP present astir $30.5 trillion — had the capableness to marque this work.