Minimum Wage: Warren Buffet Shares Ideas, Concerns

    March 4, 2014
    Toni Matthews-El
    Comments are off for this post.

Billionaire businessman Warren Buffett thinks that in a perfect world, a $15 minimum wage would be a great thing for the economy.

He told CNBC on Monday, “If you could have a minimum wage of $15 and it didn’t hurt anything else, I would love it.”

But according to Buffet, “clearly that isn’t the case.”

Buffet has long felt strongly about the US government doing more to address income equality. However, he’s concerned that a minimum wage hike to $15 per hour, as demanded by some low income workers, would do more harm than good.

Buffett did say he wouldn’t argue against President Obama raising the minimum wage from its current $7.25 minimum to a more “modest” $10.10 per hour. This number is close to minimum wage hikes that are already occurring in some states. A moderate solution seems to be the most likely outcome at the national level.

The billionaire is no stranger to minimum wage, having shared that when he was a youngster he earned a mere $0.75 per hour in the 1950’s.

Of course times have changed drastically since then. The standard of living was far less expensive during the 50’s than it is today. While things have gotten more expensive in the United States, the minimum wage rate has been slow to catch up. This is putting one heck of a strain on working Americans, and making it impossible for many to survive without government aide.

Rather than focus solely on a minimum wage hike, Buffett thinks that it would be smart to raise the Earned Income Tax Credit.

Said Buffett, “I think you can accomplish way more through the earned income tax credit without negative effects.”

Warren Buffett admits he is not moved to buy into either side of the minimum wage argument and what they say for certain a hike will do to the economy.

“People come out with these exact studies. They don’t know. Usually you just get proponents of the two sides pulling out figures that substantiate their positions.”

Buffett himself is simply arguing for a more sensible and less extreme solution.

Image via Wikimedia Commons

  • smithsson

    good article. I’ve seen a few blogs talking about this. I didn’t see many of them mention anything in the headlines about this part that Buffett had mentioned:

    ” ….and it didn’t hurt anything else, I would love it. …..clearly that isn’t the case.”

    The relevant question would be, why is that not the case?

  • naksuthin

    Generally speaking the countries with the highest minimum wages are the countries with the highest standard of living and the lowest poverty rates.
    The countries with the lowest minimum wages like India…where the minimum wage is 28 cents an hour are also home to the most poverty.
    That makes sense. Where workers are paid more, they can afford to improve their living standard, rise up from under poverty and give their kids a chance at a better life.
    People in Countries where the minimum wage is just 28 cents per hour will never be able to afford a computer or a cell phone. They are cut off from the tools that have revolutionized our society. They are stuck in a cycle of poverty that they will pass on to their children.
    In addition, higher minimum wages tend to promote inventions that have revolutionized life. The washing machine, the dishwasher, the vacuum cleaner, the lawnmower, the blender were all inventions of countries where the minimum wage was high.

    In countries where the minimum wage is low, human labor is cheap so there is no need to invent a machine to wash clothes, dishes, cook or clean the floor. A servant can do them cheaper.