With a net worth of more than $ 72.7 billion dollars, Buffett is currently the second-wealthiest man in America, with only Microsoft co-founder Bill Gates having a higher net worth at $ 79.2 billion.
Having so much in the bank, Buffett might be considered an odd spokesman for wage inequality. However, the CEO said that while the market system is “a pretty darn good system for allocating labor and resources,” it won’t provide for “the bottom twenty percent of the country.”
Part of that reason is the creative destruction of the free market, he suggested.
“The economy is getting more and more specialized”, Buffett said, meaning some people will “get left way beyond, while a great many people prosper.”
The Oracle of Omaha says one answer he sees that could help income inequality is the Earned Income Tax Credit (EITC)—a benefit that subsidizes low-income workers by reducing the amount of tax owed from wages earned.
Buffett sees the EITC as a way for “a very rich society to take care of those who just don’t fit in that well to the society, from an economic standpoint.” He added that “you want people to work… but we can do a lot better for those people while at the same time people like myself…enjoy ridiculous incomes.”
Buffet says he’s not against the idea of raising the minimum wage across the country. Still, he believes it “distorts supply and demand. If I thought a twenty-dollar-an-hour minimum wage would solve things for people, I’d be all for it.”
Buffet says he sees another outcome of that possible policy. “All it means is you’d have lot more people unemployed.”
On the Money airs on CNBC Sundays at 7:30 pm, or check listings for airtimes in local markets.
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