Should the federal minimum wage be raised?
It’s a tough question, even for business magnate Warren Buffett.
Here’s an interview that Buffett had with CNN’s Poppy Harlow on the issue.
Buffett: That’s the toughest question you’ve asked me because I’ve thought about it for 50 years, and I don’t know the answer on it.
Buffett: Well I just don’t…in economics, you always have to say, ‘And then what?’ and the real question is, are more people going to be better off if it is raised, and I don’t know the answer to that. I know that if you raise the earned income tax credit significantly, that that would definitely help people who have gotten short sticks in life. But you do lose some employment as you increase the minimum wage. If you didn’t, I’d be for having it be $15 an hour, if you actually got the same result in all other ways. But you won’t. And I don’t know the trade-offs. Each side has statistics that argue if you increase it at lot, it will only affect employment a little, and the other guys said if you increase it a little, it will kill it. I don’t know the answer to it. I’ve looked at it a lot.
Harlow: Do you think $7.25 an hour, which is the federal minimum wage granted, many states have higher minimum wages than that, many companies pay a lot more than that, but a $7.25 an hour living wage in this country?
Buffett: No, I think it’s terrible. But I think the earned income tax credit may be the better way to attack it. I’m not arguing against it, I really, I just don’t know the answer on it. But I do know $7.25 an hour is not what should be what people are trying to live on in a country as prosperous as ours, but you could have a very significant earned income tax credit at that level and make that a much more livable wage, and that might be the better way to do it.
Harlow: Tom Perkins rustled a lot of feathers, to say the least, in his letter to the Wall Street Journal, saying basically that the 1% are being persecuted akin to how Nazis persecuted the Jews.
Buffett: He probably wishes he hadn’t said that.
Harlow: Now he stepped back a little bit on his comments, but still, he believes that the 1% is being hammered unfairly, do you agree?
Buffett: Well, I don’t see anybody in the 1% that wants to leave that category and join the 99% because they’re feeling persecuted, no.
Harlow: Do you think that the 1% has been attacked unfairly?
Buffett: No, no. I mean you can always find somebody saying something unfair about any group. But, believe me, it is no great burden to live in the 1% or even the 1/10th of 1% at all, and everybody would like to join that group, and very few people want to leave that group.