While on CNBC on Monday, Buffett says that he would love to see minimum wage hit $15 an hour. But he also says it wouldn’t be a good idea.
“If you could have a minimum wage of $15 an hour and it didn’t hurt anything else, I would love it,” said Buffett. “But clearly that isn’t the case.”
He also said that he had no reason to argue with President Obama’s proposal to increase it modestly from $7.25 an hour to $10.10 an hour.
Buffett, who happens to be the second richest man in the US below Bill Gates, makes a suggestion of a different way to help the working poor.
He says that we should raise the Earned Income Tax Credit, and this will give tax money to those who stay below a certain income level.
“I think you can accomplish way more through the earned income tax credit without negative effects,” he said.
Buffett also mentions that he doesn’t actually believe any of the studies on both sides of the debate that attempt to estimate job losses from employers that would have to pay a minimum higher wage.
“It’s very hard to quantify those tradeoffs,” said Buffett. “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 strongly agrees with the government attempting to do more to adjust income inequality. “That’s something a very rich country should address,” said Buffett.
For quite a while, Buffett has proposed a minimum tax for millionaires, as well as top earners paying higher tax rates, including himself, and this proposal is known as the Buffett Rule.
Buffett talked about how he once earned a minimum wage himself during the 1950s, when it was only $.75 an hour, while working at JC Penney. He also mentioned that he doesn’t have a figure for how many of Berkshire Hathaway’s employees earn minimum wage, but he said that it’s is really a very small number.
For overall broader US economic outlook, he believes that job growth is going to continue to pick up. He’s not worried about the US having another recession, even though we’ve shown signs of a slowing economy.