Thread: Buffett: Minimum wage increase isn't answer

Billionaire Warren Buffett said the level of income inequality in the United States is extraordinary" but that raising the minimum wage is not the best solution.

"I don't have anything against raising the minimum wage but I don’t think you can do it in a significant enough way without creating a lot of distortions,” Buffett, 84, Berkshire Hathaway Inc's chief executive officer, said on Saturday at the company's annual shareholders meeting in Omaha, Nebraska. Those distortions “would cost a whole lot of jobs," Buffett said.

Answering questions alongside Buffett, Charles Munger, 91, Berkshire's vice chairman, said raising the federal minimum wage, which has been US$7.25 an hour since July 2009, "would hurt the poor."

Some large companies have recently announced plans to raise wages for their lowest-paid workers.

Wal-Mart Stores Inc, the country's largest private employer, announced a plan in February to begin paying all of its US hourly workers at least $9 an hour in April and $10 an hour by next February. The move will result in raises for about 500,000 workers in the first half of the current fiscal year and cost about $1 billion, the Bentonville, Arkansas-based company said in February.

Berkshire held 67.7 million Wal-Mart shares as of Dec 31, a stake with a value of about $5.3 billion based at Friday's closing price. Senate Republicans last year blocked legislation that would have raised the minimum wage nationally to $10.10 an hour from $7.25.

Job killer

President Barack Obama and Senate Democrats say that lifting the minimum would benefit the economy and reduce income inequality. Many Republicans and business groups say the plan would cost jobs.

Buffett, the second-richest person in the US, said raising the minimum wage was “a form of price fixing” and instead favored reforming the earned income tax credit, a refund paid to low and moderate income individuals and couples.

The US jobless rate has dropped 1.2 percentage points from the end of 2013 to 5.5% in March, close to the level that Federal Reserve policy makers consider full employment. But lower unemployment has not translated into wage gains for many Americans.

“Everyone who is willing to work should have a reasonably decent livelihood in a country like the United States. How that is best achieved, I’m actually going to write something on that soon,” Buffett said.

Tax credits

Buffett has said repeatedly that tax refunds are better for the economy and workers than forcing companies to increase wages.

"The earned income tax credit is much clearer," Buffett said in an interview with CNBC last year. "That puts more money in the pockets of people who are working for low wages."

Almost 28 million US taxpayers received the EITC in the 2013 tax year, according to IRS data in December. The payments totaled more than $66 billion and the average amount nationwide was about $2,407.

Berkshire employed 340,499 workers, as of Dec 31, according to Buffett’s annual report to shareholders. Last year the billionaire investor told CNBC that "very, very few" of them make minimum wage.

Buffett says minimum wage increase isn't answer to income gulf | Bangkok Post: news

So Buffet wants the govt to give tax refunds, aren't the US admin in enough trouble as it is.?

Thats it Buffoon, you just get richer, fek the people who have had the hardship,since the banking crisis.

Maybe people on minimum wage should pay flat rate 10% income tax? What would that do?

Originally Posted by VocalNeal

Maybe people on minimum wage should pay flat rate 10% income tax? What would that do?

Try getting corporations to pay 10% tax first.....

Originally Posted by Necron99

Originally Posted by VocalNeal

Maybe people on minimum wage should pay flat rate 10% income tax? What would that do?

Try getting corporations to pay 10% tax first.....

Or even their fair share on the tax scale - be it 5% or 25%.
No more avoidance, subsidies, or deductible write-offs.

Corporations as well as [wealthy] individuals.

Raising minimum wage only causes inflation.

Originally Posted by floomdoggle

Raising minimum wage only causes inflation.

Then that would be a good thing in countries with deflation or lower than desired inflation.

Originally Posted by floomdoggle

Raising minimum wage only causes inflation.

So do ever rising costs of living.

Originally Posted by Horatio Hornblower

Buffett, 84, Berkshire Hathaway Inc's chief executive officer

Originally Posted by Horatio Hornblower

Charles Munger, 91, Berkshire's vice chairman

This pair of market-making coffin-dodgers has got 175 years between them!

Here's a comparison of minimum wages around ASEAN...

The wealthy wouldn't be wealthy without the consumption of the lesser off. The higher their income the more they spend ...

Conversely the way to lower the disparity would be to consume and buy less.

Just reading about the up and coming Australian budget, forecast to be bad.
A government that has gone out of it's way to cut wages, conditions etc is now complaining that wage growth has been slow and cut tax revenue.
Not the governments fault of course, but someone has to pay and it won't be the rich.

Originally Posted by jamescollister

Not the governments fault of course

Mostly is fault of the gov. Tax and spend. Cut spending on unneeded, zero value programs and everyones tax bill would reduce.

Originally Posted by Norton

Originally Posted by jamescollister

Not the governments fault of course

Mostly is fault of the gov. Tax and spend. Cut spending on unneeded, zero value programs and everyones tax bill would reduce.

I'm being sarcastic Norton, it's never the governments fault.
Can't have governments taking responsibility for their actions.

Knew that but was opportunity to make my comment.

I think instead of the term "minimum wage" we should consider it a "living wage."

Enough to eat and rent a small place.

Hard to do in many states on min wage.

He also routinely tells us the rich should pay more taxes but Republicans don't listen to him when he talks about that.

Originally Posted by Storekeeper

He also routinely tells us the rich should pay more taxes but Republicans don't listen to him when he talks about that.

That's because the Koch Brothers (wonderful guys BTW) and other 1%'ers already pay the bulk of taxes so the welfare chislers and layabouts can suck off the tit of government w/out working.

^ Have you a link for what percent the Koch brothers pay in personal taxes? A link for how much Koch Industries pays in federal taxes?

I could find no info, seems to be confidential. What are they hiding?

Originally Posted by misskit

^ Have you a link for what percent the Koch brothers pay in personal taxes? A link for how much Koch Industries pays in federal taxes?

I could find no info, seems to be confidential. What are they hiding?

If it's not a public company they don't have to report.

Anyhow, Top 1% pay nearly half of federal income taxes

Top 1% pay nearly half of federal income taxes

Originally Posted by Looper

This pair of market-making coffin-dodgers has got 175 years between them!

You left out George Soros who owes $7 billion in back taxes...

If buffoon would bring his offshore companies back to the USA along with Bill Gates and the rest, the tax situation would not be any problem at all...Bufoon and Gate charity funds go off shore as well nothing to the country that made their billions...fuk em both.