Tags: Warren Buffett | minimum wage | pay | tax

Buffett: Raising Minimum Wage Could Mean Job Losses

By    |   Thursday, 24 April 2014 02:03 PM

Whether or not the federal minimum wage should be raised is such a thorny question that even billionaire businessman Warren Buffett says he is unsure what to do.

In an interview with CNN, Buffett noted the current minimum wage of $7.25 an hour is not a living wage, but that the tradeoff for raising it could be job losses.

"You do lose some employment as you increase the minimum wage. If you didn't, I would be for having it $15 an hour."

In Buffett's view, increasing the earned income tax credit (EITC) might be a better way to address low-income issues.

The EITC is aimed at encouraging people to work by providing a credit on wages earned.

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"I know that if you raise the earned income tax credit significantly, that would definitely help people who've gotten the short stick in life," Buffett noted.

"I'm not rich because somebody is poor. But some people are poor because the system does not reward particular skills," he added. "Some of them have very limited skills in terms of what it brings them in a market system."

The Congressional Budget Office estimated that a Senate Democratic bill to gradually raise the federal minimum wage to $10.10 hourly would force private businesses to spend $15 billion more in salaries in 2017 if the bill is passed.

According to CBS News, the increased pay would raise employers' wage costs by 0.003 percent, or about one-third of a penny for every dollar spent on salaries.

The Center for Economic and Policy Research estimated that at the state minimum level, the states that have both boosted their minimum wages and also posted better jobs numbers are: Rhode Island, Colorado, Montana, Vermont, Arizona, Oregon, Florida, Washington, Ohio and New York.

In contrast, West Virginia, New Jersey and Connecticut, which have higher baseline wages, saw either no change or a slight dip, the Center said.

The National Review estimated that because the cost of living varies so widely across the United States, it makes little sense for minimum wages requirements to be set at a uniform federal level.

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Whether or not the federal minimum wage should be raised is such a thorny question that even billionaire businessman Warren Buffett says he is unsure what to do.
Warren Buffett, minimum wage, pay, tax
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2014-03-24
Thursday, 24 April 2014 02:03 PM
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