Buffett: Raising Minimum Wage to $15 Would 'Reduce Employment in a Major Way'

Photo by Bill Pugliano/Getty Images(NEW YORK) — Billionaire Warren Buffett objected to the idea of raising the minimum wage to $15 in an op-ed for the Wall Street Journal on Friday, saying that such a move would “reduce employment in a major way.”

“The American Dream promises that a combination of education, hard work and good behavior can move any citizen from humble beginnings to at least reasonable success,” Buffett wrote, noting that for many Americans, that very promise has been fulfilled. However, Buffett acknowledges, “recently…the economic rewards flowing to people with specialized talents have grown dramatically faster than those going to equally decent men and women possessing more commonplace skills.”

Buffett, the Chairman and CEO of Berkshire Hathaway, cites statistics from Forbes, highlighting the massive wealth of the richest Americans, compared to the “huge number of their fellow citizens…living the American Nightmare — behaving well and working hard but barely getting by.”

The mismatch between American workers and a larger-than-ever swath of available jobs, Buffett says, “is neither the fault of the market system nor the fault of the disadvantaged individuals. It is simply a consequence of an economic engine that constantly requires more high-order talents while reducing the need for commodity-like tasks.”

Buffett discusses the importance of education in the op-ed, but notes that “even with the finest educational system in the world, a significant portion of the population will continue…to earn no more than a bare subsistence.”

Regarding the increased minimum wage, which has inspired numerous rallies in recent months, including gatherings of fast food workers around the nation, Buffett says that while he may wish every job paid at least $15 per hour, “that minimum would almost certainly reduce employment in a major way, crushing many workers possessing only basic skills.”

“Smaller increases, though obviously welcome, will still leave many hardworking Americans mired in poverty,” he adds. The solution, Buffett argues, is an expansion of the Earned Income Tax Credit, which provides low-income workers with payments from the government that get smaller as their earnings increase.

“There is no perfect system,” Buffett accepts, “and some people, of course, are unable to unwilling to work.” Still, he urges, “let’s replace the American Nightmare with an American Promise: America will deliver a decent life for anyone willing to work.”