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Buffett editorial on minimum wages and EITC (WSJ)


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Another angle of viewing this is a lesser light is that he is advocating that gov't subsidize the low wages of some of the largest corporations.

This is a rather difficult problem and one bound to get even more difficult as automation gains stream with advances in AI, Robotics and other advanced technologies.

One other area of interest in this article is the point about collective net worth of the Forbes 400 going up 2400% vs a 180% increase for lower wage earners. From my observation that is always how it goes. If the bottom 10% is at 1 and the top 10% at 10, and some policy will take them to 2 and 100 respectively, why is it wrong on the basis of increasing inequality? Isn't everyone better off( even if some more than others). A lot of this equality argument tends to prefer a world where in that same example, the guy at 1 goes to 0.8 and the person at 10 goes to 5. They are perhaps happier in that scenario claiming to have 'reduced inequality'.

I have never quite understood that argument especially from those that have beenfitted the most from capitalism.

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This is a rather difficult problem and one bound to get even more difficult as automation gains stream with advances in AI, Robotics and other advanced technologies.

 

Agreed.

 

One other area of interest in this article is the point about collective net worth of the Forbes 400 going up 2400% vs a 180% increase for lower wage earners. From my observation that is always how it goes. If the bottom 10% is at 1 and the top 10% at 10, and some policy will take them to 2 and 100 respectively, why is it wrong on the basis of increasing inequality? Isn't everyone better off( even if some more than others).

 

What you say is true if you assume that the life quality of the bottom 10% has improved. The data above does not show that. If housing and medical inflation is higher than net worth increase, the life quality of the bottom 10% might have dropped. In which case the argument against increasing inequality becomes valid.

 

I agree though that it might be more productive to measure and improve life quality measurements for the bottom 10% instead of focusing on inequality measurements.

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Buffett is essentially suggesting another step be taken towards a national "guaranteed annual income".

 

Coincidentally, or is it part of a trend, here in my Province of Alberta, Canada the new left leaning political party has promised an increase in the minimum wage to $15/hr.

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