Warren Buffett just nailed why poverty in America ‘does not make sense.’
While describing the high level of poverty in the U.S. the richest nation on earth Warren Buffett used seven simple words to perfectly articulate what many of us have been thinking.
Photo by Scott Olson/Getty Images.
“I mean, that does not make sense.”
Here’s that quote in context:
“You expect unequal results in a market economy, very unequal. But you really shouldn’t have an economy with over $50,000 in GDP per person and have lots of people living in poverty who are willing to work. I mean, that does not make sense.”
You can say that again, Warren.
Despite the U.S. having a GDP that surpasses $54,000 per person, there’s certainly no shortage of inequality.
Compared to other developed countries, “low-income Americans get an exceptionally raw deal,” as this article by Jordan Weissmann in Slate illustrates. Americans at the bottom of the economic ladder are in significantly worse circumstances than their counterparts in nations like Norway, Germany, and Canada.
“America’s poor are poor by global standards because we’ve decided to leave them so,” Weissmann wrote, noting the U.S. spends a relatively small amount on helping those in need (like the unemployed or the elderly) compared to other rich countries.
The 1% earns about 20% of the country’s income.
In case you’ve missed the memo, income inequality in the U.S. has gotten a lot worse in recent decades, too.
That infamous 1% we’re always hearing about? They rake in about 20% of the country’s total earnings more than double the share they earned in 1981. And when you look at what top American CEOs are making in contrast to their average employees, well, the numbers are downright depressing.
Why are the wealthiest getting wealthier at crazily disproportionate rates? There are many ways to approach that question. But Warren Buffett believes it comes down to a system that promotes inequality:
“A lot of the wealth [has flowed] to the top,” he argued, noting “we need governmental policies to correct that.”
I don’t know about you, but if poverty in America “does not make sense” to one of the most successful businessmen in the U.S., I think it’s time we rethink our ways.