The U.S. has one of the highest levels of income inequality in the world. Warren Buffett can tell you that.
The wealth of the top 400 richest Americans has increased 29-fold since 1982, from $93 billion to $2.7 trillion, according to the Forbes 400. Meanwhile, the wealth of “many millions of hardworking citizens remained stuck on an economic treadmill,” Buffett says.
The billionaire investor and chairman of Berkshire Hathaway
wrote an opinion piece in Time magazine explaining what’s wrong with America’s economic system.
“During this period, the tsunami of wealth didn’t trickle down,” he wrote. “It surged upward.”
The richest 0.1% of Americans own as much as the entire bottom 90%, and the wealthiest 10% own nearly 90% of stocks, according to data from DB Global Markets Research and the World Wealth and Income Database.
“The market system, however, has also left many people hopelessly behind, particularly as it has become ever more specialized,” Buffett wrote in the Time magazine piece, noting how technology has made some people enormously wealthy, while putting others out of jobs.
‘Between the first computation in 1982 and today, the wealth of the 400 increased 29-fold — from $93 billion to $2.7 trillion — while many millions of hardworking citizens remained stuck on an economic treadmill. During this period, the tsunami of wealth didn’t trickle down. It surged upward.’
But it’s not all bad news, he said. In fact, technology should give Americans reason to be optimistic about the future.
Buffett pointed to industries that have been massively disrupted by technology, like agriculture, which has seen tractors, cotton gins, fertilizer and irrigation reduce its workforce from 80% of all American workers to just 2%.
“The staggering productivity gains in farming were a blessing,” Buffett wrote. “They freed nearly 80% of the nation’s workforce to redeploy their efforts into new industries that have changed our way of life.”
Related read: The richest people on the planet just got richer
So what’s the solution to ensuring that the market continues to improve for all Americans?
“A rich family takes care of all its children, not just those with talents valued by the marketplace,” he wrote.
Buffett is among a group of billionaires including Facebook Inc.
Chief Executive Mark Zuckerberg and his wife, Priscilla Chan; activist investor Bill Ackman; and Oracle Corp.
co-founder Larry Ellison who have signed the Giving Pledge, a formal commitment made in 2010 to give away more than half of their wealth.
Meanwhile, hundreds of American millionaires and billionaires are outraged by the Trump administration’s tax overhaul and oppose its tax cuts.
“We call on Congress to raise our taxes to bring in additional much-needed revenue and to restore investments to vital services,” a letter signed by the likes of billionaire George Soros, Ben & Jerry’s founders Ben Cohen and Jerry Greenfield, and philanthropist Steven Rockefeller said. “Doing so will help create jobs, strengthen the middle class, and ensure America’s economic success.”