Long before "livable wages" became standard talking points and politicians started debating why a full-time paycheck doesn't cover rent, Warren Buffett was already sketching out a different playbook.

In a 2016 CNN interview shortly after the presidential election, the Berkshire Hathaway (BRK.A) CEO fielded a straightforward but loaded question: does capitalism itself need an overhaul so working people stop falling through the cracks?

Buffett's response blended market optimism with practical policy thinking. "In a super rich country, anybody who's willing to work 40 hours a week should have a decent living," he said plainly. But instead of endorsing a higher federal wage floor, he pointed to a mechanism already on the books: the earned income tax credit.

The Case for Income, Not Just Wages

Here's where Buffett drew the line. Rather than forcing employers to pay higher hourly rates across every industry, he argued the real focus should be on total income. "You don't need a minimum wage. You need a minimum income," Buffett explained. "The wage comes to you from your employer. The income comes from your employer plus whatever the government does."

The distinction matters because Buffett sees a major downside to mandated wage hikes. For businesses operating on thin margins, artificially inflated wage requirements could mean fewer people on the payroll. "If you tell me I've got to run a business that pays $15 an hour in many industries, I'm going to employ fewer people than before," he told CNN. His concern wasn't about protecting corporate profits but about creating a situation where well-meaning policy ends up shrinking job availability.

Instead, Buffett pitched a larger earned income tax credit that supplements lower wages. Picture someone earning $7.50 or $9 an hour whose take-home pay gets topped up to effectively match $15 through the tax credit. Employers maintain flexibility on staffing, workers take home enough to live on, and nobody loses their job because the economics stopped working.

How It Could Work

"It isn't how much you get in wages, it's how much you get in income," Buffett said, driving home the practical outcome that matters most to workers paying bills.

He also pointed out that a well-designed credit system could encourage skill development by rewarding incremental wage gains without penalizing workers for moving up even slightly. "You would give them a feeling of self-worth and you wouldn't hurt any jobs," Buffett said.

The price tag? Back in 2016, Buffett estimated an expanded earned income tax credit would run about $60 billion annually, roughly double what the government was spending then. His argument was simple: in an economy the size of the United States, now approaching $30.5 trillion in GDP, that's entirely manageable.

When Would Buffett Support Higher Minimum Wages?

Buffett didn't completely dismiss the idea of raising mandated wages. He clarified that if a higher minimum wage somehow kept everyone employed, he'd be fine with pushing it significantly higher. "If you can have a minimum wage that kept everybody in the country working, you'd make it $20 or $25 an hour," he told CNN. But he added the reality check: forcing that structure could push people with limited skills out of the job market entirely.

These comments landed when the Fight for $15 movement was gathering momentum across the country. Nearly a decade later, the conversation has evolved in interesting ways. Many large employers now voluntarily pay $18 an hour or more to attract talent, even as the federal minimum wage sits frozen. The market is doing some of what policy hasn't, but the question of whether it's enough remains wide open.

The American Dream, Redefined

Buffett framed the entire discussion around a core principle. "American Dream should be that if you work productively at 40 hours a week, you can have a decent life," he said. It's a straightforward benchmark, and one that cuts through partisan noise: full-time work should mean financial stability.

Nearly ten years on, with wage debates still making headlines and inflation adding fresh pressure, Buffett's framework feels relevant again. The specifics of how to get there remain contested, but the underlying point stands: there's more than one lever to pull when it comes to making work pay fairly in America.

Whether the earned income tax credit gets the expansion Buffett envisioned or whether wage floors eventually rise to meet the moment, the conversation he started back in 2016 keeps coming back. Sometimes the smartest solution isn't the most obvious one.