In World Economy News 08/05/2017
Warren Buffett likened unemployed workers to animals that are helpless to avoid car crashes, and said the U.S. must do more to help those displaced by competition from overseas and technology.
“Nobody should be roadkill,” Buffett said Saturday at the annual meeting of his Berkshire Hathaway Inc. in Omaha, Nebraska.
The billionaire faced several questions at the gathering about declining employment in the manufacturing sector — a key theme in the recent presidential race — and about job cuts at Kraft Heinz Co., the foodmaker backed by Buffett and 3G Capital. He reiterated his view that society at large benefits from both economic efficiency and free trade, often at the expense of individual workers who struggle to find new jobs.
He spoke of the plight of former employees at a Berkshire textile operation in New Bedford, Massachusetts, who lost their work to competition from cheaper locations decades ago. Buffett said such shifts help millions of people by providing necessities at a lower cost.
“Massive trade should be — and is actually — enormously beneficial to both the U.S. and the world,” he said. “Greater productivity will benefit the world in a general way, but to be roadkill, to be the textile worker in New Bedford” is a painful experience, he added. “It would be no fun to go through life and say I’m doing this for the greater good, and so that shoes or underwear was all for 5 percent less.”
Trump’s View
Buffett, 86, said that gross domestic product per person in the U.S. is six times higher now than when he was born, reiterating his optimism about the nation’s ability to generate wealth. That contrasts with the view of Donald Trump during his successful presidential campaign, when he said that the U.S. was ripped off by free-trade agreements. The president spoke in his inaugural speech in January about “American carnage” where “rusted-out factories” are “scattered like tombstones.”
The U.S. unemployment rate fell to 4.4 percent in April, the lowest since before the financial crisis, according to Labor Department figures Friday. Still, Gary Cohn, director of the National Economic Council, said many jobs pay too little.
“We need to bring back the manufacturing jobs that pay a lot,” he said in a Bloomberg Television interview Friday. “We need to bring back the service jobs that pay a lot.”
Buffett often calls on the U.S. to do more to help the working class and has said the tax system is tilted to benefit rich people like him, a point he pressed Saturday. He also said it is up to the president, whoever is in office, to serve as an “educator-in-chief” and explain how free trade helps the country in the long run.
“Beyond that, we have to have policies that take care of the people that become the roadkill in the process,” Buffett said. “We have got the resources.”
Source: Bloomberg
