Pimco's Gross: Income inequality a risk to capitalism as we know it
Income inequality has been a hot button issue of late. While many big earners on Wall Street, and elsewhere in the financial industry, may not fully grasp the plight of workers, Pimco's Bill Gross is not one of them and the wage discrepancy concerns him.
"It's a fundamental factor that will influence not only the U.S. economy, but global economies going forward... It will be destabilizing," the Pimco founder and CIO told Yahoo Finance's Lauren Lyster.
"Labor and capital have to share in the rewards of a productive economy and for the past 25 years labor has gotten the short end of the stick." Gross suggests that Henry Ford had the right equation when he doubled workers' wages 100 years ago. "Ford knew way back when, when he paid five bucks an hour to his workers in Detroit, that workers buy cars and that if they were earning a dollar an hour as opposed to five they wouldn't be able to afford a Ford."
Gross says we are in need of policies that bring the balance between capital and labor back. "Minimum wage, higher taxes on the rich and all that in combination," he suggests.
"Ultimately wage earners have to earn a decent wage or else capitalism can't continue in a productive way."
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