More than a third of nurses in America cannot cover a $1,000 emergency without going into debt. Teacher wages, after inflation, are lower today than they were 30 years ago. And somehow, neither of those facts surprises most people anymore.
Warren Buffett saw this coming. He said it out loud at a Berkshire Hathaway shareholder meeting, and the numbers since then have only made his point harder to argue with.
Buffett told shareholders the market does not reward teachers and nurses the way it rewards entertainers, athletes, or investors who can spot a valuable business, MoneyWise noted. At the time, the pay gap between teachers and similarly educated workers in other fields was 6.1%.
It is now 25.2%, according to the Economic Policy Institute, after hitting a record high in 2024. That gap has not closed since he spoke. It has gotten four times wider.
His point was not that capitalism is broken. It was that capitalism does not measure usefulness, and people should stop expecting it to. Three decades of data have not changed that.
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What has happened to teacher pay since Buffett spoke
Economists have a name for this: the teacher pay penalty. It measures how far teacher salaries have fallen behind what workers with the same level of education earn in other fields.
In 2025, it stands at 25.2%. Put another way, a teacher and a marketing manager who graduated the same year with the same degree are not earning the same thing — not even close. Factor in pensions and benefits, and the gap narrows, but doesn’t disappear.
The gap falls harder on male teachers than female teachers, and it varies considerably by state, but more than half of states carry a penalty that puts teachers more than a quarter behind their peers.
Since the mid-1990s, teacher wages have dropped 6.2% in real terms. Over the same period, wages for other college graduates rose 28.8%. Same starting point, opposite directions for 30 years.
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Nurses are dealing with a similar picture
A 2026 Nurse.org survey found that 55% of nurses got a raise last year, and 44% of those raises were 5% or less, which, in most cases, did not outpace rising costs.
The same survey found more than a third of nurses could not cover a $1,000 emergency without borrowing money. A significant share said they barely make it through the month on what they earn.
Some nurses picked up second jobs to close the gap. It did not help much. More than half of those workers still could not handle an unexpected $1,000 expense.
Just over three-quarters (76%) of survey respondents carried student debt on top of all that. Bureau of Labor Statistics data shows registered nurse wages growing more slowly than wages for other healthcare support roles, even as many hospitals have been asking nurses to carry heavier patient loads than before.
What makes those numbers harder to absorb is the context. Nursing requires years of education, licensing, clinical hours, and ongoing certification. The emotional and physical demands of the work are well documented.
A profession that asks that much of its workers and still leaves more than a third of them unable to cover a modest emergency has a problem that data alone cannot fully capture.
Why markets keep producing this result
Think about what the market actually pays for. A software company can go from one million users to ten million without much change in costs. A musician records one album and it sells globally for years.
That kind of reach is rare. The ceiling on what it can earn is high, and the market prices it that way.
Teaching does not work that way. A teacher serves maybe 30 students a year. A nurse cares for a fixed number of patients each shift. The work does not scale, does not reach a global market, and does not generate profit that can be measured easily.
So the market pays less, no matter how much the people receiving the service depend on it. That is not a flaw in the system. That is how the system works.
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As technology expanded the earning potential of work that can reach global audiences, the distance between those roles and essential service work grew wider.
The entertainers, athletes and investors Buffett named as examples have seen their incomes rise sharply over the past three decades. Teacher wages, in real terms, went in the other direction.
The divergence was not random. It followed the logic of the market, exactly as Buffett described it.
What Buffett said workers and the system should both do
Buffett’s answer was not to tear the system down. It was to tax the winners. People who do well under capitalism, he said, have a responsibility to contribute in a way that takes care of those the market leaves behind.
“I do think that it’s incumbent on the people that do very well under that system to be taxed in a manner that takes reasonable care of anybody that is not well adapted to that system,” he told shareholders.
Buffett has held that view consistently. His argument is that public investment in education, healthcare, and retirement programs can redirect some of the gains from market-rewarded work toward people doing essential jobs the market undervalues.
The market is not wrong, in his view. It just does not fix itself.
But Buffett and Charlie Munger were also clear at that same meeting: waiting for the system to change is not a plan. Acting with the income you have is. Spending less than you earn, paying down high-interest debt, and investing consistently over time are available to most workers, regardless of salary.
Buffett has long recommended low-cost index funds for everyday investors. He has returned to that advice many times over the years. In his 2013 letter to Berkshire shareholders, he said 90% of the money set aside for his wife after his death should go into a low-cost S&P 500 index fund, because it is a practical way to build wealth over time without needing to pick stocks.
An investment of $500 a month in a broad index fund, held for 30 years at a hypothetical 7% annual return, grows to roughly $610,000 before taxes and fees. No year is guaranteed, and markets fall.
But a teacher or nurse who starts early and does not stop can still end up somewhere very different from where their paycheck suggested they would. The difference is mostly a function of time.
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