Tuesday, May 25, 2010

Private Pay Is At An All Time Low, Government Payouts At An All Time High

I guess this is part of what the President ment by "spreading the wealth". Private wages are at an all time low while Government benefits are at an all time high. What people need to realize is that the Feds need the private wages and especially the higher paying jobs to collect the taxes that the Feds use to pay these benefits and pensions. If the jobs keep getting erased as they have been, nearly 8 million since the recession started, most of that in 2 years under Obama, it will be sustainable. Not too mention also a fact I learned today that is not in the USA Today article below or most other people's blogs, 23% of Americans are on Food Stamps and another 11% are on Welfare. And I'm still unemployed.

Here's some facts from the article:

Private wages. A record-low 41.9% of the nation's personal income came from private wages and salaries in the first quarter, down from 44.6% when the recession began in December 2007.

Government benefits. Individuals got 17.9% of their income from government programs in the first quarter, up from 14.2% when the recession started. Programs for the elderly, the poor and the unemployed all grew in cost and importance. An additional 9.8% of personal income was paid as wages to government employees.

USA Today:

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.

At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.

The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. "This is really important," Grimes says.

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