Real World

Welcome to the growing welfare state. At some point, the numbers will basically cause this country to crumble. It's simply inevitable at our current pace.


Private pay shrinks to historic lows

PAY SCALE



By Dennis Cauchon, 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.

Private pay shrinks to historic lows - USATODAY.com

__________________

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.


"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
Leo Tolstoy, 1897

apple strudel

Um, that's because of unemployment guys. We lost 8 million jobs and all of those people (even the Republicans!) signed up to get unemployment checks. The statement about sustainability is fatuous because unemployment is finite. Sounds like a pretty lazy analysis that doesn't call out a lot of contributing factors, and the real devil in this story is corporate layoffs. Sigh.

Real World

Reading is fundamental.

Even if you didn't read the article, the posted chart shows a trend spanning over 10 years time. Were it spanning the last 1, 2, or even 3 years, then I'd lend credence to that which you are saying. However, this is a long term trend bud. One that shows no sign of slowing, as the welfare state continues to grow. Welfare on all levels mind you.

__________________

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.


"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
Leo Tolstoy, 1897

apple strudel

The chart is essentially flat from ~2002 to 2007. Then it jumps. The other thing this analysis totally fails at is controlling for social security since boomers are now representing a larger percentage of the population. Of course percentages like this would go up with an older population. It's a crap analysis.

PatriotsReign

You're right! And add in the legacy costs of baby-boomers who were employed by the gov't and you have....

UNSUSTAINABILITY!

__________________
"No one walking this earth knows what is truly righteous"

khayos

Why is it crap? It clearly demonstrates that government spending is going up and private pay as a percent is going down. That strikes me as a problem if the trend continues.

Patters

The Democrats are counting on climate control and health care reform to jump start the economy by creating new business sectors that, at least initially, should generate a lot of new work and a lot of investment by venture capitalists. This is more or less the same strategy that Kennedy engaged in with NASA, that Reagan engaged in with the defense shield, and that Clinton engaged in with the tech sector. It takes a few years to see if this kind of approach takes hold, so right now I think the administration is in a holding pattern, trying to prop up the economy while these new sectors get underway.

apple strudel

Because some idiot in the article said the same thing at the same time pointing out that part of the problem is unemployment insurance which is, by definition, not going to continue for individuals. The only way unemployment insurance remains a problem is if layoffs continue, which the evidence shows is not happening. I'll overlook the part about SS in this post because I already explained that.

khayos

So you think private pay as a percent will eventually go back up?

apple strudel

Almost by definition as unemployment benefits dry up in the short term, and as the boomers start to die in the medium term, and not accounting for new entitlement programs. It might be a legitimate discussion if we were talking about new permanent entitlements like health care, but we're not.