Private pay shrinks to historic lows

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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.

Roboute's picture
Roboute
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May. 7, 2010 3:23 pm

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That's pretty true. Stimulous programs, government incomes, are great when they stimulate production...job creation. Increased economic activity ultimately pays for the stimulous as in Eisenhowers Interstate Highway construction. It paid for itself and a lot more with increased tax revenues..

What is there to stimulate? The productive economy has been shipped off to China..

Today, Ike would be buying Chinese steel, Chinese concrete, etc.. New business along the thousands of miles of roadway would have used Chinese construction materials and stocked their facilities with Chinese products. His program would have stimulated the Chinese economy way more than the U.S. economy.

Recovery without a revamping of trade policy is a pipe dream.

The 12 trillion in bailouts and guarantees to financiers and banksters created how many jobs? Zilch.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 3:01 pm

Yup, has nothing to do with public or private spending. Has everything to do with what it is spent on.

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DRC
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Jul. 31, 2007 3:01 pm

Currently Chatting

The Death of the Middle Class was by Design...

Even in the face of the so-called Recovery, poverty and inequality are getting worse in our country, and more wealth and power is flowing straight to the top. According to Paul Buchheit over at Alternet, this is the end result of winner-take-all capitalism, and this destruction of the working class has all been by design.

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