An interesting reference on Adam Tooze’s blog today to a study two months ago on the growth of the US welfare state since 1970. According to the Economic Innovation Group, government transfers now account for 18% of personal income, primarily due to demography - the increase in the elderly population - but “also driven by rapidly increasing costs of healthcare and a shrinking geography of good earnings opportunities in the United States.”
“What does it mean for a community when its economic lifeblood is much less directly tied to work, production, and income earned through labor—and much more directly tied to transfers from the government?”, the study’s authors ask. ______________________________________ The Great “Transfer”-mation How American communities became reliant on income from government Kenan Fikri, Sarah Eckhardt and Benjamin Glasner Economic Innovation Group September 2024 Income from government transfers is the fastest-growing major component of Americans’ personal income. Nationally, Americans received $3.8 trillion in government transfers in 2022, accounting for 18 percent of all personal income in the United States. That share has more than doubled since 1970. Transfer income has grown three times as quickly as non-transfer income over the past several decades. Transfers’ significance as a source of income for American communities has accelerated dramatically since the turn of the century. In 2000, only about 10 percent of counties received a quarter or more of total personal incomes from transfers. By 2022, the most recent data year, 53 percent did. This expansion of the transfer economy is primarily driven by the country’s demographic evolution into an older society. Retirement-age Americans make up a rising share of the total United States population. Since the largest transfer programs—Social Security and Medicare —are designed for retirement-age Americans, transfer payments expand as the elderly population grows. The demographic transformation has not, however, hit all places equally. Younger and faster-growing metropolitan hubs have been less affected by it. It is much more advanced in less-populated regions, many of which are contending with population loss and economic decline. In San Mateo, California, or Arlington, Virginia, transfers account for only 5 percent of total personal income. In parts of eastern Kentucky or rural New Mexico, they account for closer to 50 percent. The rising transfer share is a consequence of more than just an aging society. It is also driven by rapidly increasing costs of healthcare and a shrinking geography of good earnings opportunities in the United States. The rise of the transfer share highlights a huge shift in how Americans derive their earnings and raises the question: What does it mean for a community when its economic lifeblood is much less directly tied to work, production, and income earned through labor—and much more directly tied to transfers from the government? In that sense, this work fits into the growing body of scholarship around the mechanisms of economic and demographic decline, and their implications. Full: https://eig.org/wp-content/uploads/2024/09/Great-Transfermation.pdf -=-=-=-=-=-=-=-=-=-=-=- Groups.io Links: You receive all messages sent to this group. View/Reply Online (#33589): https://groups.io/g/marxmail/message/33589 Mute This Topic: https://groups.io/mt/109577151/21656 -=-=- POSTING RULES & NOTES #1 YOU MUST clip all extraneous text when replying to a message. #2 This mail-list, like most, is publicly & permanently archived. #3 Subscribe and post under an alias if #2 is a concern. #4 Do not exceed five posts a day. -=-=- Group Owner: [email protected] Unsubscribe: https://groups.io/g/marxmail/leave/13617172/21656/1316126222/xyzzy [[email protected]] -=-=-=-=-=-=-=-=-=-=-=-
