Is This Why Americans Have Lost The Drive To "Earn" More

Tyler Durden's picture

In the recent past we noted the somewhat startling reality that "the single mom is better off earning gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045." While mathematics is our tool - as opposed to the mathemagics of some of the more politically biased media who did not like our message - the painful reality in America is that: for increasingly more Americans it is now more lucrative - in the form of actual disposable income - to sit, do nothing, and collect various welfare entitlements, than to work. This is such an important topic that we felt it necessary to warrant a second look. The graphic below quite clearly, and very painfully, confirms that there is an earnings vacuum of around $40k in which US workers are perfectly ambivalent toward inputting more effort since it does not result in any additional incremental disposable income. With the ongoing 'fiscal cliff' battles over taxes and entitlements, this is a problematic finding, since - as a result - it is the US government that will have to keep funding indirectly this lost productivity and worker output (via wealth redistribution).

 

As we noted before (details below):

We realize that this is a painful topic in a country in which the issue of welfare benefits, and cutting (or not) the spending side of the fiscal cliff, have become the two most sensitive social topics. Alas, none of that changes the matrix of incentives for most Americans who find themselves in a comparable situation: either being on the left side of minimum US wage, and relying on benefits, or move to the right side at far greater personal investment of work, and energy, and... have the same disposable income at the end of the day.

Naturally, the topic of wealth redistribution is paramount one now that America is entering the terminal phase of its out of control spending, and whose response to hike taxes in a globalized, easily fungible world, will merely force more of the uber-wealthy to find offshore tax jurisdictions, avoid US taxation altogether, and thus result in even lower budget revenues for the US. It explains why the cluelessly incompetent but supposedly impartial Congressional Budget Office just released a key paper titled "Share of Returns Filed by Low- and Moderate-Income Workers, by Marginal Tax Rate, Under 2012 Law" which carries a chart of disposable income by net income comparable to the one above.

But perhaps the scariest chart in the entire presentation is the following summarizing the unsustainable welfare burden on current taxpayers:

  • For every 1.65 employed persons in the private sector, 1 person receives welfare assistance
  • For every 1.25 employed persons in the private sector, 1 person receives welfare assistance or works for the government.

The punchline: 110 million privately employed workers; 88 million welfare recipients and government workers and rising rapidly.

And since nothing has changed in the past two years, and in fact the situation has gotten progressively (pardon the pun) worse, here is our conclusion on this topic from two years ago:

We have been writing for over a year, how the very top of America's social order steals from the middle class each and every day. Now we finally know that the very bottom of the entitlement food chain also makes out like a bandit compared to that idiot American who actually works and pays their taxes. One can only also hope that in addition to seeing their disposable income be eaten away by a kleptocratic entitlement state, that the disappearing middle class is also selling off its weaponry. Because if it isn't, and if it finally decides it has had enough, the outcome will not be surprising at all: it will be the same old that has occurred in virtually every revolution in the history of the world to date.

But for now, just stick head in sand, and pretend all is good. Self-deception is now the only thing left for the entire insolvent entitlement-addicted world.

* * *

Full must read presentation: "Welfare's Failure and the Solution"

 

Some other thoughts on this topic: DOES IT PAY, AT THE MARGIN, TO WORK AND SAVE?

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Oppressed In California's picture

You're probably a small business owner with nothing but government contracts.  Talk about moochers.

HurricaneSeason's picture

Take all the affirmative action contractors MBE, WBE, DBE, WTF and 3/4 million postal workers, military, and others and I think 20 million government workers seems way too low. I'd like to see a list of who is defined as a government worker these days. Does that include millions of teachers, I would think?

Poetic injustice's picture

Internationally, yes. Firemen, police, teachers are counted as government employees because government (local or country) pays them.

HurricaneSeason's picture

Yes, I think we're mostly talking police, firemen and teacers here, but you never know. The postal workers are no longer government employees, they are in the "private sector" even though they are the only ones that can put the mail in the box by law. I'd love to see a breakdown of the government workers by trade, because I'm sure there'd be many of them missing from the list. It'd be easier to see the list of the first 20 million to find the rest.

CaptainObvious's picture

As a small business owner, you should be depressed when responsible, hard-working consumers decide to unplug from the economy.  Who do you think patronizes your small business? 

There are worthless moochers at the top AND at the bottom.  What are you going to do about the worthless moochers at the bottom when the worthless moochers at the top leave these shores, as they can easily afford to do, and the productive people in the middle stop consuming?  There are going to be riots; the worthless moochers at the bottom are not people who know how to take care of themselves or are even willing to learn to take care of themselves.  These are people who will arm themselves and come after what you've got, as they've proven abundantly in the past.  Think you'll be better off then?

Silver Bug's picture

Half of America is happy to live in a complete nanny and welfare state. They have no drive to live a fulfilling life. It is sad.

 

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boogerbently's picture

It's nice to see ZH'ers bag on losers, for a change, instead of retirees.

GetZeeGold's picture

 

 

Bagging losers is easy....you don't lead them as much as retirees.

 

Aim straight at them and pull the trigger.

willwork4food's picture

Absolutely right. These wothless kids want to get fed each day, entertained and by golly if they don't DEMAND a new diaper every few hours.

Dayum..

FreedomGuy's picture

I just got my third quarter "bonus" check yesterday. I live on a combination of salary and bonus, usually 80-20. When I see nearly half the bonus go out in government subtractions I wonder what the hell I am working for at times. My life is a morass of government rules and levies that gets more restrictive every year. i watch sophisticated good looking know-nothings, do-nothings like President Obama and I feel nothing but virtual hatred for this arrogant unaccomplished egomaniac ruining an entire way of life. To be fair, it did not just start with him, but it is likely to finish with him.

A part of me empathizes with the person on public assistance. it is a guaranteed check for no effort. If you go into the private sector you have to learn how to put up with unsavory people, take risks, honor your word, work hard for little reward at the beginning, etc. There is much risk and no guarantees. However, it is the only way to self respect, honor and the satisfaction of success. It cannot be given. It has to be earned. Welfare neighborhoods are the most depressing and dangerous of all neighborhoods. They are not swimming in happiness and gratitude. I find this mute testimony to the success of government programs.

My theory is down deep somewhere in their subconscious they know that they are at the endpoint of stolen money. If they carjacked someone for the Christmas TV they would go to jail. If they let the government do the same thing they are praised.

Husk-Erzulie's picture

Welfare, the dole, is much more dangerous for those who recieve it than those who are forced to pay for it.  From the point of view of oligarchical or ruling class planners it is a most effective tool for destroying troublesome subcultures/ethnicities.  Two or three generations and you suck the life right out of them; throw in a draft and a nice slaughtersome war and you simply enhance the process by breaking the transfer of cultural knowledge between generations, both practical and moral.  Any subculture which finds themselves outside the ruling class should view welfare with the absolute horror it deserves, it's proponents as agents of literal death and destruction, and RUN not walk away.  Race doesn't matter, Black, Scottish, Native American etc.  If the state is trying to hand you a "welfare" check, it is dripping with blood and pregnant with the destruction of your people.  It is the end of self help, the end  of family, the end of cultural uniqueness, the end of hope.

Moe Howard's picture

Well said by both of you. Bravo. I agree.

AssFire's picture

I agree and applaud as well Moe.

Only the broiler and rand trolls seem to agree that it is our government's job to confiscate wealth for their constituents.

FreedomGuy's picture

Very true, Husk. I have seen different analyses. At the end, to be on long term welfare you have to carve out your conscience and throw it away. That explains what we see in welfare neighborhoods. It is also true as others have said directly or indirectly that an entire class of people without a conscience can be a useful thing to some. It is how we get to the collectivist end game, I believe.

shovelhead's picture

You don't get it.

For these people, free money IS a fulfilling life. Quite a few on the left hand side of the bell curve have different priorities than the rest.

Moe Howard's picture

That wasn't true back in the late 1950's - 1964. It was LBJ and the war on poverty that destroyed the black family and values, and it's been working on every other race since. Endgame; Government control of everything.

Central Bankster's picture

The idea of transfering the wealth from productive to the unporductive is clearly a problem.  But lets be honest here.  Cut these benefits to zero, and the government is still bankrupt.

PGR88's picture

Incorrect.

Cut the benefits to zero - and you get at least another 20 million Americans entering the labor force, probably many more.

How much would that many more working and productive Americans increase tax reciepts to the Gov't?   How much would that increase GDP?  How much would that reduce the trade deficit?   How much would that reduce crime?

Having people working is ALWAYS better than not, financially, socaily, spiritually.

tenpanhandle's picture

PGR88 - you upvoted your own reply --Ha!Ha!

LetThemEatRand's picture

Virtually everyone with whom I engage in debate here gets a magic upvote within 10 seconds of their own posting.  I guess he learned from the "best."

jballz's picture

I up vote almost all of my own comments. I wouldn't write them if i didn't think they were fucking awesome.

Although occasionally i will down vote them as soon as I post when I am sure my input will run against the lemming groupthink of the masses.

LetThemEatRand's picture

That response gets an upvote from me, for which I apologize in advance.

Rusty Shorts's picture

..well i be Jackleg Jesus, i just just down voted myself...damn. 

Central Bankster's picture

I downvoted you just because I don't like you.

willwork4food's picture

Ahh, isn't that sweet? We're all one just happy family here @ ZH.

anyone got some spare change?

John_Coltrane's picture

But you earn every downvote, my included, with your every comment.  Get thee to the HuffPo where your fellow binary neuron types reside.

CaptainObvious's picture

Whereas you get 10 downvotes as soon as people read your user name.  Why is that, do you think?

Oh, and let me increase your red count.  It's part of my charitable giving for the day. ;)

boogerbently's picture

I didn't know that was possible.

I just "upvoted" myself.

ebworthen's picture

And what will those 20 million enter the workforce to do?

Confused's picture

Shhhhh....................

FeralSerf's picture

Since those at the bottom of the food chain are getting their hours cut to 29 per week, thanks to Obamacare's health insurance requirements, they can slip into the vacuum there.  And everyone will live happily ever after as part time workers.

It might be a good idea to check to make sure that burger was actually flipped before you eat it.

boogerbently's picture

That's the problem with the dem "master plan".

When less and less work, more and more taxes will be required to support them, but less will be working and paying in!

I'm sure there's a simple explanation.

Matt's picture

And what will keep government from spending money on something else, in such a way as to continue running deficits?

jballz's picture

Carjack your Lexus and rape your women folk, bitchez.

I love this chart. I want everyone to see it and stop working. Get on a program. Or make six figures. There is no life in the middle.

Them we find out how long it works when the ratio is ten mooches to one half worker.

Fuck if it works....we are set!

Don't forget one in twenty of us probably wants to work and doesn't do it for the money. You know, retarfs and such. They can carry us all maybe?

Never know until we give it a go.

newengland's picture

Red mist: dead before the body hits the ground.

There will be consequences for politicos and their pets when war weary men come home, and find everything they fought for betrayed by the masses, the main scream media and the DC NWO crowd.

That's why the Patriot Act and NDAA were passed. The freak inbred NWO and their fans know that some men can defend their families, the only thing that makes their lives worth living.

economics9698's picture

When the fiat dies we will get a few heads on some sticks.

willwork4food's picture

We should have done that 3 years after the NAFTA passage the good folks in Congress gave us.

Moe Howard's picture

The jobs "Americans just won't do", which are done by slave labor imported from south of the border currently.

kaiserhoff's picture

Yes, cut them to zero and kick the illegals out..., a win, win for the budget, rule of law, and Western Civ.

Probably should phase them out over a two year period, worst offenders first, but once the end is in sight, work becomes a lot more appealing. 

Karlus's picture

But how could those "undocumented guest workers" vote?

The Gooch's picture

O will just have his productive (8,000+ and growing by the hour) homies from MS-13 stand outside the polls-

https://pbs.twimg.com/media/A48C9-NCcAEuNI2.jpg

11:59

 

boogerbently's picture

The same way "hawaiian born" barry had his education paid for with foreign student loans.

max2205's picture

All those illegals get the best deal. Guarrentied everything. Thanks black prezzz

Confused's picture

I'd be interested in the answers to these questions as well.

 

But lets first workout the problem of finding these 20+ million people newly entering the workforce (along with all those college debt slaves) jobs.

 

Or is finding a job as easy as cutting those benefits? 

 

Can't disagree with having people working is always better than not. But there are a ton of people out there who WANT to work. Now all they need is someone to hire them. Any ideas? 

jballz's picture

Of course they will find work. Look at the great depression. None of these programs and nobody went hungry back then. They had to improvise a bit, but shit we got through it and the fascism and communism wasn't that hard to shake.

But so you know I offered a mother of three a hundred bucks for a session and she turned me down. Food stamps. Take those away she would have earned it the old fashioned way. Entitlements ruin all the fun.

August's picture

Heck, in 1946 you could get a Japanese girl all night in exchange for a can of condensed milk.

USA!  USA!

economics9698's picture

That HBO whore on TV is still charging $20 for a bj.