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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Yen Cross's picture

 Thanks Ebworthen/  I think you hit the nail on the head. I need to work on my delivery system.

Matt's picture

Why the hate for the lawyers? They're just responding to the incentives the system is providing them. I would say that, as measured by the incentives system, they are actually pretty smart.

Yen Cross's picture

Oh man, I could have funded your Law School loans with the legal fees I have paid to run businesses. No litigation, just setup fees and mitigation/arbitration fees. Every law firm wants some "equity" in the game.

Uncle Remus's picture

Just because you can doesn't mean you should.

"They're just responding to the incentives the system is providing them."

Let's revisit that when the bodies start hitting the floor.

newengland's picture

'Just because you can doesn't mean you should.'

There. Sums it all up, succinctly. I pity the welfare recipients, the canon fodder. I despise the corporate welfare recipients, the canon.

No rope is too short and no drop is too long for the cynical money grubbing politicos who grift off all. Joe Biden, public enemy number 1...the man behind the throne, hiding behind the nicey guy.

The Federal Reserve Act of 1913 ruined the Republic, and reclaimed it for the international financiers and their British monarchy who do so like the thug Politburos and despots. The NWO wants to make tax slaves, wage slaves of all, serving a technocratic beast, as defined by the Trilateral Commission, the vehicle of people like inbred Rockefellers, Rothschilds, Oppenheimers, the AshkeNAZI.

Hubbs's picture

Except those motherfuckers are held to no standards or accountability.Tried suing 4 of them, and even the trial court opined they were negligent (comitted legal malpractice)  but then turned around and granted them summary judgment in their favor because my losses were "speculative" so the evidence never sees the light of a jury day.

Line the lawyers up along the ditch (so you don't even have to waste time burying them), and mow them down with the M-60 (.308) of your choice. Keep the ammo coming, and don't forget to switch the barrels after every 200 rds.

CaptainObvious's picture

Go read up on a class action lawsuit, ANY class action lawsuit, and then maybe you'll understand the hate for the lawyers. 

James's picture

Matt says - I would say that, as measured by the incentives system, they are actually pretty smart.


I beg to differ.

I'm 30/1 w/the courts.

I owned a biz for 30+ yrs.

I owned an apt. bldg too.

Their in fact is nothing new under the sun.

Whatever your case is precedent has already been established (case law)

Research, if you actually have a defense,will enable you to prove your case stating at least one, if not more, case precedent.

Dec. 6 once again I will be deposed.

Was told 3-12 lawyers will attempt to roll me.

None of these defense lawyers know I'm going to do a smackdown yet as in their eyes i'm just another schmuck.

In all my cases at the end of deposition/court they're so p.o.the veins in their foreheads look like garden hoses.

It's not that the lawyers are smart.

It is that the public is ignorant.


tony bonn's picture

"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."

god bless and love zh but this analysis is so stale it could be a hockey puck...the public interest was publishing this type of analysis in the 1970s and 80s...nathan glazer and company covered this issue to kingom come and not a goddamned thing has changed in 30 years....

a veritable galaxy of who's who in supply side economics and assorted hangers on used this material to give birth to the lowering of marginal tax rates because  of similarly perverse effects on upper income workers in the heyday of the kennedy - carter era of high marginal tax rates....y'all remember george gilder?

my god is the world autistic

CH1's picture

the kennedy - carter era of high marginal tax rates

I remember. And I remember a lot of loopholes back then too. Not many people actually paid 70% (No one that I ever knew.)

knukles's picture

Hell, everything was deductible.  Sales tax, property tax, state tax, double mortgages, interest to borrow to finance muni portfolios....
You name it!

CH1's picture

Good times... good times. :)

Umh's picture

You could even write off your credit card interest. I thing it was the 80's when they decided that to many people had credit card interest and changed the tax  law.

carbon's picture


blindman's picture

U.S. Justice Dept. indicts Paul Thorsen, autism/vaccine researcher.
Edited on Thu Apr-28-11 06:30 PM by pnwmom

Thorsen's research has appeared to disprove links between autism and vaccines. He's being
charged now with submitting invoices to the CDC between 2004-08 that "falsely
claimed that a CDC laboratory had performed work and was owed grant money." He was
the principal investigator on this $11 million CDC grant that included research on autism
and vaccines.

Here's the press release:

April 13, 2011 /
CONTACT: Patrick Crosby
FAX (404)581-6160

Thorsen Allegedly Absconded With Over $1 Million

mumbo_jumbo's picture

it is just math folks, ship all the well paying jobs to China and we're left with what?  the charts you see above.

Incubus's picture

It's all part of the modern American dream.  We'll all be "professional" office workers that make jack shit and are above dirtying our hands doing actual work.

Mass pretentiousness has its price, it seems.



Vendetta's picture

we will be left with more war

Central Bankster's picture

And what happens if AMT expires and suddenly, half of all tax payers are hit by additional taxation?  Even making more, will be marginally less valuable.  All those joint filers making 75-85k, find themselves just as "valuable" economically as the woman with no education and 2 kids workin 10-30 hours a week.  Ahh, good game fascists, good game.  You won. 

disabledvet's picture

when that happens we kick the animals out of their cages in the zoo and insert ourselves instead.

Aurora Ex Machina's picture

Actually, this meme played out in April / June / July:


The American Myth of Social Mobility Huff Post

The American Dream is a Myth Business Insider

Social Mobility and Inequality Economist

Harder for Americans to Rise from Lower Rungs NY Times

Too hot for TED: Income Inequality NationalJournal

Evidence: Social mobility is lower in more unequal countries Equality Trust (included because there's a very nice graph in there of country comparisons - hint, America is bottom right, when you want to be top left)


Conclusion: MSM is pushing the meme that people can no longer strive to reach the top, because they can no longer reach the top.

Time for the stereotypical George Carlin video, which gets used in every one of these discussions.


Real conclusion: the meme has taken hold, and has nothing to do with "entitlements". "Entitlements" never stopped the immigrants from working 24/7 in their SMEs to better themselves, when they believed the dream (or, perhaps, when the Banks weren't total bastards over lending, but that's a different topic).


If Money = Energy, then you really need to look into the gravitational effects of money. Yes, it works towards a black hole singularity. Might want to count the # of mega-Corps left in the world. Getting smaller, my friends.

disabledvet's picture

how can a "dream" be a "myth"? and if it is a "myth" isn't that a good thing? i mean everyone wakes up and says "man i had this amazing dream." but what if you said "man, i woke up this morning and i had this amazing myth!" people might actually listen for a change "if you had an amazing myth to tell them about." nobody listens's really sad. i've devolved to plain old bald faced lying to get attention these days. sad days indeed, sad days indeed.

Aurora Ex Machina's picture

There's a difference between a myth and a legend.

Bottom line is that; The ability of being able to rise to the top in American society is a legend of the first 200 years, but now a myth.


Note: due to your tag, I'm happy to offer a free lesson / skill share / training in anything you'd like if it'd help you out.[1]





[1] Work out if that's a snark about your lying comment yourself. Then ask, or not.

RopeADope's picture

Between that and central banks that steal from you and give to the 1% is it really that surprising that the middle class no longer believes the work hard and you will be rewarded line of BS?

Central Bankster's picture

I mean just look at all the new money, pull yourself up from nothing types who became mega rich.  They truly won the lottery.  Take Mark Cuban for example.  The guy comes up with a decent idea during a bubble caused by Greenspan.  A business that probably should have netted him a few million dollars and he instead sells a business that doesn't even cashflow anymore, for nearly 6 billion.  Good for him seriously, I'm jealous!

BeagleOne's picture

The AEI is another fascist front group.

Dr. Engali's picture

Yeah so we should probably dismiss this analysis entirely. I suppose we could get a balanced piece from the Huffpo or MSNBC. What this nation needs is more people on welfare and fewer workers supporting them..... that's sustainable.

Troublehoff's picture

If this is really true - ffs - grrrr

new game's picture

solution is as simple as raising a family and knowing how to say no and mean it.

oh, and if we as a nation wanted to solve any of these problems we could in a simple blink, but

we have a broken system where we vote in a bunch of two faced liars working for the matrix(corporation)...

and the best part is about 1 percent of amerikans have a fucking clue how owned they are...

freedom vanishing in a flash, as all the blood spilled will be in vain.

Yen Cross's picture

 When we read the household income chart, what is the first "trend line" we  see? I see a declining left to right step down in earnings, quality of life, and children being born out of wedlock/

  I see a giant blue wave, being slammed by a wave of reality!  Carter was smarter than Obama/ At least Carter grows peanuts.

  Did you catch the Unions Camped out side of the Mayor of Chicago house hold! Friday the trash union was camping out/

   Bring back the guillotine and rack!  O’Hare Janitors Descend On Mayor’s House To Protest Looming Job Cuts « CBS Chicago

tenpanhandle's picture

give to one - must give to all (except if you don't belong to a union, that is).

Dre4dwolf's picture

Theres nothing left to buy, thats how I see it.

In America, you dont have to work that hard to GET STUFF, you have to work hard to KEEP WHAT YOU ALREADY HAVE.

That how it goes.

You dont actually Own ANYTHING in America, its all owned by the state and banks, and you have to rent your house/cars/hell even half the crap in your house from the state and banks.

If Banks didnt exist to give loans, cars and homes would be sooooo affordable by ANYONE who has atleast a basic income.

Its banks that drive demand to bubble levels because of fraudulant loan origination that pumps the system with a ton of counterfeit currency... (its like playing monopoly and every round everyone gets 1000$), eventually prices will rise..... in a real world scenario.

Incubus's picture

Look at the higher education bubble.

Modern economics would be a comedy if it weren't so tragic.

Because when the act finishes, bullets will be inserted into skulls and the killing starts.


hooligan2009's picture

+1 brazillion - you have hit the nail smack on the head, bravo.

our lives are dominated by borrowing. borrowing = taking from tomorrow to use today in the expectation that it will make a profit (sell more or buy before prices go up).

when there is no demand for crap shitty, mobocracy sponsored, output..the system fucks up.

now..lets wait for tomorrows headlines.

Joebloinvestor's picture

They are lying to us about how they are gonna get us out of the debt they subjugated us to.

Of course someone besides the politicians will pay the bill.

Mentaliusanything's picture

Well thats not actually true! They just have not the stomach to say to all the people that this debt is just deferred future Taxation. Inflate all you want and you will find the bill inflates as well. This is where Bernanke is a fool on a Hill.

And as to Government  Transfer (read that as shush money) payments then I refer you to a certain Mrs Thatcher.....  "There can be No entitlement without an Obligation" And that includes a certain number of Corporate thieves that either avoid Taxation or suck at balls of lobbiests to avoid their fair share. Google, Apple, GM, Exon all of them single Mothers(fuckers)

Crtrvlt's picture

This still doesn't even match all the corporate welfare and the approx 35 trillion plus and counting transferred to wall st the last 4 years ( via their best friend the fed and the treasury of course) in the form of, among other methods, direct cash injections, short term overnight loans, free money at the discount window and various liquidity swaps which the banks and their 35:1 leverage ratios and shadow banking liabilities needed to even stay alive even to this day.

2 wrongs obviously don't make a right. So you have the parasites on the bottom, partly there because of the massive gap in record corporate profits (deteriorating as we speak) and record low wages, and the scumbag leeches at the top abusing the system with the government's blessing because of political donations.

We're fucked

sangell's picture

EVery time you see a broad nosed, rubber lipped ape with a 100 inch ass marching across a parking lot with her brood of hubshis you see the problem. Until they are exterminated there is no solution.

Karlus's picture

Just wait until there is a hiccup with the Kroger supply chain. They willl be swiping their SNAP cards until their bodies stink up the cities.

vast-dom's picture

9 people up-voted "EVery time you see a broad nosed, rubber lipped ape with a 100 inch ass marching across a parking lot with her brood of hubshis you see the problem. Until they are exterminated there is no solution."


i am sorry to say ZH is done. the readership is fucked. there was never racism like this before. let's not forget the big-assed white people busy stuffing themselves all across this fucked up country of ours and of course the spics and the kikes running everything. yeah it's all the kikes fault since they own everything and everyone and the niggers for eating all that free junk food and the whops speakchuckers gringos and everyone else we can hate based on ethnicity and what have you. 


if you really wanna get going let's just say that the jews are at that extreme right tail of the IQ distribution curve, just a touch ahead of the Asians. So you dumb hateful white people are all ours! and if it wasn't for us, you wouldnt have an internet, atomic bombs and energy google or even Tyler Durden himself. See WHITE PEOPLE FUCKED IT ALL UP FOR EVERYONE and Jews aren't really white they are more middle eastern which is closer to niggers than plain old white people. You like that?

Angus McHugepenis's picture

vast-dom: Chill man, it's an obvious troll account even though it's been around for 2 years, 45 weeks. You've got better things to do than get upset with that obvious troll post. Shhh... if you listen closely you can here me cracking another beer. Got one here for you too.


AssFire's picture


Both you and vast-doom are part of the problem.


Multiculturalism is a proxy for multiracialism, and integration is a proxy for mono-racialism, which is a proxy for white genocide.

The proposition that the ultimate interest in human life is the continuity of one's ethnic group. Not prosperity, not personal liberty, not niceness to the minorties , not any preference of the pro-immigration/colonization mentality.

When White liberals spend decades non-stop 24 /7 harping on at every available opportunity about the Original Sins of the Fathers to the point where it becomes a CULT , you are committing an evil deed , because what you are doing is sending a message , and that message is that all future generations of White children not yet born share the collective guilt of the White Lefts Litany of White Historical real or imaginary injustices .

There is a word for that . It is called a " BLOOD LIBEL " --a RACIAL --BLOOD LIBEL , that is asking for its pound of flesh in retribution .
Is that what you want to see looking back at you Mr. Lefty , from the mirror, when you wake up one morning?

We often have some White historical guilt Lefties on this thread spreading their 6th form civilizational mea-culpa , that has now become the unchallenged de facto factory setting narrative in every educational institution and every champagne trendy radical chic champagne socialist dinner party in every single White nation on the planet , and anyone who even so much as questions these Lefty guilt sodden intellectual giants and experts on world history is of course --once again --" a racist " for even doing so . Well you cannot get out of that closed loop never ending polemic --can you ? It's check mate in one frocking move isn't it .
So listen you holier-than-thou virtue narcissist --love me , love me --I'm a liberal " ALL of humanity loving " hippies !

You win the global compassion/ guilt sentiment competition . Happy now .
Now I must have told you Lefties the following a hundred times and you all come back repeating the same 6th form off the shelf plug in clap-trap about the sins of the White man . Why don't you read some books that don't conform to your preconceptions ?

FACT ; The White race did not invent slavery , but he did ban it all across the world , and if he had not , it would still be going on in Africa today .

FACT ; A new strain of small pox or any other plague could have wiped out 1/3rd of all populations , but the Whites invented cures for them , and when you add up all the other benefits of technology , the White race has spared a billion lives from famine , disease , child mortality , pestilence and god knows what else .
Question : When you say that the White man was more cruel , evil , sexist , homophobic, authoritarian, fascistic and totalitarian , in comparison to WHO ?

FACT ; Islam expanded from a pagan desert cult to conquer , colonize and convert 1/5th of the planet leaving a pile of 270 million dead bodies in its wake , and NO , the Crusades were a response to two unprovoked attacks by Islam, one as far up as Tours in France and another to the Gates of Vienna , and centuries of Barbary pirate raids on Mediterranean and British coastal settlements which took 1 million white slaves back to Africa

There is no act of cruelty that the White man has committed that Amerindians , Chinese , Africans , Muslims , Japanese , or other races are not capable of . And do you think any of them would have had second thought about colonizing the world if they had the chance , and do you think they would have lost sleep about it .

FACT ; So you arty-artsy white liberals peddle half educated cafe pseudo-intellectual clap-trap that we have all heard before , because you think that the more you denigrate your own civilization , the most successful , beneficial and humanitarian in all of human history because you get a big smug....

" Pooh how I bask in the ego-glow of moral supremacy , as I condemn my own civilization as evil --love --love me "
out of it -Oh and by the way , there are so many of you now that you are creating utter havoc ,and busy creating future world that no liberal progressive would ever want to live in .

Can you White liberals not get it through your thick skulls that any civilization that gropes around apologizing for existing 24/7 as if it had no redeeming features whatsoever , cannot hope to survive . It will eat itself alive from within ..

Angus McHugepenis's picture

Ummm... the last time I looked I was FAR from being an "artsy-artsy white liberal". Give your fucking head a shake. I have no idea what else you are ranting about.

Surrealist's picture

I seriously cannot believe some of the abject rubbish we read in various media reports....


World Economy in Best Shape for 18 Months, Poll Shows

“The global economy is improving, recovering and healing, thanks to the U.S. and the emerging markets,” said Andrea Guzzi, a poll respondent and vice president of IST Investmentstiftung fuer Personalvorsorge, which manages money for Swiss pension funds. “More people are becoming wealthy, less and less are poor.”

I am Jobe's picture

Sure and I see a Unicorn in my backyard everyday.


Aurora Ex Machina's picture


North Korea finds secret Unicorn lair

Currently trending on all major sources, including Telegraph and fleet-street. At which point we all groan, because the MSM has gone full retard and is so unprofessional these days, it can't check sources. (I mean, REALLY, you're adults being paid a wage for this, and you can't do a 5 min GREP? REALLY? AND YOU DESERVE TO BE PAID?)

Flip-trick: not actually a unicorn, it's a Qilin.


The Qilin (Chinese: ??; pinyin: qílín; Wade–Giles: ch'i-lin) is a mythical hooved Chinese chimerical creature known throughout various East Asian cultures, and is said to appear with the imminent arrival or passing of a wise sage or an illustrious ruler.[1] It is a good omen that brings rui (Chinese: ?; pinyin: ruì; roughly translated as "serenity" or "prosperity"). It is often depicted with what looks like fire all over its body. It is sometimes misleadingly called the "Chinese unicorn" due to conflation with the unicorn by Westerners.


Conclusion: story isn't about rainbows, unicorns or MLP. They're celebrating the arrival of a new illustrious ruler, fire based, rui, get the picture? 

Vendetta's picture

ha. .... comment is spot on