One-Third of US Wages? Government Handouts

Social welfare benefits make up 35% of wages and salaries

By Evann Gastaldo,  Newser Staff

Posted Mar 9, 2011 11:49 AM CST

(Newser) – More than a third of the total wages and salaries in the US is made up of government payouts, CNBC reports. Social welfare benefits including Social Security, Medicare, and unemployment insurance account for 35% of wages and salaries—a record figure that is up from 21% in 2000 and 10% in 1960, according to a research firm. That percentage is sure to increase if nothing changes before the rest of the Baby Boomers retire.

Thanks in part to measures intended to fight the financial crisis, such benefits have increased over the past two years by some $514 billion. One economist involved in the study says that in order to get back to a pre-recession level of 26%, “either wages and salaries would have to increase $2.3 trillion, or 35%, to $8.8 trillion, or social welfare benefits would have to decline $500 billion, or 23%, to $1.7 trillion.” But it could be worse: In the UK, 44% of wages and salaries is made up of social welfare benefits.

Frank Sawyer (R) displays a sign during a demonstration in front of the Social Security Administration office April 26, 2005 in Chicago, Illinois.
Frank Sawyer (R) displays a sign during a demonstration in front of the Social Security Administration office April 26, 2005 in Chicago, Illinois.   (Getty Images)
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