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‘Means-Tested Gov’t Benefit Recipients Outnumber Full-Time Year-Round Workers’

by Grace

Are there enough workers to maintain growing levels of government benefits?

Census Bureau: Means-Tested Gov’t Benefit Recipients Outnumber Full-Time Year-Round Workers

… Americans who were recipients of means-tested government benefits in 2011 outnumbered year-round full-time workers, according to data released this month by the Census Bureau….

There were 108,592,000 people in the United States in the fourth quarter of 2011 who were recipients of one or more means-tested government benefit programs, the Census Bureau said in data released this week. Meanwhile, according to the Census Bureau, there were 101,716,000 people who worked full-time year round in 2011. That included both private-sector and government workers.

That means there were about 1.07 people getting some form of means-tested government benefit for every 1 person working full-time year round.

It’s hard to see how this can continue.

Adding in the recipients of non-means-tested government programs paints a more detailed picture on the strain government programs place on workers.

When the people who received non-means-tested government benefits from programs such as Social Security, Medicare, unemployment and non-means-tested veterans compensation are added to those who received means-tested government programs such as food stamps, Supplemental Security Income and public housing, the total number of people receiving government benefits from one or more programs in the United States in 2011 climbs to 151,014,000, according to the Census Bureau.


The jobs picture does not offer much hope.

20131029.COCJobLossesRecessionsA

… Nearly 5 years after peak employment occurred in the United States, we are still 2% below levels recorded prior to the recession. 62 months is a staggering number, when one considers that the next closest percent job loss total occurred in the 2001 recession (47 months). In simple terms, never before has it taken the United States economy this long to show 0% job losses after a recession.

Equally unsettling is that at the current anemic rate of job creation that is occurring in the United States, it may be years, not months, before the red line tracking this job loss percentage crosses 0%.

The increase in involuntary part-time workers is a two-fold problem, shrinking tax revenue and amplifying the need for government benefits.

20131029.COCPartTimeJobsApr2013

A turnaround may be dependent on the recovery of the country’s “collective confidence”.

In his commentary on the topic, United Capital Funding Corp. Managing Partner Mark Mandula admits “it is difficult to remain optimistic”. But he believes our country “remains the ‘North Star’ of all of the economies in the world”, with no lack of “initiative, a qualified work force or energy”.  He thinks the country needs is a restoration of its “collective confidence” before we will see the return of economic prosperity.

Or a turnaround may only happen when we finally run out of other people’s money.

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Posted on October 30, 2013 at 5:37 am in jobs after college   |  RSS feed

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9 Comments to “‘Means-Tested Gov’t Benefit Recipients Outnumber Full-Time Year-Round Workers’”

    
  1. CSProfMom
    October 30, 2013 at 6:01 am

    Reading this gives the alarming picture of lots of non-working people being supported by fewer working people. But the benefits food stamps, energy assistance, and WIC in the benefits. Those programs enroll a large number of working people. So you are really looking at a situation in which better off working people are subsidizing worse off working people.

    Someone on a WNYC show recently made the point that the minimum wage can be kept artificially low because of supports like food stamps. So, in effect, we taxpayers are subsidizing business’s ability to keep wages low.

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  2. kcab
    October 30, 2013 at 1:28 pm

    As CSProfMom says above, workers and benefits recipients are not mutually exclusive groups. See for instance, the blog post: http://www.ritholtz.com/blog/2013/10/makers-and-takers/ for a discussion and some interesting notes. (There’s a story of a worker at McDonald’s who, unable to make ends meet, called a ‘help line’ and was told to look into applying for federal benefits.)

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  3. Grace
    October 30, 2013 at 3:06 pm

    Only about 20% of minimum wage workers live in households with incomes below the poverty line, so I’m not sure the “subsidy” to business is that significant. And artificially increasing wages by raising the minimum wage carries its own costs in lost jobs, which would likely bump up the need for means-tested benefits among some groups.

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  4. Grace
    October 30, 2013 at 3:12 pm

    “workers and benefits recipients are not mutually exclusive groups.”

    Agreed. But “Full-Time Year-Round Workers” probably use a lot less in benefits than part-time workers do. The dramatic rise in part-time workers who would like (and need) full-time jobs is part of this problematic equation.

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  5. zzzzzz
    October 30, 2013 at 5:36 pm

    Minimum wage being kept artificially low is self-contradictory, as the minimum wage itself is an artificial construct.

    Whether or not a minimum wage should be a living wage is not a question whose answer has any broad consensus.

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  6. CSProfMom
    October 31, 2013 at 6:02 am

    zzzzz, I was going to make a similar point. You can’t “artificially raise” the minimum wage because it isn’t something that has a “natural” setting. However, even if there were no minimum wage, the effect would still be the same. Food stamps would still function as a subsidy allowing companies to keep wages low.

    The problem of part time employment is very difficult to solve since it is part of a trend – the move to contractor labor – that has been going on at least since the 90’s. The concept of fulltime, permanent employee has been disappearing at least since then. In the tech sector, by the late 90’s, it seemed like everyone was a contractor. It is a short move from fulltime contractor to parttime.

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  7. Grace
    October 31, 2013 at 2:03 pm

    The trends toward lower employment numbers may be long term, but this recent recession has boosted the negative figures tremendously.

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  8. zzzzzz
    October 31, 2013 at 8:48 pm

    The minimum wage does have a “natural” setting: zero.

    If people are paying to work, then perhaps it’s not a job, it’s college.

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  9. CSProfMom
    November 1, 2013 at 6:15 am

    The numbers are definitely worse now. I actually think that the longterm trend towards highly contingent professional labor is one of the factors making this recession so bad. I first noticed the trend in the early 90’s, during the Bush I recession, when suddenly graduates of my school with masters in CS could only get jobs as contractors, jobs in which they were expected to move from employer to employer quite rapidly. Before that, most of the graduates with masters could expect a nice job with a big stable company. That era also saw the rise of the perma-temp at companies like Microsoft – employees who did everything a regular employee did but without the perks of being a real employee. Things improved a little in the tech sector in the Clinton era, but many people were still stuck in contractor postions – I had several friends who could never get out of the trap. And it got even worse in the recession of 2000, when people started increasingly doing piecework, bidding on contract jobs online. I know people stuck in that model too!

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