Private Sector Salaries Shrinking

by Kate Piercy According to a USA TODAY analysis of government data, “paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year.” On the other hand, government-provided benefits, including Social Security and unemployment insurance, for example, rose to record high levels during the first three...

by Kate Piercy

According to a USA TODAY analysis of government data, “paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year.”

On the other hand, government-provided benefits, including Social Security and unemployment insurance, for example, rose to record high levels during the first three months of 2010.

University of Michigan economist Donald Grimes says this trend is not sustainable:

Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. “This is really important,” Grimes says.

For more on the report, check out USA TODAY’s article here.