The decline in private-sector wages is just the tip of the iceberg.
Last Tuesday, Dennis Cauchon at USA Today had an insightful take on an economic release from the government’s Bureau of Economic Analysis (BEA). Using BEA’s March 2010 Personal Income and Outlays report, he calculated that wages paid by private companies “shrank to their smallest share of personal income in U.S. history during the first quarter of this year.”
Cauchon then unfortunately went to the prevailing media template, the one requiring that the Bush 43 era be dragged into everything, regardless of relevance:
A record-low 41.9% of the nation’s personal income came from private wages and salaries in the first quarter, down from 44.6% when the recession began in December 2007.
Cauchon’s convenient timing ignores the fact that as late as the fourth quarter of 2008, the same calculation using numbers in the same BEA report he cited came in at 44.0%. In other words, over three-quarters of the decline (2.1 percentage points divided by 2.7 points is actually 78%) occurred after everyone knew that Obama would be in charge.
As important as what Cauchon cited is (after the reality-based context yours truly has provided), the shrinkage in private pay only partially unmasks the much more broadly important story of rapidly advancing statism. Federal intrusion into the private sector and federal confiscation from it are accelerating. A tipping point may be near.
For items one could put hard numbers to with sufficient research, let’s start with entities still classified as “private” which Uncle Sam actually or substantively controls.