Who Really Lives on a Fixed Income?
Contrary to the myth, writes Mark Pribonic, workers in the private sector have little ability to increase their nominal wages during times of rising prices. But the same cannot be said for the recipients of government checks. Instituted under federal legislation passed in the 1970s, citizens receiving Social Security and Supplemental Security Income get an automatic increase in their checks every December that partially compensates for the rising costs of daily living. FULL ARTICLE
Comments (10)
Allen Young
07/08/08am The suggestion that automatically S. S.
checks each year increase is not correct for some
recipients.
For some, the check amounts decrease, because each year the portion of gross withheld for Medicare each month has increased more than gross increased. That is my experience.
Allen Young, Houston
Published: July 8, 2008 9:19 AM
N. Joseph Potts
"One initial effect of expansive monetary credit is upward pressure on commodity and raw-material prices."
The timing, magnitude, and locus of the effects of inflation are not easily found - not even as "ONE initial effect." Particularly when expectations of more inflation are widespread, upward pressures can be concentrated in things that aren't major factors of production, or costs of running businesses, like gold, collectibles in general, and real estate.
But the main thrust of the article - the "fixed income" chant is totally myth to serve a destructive agenda - is as true as can be.
If those living on distributions from the government are on "fixed incomes," then the rest of us must be on broken incomes.
Published: July 8, 2008 9:23 AM
Matt
Let's face it what we have is theft on a grand scale, covered-up with the Ethic of helping this group or that group. Inflation of goods and services cannot take place unless first we have inflation of the money supply. Those first at the money supply trough:
the banks, special interest groups and politicians are the beneficiaries, those last, pensioners and wage earners are losers.
What we have is an Ethical Problem and if this is not addressed all else is just gibberish and a cover-up for more of the same.
Published: July 8, 2008 9:35 AM
Steve
I couldn't agree more with the points raised in the article. My belief is that the only group that isn't on a fixed income are the elected representatives in this country. Only they can agree to give themselves raises with no regard for the source of the wealth to pay for it - unlike those in the private sector who are bound by what the market will bear for their labors.
Published: July 8, 2008 9:46 AM
J. H. Huebert
Workers can increase their incomes by working more hours, taking second jobs, etc. The assumption behind the "fixed income" cliche is that the elderly cannot do that. And that's wrong, of course -- there are lots of jobs old people can and should do rather than force us to pay for their enjoyment of 20-30 years of mindless leisure.
Published: July 8, 2008 1:39 PM
Florida Economist
"With increases in private-sector compensation trailing in comparison to that experienced in government pay, the income gap that once heavily favored the former has all but disappeared."
In order to validate this statement, we would have to analyze the actual pay across multiple disciplines (government and private), not just take the increase in annual standard of living pay as a hard indicator. I would suggest that the income gap has contracted, but not nearly enough to make the above determination.
The article is correct on its basic assumption and reminds us of the few perils that lurk in the free economy, as certain government programs override its ability to find a state of fair compensation based on some output.
Persons, regardless of age, who receive automatic increases in compensation based on rules outlined in their retirement plan or government plan, are not on fixed incomes. They are in fact on a variable income scale, albeit ever so slightly. While their annual compensation may increase just a few hundred dollars a year, or even decrease due to the impact of other automated variable expenses, the compensation does in fact change.
Published: July 8, 2008 2:55 PM
Steve
I work in home health as an LVN. I (used to) make pretty good money, but haven't had a raise in 3 years because the Govt refuses to increase medi-medi re-
imbursement.
Now I'm facing an 8.5% decrease in pay because the Gov. of Calif is cutting Medi-Cal payments 10%. Not all is rosey in the private sector
Published: July 8, 2008 11:53 PM
Kevin
On the other hand, government employment increased by nearly 77,000 jobs through the first three months of this year.
The economy is crumbling but the government is able to add 77,000 jobs. This seems like their normal response to economic crisis. Increase their payrolls will stimulate the economy I am sure. Maybe increasing entitlements is the way to fix the whole economic mess.
That is 77,000 more votes they will always be able to count on. Is it any wonder change is so hard to effect in the country? The government just buys more votes every year by employing more people.
Published: July 10, 2008 3:06 PM
Kevin
On the other hand, government employment increased by nearly 77,000 jobs through the first three months of this year.
The economy is crumbling but the government is able to add 77,000 jobs. This seems like their normal response to economic crisis. Increase their payrolls will stimulate the economy I am sure. Maybe increasing entitlements is the way to fix the whole economic mess.
That is 77,000 more votes they will always be able to count on. Is it any wonder change is so hard to effect in the country? The government just buys more votes every year by employing more people.
Published: July 10, 2008 3:09 PM
FinancialServicesRenoNV
Greetings all members,
I would just like to say hello and let you know that I'm happy to be a member - been a lurker long enough :)
Hope to contribute some and gain some knowledge along the way....
Published: March 28, 2009 5:27 PM