Big Government? Where it is By State

As the future of later born Americans continues to get cashed in to benefit Generation Greed, the executive/financial class, and the political/union class, with no commentary or acknowledgment in this phony, tribalist political campaign, there isn’t much left to say that I didn’t say four years ago.  The “revolutionary” Donald Trump kept things going in the same direction, but an accelerated pace, with more tax cuts for the rich, more debt, more benefits for his generation, and an ever-diminished future for those coming later.  This followed the Obama Administration, perhaps the most conservative (with regard to the original meaning – trying to keep things the same) since Hoover in the face of an economic and social collapse. The system was preserved, so the winners on the inside were protected.  The average life expectancy of those born after 1957 fell.

At this point, it’s all about keeping the privileges for your interests while using tribalism to shift the blame.  Since federal elections are decided by state, however, it might be illuminating to show which states had the “biggest government” in 2018, according to data provided by the Bureau of Economic Analysis.  It was the very states where a majority of the people will say they are against big government.  They are actually in favor of big government for themselves, against having to pay for it, and against any services and benefits for anyone else, particularly the later-born generations who will be left with their debts.

The BEA data — all kinds of data — may be found here.

https://www.bea.gov/data/income-saving

A spreadsheet with the data used in this post is here.

BEAIncSourceByState

The measure used is a combination of two things as a percent of the total personal income of the residents of each state.  Earnings (wages and benefits) of those working for the government (federal, state, local) and government-owned enterprises (the MTA, the post office).  And “transfer payments” from some Americans to others – Social Security, Medicare, Medicaid, food stamps, welfare, SSI, etc. etc.  I used the data to compute these percentages.

Also SA05, for government and private earnings.

The data shows that in 2018, the earnings of state and local government workers equaled 15.7% of total U.S. personal income.  The figure for New York State was 15.2%.  And transfer payments equaled 17.1% of total personal income nationwide.  The figure for New York State was 16.5%.   Adding these two together one gets a figure of 32.7% of personal income for the U.S. and 31.7%, slightly below average, for New York State.

The earnings of government and government enterprise workers are a very high share of total personal income in the District of Columbia, Maryland, and Virginia, for obvious reasons.  But most of the other states where government accounts for a high share of total personal income are poor states (or states with lots of old people) in the south and west.  West Virginia, Mississippi, Alabama, South Carolina, Kentucky, Arkansas, Louisiana, North Carolina and Florida.  New Mexico, Alaska, Montana, Wyoming, Oklahoma, Arizona, Oregon, Idaho, and Iowa.

But also Rhode Island, Vermont, Delaware, and Maine in the Northeast, and Michigan, Ohio and Missouri in the Midwest.

Many of these states, where much of the money is coming from the government, currently have far lower unemployment than New York. In fact the states with the highest unemployment right now are Massachusetts and New York.

The states with below average government, in addition to New York, include Wisconsin, California, Minnesota, Illinois, New Jersey, New Hampshire, Connecticut and Massachusetts.  Many of these states are currently hurting, meaning they are generating less in private sector earnings to be redistributed to the rest of the country. Thus the resentment of these states by the rest of the country, and the accusation of wasteful government spending here.  Something that is really only true of New York.

New York’s low government earnings and transfer payments relative to personal income were a consequence of an economic boom that benefitted NYC to an unusual extent.  Thus increasing personal income – especially, almost exclusively, among the retired and at the top.  The increase in total personal income has obviously reversed, and the tax base has shrunk with it, but those who work for the government, and who rely on government funding in (for example) the construction and health care sectors, still expect to continue to receive even more government funding than before. Other New Yorkers, and future New Yorkers are expected to pay for this out of lower incomes, while receiving less in public services.

Within New York State, government and government enterprises have always been a larger share of total personal income outside New York City than in it. In fact, a substantial share of the government sector earnings within New York City are paid to those who live outside the city, to city workers who live in the suburbs.  These earnings are counted against NYC’s total in the chart.

The NYC data was changed to make its government sector earnings seem smaller through 2017, followed by a big leap in 2018.  Regardless of what is hopefully just an error, though possibly not, it is fair to say government earnings are lower in New York City than in the rest of New York State.

With its massive Medicaid spending, New York City has traditionally had far higher transfer payments as a percent of its residents’ personal income than the rest of New York State. That changed in the mid-2010s, as NYC’s economy boomed and the rest of the state aged.  As of 2020, as workers flee the city even if nominally tied to jobs here, it may have changed again.

Just remember this:  all these “welfare states” with more government as a percent of personal income than New York State, other parts of New York State with as much or more government than New York City (and NYC public workers who live in the suburbs), retired NYC public employees with retroactively enriched pensions, NYC public employees with non-working seniority assignments, debts incurred in the past with little in additional infrastructure provided, and transfer payments for today’s seniors — all take money off the top before a dime is provided in services for NYC residents, or invested in the future.  Children will die in the streets before those who are used to taking money off the top give back a cent.

It isn’t fair and it isn’t due to the coronavirus, which merely has accelerated things that would have happened anyway.  But since criticizing what Republicans have done to us in New York, unlike pointing out what Democrats and their unions and contractors have done to us, isn’t under Omerta, suffice it to say that NYC does not get more government than average.  It just pays far more for it than anyone else.

1 thought on “Big Government? Where it is By State

  1. nobody knose

    Given that people pay into (are forced, actually) Social Security, i don’t see how that should be put into the same bucket as welfare and food stamps. Also, i don’t think the military is an element of what most folks think of as “big government.”

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