The State of America’s Private Sector 30: March, 2012

The U.S. Department of Commerce’s Bureau of Economic Analysis recently released their monthly personal income data for March, 2012 (pdf). The chart below shows the private sector share of personal income from January 1959 to March 2012. For March, the private sector share of personal income was 71.27 percent.

While the private sector continues to claw it’s way back up (after cratering in May, 2009 at 69.06 percent), the current level is still well below the pre-Great Recession level of 74.48 percent set in June 2007. With the aging of the baby boomers and Obamacare looming, it’s doubtbul that we will ever get back to pre-recession levels. We will all be poorer as a result of a smaller private sector.

 Chart Showing Private Sector Share of Personal Income by Month from January 1959 to March 2012

However, while the private sector has been gaining ground, there is other less rosy news. The chart below shows, on a monthly basis, the contributions paid into Social Security and Medicare (red line) via the payroll tax versus the benefits paid-out by Social Security and Medicare (green line). While contributions are finally growing again, benefits paid-out have been growing faster.  In fact, in March, the gap between the two set an all-time record of $351.6 billion–more benefits being paid than taxes being collected.

Chart Showing Growing Gap Between Contributions and Benefits for Social Security and Medicare January 1959 to March 2012