Just looking at the history for the last 30 years, I find a pattern. The take home pay of the U.S. worker is being replaced by benefits from the government in some form. Nearly all of this initiative being driven from the Feds. Once the Federal government puts something in place, many states follow with their own similar program. And so it goes.
Let's take a look at a few of these benefits...
Earned Income Credit
Additional Child Tax Credit
Child Care Subsidies
Food Stamps
Medicaid
Disability
Supplemental Security Income (SSI)
Rent assistance
College Grants
Transportation
HUD
Home Loan assistance
Low cost college loans
Utilities assistance
I intentionally left off Medicare and Social Security as I believe these not be welfare programs (in general) but entitlements that, over a lifetime, you paid to get at some future point in time.
This is likely a partial list as these were the ones off the top of my head. If you want to see full disclosure try: http://www.usa.gov/Citizen/Topics/Benefits.shtml
To be clear, I'm not blaming anyone in the income box taking any of these benefits. In order to survive they pretty much have to do it. It's just sad to see the government providing more and more of our compensation package and letting the corporations who pay us to work, get off scot free -- and they know it. How and why have they benefited? Simple. The government (incentivized by the lobbyists) have designed a system where corporations are allowed, even encouraged, to pay low wages. Just look at any 'real dollar' wage chart like this one:
The blue line is real wages (taking into account inflation). Notice that through the years our purchasing power (as far as wages go) has declined. How can this continue to be possible? Won't there be some tipping point? Perhaps. But the real answer lies in the nontaxable government benefits that the working poor receive. That information is no where. It's not even mentioned as 'Compensation', but it should be. Isn't a low income benefit, provided by the government, a subsidy to your compensation package, especially given that you must have earned (you worked for it) income? Sure it is. I would love to see a study showing compensation as a package deal -- those benefits and wage from your employer PLUS the welfare programs that people receive due to corporate low wages. I would bet the blue line would be higher. Not only would it be higher but in the last 20 years I would bet it would be stunningly higher.
In conclusion, the income box is real. Government has consumed more and more of the typical American's compensation package. Therefore, making the lower middle class more dependent upon the government to 'fill in' the gaps that the system is clearly designed to push. That gap is being filled by our elected officials making laws to fill them.
A further note is that Obamacare is designed in the same manner -- but is now creeping up to around the $94,000 level. If we allow this kind of government creep to continue, we will no longer live in a capitalist country where independence is the dream of many. Rather, we will live in a box and be severely punished (benefits yanked) if we step outside of it.
