
Personal income in the US shot up a record 10.5% in April - prostoalex
https://qz.com/1862614/personal-income-in-the-us-shot-up-a-record-10-5-percent-in-april/
======
rootusrootus
I'm thinking the Europeans (at least the ones that did this) got it right by
subsidizing payrolls so employers could just keep on paying staff as if they
were working. Much simpler to coordinate payments to a smaller number of
endpoints, none of the hassle of trying to process orders of magnitude more
unemployment claims, etc.

But, then I suppose it would be an obstacle to companies using the opportunity
to permanently trim staff. Hmm.

~~~
Barrin92
This works because European countries are very corporatist. There is a high
degree of labour organisation and governments, unions, and employers often
work together to maintain say, employment rather than responding to market
fluctuations.

This is why German unions say in the early 2000s during Germany's "sick man of
Europe" period, negotiated _stalling_ pay raises to maintain employment.

In the US (and also often here on HN) this will just be described as
inefficient, ignoring market signals or something like it. I don't think it's
even possible to coordinate the economy like this in the US.

~~~
hogFeast
It requires a level of corporate control over politics that just doesn't exist
in the US.

~~~
jacobush
I don't know what to make of this comment. On the one hand, it makes sense, on
the other, corporate control over politics in the US is near complete.

Maybe it just goes to show to show that corporations can not control
themselves. They need to be guided.

~~~
hogFeast
It isn't anywhere near complete.

In the US, corporations fight with the state. In most Nordic/North European
countries, corporations are the state (the history is just totally different,
large corporations have run those countries for decades).

I will give you an example: Germany we can agree is a fairly rich economy, the
average German citizen has the same net wealth as a Greek citizen...a country
where the economy basically doesn't function, unemployment has been in the
high teens for two decades, etc.

I also knew someone who run a chemicals business in Europe. In the UK, unions
fought every step the way, they negotiated huge salaries for members, they
would make threats, they would strike. In Germany, they just rolled over. As
long as you paid the right people off, low wages, subsidised loans, etc. They
just did whatever management told them (I think people who talk about worker
representatives on boards assume that there is some scrutiny going on...I have
never seen this occur).

The closest comparison is probably China. Very similar.

~~~
kazen44
are you serious in your reply? because claiming german unions didn't fight
every step of the way is absurd.

Unions and other left winged organisations played a major role in german
history. Germany was the first country with a state supported pension and
healthcare system. The SPD has been in power for a majority of germany's post-
ww2 history together with CDU in the grand coalition and the average greek
does not have the same net wealth as the average german.

------
NicoJuicy
This is a total number, it doesn't say to where the money went.

I would only trust medians or the 95 percentile with the current
administration.

Statistics are meant to be misleading. It's even in my profile description :)

~~~
mrep
The federal government is giving unemployed people 600 per week (31,200 a
year) on top of state benefits regardless of their income so anyone making
less than that is making more on the federal government alone. That is why
total income has gone up.

------
ravenstine
Not sure how this is a useful statistic. I'm being perfectly honest. I think
it can only be useful in retrospect, since our ability to predict the near
future, given current circumstances, doesn't seem high.

~~~
sesuximo
I think is interesting and surprising even if it doesn’t inform opinions about
next steps

------
verdverm
Because the govt super sized their unemployment checks, be ready for the end
of unearned bonuses in a few weeks

~~~
bb2018
I'm agreeing with you - but isn't that the whole point of a stimulus? Boost
short term economy and therefore hope, even if the gains are not long-lasting,
the money floating around both helps people pay their bills and motivates them
to make purchases?

There is still a couple more months of increased UI. Surely, it will be a huge
fall after that, but in a much better place than if there were minimal or no
increased benefits to begin with.

I would love to see another half-sized measure - but don't think the fact that
it will fall in the future almost proves its usefulness.

~~~
thephyber
> isn't that the whole point of a stimulus?

What was passed wasn't economic stimulus. It was paying people to safely stay
at home.

Stimulus would be paying people to stimulate more demand (which may happen,
but it will be after the economy opens up again).

~~~
bb2018
I really disagree. The payment amount was not linked to whether or not
individual people stayed at home or whether or not they lived in an area that
had strict stay-at-home orders.

The economy may not seem "stimulated" compared to where it was a year ago -
but it is certainly "stimulated" compared to what it would have been if the
additional checks didn't go out and a much larger swath of the population
missed rent, car payments, or credit card bills.

~~~
thephyber
> but it is certainly "stimulated" compared to what it would have been if the
> additional checks didn't go out and a much larger swath of the population
> missed rent, car payments, or credit card bills.

By that definition, every single bill that passes appropriations sends money
to someone and therefore "stimulates the economy".

I still don't think stimulus was the impetus there. Compassion for those who
lost their job, a desire to avoid/mitigate social instability, and
reinforcement for people to follow the directions of health professionals.

As far as I can tell, this is the bill/law[1]. No mention of stimulus in the
title or abstracts.

[1] [https://www.congress.gov/bill/116th-congress/house-
bill/6199...](https://www.congress.gov/bill/116th-congress/house-
bill/6199/all-info)

~~~
bb2018
Trump, Mnuchin, Pelosi, McConnell, Sanders, and Biden have all referred to
this as a stimulus. Sure, anything with money could stimulate some, but the
express purpose of this was to stabilize and stimulate the economy. Most bills
have that a secondary goal. A bill which directs money to institutions that do
cancer research stimulates economic movement but that is not comparable to
giving money directly to people for not working or losing their job.

There is no mention of the bill, either in the law itself or in discussions,
that this would somehow reduce transmission by encouraging people to stay
home.

Trump: [https://www.cnbc.com/2020/05/22/coronavirus-stimulus-
trump-w...](https://www.cnbc.com/2020/05/22/coronavirus-stimulus-trump-wants-
to-send-out-more-relief-money.html)

Mnuchin:
[https://www.youtube.com/watch?v=QoEsSwxKGtk](https://www.youtube.com/watch?v=QoEsSwxKGtk)

Pelosi: [https://www.cnn.com/videos/politics/2020/05/12/nancy-
pelosi-...](https://www.cnn.com/videos/politics/2020/05/12/nancy-pelosi-
stimulus-bill-price-sot-lead-vpx.cnn)

McConnell:
[https://www.youtube.com/watch?v=dHGSQCMZSt4](https://www.youtube.com/watch?v=dHGSQCMZSt4)

Sanders: [https://www.masslive.com/coronavirus/2020/05/bernie-
sanders-...](https://www.masslive.com/coronavirus/2020/05/bernie-sanders-
maintains-push-for-recurring-checks-in-coronavirus-stimulus.html)

Biden: [https://www.bloomberg.com/news/articles/2020-04-26/biden-
ass...](https://www.bloomberg.com/news/articles/2020-04-26/biden-assails-
stimulus-calls-u-s-corporations-greedy-as-hell)

------
carlsborg
Can someone explain that US personal income $18.5 Trillion figure? That’s
approaching the entire GDP.

~~~
thephyber
> Seasonally adjusted annual rate

This means that _if the trend were to continue for a year_ , the amount of
personal income would be that figure. GDP is always an annual figure.

It's not clear if "personal income" is just cash or includes benefits (like
health care).

It's also possible that people who are laid off / furloughed are dipping into
their retirement funds, because the administration gave guidance that doing so
right now would not be penalized for those who are economically impacted
(please don't do trust me and verify with your accountant).

------
pentaphobe
Seems like you could get this exact statistic by having 20 million or so low
earners lose their jobs - as in the shifting average (not talking about
unemployment cheques)

------
ericmcer
Isn’t this the exact opposite of what we want? If a stimulus results in
decreased spending we are literally just flooding the market with dollars that
are being saved. If that money isn’t being spent it isn’t triggering the
desired effect of a stimulus package... creation of goods and services. It’s
basically just a big middle finger to people who don’t take on debt and who
are still working, especially service workers. If they announce an extension
of the bonus unemployment I will definitely ask to be laid off, 3 months of
making $4500 a month with infinite free time to pursue side projects?

~~~
triyambakam
So could a couple make $9000 a month, or more with children?

~~~
ericmcer
If a couple both got laid off in late March and filed for unemployment they
would have made 4200 + 4200 + 1200 + 1200 = 10800

~~~
thephyber
> filed for unemployment

I would like to point out that filing for unemployment is risky:

    
    
      - it's not a guaranteed approval,
      - you don't automatically get health insurance (and COBRA moves all of the cost to you, rather than split between employer+employee),
      - there's little hope of a bonus extension, and
      - there's a chance that your state exhausts their unemployment fund in the near future.

------
082349872349872
How many months of 110% income would it take for, say, the middle 80% of US
households to have accumulated 6 months worth of savings?

~~~
lifeisstillgood
Why not just create a simplified welfare state ? Claim benefits for up to six
months no questions asked.

~~~
thephyber
> Why not

Because US policy makers don't trust citizens. They demand that all benefits
be means-tested and the onus is on the recipient to prove.

Also, one of the major parties (the one that controls the Senate and the
Executive Branch) wants to dismantle "the welfare state". I don't think COVID
changed that part of the platform.

Personally, I would love for policy makers to listen to Code For America
leadership and change policy to make it stupid simple to hook into employer
data to know when a person is layed off and message them with SMS or a Push
Notification that they are already registered for {unemployment, MedicAid,
food assistance}, but the friction for those systems is what one (or both)
party wants, so I'm not holding my breath.

------
unstatusthequo
Quantitative easing?

------
planxty
A small step up from the pit of despair we're in should not be confused for
meaningful progress, though we should fully expect the Trump administration
will soon be releasing misleading self-congratulatory statistics for political
gain.

------
TAForObvReasons
This is great news for a bunch of reasons. In the immediate term, it's great
that people and families saw extra income in a trying time. In the longer
term, hopefully this informs a larger discussion on the minimum wage and
effectiveness of various social programs.

~~~
justinzollars
No one's pay went up. 40 million people lost their jobs, the majority of who
made very little money. The average went up because low wage jobs were
vaporized

~~~
TAForObvReasons
pay != income, which is the key point here. The fact that millions of families
are seeing more money now in the current unemployment benefit scheme raises
the question about whether the pre-corona minimum wage was too low and whether
we need to invest more in social programs.

And this honestly couldn't have happened at a more interesting time, since
this is a presidential election year. Millions of voters who might have voted
on social or cultural issues may be more inclined now to vote for politicians
interested in bolstering social programs.

~~~
thephyber
> in the current unemployment benefit scheme

Congress (a nationally centralized organization) was doling out the money and
used a simple formula (+$600 for every unemployed person, no matter what their
job was).

> whether we need to invest more in social programs

I think "invest more" is maybe the wrong way to think about it and would just
throw more money at the problem the wrong way. I think we need to change how
legislatures and federal departments dictate how social programs be
administered.

Code For America (and 18F and USDS, etc) has great programs where they go in
and assist government departments to improve the experience for the end user.
They generally try to change the project management to think about MVPs and
use Agile methodology and _most importantly_ build small increments quickly
and iterate. Traditional US social programs were mega projects defined at
legislation/RFP time (both highly corrupt because lobbyists and contractors
would steer requirements).

We need to empower departments that administer social programs to run them for
the people who actually use them and allow them the flexibility to change the
requirements of the program.

------
chiefalchemist
Interesing. I guess it's a matter of perspective. The headline could have just
as easily highlighted the increase in the national debt. This money didn't
fall out of the sky.

Or perhaps, more accurately, characterize it as a loan that will eventually
have to be paid off - directly or indirectly - by the taxpayers currently
receiving it as "income."

Question: This isn't actually income, is it? That is, it's not taxed. Nor is
it capital gain, as that is taxed as well. This would traditionally be labeled
an entitlement, correct?

