The amount of income from the federal government directed to individuals in this country has exploded in recent years, and few states have received more in benefits than West Virginia.
A comprehensive study by the bipartisan Economic Innovation Group determined that “Americans received $3.8 trillion in government transfers in 2022, accounting for 18 percent of all personal income in the U.S. That share has more than doubled since 1970… and has grown three times as quickly as non-transfer income.”
Transfer payments include Social Security, Medicare, Veterans benefits, various poverty programs including tax credits, Supplemental Security Income and nutrition programs, unemployment insurance and various education and training support programs.
The research categorizes the share of personal income from government transfers as minimal (under 15 percent), moderate (15 to 25 percent) and significant (above 25 percent). The residents of every county in West Virginia except Berkeley, Doddridge, Harrison, Jefferson and Putnam receive more than 25 percent of their income from these programs.
In some of the state’s poorer counties, particularly in southern West Virginia, nearly half of all income comes from federal government transfer payments.
There are several reasons for these dramatic increases in West Virginia and nationally:
–The single largest transfer programs are Social Security and Medicare, and retirement-age Americans “make up a rising share of the total population.” West Virginia has one of the oldest populations of any state.
–West Virginia’s population is less healthy than most states and “increasing costs of health care and a shrinking opportunity of good earnings opportunities” contribute to higher transfer payments.
–West Virginia is a poor state, meaning a higher percent of the population is eligible for low income benefits. For example, in FY 2022 one in six state residents were on the Supplemental Nutrition Assistance Program (SNAP) and nearly 65,000 West Virginians were receiving Supplemental Security Income because they had little or no income or were disabled.
The point here is not to judge the merits of these programs, but rather to highlight that the dramatic growth has implications. As the research points out, the over-65 population is growing three times faster than the working age population.
They conclude that the current path is unsustainable and fraught with trade-offs. “Significantly raising taxes and dramatically cutting transfer programs could choke off the very economic activity that finances transfers and immiserate the lives of people who depend on them.”
This report is yet another warning that is ignored by our political leaders who believe our policy decisions—or lack thereof—and the inescapable shift in our demographics are not worthy of debate.
The report should also be sobering to West Virginians who make ad hominem attacks on the federal government and “the deep state” while cashing the checks or taking advantage of the benefits that come out of Washington.