Where Does the Country’s Personal Income Come From?

Aug 9, 2022 | Finconomics 101, No Bull Economics

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Executive Summary:  Is it surprising to know that only 52% of the nation’s personal income comes from wages and salaries? If you add in benefits, the total increases to 63%. The fact that benefits now represent 17% of total employee compensation can help explain why Americans are strapped for cash. You can’t buy food with health insurance contributions from your company.

Notably, approximately 27% of personal income (more than half of total wages and salaries) is generated by interest income, small business profits, and rental income. This reflects the importance of supplementing the salary from your job.

Government assistance represents the next largest contributor to total personal income at almost 10% with government-provided health care representing 44% of this amount.

Lastly, we can see taxes take a 14% bite out of personal income leaving the country with $18.7 trillion in annualized disposable personal income for consumption and savings.

Personal Income Graph

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