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- Americans are increasingly relying on government aid thanks to aging populations and rising costs.
- Money from programs like Social Security accounted for 18% of total personal income in 2022.
- That's a nine percentage-point increase from 1970, and the equivalent of $3.8 trillion.
Americans are increasingly relying on government assistance — and it reflects a shifting economic landscape.
A growing share of income in most US counties is coming from social safety net programs like SNAP, Social Security, and Medicaid, per a report published in September by the research firm Economic Innovation Group. Government transfers of funds from these programs accounted for about 18% of total personal income in the US in 2022, a nine percentage-point increase from 1970, and the equivalent of $3.8 trillion. The spike is in both urban and rural counties.
The report said that Americans' increasing dependence on government assistance is in part due to an aging population. One in six people in 2022 were over the age of 65 — compared to one in 10 in 1970 — and just over half of the national transfer income flows from Medicare and Social Security.
What's more, healthcare is straining people's finances. The report said Medicare and Medicaid prices are becoming more expensive as costs for care rise.
The report's findings come as Business Insider has spoken with many retirees — who are living solely on Social Security income because they don't have savings or retirement investments — who say they are struggling to afford basic necessities.
"I don't want to be rich, I just need to be comfortable," a baby boomer living on $1,104 monthly in Social Security previously told BI. "I just want to know that I can have food when I need it and a nice roof over my head."
The EIG's analysis of county and county-equivalent data (such as parishes in Louisiana that are considered similar to a county) shows how much government aid transfers as a share of total income varied across the US. Just a handful of places with data had shares above 40% in 2000, as seen in the map below.
Most counties from EIG's analysis saw government transfers as a share of total income rise between 2000 and 2022, with many increasing by at least 10 percentage points.
"Today, most US counties depend on a level of government transfer income that was once reserved only for the most distressed places," the report said.
Paychecks and investments are Americans' main sources of income outside government assistance. Still, many don't make enough to get by: 13% of individuals live below the federal poverty line, per a report from the nonprofit United Way's United for ALICE program. That's $15,060 annually for one person.
The EIG report suggests that reliance on government transfers will continue to be a norm in many US counties. EIG said enacting policies that boost wages and encourage workforce participation would be possible solutions to help reduce reliance on government assistance.
Are you living on a limited income or relying on government assistance? Are you open to sharing how you budget and afford basic necessities? If so, reach out to these reporters at allisonkelly@businessinsider.com and mhoff@businessinsider.com.