Nominally, wages were up 2% last year -- but down 2% in real dollars due to inflation.
According the Social Security Administration, based on compensation (wages, tips, and the like) that is subject to Federal income taxes (as reported by employers on Forms W-2) --- 50 percent of all wage earners in the U.S. had a net compensation less than or equal to the median wage, which is estimated to be $27,519.10 for 2012.
|Year||# of wage earners||Median wage|
From December 2009 to December 2012 the labor force saw an increase of 2,714,557 wage earners.
Also Note: In 2012 50 percent of all wage earners had net compensation less than or equal to the median wage, which is estimated to be $27,519.10 for 2012 --- which means, nominal wages were up $553.67 (or 2%) from the year before --- but according to the BLS inflation calculator, would actually be worth $28,065.06 in real 2012 dollars --- or down 2% in real dollars from the year before.
Social Security benefits for nearly 58 million people will increase by 1.5 percent next year. The increase is among the smallest since automatic adjustments were adopted in 1975. It is small because consumer prices haven't gone up much in the past year.
The average COLA will be just $19 per month, but it will quickly be consumed by the rising costs of basic needs like food, utilities and health care. (In the budget talks, the Republicans want, and a few Democrats agree, that future COLAs should use chained-CPI to calculate even lesser cost-of-living adjustments.)
The wage threshold (or "cap") for those who must pay Social Security taxes is currently set at $113,700 --- but this will increase to $117,000 next year. Wages above the threshold are not subject to any Social Security taxes at all (and neither is capital gains income).
FACT CHECK: The Huffington Post just reported, "About 165 million workers pay Social Security taxes. About 10 million earn wages above the threshold." But according to the data from Social Security, it appears we have 153.6 million in the labor force who pay Social Security taxes, and we have about 8 million wage earners* above the $113,700 threshold.
153,632,290 total wage earners
- 145,241,419 cumulative number up to $114,119 a year
= 8,390,871 for a difference of those who do not pay any Social Security taxes on earnings over $113,700 a year (like congressional salaries of $174,000, who also have their SS taxes capped after the first $113,700 earned.)
* I'm assuming that if Warren Buffet earned all his income from capital gains on investments, he wouldn't be included in this data. But if he paid himself a base salary (for being self-employed or as a CEO of one of his companies), maybe he might be. He could have even paid himself one dollar. "Hey Warren...are you in this data?"
PLEASE NOTE: At the end of FY2012 there were 8,827,795* Americans on Social Security disability and they averaged $1,130 a month (or $13,560 a year) --- and there were 36,719,288 Social Security retirees averaging $1,261 a month (or $15,144 a year).
*Although actual disability "claims" were up (as they usually are during a recession and its aftermath), actual "awards" have declined as have "terminations" increased. The actual net increase for those receiving disability benefits is up a mere 251,728 from the FY2011 to FY2012.
So while 50% of wage earners in the labor force took home a measly $27,519 a year, those who rely on Social Security fared much worse. The GOP wants to cut their benefits so that the top one percent pays less taxes.
1) Remove the "cap" on Social Security taxes.
2) Tax all capital gains as regular income using the current marginal tax rates.
3) Tax all capital gains for Social Security.