Posts filed under “Wages & Income”
He notes that in March, there has been a very strong surge in withholding taxes. The amount is roughly equivalent to 300,000 new workers being paid $30,000 salaries. Matt presume many of these jobs are Census hires.
How he arrived at the 300,000 estimate:
In February, the un-adjusted growth in withholding taxes over February 2009 was -2.28%. For the first 21 business days of March, the growth rate is +3.12%. That’s a miraculous 5% jump, the bulk of which is almost certainly the result of Census Bureau hiring. Let’s take a look at how many new jobs would fit this size of a leap:
The dollar amount of March’s gain is $4,764,000,000.
Divide that by 21 days, and we get a daily average of $226,860,000.
Divide that by 5 and we get $45,370,000 per work week.
So, how many new workers would be required for the IRS to rake-off $45,370,000 per week more in taxes this month? A good ballpark figure might be 300,000 new jobs.
If you hired 300,000 workers and paid them an average annual salary of $30,000, your weekly payroll would be $173,076,923 (300,000 * 30,000 / 52).
If you withheld 26.5% in taxes from each paycheck, the total would be $45,865,385 ($173,076,923 * 0.265), which is pretty close to the increase in March’s withholdings so far.
However, the withholding data is not detailed in any way by the Treasury Department, and we only have totals to work with. So, we can only make very, very rough estimates since there is a wide range of salaries, multiple tax brackets, and the fact that many workers will have had their hours increased as opposed to being newly hired.
Nevertheless, the Bureau of Labor Statistics should report a very large number on Friday morning.
The Census Bureau hasn’t published any hiring statistics that I have seen, but the consensus among economists is that they have hired 100,000 workers in March. They could have hired quite a lot more of the planned 1.2 million total, but the army of door-knockers isn’t scheduled to hit the streets until May, though they will likely go on the payroll for training well before then.
The bottom line is that Friday’s jobs report should be very strong, though it could disappoint the market if the Census Bureau was responsible for the bulk of hiring as opposed to the private economy.
Here are the key data points: • The average CASH payout for the top 25 execs at the 5 companies that were bailed out by Uncle Sam — AIG, Chrysler, GM, GMAC and Chrysler Credit — has been cut in half since 2008 to $469,777. • For the top earners at those companies, pay is…Read More
I have a few quotes in Matt Taibbi’s no holds barred look at Wall Street’s profits and bonus culture. It is classic Taibbi, full of righteous indignation and fury over the bailed out banks quick transformation from near bankruptcy to record profits. He details 7 scams the various TARP recipients have pulled. Here’s a taste…Read More
This chart, from a Reuters’ analysis of pay at the 18 biggest banks by market value, illustrates the massive differences in pay among the CEOs of the world’s top banks. The compensation of the CEOs of the largest U.S. banks towers above what’s paid to banking chiefs in other parts of the world. > Source:…Read More
Ever wonder why Goldman execs don’t speak to mere mortals? The answer was hidden in a tongue-in-cheek Michael Lewis Bloomberg column, which he slipped this by everyone late night Friday. Its an internal memo to Lloyd Bankfein, chock full of suggestions to improve GS’ public image. This one was my favorite: Each year, for example,…Read More
I stumbled across a fascinating pierce of research (via a reader) regarding misaligned pay incentives Bear Stearns and Lehman Brothers: “The standard narrative of the meltdown of Bear Stearns and Lehman Brothers assumes that the wealth of the top executives of these firms was largely wiped out along with their firms. In the ongoing debate…Read More
Today’s NYT magazine has a long, well done interesting piece on Kenneth Feinberg, the government’s special master for executive compensation, titled What’s a Bailed-Out Banker Really Worth?. Anytime I read a discussion on compensation, bonuses, and bailouts, I am astonished as to how much of the general discontent over these issues traces back to the…Read More
Distinguished law scholar Elizabeth Warren teaches contract law, bankruptcy, and commercial law at Harvard Law School. She is an outspoken critic of America’s credit economy, which she has linked to the continuing rise in bankruptcy among the middle-class.
Mike Santoli has an interesting perspective on the furious reactions to Goldie’s bonuses in this week’s Barron’s: “Absent in the rage against people earning impressive pay after their firms got public help is the key question: Do we want the firms that received aid to continue operating as autonomous, profit-seeking businesses, or as quasi-utilities operating…Read More