John Lettieri, President and CEO of Economic Innovation Group | Official Website
John Lettieri, President and CEO of Economic Innovation Group | Official Website
In total, residents in Alabama received $60.5 billion, equivalent to $11,924 per capita.
For comparison, the average across all states in the U.S. was $75.42 billion in total, or $11,542 per capita.
Government transfer payments are non-repayable funds provided by federal, state, or local governments to support individuals in need. These payments aim to stabilize economic conditions and provide financial support during hardships. Key programs include Social Security transfers (retirement benefits), Medicare transfers (healthcare for seniors), Medicaid transfers (healthcare for low-income individuals), and income maintenance transfers (financial assistance for basic needs).
Breaking down the contributions in Alabama at the time, Social Security transfers made up $21.19 billion, a 35% share of the total. Medicare transfers accounted for $15.53 billion (25.7%), while Medicaid contributed $7.59 billion (12.5%). Income maintenance programs, including assistance such as SNAP or TANF, added another $7.49 billion, or 12.4% of the total.
With 17.9% of the population aged 65 and older, Alabama has a significant demand for programs like Social Security and Medicare. The total income excluding government transfers in Alabama was $38,992 per capita, noticeably below the state's total income of $50,916 per capita, emphasizing the role of government transfers in overall income.
When comparing 2022 to the previous year, Alabama saw a decrease in its government transfer dependency by 3.5%.
Government transfers have long been a modest financial safety net, historically comprising only a small fraction of Americans' income. However, since the 1970s—sometimes dubbed the “Great Transfer-mation”—dependency has surged from 8.2% (or $2,022 per capita in inflation-adjusted 2022 dollars) in 1970 to 17.6% (or $11,542 per capita) in 2022 nationwide. In Alabama, reliance on government transfers has similarly increased from 9.6% (or $1,736 per capita) in 1970 to 23.4% (or $11,924 per capita) in 2022, reflecting broader national trends.
According to the Economic Innovation Group’s analysis, these trends are not merely short-term responses to economic pressures but rather reflect a profound, long-term transformation in how government support is integrated into American life. The study illustrates that structural shifts—from rising healthcare expenses and demographic changes to stagnant wages—have significantly increased dependency on government transfers.
| State | Rank | Dependency on Transfers (%) | % Population 65+ | Social Security Transfers (%) | Medicare Transfers (%) | Medicaid Transfers (%) | Income Maintenance Transfers (%) | Per Capita Transfers ($) |
|---|---|---|---|---|---|---|---|---|
| West Virginia | 1 | 28.9% | 21.1% | 33.7% | 23.9% | 19.8% | 10.9% | $14,450 |
| New Mexico | 2 | 26.5% | 19.3% | 27.7% | 18.2% | 29% | 15.7% | $13,842 |
| Mississippi | 3 | 25.8% | 17.2% | 33.6% | 26.1% | 16.8% | 12.1% | $11,984 |
| Kentucky | 4 | 24.8% | 17.4% | 30.9% | 23.2% | 26.3% | 10.1% | $12,890 |
| Louisiana | 5 | 23.9% | 16.8% | 27.2% | 23.7% | 26.7% | 12.8% | $13,019 |
| Arkansas | 6 | 23.7% | 17.7% | 32.7% | 23.5% | 23.5% | 9.6% | $12,493 |
| Alabama | 7 | 23.4% | 17.9% | 35% | 25.7% | 12.5% | 12.4% | $11,924 |
| Maine | 8 | 22.7% | 22.4% | 33.6% | 23.7% | 20.5% | 11.9% | $13,779 |
| South Carolina | 9 | 22.4% | 18.9% | 36.6% | 25.8% | 12.3% | 11% | $12,028 |
| Delaware | 10 | 21.9% | 20.6% | 33.8% | 23.3% | 23.3% | 9.2% | $13,866 |
| Arizona | 11 | 20.7% | 18.9% | 31.6% | 22.1% | 24.4% | 8.9% | $12,093 |
| Michigan | 12 | 20.7% | 18.6% | 37.4% | 25.7% | 18.1% | 10.7% | $11,834 |
| Oklahoma | 13 | 20.7% | 16.3% | 32% | 24.3% | 17.2% | 12.4% | $11,654 |
| Alaska | 14 | 20.6% | 13.9% | 19.4% | 13.4% | 24% | 11.1% | $14,153 |
| Ohio | 15 | 20.2% | 18.3% | 32.5% | 25.9% | 22.4% | 10.8% | $11,680 |
| Oregon | 16 | 20.1% | 19.1% | 32.7% | 21.4% | 26.1% | 9.8% | $12,514 |
| Pennsylvania | 17 | 20.1% | 19.5% | 33.4% | 24.5% | 25.4% | 9.3% | $12,986 |
| Vermont | 18 | 20% | 21.4% | 36.8% | 20.8% | 24.1% | 8.7% | $12,623 |
| Indiana | 19 | 19.8% | 16.8% | 34.3% | 24.3% | 22.1% | 10.9% | $11,545 |
| Missouri | 20 | 19.8% | 17.9% | 34.7% | 26% | 20% | 8.6% | $11,453 |
| North Carolina | 21 | 19.8% | 17.2% | 33.9% | 24.3% | 15.7% | 11.7% | $11,491 |
| Rhode Island | 22 | 19.6% | 18.8% | 32.7% | 23% | 24.4% | 10.2% | $12,447 |
| Tennessee | 23 | 19.2% | 17.1% | 35.3% | 25.7% | 15.6% | 11.5% | $11,209 |
| Florida | 24 | 18.9% | 21.4% | 34.1% | 28.9% | 12.4% | 9.4% | $12,269 |
| Montana | 25 | 18.3% | 20% | 36.2% | 22.6% | 19.3% | 7% | $11,163 |
| Hawaii | 26 | 18.2% | 18.1% | 33.8% | 21.5% | 19.7% | 13.6% | $11,236 |
| Wisconsin | 27 | 18.1% | 18.6% | 38.2% | 24.8% | 18% | 9.5% | $11,137 |
| Idaho | 28 | 18% | 16.9% | 35.9% | 22.7% | 17.5% | 11.5% | $10,187 |
| Iowa | 29 | 17.9% | 18.1% | 37% | 24.7% | 20.3% | 8.4% | $10,773 |
| New York | 30 | 17.9% | 18% | 26.8% | 22.2% | 32.1% | 12.8% | $13,463 |
| Georgia | 31 | 17.6% | 15% | 32.6% | 24.7% | 13.3% | 14.5% | $9,964 |
| Kansas | 32 | 16.7% | 17% | 37.7% | 25.9% | 15.9% | 9.1% | $10,119 |
| Minnesota | 33 | 16.5% | 17.3% | 33.1% | 21.9% | 26.4% | 9.7% | $11,379 |
| Nevada | 34 | 16.5% | 17% | 32.8% | 26% | 15.5% | 12.3% | $10,264 |
| Illinois | 35 | 16% | 17% | 32.1% | 24.4% | 20.1% | 14.9% | $10,848 |
| Nebraska | 36 | 16% | 16.8% | 34.1% | 25% | 17.6% | 8.3% | $10,262 |
| South Dakota | 37 | 15.7% | 18% | 35.8% | 24.5% | 13.4% | 12.4% | $10,713 |
| Virginia | 38 | 15.7% | 17% | 33.3% | 21.6% | 20.8% | 10% | $10,811 |
| California | 39 | 15.5% | 15.7% | 24.6% | 22.5% | 26.7% | 14.6% | $11,927 |
| Texas | 40 | 15.5% | 13.4% | 28.5% | 24.3% | 19.9% | 13.3% | $9,720 |
| Maryland | 41 | 15.3% | 16.7% | 31.7% | 24.5% | 23.5% | 10.7% | $10,724 |
| New Hampshire | 42 | 15.1% | 20% | 42.2% | 25.3% | 16.4% | 5.6% | $11,127 |
| Massachusetts | 43 | 14.9% | 18% | 28.7% | 24% | 25.1% | 15.4% | $12,629 |
| Wyoming | 44 | 14.8% | 18.6% | 37.6% | 23.5% | 11.5% | 6.5% | $10,831 |
| New Jersey | 45 | 14.4% | 17.3% | 33.6% | 25.1% | 21.3% | 10.3% | $11,114 |
| Connecticut | 46 | 14.3% | 18.6% | 34% | 25.4% | 24% | 9% | $11,828 |
| Washington | 47 | 14.2% | 16.7% | 33.8% | 20.8% | 21.4% | 9.8% | $10,697 |
| North Dakota | 48 | 14.1% | 16.6% | 33.9% | 23.6% | 20.5% | 7.8% | $9,913 |
| District of Columbia | 49 | 13.8% | 13% | 17.1% | 16.5% | 44% | 15.8% | $13,278 |
| Colorado | 50 | 13.2% | 15.6% | 30.8% | 21.4% | 21.3% | 13.3% | $10,012 |
| Utah | 51 | 12.7% | 11.9% | 33.7% | 21.9% | 17.4% | 11.6% | $7,551 |
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