Social Policy
0 Social insurance = largest part of welfare state
0 Social Security, Medicare, Unemployment, Worker’s compensation
0 Benefits working middle class; payroll tax contributions;
“deserving”; indexed
0 Public assistance
0 Food stamps, housing, child welfare
0 Selective and means-tested; not indexed; controversial
0 Education
0 Private welfare state = relatively large
0 Health insurance, pensions from employer
0 Government-subsidized through tax code, exemptions
0 More inequitable than public programs
0 Spending on social insurance, public assistance, and state-
subsidized private welfare expanded dramatically since WWII
0 Still comparatively small (Figure 10.1)
0 Americans enjoy fewer social rights (e.g., right to health care)
Historical Welfare State
0 Early American welfare state = extended social
protection to veteran soldiers and mothers (following
Civil War)
0 (1880-1910) ¼ of federal budget spent on pensions for Civil
War veterans and dependents
0 Progessive Era “maternalist” welfare state developed
to promote motherhood
0 Income assistance to single, poor mothers who proved
“worthiness”; contingent on behavior
0 Conform to traditional gender roles (i.e., full-time childcentered domesticity)
0 Unwed mothers often excluded
0 Many states, localities excluded black mothers (especially in
South)
0 Gender and race roles inscribed in social policy
New Deal and Beyond
0 Expansion of welfare state
0 Unemployment, poverty, despair  political action  federally
funded jobs and social welfare
0 Reform resisted by corporate community
0 Social Security Act (1935)
0 Pensions, unemployment compensation for workers; public
assistance to elderly, blind; for poor, single mothers -- Aid to
Dependent Children (ADC)
0 Reinforced conservative nature of welfare state
0 Localism (states set benefit levels, eligibility requirements)
0 Benefits set low
0 Distinction between “deserving” and “undeserving” = social
assistance programs (payroll taxes) vs. public assistance programs
(general fund)
0 Gender inequalities (men more likely to qualify for social insurance)
0 Racial content (advantaged whites, excluded African Americans);
clear example, GI Bill
0 Fair Labor Standards Act (1938) established minimum wage
and 40 hour work week
New Deal and Beyond, cont.
0 WWII halted social reform; business community, conservative
Congress resisted new initiatives
0 (1946) Full employment, (1949) National Health Insurance,
Truman’s Fair Deal (extending New Deal) all defeated
0 Unions, liberals used collective bargaining to gain pensions,
health insurance, unemployment protection  private welfare
system
0 Employer-based benefits = workers dependent for social
protection (health insurance, pensions) on firms; tied workers to
employers
0 Divided workers from each other = workers in corporate sector had
less stake in improving, expanding programs for other workers, poor
0 Businesses offered tax incentives to subsidize employer-based
welfare
0 Limited public benefits encouraged reliance on private, corporate
welfare plans
0 Private plans act as brake on extension of public welfare state
New Poverty
0 Increasing numbers living in poverty (1960s)
0 African Americans in urban ghettos
0 Greater discrimination than earlier groups of immigrants
0 Postindustrial economy  increasing importance of education, skills;
factories relocated to suburbs; service sector jobs don’t pay living wage
0 Women
0 (present) 1/3 of all female-headed households in poverty; ½ of all families
in poverty
0 Women earn lower wages; some need to stay home to care for children
0 Children
0 (present) poverty rate among children around 20%; 3x’s higher than in
Europe
0 Welfare state generationally skewed (most benefits flow to elderly through
expensive programs: Medicare and Social Security)
0 Poverty today
0 Good and bad jobs growing at expense of blue collar jobs in middle
0 Service sector = low wages, no benefits, irregular employment
0 Value of federal minimum wage declined (Table 10.1)
0 See page 331, Responsibility for Poverty: What Do You Think?
Great Society Program
0 Johnson declared War on Poverty (Great Society = free of
hunger and privation)
0 Health insurance (Medicare, Medicaid) for aged, poor; education for
disadvantaged (Head Start, Upward Bound); Job-training (Job
Corps); Housing and urban development (Model Cities)
0 Goal = enhance opportunities for poor
0 Undermined by social unrest, war in Vietnam
0 Conservatives = War on Poverty failed, harmful
0 Great Society polarized electorate along social insurance/public
assistance and race lines
0 Politicians exploited tensions using “welfare” as code word to appeal
to some voters’ fears over crime, taxes, morality, and race (peaked
during Reagan administration)
0 War on Poverty successes
0 Reduced poverty from 19% (1964) to 12% (1979)
0 Reduced malnutrition, increased access to medical care, improved
housing, expanded education
Reagan to Clinton
0 Reagan reduced size, scope of welfare state
0 Slowed spending; slashed Great Society
0 Left social insurance intact
0 Put welfare state on defensive
0 Problem of poverty = increasing poor’s resources  changing
the poor’s behavior; blaming circumstances on inadequacies
of economy  perverse incentives of welfare state
0 Clinton
0 Abandoned campaign promise to invest in domestic programs
0 Supported welfare “reform” with Personal Responsibility
and Work Opportunity Reconciliation Act (PRWORA) (1996)
0 Replaced AFDC with Temporary Assistance to Needy Families
(TANF)
0 States got fixed sums in form of block grants; Two year limits;
lifetime limit of 5 years
0 Welfare rolls declined with resurgent economy
(1993); grew in wake of Great Recession (2008)
Bush to Obama
0 Expanded federal role in public education
0 No Child Left Behind (NCLB) (2002); sought to narrow gap between advantaged and
disadvantaged; underfunded, controversial
0 Medicare Part D (2004); prescription drug coverage to Medicare
recipients
0 Supported by pharmaceutical manufacturers (no price controls, price regulation, and
negotiation to secure lower prices)
0 Increased spending on children’s health
0 State Children’s Health Insurance Plan (SCHIP) expanded federal Medicaid spending so
states could provide health insurance to children whose families met income
requirements
0 Health became fastest growing area of welfare state; US top in
expenditures on health (Figure 10.2)
0 Obama’s Affordable Health Care Act (AHCA) (2010)
0 Employers (> 50 workers) must provide affordable insurance; individuals required to
have health insurance; state-based insurance marketplaces called exchanges; insurers
unable to deny applicants, impose lifetime limits; improved medicare prescription drug
benefit; children on parent’s policies until 26
0 Hugely controversial; massive lobbying by pharmaceutical industry,
health insurance companies; successfully blocked public option
Conclusion
0 Conservative = stabilizes corporate capitalist system; alleviates but
does not correct basic structural inequalities; reinforces market by
0
0
0
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making inequalities, insecurities tolerable
Egalitarian = offers more egalitarian alternative to market; can improve
workers’ standards of living making them less dependent on wages, thus
reducing power of employers; can spread to other activities,
progressively infringing on areas operated on market principles and
ability to pay
US welfare system exhibits both = extended protections to vulnerable
groups, but in ways that reinforce divisions between workers and poor,
whites and blacks, men and women
Question of poverty: economic growth alone cannot reduce poverty;
only government programs in tandem with successful economy
Goals of welfare state(?): support private economy to increase
economic growth; compensate for inequalities; provide security against
hazards; enhance and equalize opportunities; reduce income and wealth
gaps…what do you think?