THE WELFARE REGIME OF
THE US
Some unorganized thoughts
By Vache Gabrielyan
WELFARE
REGIME TYPES
CORPORATIST
SOCIAL-DEMOCRATIC
LIBERAL
Basic Principle
Solidarity
Mutual responsibility is
shared through social
networks. Welfare is based
on individual contribution.
Those not belonging are
excluded.
Institutional
Need is accepted as a normal
part of social life that should be
addressed through institutions.
Welfare is provided for the
population as a whole, i.e. is
universalist.
Residualist
Welfare is a safety
net for the poor.
Representative
Countries
France
Germany
UK
Sweden
US
Based on
Solidarity
Social Market
Institutional
Welfare State
Institutionalredistributive
Pluralist in Practice,
Liberal in Ideology
Solidarity
Social state
Minimum
standards
Broad social
provision
Individualism
Inclusion
of the
excluded
Corporatism
Subsidiarity
Laissez-faire
Social
protection
Best
services
possible
Egalitarianism
Residualism
Punitive view of
poverty
WELFARE EXPENDITURE FOR OECD MEMBER STATES
(AS A PERCENTAGE OF GDP) IN THE 1990s
Denmark
29.2
Portugal
21.1
Sweden
28.9
Luxembourg
20.8
28.5
Czech
Republic
20.1
Germany
27.4
Hungary
20.1
Belgium
27.2
Iceland
19.8
Switzerland
26.4
Spain
19.6
Austria
26.0
New Zealand
18.5
Finland
24.8
Australia
18.0
24.4
Slovak
Republic
17.9
Greece
24.3
Canada
17.8
Norway
23.9
Japan
16.9
Poland
23.0
United States
14.8
United Kingdom
21.8
Ireland
13.8
Netherlands
21.8
Mexico
11.8
South Korea
6.1
France
Italy
Measuring Poverty
US
Poverty threshold is defined by identifying the cost of a food
basket and estimating from that how much income is
necessary.
EU
Poverty is defined through a comparative measure
which sets a poverty line at 50% of the median
income.
The U.S. Liberal Welfare System
• a low degree of decommodification (i.e. the relative
independence of the system towards the compulsion and
risks of the capitalistic market) and a dominant role of
the free market and the family;
• little social rights, a low level of benefits, little
redistribution of wealth, social stigmatization and a high
degree of private welfare;
• a strong institutionalized working-culture, where social
insecurity is used as a motor of economical development
(Esping-Andersen 1997).
The Clinton administration (New Left)
policies
• Flexibilization and deregulation of labor;
• The low-wages-high-employment strategy;
• Protecting the family as the basic moral
institution.
The Ideal Concepts (Leitbild)
Behind the US Welfare System
• Welfare capitalism (i.e. the notion that social problems can be
solved without any state intervention by the economy and society
itself) is the predominant Leitbild behind American welfare politics.
Alternative Leitbilder (e.g. communitarianism) only reach the core of
welfare politics if they fit into the liberal philosophy of the U.S.A.
• Moral individualism (i.e. the notion that every individual has a
responsibility towards the "truly needy" and he’s supposed to get
involved somehow in political or civil associations which care for the
poor, rather than delegate his responsibility to the government) is
the general Leitbild in the American society. It keeps up the private
dimension of welfare and makes Welfare Capitalism possible
(Matthias Zeylmans).
THE UPSIDE
Many intellectuals in the US and Asia believe that European social
welfare policies should be a blueprint for action in their own countries.
But those policies, financed by high taxes and costly mandates on
business, are mainly responsible for the enormous increase in
European unemployment during the past decade and a half. This
‘European disease’ is hardly a model for other nations.
Gary Becker, 1992 Nobel laureate, Chicago University
Business Week, 8 April 1996
THE DOWNSIDE
Yet, as the UK and western Europe contemplate adapting more
to the ‘American model’ it is worth noticing a more menacing
side. Economic inequality has continued to widen. All the rungs
on the economic ladder are now further apart than a generation
ago, and the space between them continues to spread. This
widening of inequality leads to distress and misery for those at or
near the bottom and anxiety for those in the middle. Left
unchecked it could also undermine the stability and moral
authority of the nation.
Robert Reich, former U.S. Secretary of Labor,
Brandeis University
Financial Times, 3 March 1997