SOCIAL WELFARE POLICYMAKING

Social Welfare Policies

• Provide benefits to individuals• Based on either Entitlement (regardless of

need; Social Security/Medicare) or Means-Tested programs (based on need; Food Stamps or Medicaid)

Means-Tested Programs

• Controversial due to philosophical differences• Deserving Poor vs. Undeserving Poor• Social Darwinism vs. Cyclical / Structural

Poverty

Income Distribution: describes how the national income is divided

• Relative Deprivation: perception by an individual that they are not doing well economically in comparison to others

• Income: amount of money collected between two points in time

• Wealth: Value of all assets owned (stocks, bonds, bank accounts, cars, houses, etc.)– 1/3 of wealth held by 1%, – 1/3 by next 9%, – remaining 1/3 by the other 90%

Poverty Line

• Income threshold below which people are considered poor

• 1 person = 11,170• 4 persons = 23,050• 43.6 million, about 14.3%, officially poor in

2009• ‘Feminization of Poverty’: increasing

concentration of poverty among women

Gov’t.’s Affect on Income

•Government can affect income via two ways:–Taxation & Expenditures

TAXATION

• Progressive Tax: bigger % from rich• Proportional Tax: same % from all• Regressive Tax: bigger % from poor• Earned Income Tax Credit (EITC): refundable

credit for working people who earn low incomes

EXPENDITURES

• Transfer Payments: benefits directly to individuals– cash, food stamps, low % loans

Evolution of “Welfare State”

• 1789-1935: parents care for children who take care of parents as they age

• 1935: Social Security Act created as part of FDR’s New Deal– $ for retired, disabled– Aid for Families with Dependent Children (AFDC)

• 1964: LBJ’s “War on Poverty”– Medicare/Medicaid

• 1980’s: De-funding of social welfare programs under Reagan

• 1996: Welfare Reform Act, WJ Clinton– Must find work within 2 years– Total of 5 years welfare– AFDC changes to TANF (“Temporary Assistance for

Needy Families”)

Political Conflict

• Social Darwinism/dependency (“Deserving Poor”) vs. Cyclical/Structural Poverty (“Undeserving Poor”)

• Americans tend to see welfare recipients as overwhelmingly African-American, lazy, and undeserving

• Feelings on race affect feelings on welfare• Media portrays recipients as minority when

majority are White

Source: Census Bureau - Table H-3, 2010

What percent in taxes does each pay after paying for basic necessities like food and shelter, rather than

total income?

If you subtract this $2,000 a month or $24,000 per year from the various quintiles' incomes, the following pre-

tax disposable incomes result:

And here are the actual average taxes paid by quintile:

And so, here are the tax percentages that each quintile actually pays as a percent of their true disposable

incomes, assuming everyone needs at least $2,000 a month just to get by:

SOCIAL SECURITY

• Trust Fund: $ in to pay current recipients• 12.4% tax up to $102,000• 6.2% paid by employee• 6.2% paid by employer

INSOLVENCY

• Life expectancy: 1935 = < 65; 2009 = >78

• Baby Boom = fewer workers-to-recipients ratio

• Fund has been ‘raided’ over the years to pay for other programs

SOLUTION(S)?

• Increase Payroll Taxes• Decrease benefits for recipients• Increase age at which benefits are recived• Means-Testing recipients

Efficacy of Groups re: Social Welfare Policymaking

• Elderly: well-organized with a high amount of resources = effective

• Poor: vote less, less money, fewer organizations = less effective