SOCIAL WELFARE POLICYMAKING
Feb 23, 2016
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