Welfare
Encyclopedia
Welfare refers to a broad discourse which may hold certain implications regarding the provision of a minimal level of wellbeing and social support
for all citizens without the stigma
of charity. This is termed "social solidarity". In most developed countries, welfare is largely provided by the government, in addition to charities
, informal social groups, religious groups, and inter-governmental organizations. In the end, this term replaces "charity" as it was known for thousands of years, being the act of providing for those who temporarily or permanently could not provide for themselves.
s, health services, or housing. Welfare can be provided by governments, non-governmental organization
s, or a combination of the two. Welfare programs may be funded directly by governments, or in social insurance
models, by the members of the welfare scheme.
Welfare systems differ from country to country, but welfare is commonly provided to individuals who are unemployed
, those with illness
or disability
, the elderly, those with dependent children, and veteran
s. A person's eligibility for welfare may also be constrained by means test
ing or other conditions.
In a more general sense, welfare also means the well-being of individuals or a group - in other words, their health, happiness, safety, prosperity, and fortunes.
Subsidy
Subsidizing a good is one way of redistributing wealth to the poor. It is money that is paid usually by a government to keep the price of a product or service low or to help a business or organization to continue to function. In a budget constraint between ‘all other goods’ and a ‘subsidized good’, the maximum amount of ‘all other goods will remain the same but the budget constraint will shift outward for the ‘subsidized good’ because the cost of the ‘subsidized good’ is reduced for the consumer and so they have the ability to consume more of said good. Some people do not want to use subsidies because they want the poor to consume the subsidized good or service in a specific way or because subsidizing goods (such as health care) can lead to an over consumption of the good.
Voucher
A voucher is like a subsidy that can only be consumed in a specific way like a school voucher or section 8 housing. For instance, families who receive school vouchers may only use them to send their children to schools to help pay tuition costs. Schools then exchange the voucher for cash. Similarly, in section 8 housing, families with this voucher can only use the voucher to pay a portion of their living costs in specified units or in a private sector. In a budget constraint between ‘all other goods’ and a ‘voucher good’ our budget constraint will shift out parallel to an amount equal to the amount of the voucher but the money we have to spend on ‘all other goods’ remains capped at the same amount we had to spend before the voucher. Voucher programs can make us worse off because of the cap on our ability to spend on ‘all other goods’ our indifference curves could limit us.
Direct Cash
This is straight cash with no restrictions on how it can be consumed. Direct cash may cause greater budget constraint because the recipient can spend the cash subsidy on all ‘other goods’ or on a ‘subsidized good’. Direct cash increases the entire budget constraint and shifts the indifference curves outward allowing us to maximize individual utility.
is used to describe a state in which the government provides the majority of welfare services; the phrase also describes those services collectively.
Welfare may be funded by governments out of general revenue
, typically by way of redistributive taxation
. Social insurance
-type welfare schemes are funded on a contributory basis by the members of the scheme. Contributions may be pooled to fund the scheme as a whole, or reserved for the benefit of a particular member. Participation in such schemes is either compulsory, or the program is subsidized heavily enough that most eligible individuals choose to participate.
Examples of social insurance programs include the Social Security
and Medicare
programs in the United States.
Participation in such schemes is either compulsory, or the program is subsidized heavily enough that most eligible individuals choose to participate. Some opponents of welfare argue that it affects work incentives. They also argue that the taxes levied can also affect work incentives. A good example of this would be the reform of the Aid to Families with Dependent Children (AFDC) program. Per AFDC, some amount per recipeint is guaranteed. However, for every dollar the recipient earns the monthly stipend is decreased by an equivalent amount. For most persons, this reduces their incentive to work. This program was replaced by Temporary Aid to Needy Families (TANF). Under TANF, people were required to actively seek employment while receiving aid and they could only receive aid for a limited amount of time. However, states can choose the amount of resources they will devote to the program. Some people believe this is how we should reform Medicaid.
, social welfare to help the poor was enlarged by the Caesar Trajan
. Trajan's program brought acclaim from many, including Pliny the Younger
.
In Jewish tradition, the poor are entitled to charity (represented by tzedakah
) and justice as a matter of right rather than benevolence. Contemporary charity is regarded as a continuation of the Biblical
Maaser Ani, or poor-tithe
, as well as Biblical practices, such as permitting the poor to glean the corners of a field and harvest during the Shmita (Sabbatical year). Voluntary charity, along with prayer
and repentance
, is believed to ameliorate the consequences of bad acts.
The Song dynasty (c.1000AD) government supported multiple forms of social welfare programs, including the establishment of retirement homes, public clinics, and pauper's graveyards
According to Robert Henry Nelson, "The medieval Roman Catholic Church
operated a far-reaching and comprehensive welfare system for the poor..."
The concepts of welfare and pension
were put into practice in the early Islamic law
of the Caliphate
as forms of Zakat
(charity), one of the Five Pillars of Islam
, since the time of the Rashidun caliph
Umar
in the 7th century. The tax
es (including Zakat and Jizya
) collected in the treasury
of an Islamic government were used to provide income
for the needy, including the poor
, elderly
, orphan
s, widow
s, and the disabled. According to the Islamic jurist Al-Ghazali
(Algazel, 1058–1111), the government was also expected to store up food supplies in every region in case a disaster
or famine
occurred. (See Bayt al-mal
for further information.)
There is relatively little statistic
al data on welfare transfer payment
s before the High Middle Ages
. In the medieval period and until the Industrial Revolution
, the function of welfare payments in Europe
was principally achieved through private giving or charity
. In those early times, there was a much broader group considered to be in poverty as compared to the 21st century.
Early welfare programs in Europe included the English
Poor Law
of 1601, which gave parish
es the responsibility for providing welfare payments to the poor. This system was substantially modified by the 19th-century Poor Law Amendment Act, which introduced the system of workhouse
s.
It was predominantly in the late 19th and early 20th centuries that an organized system of state welfare provision was introduced in many countries. Otto von Bismarck
, Chancellor of Germany, introduced one of the first welfare systems for the working class
es. In Great Britain
the Liberal
government of Henry Campbell-Bannerman
and David Lloyd George
introduced the National Insurance
system in 1911, a system later expanded by Clement Attlee
. The United States did not have an organized welfare system until the Great Depression
, when emergency relief measures were introduced under President
Franklin D. Roosevelt
. Even then, Roosevelt's New Deal
focused predominantly on a program of providing work and stimulating the economy through public spending on projects, rather than on cash payment.
is a strong value of the French Social Protection system. The first article of the French Code of Social Security describes the principle of solidarity. Solidarity is commonly comprehended in relations of similar work, shared responsibility and common risks. Existing solidarities in France caused the expansion of health and social security.
. Due to the pressure of the workers' movement in the late 19th century, Reichskanzler Otto von Bismarck introduced the first rudimentary state social insurance scheme. Today, the social protection of all its citizens is considered a central pillar of German national policy. 27.6 percent of Germany's GDP is channeled into an all-embracing system of health, pension
, accident, longterm care and unemployment insurance, compared to 16.2 percent in the US. In addition, there are tax-financed services such as child benefits (Kindergeld, beginning at €184 per month for the first and second children, €190 for the third and €215 for each child thereafter, until they attain 25 years or receive their first professional qualification), and basic provisions for those unable to work or anyone with an income below the poverty line.
Since 2005, reception of full unemployment pay (60-67% of the previous net salary
) has been restricted to 12 months in general and 18 months for those over 55. This is now followed by (usually much lower) Arbeitslosengeld II (ALG II) or Sozialhilfe, which is independent of previous employment.
Under ALG II, a single person receives €364 per month plus the cost of 'adequate' housing, a pension scheme and health insurance
. ALG II can also be paid partially to supplement a low work income.
in the European tradition; however, it is not referred to as "welfare", but rather as "social programs". In Canada, "welfare" usually refers specifically to direct payments to poor individuals (as in the American usage) and not to healthcare and education spending (as in the European usage).
The Canadian social safety net
covers a broad spectrum of programs, and because Canada is a federation
, many are run by the provinces. Canada has a wide range of government transfer payments to individuals, which totaled $145 billion in 2006. Only social programs that direct funds to individuals are included in that cost; programs such as medicare and public education
are additional costs.
Generally speaking, before the Great Depression
, most social services were provided by religious charities and other private groups. Changing government policy between the 1930s and 1960s saw the emergence of a welfare state, similar to many Western Europe
an countries. Most programs from that era are still in use, although many were scaled back during the 1990s as government priorities shifted towards reducing debt
and deficit.
grew alarmingly, preventing the welfare state from developing completely. In the 1990s, efforts moving towards decentralization
and privatization
were used in an attempt to cope with European pressures for economic stability, which were finally reached by 2001.
Welfare (=Välfärd) means in a broad sense standard of life. Welfare is everything that contributes to a good = well-fare (good journey) in life. It is also a systematic infrastructure to protect a good life, from a minimum up to (today) just about average (like 'one size fits all' or 'black T-ford').
Sweden
has been categorised by some observers as a middle way between a capitalist economy and a socialist economy. Supporters of this system assert that Sweden has found a way of achieving high levels of social equality
, without stifling entrepreneurialism. The perspective has been questioned by supporters of economic liberalization
in Sweden.
Government pension payments are financed through an 18.5% pension tax on all taxed incomes in the country, which comes partly from a tax
category called a public pension fee (7% on gross income
), and 30% of a tax category called employer fees on salaries (which is 33% on a netted income). Since January 2001 the 18.5% is divided in two parts: 16% goes to current payments, and 2.5% goes into individual retirement accounts, which were introduced in 2001. Money saved and invested in government funds, and IRAs
for future pension costs, are roughly 5 times annual government pension expenses (725/150).
hgh
. After the Great Society
legislation of the 1960s, for the first time a person who was not elderly or disabled could receive aid from the American government. Aid could include general welfare payments, health care through Medicaid
, food stamps, special payments for pregnant women and young mothers, and federal and state housing benefits. In 1968, 4.1% of families were headed by a woman on welfare; by 1980, the percentage increased to 10%. In the 1970s, California
was the U.S. state with the most generous welfare system. Virtually all food stamp costs are paid by the federal government. In 2008, 28.7 percent of the households headed by single women were considered poor.
Before the Welfare Reform Act of 1996, welfare was "once considered an open-ended right," but welfare reform
converted it "into a finite program built to provide short-term cash assistance and steer people quickly into jobs." Prior to reform, states were given "limitless" money by the federal government, increasing per family on welfare, under the 60-year-old Aid to Families with Dependent Children
(AFDC) program. This gave states no incentive to direct welfare funds to the neediest recipients or to encourage individuals to go off welfare (the state lost federal money when someone left the system). Nationwide, one child in seven received AFDC funds, which mostly went to single mothers.
In 1996, under the Bill Clinton
administration, Congress
passed the Personal Responsibility and Work Opportunity Reconciliation Act, which gave control of the welfare system back to the states. Because welfare is no longer under the control of the federal government, there are basic requirements the states need to meet with regards to welfare services. Still, most states offer basic assistance, such as health care, food stamps, child care assistance, unemployment, cash aid, and housing assistance. After reforms, which President Clinton said would "end welfare as we know it," amounts from the federal government were given out in a flat rate
per state based on population
. Each state must meet certain criteria to ensure recipients are being encouraged to work themselves out of welfare. The new program is called Temporary Assistance for Needy Families
(TANF). It encourages states to require some sort of employment search in exchange for providing funds to individuals, and imposes a five-year lifetime limit on cash assistance. The bill restricts welfare from most legal immigrants and increased financial assistance for child care. The federal government also maintains an emergency $2 billion TANF fund to assist states that may have rising unemployment.
Following these changes, millions of people left the welfare rolls (a 60% drop overall), employment rose, and the child poverty rate was reduced. A 2007 Congressional Budget Office
study found that incomes in affected families rose by 35%. The reforms were "widely applauded" after "bitter protest." The Times
called the reform "one of the few undisputed triumphs of American government in the past 20 years." However, critics of the reforms sometimes point out that the massive decrease of people on the welfare rolls during the 1990s wasn't due to a rise in actual gainful employment in this population, but rather, was due almost exclusively to their offloading into workfare
, giving them a different classification than classic welfare recipient. The late 1990s were also considered an unusually strong economic time, and critics voiced their concern about what would happen in an economic downturn.
Aspects of the program vary in different states. Michigan
, for example, requires recipients to spend a month in a job search program before benefits can begin. Saying that it is “unfair for Florida taxpayers to subsidize drug addiction”, Florida
Governor Rick Scott signed the Welfare Drug-Screen Measure which requires welfare applicants to undergo drug screening. The law went into effect on July 1, 2011. Ita was later revoked by a Federal Judge.
National Review
editorial
ized that the Economic Stimulus Act of 2009 will reverse the welfare-to-work provisions that Bill Clinton signed in the 1990s, and will again base
federal grants to states on the number of people signed up for welfare rather than at a flat rate. One of the experts who worked on the 1996 bill said that the provisions would lead to the largest one-year increase in welfare spending in American history. The House
bill provides $4 billion to pay 80% of states' welfare caseloads. Although each state received $16.5 billion annually from the federal government as welfare rolls dropped, they spent the rest of the block grant
on other types of assistance rather than saving it for worse economic times.
Eligibility for welfare depends on a variety of factors, including gross and net income, family size, and other circumstances like pregnancy, homelessness, unemployment, and medical conditions.
Arguments on the Social and Economic Benefits of Welfare
Welfare is a form of social protection
, as it is concerned with overcoming adverse situations that affect needy individuals. Although social protection was established to assist the working classes and to address transient poverty, it has come to encompass a greater variety of issues surrounding poverty.
The purpose of welfare is to assist individuals in need. The ultimate goal is to lift welfare recipients out of poverty and make them self-sufficient. Séverine Deneulin and Lila Shahani have considered welfare as a mode of economic development, terming it the human development and capability approach. The capability approach focuses on people and not simply on economic growth. While this approach still considers economic growth and macroeconomic stability, the aim is to “expand what people are able to do and be”. This people-centered focus is “one that enables people to enjoy a healthy life, a good education, a meaningful job, physical safety, democratic debate and so on”.
Amartya Sen
argues that enhancing an individual’s capabilities results in the greater likelihood for individual success and society's success. Enhancing freedoms is one means for development. Sen discusses “unfreedoms,” which can include famine
, lack of healthcare, and gender
discrimination. In this regard, welfare provides individuals with the basic needs necessary to live a healthy life with the capability to enjoy the freedoms that are inherently available to all. Therefore, it is essential to note the importance of welfare for underprivileged individuals who need governmental assistance in the form of welfare.
Welfare Misperceptions
Welfare has come to be associated with poverty. Additionally, blacks have overwhelmingly dominated images of poverty over the last few decades. As Martin Gilens, assistant professor of Political Science at Yale University, states, “white Americans with the most exaggerated misunderstandings of the racial composition of the poor are the most likely to oppose welfare”. This perception possibly perpetuates negative racial stereotypes and could increase Americans’ opposition and racialization of welfare policies.
Since the implementation of TANF, the percentages of black and Hispanic
families have increased, while the percentage of white families has decreased. In 1992, blacks represented 37 percent of those on welfare; by 2002, this number increased slightly to 38 percent. In that same time period, the percentage of Hispanics rose from 18 percent to 25 percent. On the other hand, the percentage of whites on welfare decreased from 39 percent to 32 percent in that same time frame.
Additionally, because TANF gave individual states increased flexibility in imposing time-limited welfare policies, the reforms implemented vary by state. Recent policy studies have found a statistically significant relationship between the racial makeup of a state’s welfare population and whether the state adopts tougher welfare policies. Aggressive get-tough reforms include full-family sanctions, short time limits, and family cap policies. Essentially, as the percentage of blacks in the welfare population rises, the probability that the state will adopt full-family sanctions increases from 54 to 97 percent; the probability that the state will adopt a family cap increases from 5 percent to 96 percent; and the probability that the state will adopt a shorter time limit than five years increases from 10 to 88 percent. Moreover, nonwhites are more likely to live in states with tougher policies.
Timeline
1880s-1890s: Attempts were made to move poor people from work yards to poor houses if they were in search of relief funds.
1893-1894: Attempts were made at the first unemployment payments, but were unsuccessful due to the 1893-1894 recession
.
1932: The Great Depression had gotten worse and the first attempts to fund relief failed. The “Emergency Relief Act”, which gave local governments $300 million, was passed into law.
1933: In March 1933, President
Franklin D. Roosevelt
pushed Congress to establish the Civilian Conservation Corps
.
1935: The Social Security Act was passed on June 17, 1935. The bill included direct relief (cash, food stamps, etc.) and changes for unemployment insurance.
1940: Aid to Families With Dependent Children (AFDC) was established.
1964: Johnson’s War on Poverty
is underway, and the Economic Opportunity Act was passed. Commonly known as “the Great Society
”
1996: Passed under Clinton, the “Personal Responsibility and Work Opportunity Reconciliation Act of 1996” becomes law.
The 1980s had a significant effect on social protection policies. Prior to the 1980s, most Latin American countries focused on social insurance policies involving formal sector workers, assuming that the informal sector would disappear with economic development
. The economic crisis of the 1980s and the liberalization
of the labor market led to a growing informal sector and a rapid increase in poverty and inequality. Latin American countries did not have the institutions and funds to properly handle such a crisis, both due to the structure of the social security system, and to the previously implemented structural adjustment
policies (SAPs) that had decreased the size of the state.
New welfare programs have integrated the multidimensional, social risk management
, and capabilities approaches into poverty alleviation. They focus on income transfers and service provisions while aiming to alleviate both long- and short-term poverty through, among other things, education, health, security, and housing. Unlike previous programs that targeted the working class, new programs have successfully focused on locating and targeting the very poorest.
The impacts of social assistance programs vary between countries, and many programs have yet to be fully evaluated. According to Barrientos and Santibanez, the programs have been more successful in increasing investment in human capital
than in bringing households above the poverty line. Challenges still exist, including the extreme inequality levels and the mass scale of poverty; locating a financial basis for programs; and deciding on exit strategies
or on the long-term establishment of programs.
and unnecessary.
Current programs have been built as short-term rather than as permanent institutions, and many of them have rather short time spans (around five years). Some programs have time frames that reflect available funding. One example of this is Bolivia’s Bonosol, which is financed by proceeds from the privatization of utilities—an unsustainable funding source. Some see Latin America’s social assistance programs as a way to patch up high levels of poverty and inequalities, partly brought on by the current economic system.
Others argue that the effectiveness of the programs relies on the ability of mostly free-trade oriented economic systems to address poverty.
Social support
Social support can be defined and measured in many ways. It can loosely be defined as feeling that one is cared for by and has assistance available from other people and that one is part of a supportive social network...
for all citizens without the stigma
Social stigma
Social stigma is the severe disapproval of or discontent with a person on the grounds of characteristics that distinguish them from other members of a society.Almost all stigma is based on a person differing from social or cultural norms...
of charity. This is termed "social solidarity". In most developed countries, welfare is largely provided by the government, in addition to charities
Charitable organization
A charitable organization is a type of non-profit organization . It differs from other types of NPOs in that it centers on philanthropic goals A charitable organization is a type of non-profit organization (NPO). It differs from other types of NPOs in that it centers on philanthropic goals A...
, informal social groups, religious groups, and inter-governmental organizations. In the end, this term replaces "charity" as it was known for thousands of years, being the act of providing for those who temporarily or permanently could not provide for themselves.
Forms
Welfare can take a variety of forms, such as monetary payments, subsidies and voucherVoucher
A voucher is a bond which is worth a certain monetary value and which may be spent only for specific reasons or on specific goods. Examples include housing, travel, and food vouchers...
s, health services, or housing. Welfare can be provided by governments, non-governmental organization
Non-governmental organization
A non-governmental organization is a legally constituted organization created by natural or legal persons that operates independently from any government. The term originated from the United Nations , and is normally used to refer to organizations that do not form part of the government and are...
s, or a combination of the two. Welfare programs may be funded directly by governments, or in social insurance
Social insurance
Social insurance is any government-sponsored program with the following four characteristics:* the benefits, eligibility requirements and other aspects of the program are defined by statute;...
models, by the members of the welfare scheme.
Welfare systems differ from country to country, but welfare is commonly provided to individuals who are unemployed
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
, those with illness
Illness
Illness is a state of poor health. Illness is sometimes considered another word for disease. Others maintain that fine distinctions exist...
or disability
Disability
A disability may be physical, cognitive, mental, sensory, emotional, developmental or some combination of these.Many people would rather be referred to as a person with a disability instead of handicapped...
, the elderly, those with dependent children, and veteran
Veteran
A veteran is a person who has had long service or experience in a particular occupation or field; " A veteran of ..."...
s. A person's eligibility for welfare may also be constrained by means test
Means test
A means test is a determination of whether an individual or family is eligible for help from the government.- Canada :In Canada means tests are used for student finance , and "welfare" . They are not generally used for primary education and secondary education which are tax-funded...
ing or other conditions.
In a more general sense, welfare also means the well-being of individuals or a group - in other words, their health, happiness, safety, prosperity, and fortunes.
Subsidy
Subsidizing a good is one way of redistributing wealth to the poor. It is money that is paid usually by a government to keep the price of a product or service low or to help a business or organization to continue to function. In a budget constraint between ‘all other goods’ and a ‘subsidized good’, the maximum amount of ‘all other goods will remain the same but the budget constraint will shift outward for the ‘subsidized good’ because the cost of the ‘subsidized good’ is reduced for the consumer and so they have the ability to consume more of said good. Some people do not want to use subsidies because they want the poor to consume the subsidized good or service in a specific way or because subsidizing goods (such as health care) can lead to an over consumption of the good.
Voucher
A voucher is like a subsidy that can only be consumed in a specific way like a school voucher or section 8 housing. For instance, families who receive school vouchers may only use them to send their children to schools to help pay tuition costs. Schools then exchange the voucher for cash. Similarly, in section 8 housing, families with this voucher can only use the voucher to pay a portion of their living costs in specified units or in a private sector. In a budget constraint between ‘all other goods’ and a ‘voucher good’ our budget constraint will shift out parallel to an amount equal to the amount of the voucher but the money we have to spend on ‘all other goods’ remains capped at the same amount we had to spend before the voucher. Voucher programs can make us worse off because of the cap on our ability to spend on ‘all other goods’ our indifference curves could limit us.
Direct Cash
This is straight cash with no restrictions on how it can be consumed. Direct cash may cause greater budget constraint because the recipient can spend the cash subsidy on all ‘other goods’ or on a ‘subsidized good’. Direct cash increases the entire budget constraint and shifts the indifference curves outward allowing us to maximize individual utility.
Provision and funding
Welfare may be provided directly by governments or their agencies, by private organizations, or by a combination. The term welfare stateWelfare state
A welfare state is a "concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those...
is used to describe a state in which the government provides the majority of welfare services; the phrase also describes those services collectively.
Welfare may be funded by governments out of general revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
, typically by way of redistributive taxation
Redistribution (economics)
Redistribution of wealth is the transfer of income, wealth or property from some individuals to others caused by a social mechanism such as taxation, monetary policies, welfare, nationalization, charity, divorce or tort law. Most often it refers to progressive redistribution, from the rich to the...
. Social insurance
Social insurance
Social insurance is any government-sponsored program with the following four characteristics:* the benefits, eligibility requirements and other aspects of the program are defined by statute;...
-type welfare schemes are funded on a contributory basis by the members of the scheme. Contributions may be pooled to fund the scheme as a whole, or reserved for the benefit of a particular member. Participation in such schemes is either compulsory, or the program is subsidized heavily enough that most eligible individuals choose to participate.
Examples of social insurance programs include the Social Security
Social Security (United States)
In the United States, Social Security refers to the federal Old-Age, Survivors, and Disability Insurance program.The original Social Security Act and the current version of the Act, as amended encompass several social welfare and social insurance programs...
and Medicare
Medicare (United States)
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...
programs in the United States.
Participation in such schemes is either compulsory, or the program is subsidized heavily enough that most eligible individuals choose to participate. Some opponents of welfare argue that it affects work incentives. They also argue that the taxes levied can also affect work incentives. A good example of this would be the reform of the Aid to Families with Dependent Children (AFDC) program. Per AFDC, some amount per recipeint is guaranteed. However, for every dollar the recipient earns the monthly stipend is decreased by an equivalent amount. For most persons, this reduces their incentive to work. This program was replaced by Temporary Aid to Needy Families (TANF). Under TANF, people were required to actively seek employment while receiving aid and they could only receive aid for a limited amount of time. However, states can choose the amount of resources they will devote to the program. Some people believe this is how we should reform Medicaid.
History
In the Roman EmpireRoman Empire
The Roman Empire was the post-Republican period of the ancient Roman civilization, characterised by an autocratic form of government and large territorial holdings in Europe and around the Mediterranean....
, social welfare to help the poor was enlarged by the Caesar Trajan
Trajan
Trajan , was Roman Emperor from 98 to 117 AD. Born into a non-patrician family in the province of Hispania Baetica, in Spain Trajan rose to prominence during the reign of emperor Domitian. Serving as a legatus legionis in Hispania Tarraconensis, in Spain, in 89 Trajan supported the emperor against...
. Trajan's program brought acclaim from many, including Pliny the Younger
Pliny the Younger
Gaius Plinius Caecilius Secundus, born Gaius Caecilius or Gaius Caecilius Cilo , better known as Pliny the Younger, was a lawyer, author, and magistrate of Ancient Rome. Pliny's uncle, Pliny the Elder, helped raise and educate him...
.
In Jewish tradition, the poor are entitled to charity (represented by tzedakah
Tzedakah
Tzedakah or Ṣ'daqah in Classical Hebrew is a Hebrew word commonly translated as charity, though it is based on the Hebrew word meaning righteousness, fairness or justice...
) and justice as a matter of right rather than benevolence. Contemporary charity is regarded as a continuation of the Biblical
Bible
The Bible refers to any one of the collections of the primary religious texts of Judaism and Christianity. There is no common version of the Bible, as the individual books , their contents and their order vary among denominations...
Maaser Ani, or poor-tithe
Tithe
A tithe is a one-tenth part of something, paid as a contribution to a religious organization or compulsory tax to government. Today, tithes are normally voluntary and paid in cash, cheques, or stocks, whereas historically tithes were required and paid in kind, such as agricultural products...
, as well as Biblical practices, such as permitting the poor to glean the corners of a field and harvest during the Shmita (Sabbatical year). Voluntary charity, along with prayer
Prayer
Prayer is a form of religious practice that seeks to activate a volitional rapport to a deity through deliberate practice. Prayer may be either individual or communal and take place in public or in private. It may involve the use of words or song. When language is used, prayer may take the form of...
and repentance
Repentance
Repentance is a change of thought to correct a wrong and gain forgiveness from a person who is wronged. In religious contexts it usually refers to confession to God, ceasing sin against God, and resolving to live according to religious law...
, is believed to ameliorate the consequences of bad acts.
The Song dynasty (c.1000AD) government supported multiple forms of social welfare programs, including the establishment of retirement homes, public clinics, and pauper's graveyards
According to Robert Henry Nelson, "The medieval Roman Catholic Church
Roman Catholic Church
The Catholic Church, also known as the Roman Catholic Church, is the world's largest Christian church, with over a billion members. Led by the Pope, it defines its mission as spreading the gospel of Jesus Christ, administering the sacraments and exercising charity...
operated a far-reaching and comprehensive welfare system for the poor..."
The concepts of welfare and pension
Pension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...
were put into practice in the early Islamic law
Sharia
Sharia law, is the moral code and religious law of Islam. Sharia is derived from two primary sources of Islamic law: the precepts set forth in the Quran, and the example set by the Islamic prophet Muhammad in the Sunnah. Fiqh jurisprudence interprets and extends the application of sharia to...
of the Caliphate
Caliphate
The term caliphate, "dominion of a caliph " , refers to the first system of government established in Islam and represented the political unity of the Muslim Ummah...
as forms of Zakat
Zakat
Zakāt , one of the Five Pillars of Islam, is the giving of a fixed portion of one's wealth to charity, generally to the poor and needy.-History:Zakat, a practice initiated by Muhammed himself, has played an important role throughout Islamic history...
(charity), one of the Five Pillars of Islam
Five Pillars of Islam
The Pillars of Islam are basic concepts and duties for accepting the religion for the Muslims.The Shi'i and Sunni both agree on the essential details for the performance of these acts, but the Shi'a do not refer to them by the same name .-Pillars of Shia:According to Shia Islam, the...
, since the time of the Rashidun caliph
Rashidun Caliphate
The Rashidun Caliphate , comprising the first four caliphs in Islam's history, was founded after Muhammad's death in 632, Year 10 A.H.. At its height, the Caliphate extended from the Arabian Peninsula, to the Levant, Caucasus and North Africa in the west, to the Iranian highlands and Central Asia...
Umar
Umar
`Umar ibn al-Khattāb c. 2 November , was a leading companion and adviser to the Islamic prophet Muhammad who later became the second Muslim Caliph after Muhammad's death....
in the 7th century. The tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
es (including Zakat and Jizya
Jizya
Under Islamic law, jizya or jizyah is a per capita tax levied on a section of an Islamic state's non-Muslim citizens, who meet certain criteria...
) collected in the treasury
Treasury
A treasury is either*A government department related to finance and taxation.*A place where currency or precious items is/are kept....
of an Islamic government were used to provide income
Income
Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...
for the needy, including the poor
Poverty
Poverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...
, elderly
Old age
Old age consists of ages nearing or surpassing the average life span of human beings, and thus the end of the human life cycle...
, orphan
Orphan
An orphan is a child permanently bereaved of or abandoned by his or her parents. In common usage, only a child who has lost both parents is called an orphan...
s, widow
Widow
A widow is a woman whose spouse has died, while a widower is a man whose spouse has died. The state of having lost one's spouse to death is termed widowhood or occasionally viduity. The adjective form is widowed...
s, and the disabled. According to the Islamic jurist Al-Ghazali
Al-Ghazali
Abu Hāmed Mohammad ibn Mohammad al-Ghazzālī , known as Algazel to the western medieval world, born and died in Tus, in the Khorasan province of Persia was a Persian Muslim theologian, jurist, philosopher, and mystic....
(Algazel, 1058–1111), the government was also expected to store up food supplies in every region in case a disaster
Disaster
A disaster is a natural or man-made hazard that has come to fruition, resulting in an event of substantial extent causing significant physical damage or destruction, loss of life, or drastic change to the environment...
or famine
Famine
A famine is a widespread scarcity of food, caused by several factors including crop failure, overpopulation, or government policies. This phenomenon is usually accompanied or followed by regional malnutrition, starvation, epidemic, and increased mortality. Every continent in the world has...
occurred. (See Bayt al-mal
Bayt al-mal
Bayt al-mal is an Arabic term that is translated as "House of money" or "House of Wealth." Historically, it was a financial institution responsible for the administration of taxes in Islamic states, particularly in the early Islamic Caliphate. It served as a royal treasury for the caliphs and...
for further information.)
There is relatively little statistic
Statistic
A statistic is a single measure of some attribute of a sample . It is calculated by applying a function to the values of the items comprising the sample which are known together as a set of data.More formally, statistical theory defines a statistic as a function of a sample where the function...
al data on welfare transfer payment
Transfer payment
In economics, a transfer payment is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output...
s before the High Middle Ages
High Middle Ages
The High Middle Ages was the period of European history around the 11th, 12th, and 13th centuries . The High Middle Ages were preceded by the Early Middle Ages and followed by the Late Middle Ages, which by convention end around 1500....
. In the medieval period and until the Industrial Revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...
, the function of welfare payments in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
was principally achieved through private giving or charity
Charity (practice)
The practice of charity means the voluntary giving of help to those in need who are not related to the giver.- Etymology :The word "charity" entered the English language through the Old French word "charité" which was derived from the Latin "caritas".Originally in Latin the word caritas meant...
. In those early times, there was a much broader group considered to be in poverty as compared to the 21st century.
Early welfare programs in Europe included the English
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
Poor Law
Poor Law
The English Poor Laws were a system of poor relief which existed in England and Wales that developed out of late-medieval and Tudor-era laws before being codified in 1587–98...
of 1601, which gave parish
Parish
A parish is a territorial unit historically under the pastoral care and clerical jurisdiction of one parish priest, who might be assisted in his pastoral duties by a curate or curates - also priests but not the parish priest - from a more or less central parish church with its associated organization...
es the responsibility for providing welfare payments to the poor. This system was substantially modified by the 19th-century Poor Law Amendment Act, which introduced the system of workhouse
Workhouse
In England and Wales a workhouse, colloquially known as a spike, was a place where those unable to support themselves were offered accommodation and employment...
s.
It was predominantly in the late 19th and early 20th centuries that an organized system of state welfare provision was introduced in many countries. Otto von Bismarck
Otto von Bismarck
Otto Eduard Leopold, Prince of Bismarck, Duke of Lauenburg , simply known as Otto von Bismarck, was a Prussian-German statesman whose actions unified Germany, made it a major player in world affairs, and created a balance of power that kept Europe at peace after 1871.As Minister President of...
, Chancellor of Germany, introduced one of the first welfare systems for the working class
Working class
Working class is a term used in the social sciences and in ordinary conversation to describe those employed in lower tier jobs , often extending to those in unemployment or otherwise possessing below-average incomes...
es. In Great Britain
Great Britain
Great Britain or Britain is an island situated to the northwest of Continental Europe. It is the ninth largest island in the world, and the largest European island, as well as the largest of the British Isles...
the Liberal
Liberal Party (UK)
The Liberal Party was one of the two major political parties of the United Kingdom during the 19th and early 20th centuries. It was a third party of negligible importance throughout the latter half of the 20th Century, before merging with the Social Democratic Party in 1988 to form the present day...
government of Henry Campbell-Bannerman
Henry Campbell-Bannerman
Sir Henry Campbell-Bannerman GCB was a British Liberal Party politician who served as Prime Minister of the United Kingdom from 1905 to 1908 and Leader of the Liberal Party from 1899 to 1908. He also served as Secretary of State for War twice, in the Cabinets of Gladstone and Rosebery...
and David Lloyd George
David Lloyd George
David Lloyd George, 1st Earl Lloyd-George of Dwyfor OM, PC was a British Liberal politician and statesman...
introduced the National Insurance
National Insurance
National Insurance in the United Kingdom was initially a contributory system of insurance against illness and unemployment, and later also provided retirement pensions and other benefits...
system in 1911, a system later expanded by Clement Attlee
Clement Attlee
Clement Richard Attlee, 1st Earl Attlee, KG, OM, CH, PC, FRS was a British Labour politician who served as the Prime Minister of the United Kingdom from 1945 to 1951, and as the Leader of the Labour Party from 1935 to 1955...
. The United States did not have an organized welfare system until the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
, when emergency relief measures were introduced under President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
Franklin D. Roosevelt
Franklin D. Roosevelt
Franklin Delano Roosevelt , also known by his initials, FDR, was the 32nd President of the United States and a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war...
. Even then, Roosevelt's New Deal
New Deal
The New Deal was a series of economic programs implemented in the United States between 1933 and 1936. They were passed by the U.S. Congress during the first term of President Franklin D. Roosevelt. The programs were Roosevelt's responses to the Great Depression, and focused on what historians call...
focused predominantly on a program of providing work and stimulating the economy through public spending on projects, rather than on cash payment.
France
SolidaritySolidarity
Solidarity is a Polish trade union federation that emerged on August 31, 1980 at the Gdańsk Shipyard under the leadership of Lech Wałęsa. It was the first non-communist party-controlled trade union in a Warsaw Pact country. Solidarity reached 9.5 million members before its September 1981 congress...
is a strong value of the French Social Protection system. The first article of the French Code of Social Security describes the principle of solidarity. Solidarity is commonly comprehended in relations of similar work, shared responsibility and common risks. Existing solidarities in France caused the expansion of health and social security.
Germany
The welfare state has a long tradition in Germany dating back to the industrial revolutionIndustrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...
. Due to the pressure of the workers' movement in the late 19th century, Reichskanzler Otto von Bismarck introduced the first rudimentary state social insurance scheme. Today, the social protection of all its citizens is considered a central pillar of German national policy. 27.6 percent of Germany's GDP is channeled into an all-embracing system of health, pension
Pension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...
, accident, longterm care and unemployment insurance, compared to 16.2 percent in the US. In addition, there are tax-financed services such as child benefits (Kindergeld, beginning at €184 per month for the first and second children, €190 for the third and €215 for each child thereafter, until they attain 25 years or receive their first professional qualification), and basic provisions for those unable to work or anyone with an income below the poverty line.
Since 2005, reception of full unemployment pay (60-67% of the previous net salary
Salary
A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis....
) has been restricted to 12 months in general and 18 months for those over 55. This is now followed by (usually much lower) Arbeitslosengeld II (ALG II) or Sozialhilfe, which is independent of previous employment.
Under ALG II, a single person receives €364 per month plus the cost of 'adequate' housing, a pension scheme and health insurance
Health insurance
Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is...
. ALG II can also be paid partially to supplement a low work income.
Canada
Canada has a welfare stateWelfare state
A welfare state is a "concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those...
in the European tradition; however, it is not referred to as "welfare", but rather as "social programs". In Canada, "welfare" usually refers specifically to direct payments to poor individuals (as in the American usage) and not to healthcare and education spending (as in the European usage).
The Canadian social safety net
Social safety net
Social safety nets, or "socioeconomic safety nets", are non-contributory transfer programs seeking to prevent the poor or those vulnerable to shocks and poverty from falling below a certain poverty level. Safety net programs can be provided by the public sector or by the private sector...
covers a broad spectrum of programs, and because Canada is a federation
Canadian federalism
Canada is a federation with two distinct jurisdictions of political authority: the country-wide federal government and the ten regionally-based provincial governments. It also has three territorial governments in the far north, though these are subject to the federal government...
, many are run by the provinces. Canada has a wide range of government transfer payments to individuals, which totaled $145 billion in 2006. Only social programs that direct funds to individuals are included in that cost; programs such as medicare and public education
Public education
State schools, also known in the United States and Canada as public schools,In much of the Commonwealth, including Australia, New Zealand, South Africa, and the United Kingdom, the terms 'public education', 'public school' and 'independent school' are used for private schools, that is, schools...
are additional costs.
Generally speaking, before the Great Depression
Great Depression in Canada
Canada was hit hard by the Great Depression. Between 1929 and 1939, the gross national product dropped 40% . Unemployment reached 27% at the depth of the Depression in 1933...
, most social services were provided by religious charities and other private groups. Changing government policy between the 1930s and 1960s saw the emergence of a welfare state, similar to many Western Europe
Western Europe
Western Europe is a loose term for the collection of countries in the western most region of the European continents, though this definition is context-dependent and carries cultural and political connotations. One definition describes Western Europe as a geographic entity—the region lying in the...
an countries. Most programs from that era are still in use, although many were scaled back during the 1990s as government priorities shifted towards reducing debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
and deficit.
Italy
The Italian welfare state's foundations were laid along the lines of the corporatist-conservative model, or of its Mediterranean variant. Later, in the 1960s and 1970s, increases in public spending and a major focus on universality brought it on the same path as social-democratic systems. These policies proved to be financially unsustainable, as public debt and inflationInflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
grew alarmingly, preventing the welfare state from developing completely. In the 1990s, efforts moving towards decentralization
Decentralization
__FORCETOC__Decentralization or decentralisation is the process of dispersing decision-making governance closer to the people and/or citizens. It includes the dispersal of administration or governance in sectors or areas like engineering, management science, political science, political economy,...
and privatization
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
were used in an attempt to cope with European pressures for economic stability, which were finally reached by 2001.
Sweden
In SwedenSweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
Welfare (=Välfärd) means in a broad sense standard of life. Welfare is everything that contributes to a good = well-fare (good journey) in life. It is also a systematic infrastructure to protect a good life, from a minimum up to (today) just about average (like 'one size fits all' or 'black T-ford').
Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
has been categorised by some observers as a middle way between a capitalist economy and a socialist economy. Supporters of this system assert that Sweden has found a way of achieving high levels of social equality
Social equality
Social equality is a social state of affairs in which all people within a specific society or isolated group have the same status in a certain respect. At the very least, social equality includes equal rights under the law, such as security, voting rights, freedom of speech and assembly, and the...
, without stifling entrepreneurialism. The perspective has been questioned by supporters of economic liberalization
Economic liberalization
Economic liberalization is a very broad term that usually refers to fewer government regulations and restrictions in the economy in exchange for greater participation of private entities; the doctrine is associated with classical liberalism...
in Sweden.
Government pension payments are financed through an 18.5% pension tax on all taxed incomes in the country, which comes partly from a tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
category called a public pension fee (7% on gross income
Gross income
Gross income in United States tax law is receipts and gains from all sources less cost of goods sold. Gross income is the starting point for determining Federal and state income tax of individuals, corporations, estates and trusts, whether resident or nonresident."Except as otherwise provided" by...
), and 30% of a tax category called employer fees on salaries (which is 33% on a netted income). Since January 2001 the 18.5% is divided in two parts: 16% goes to current payments, and 2.5% goes into individual retirement accounts, which were introduced in 2001. Money saved and invested in government funds, and IRAs
Individual Retirement Account
An individual retirement arrangement is the blanket term for a form of retirement plan that provides tax advantages for retirement savings in the United States...
for future pension costs, are roughly 5 times annual government pension expenses (725/150).
hgh
Japan
In Japan, the Oita district ruled on October 18, 2010, that foreigners with permanent residency have no rights to welfare benefits.United States
The welfare system in the United States began in the 1930s, during the Great DepressionGreat Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
. After the Great Society
Great Society
The Great Society was a set of domestic programs in the United States promoted by President Lyndon B. Johnson and fellow Democrats in Congress in the 1960s. Two main goals of the Great Society social reforms were the elimination of poverty and racial injustice...
legislation of the 1960s, for the first time a person who was not elderly or disabled could receive aid from the American government. Aid could include general welfare payments, health care through Medicaid
Medicaid
Medicaid is the United States health program for certain people and families with low incomes and resources. It is a means-tested program that is jointly funded by the state and federal governments, and is managed by the states. People served by Medicaid are U.S. citizens or legal permanent...
, food stamps, special payments for pregnant women and young mothers, and federal and state housing benefits. In 1968, 4.1% of families were headed by a woman on welfare; by 1980, the percentage increased to 10%. In the 1970s, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
was the U.S. state with the most generous welfare system. Virtually all food stamp costs are paid by the federal government. In 2008, 28.7 percent of the households headed by single women were considered poor.
Before the Welfare Reform Act of 1996, welfare was "once considered an open-ended right," but welfare reform
Welfare reform
Welfare reform refers to the process of reforming the framework of social security and welfare provisions, but what is considered reform is a matter of opinion. The term was used in the United States to support the Personal Responsibility and Work Opportunity Act...
converted it "into a finite program built to provide short-term cash assistance and steer people quickly into jobs." Prior to reform, states were given "limitless" money by the federal government, increasing per family on welfare, under the 60-year-old Aid to Families with Dependent Children
Aid to Families with Dependent Children
Aid to Families with Dependent Children was a federal assistance program in effect from 1935 to 1996, which was administered by the United States Department of Health and Human Services...
(AFDC) program. This gave states no incentive to direct welfare funds to the neediest recipients or to encourage individuals to go off welfare (the state lost federal money when someone left the system). Nationwide, one child in seven received AFDC funds, which mostly went to single mothers.
In 1996, under the Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
administration, Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
passed the Personal Responsibility and Work Opportunity Reconciliation Act, which gave control of the welfare system back to the states. Because welfare is no longer under the control of the federal government, there are basic requirements the states need to meet with regards to welfare services. Still, most states offer basic assistance, such as health care, food stamps, child care assistance, unemployment, cash aid, and housing assistance. After reforms, which President Clinton said would "end welfare as we know it," amounts from the federal government were given out in a flat rate
Flat rate
A flat fee, also referred to as a flat rate or a linear rate, refers to a pricing structure that charges a single fixed fee for a service, regardless of usage. Rarely, it may refer to a rate that does not vary with usage or time of use...
per state based on population
Population
A population is all the organisms that both belong to the same group or species and live in the same geographical area. The area that is used to define a sexual population is such that inter-breeding is possible between any pair within the area and more probable than cross-breeding with individuals...
. Each state must meet certain criteria to ensure recipients are being encouraged to work themselves out of welfare. The new program is called Temporary Assistance for Needy Families
Temporary Assistance for Needy Families
Temporary Assistance for Needy Families is one of the United States of America's federal assistance programs. It began on July 2, 1997, and succeeded the Aid to Families with Dependent Children program, providing cash assistance to indigent American families with dependent children through the...
(TANF). It encourages states to require some sort of employment search in exchange for providing funds to individuals, and imposes a five-year lifetime limit on cash assistance. The bill restricts welfare from most legal immigrants and increased financial assistance for child care. The federal government also maintains an emergency $2 billion TANF fund to assist states that may have rising unemployment.
Following these changes, millions of people left the welfare rolls (a 60% drop overall), employment rose, and the child poverty rate was reduced. A 2007 Congressional Budget Office
Congressional Budget Office
The Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
study found that incomes in affected families rose by 35%. The reforms were "widely applauded" after "bitter protest." The Times
The Times
The Times is a British daily national newspaper, first published in London in 1785 under the title The Daily Universal Register . The Times and its sister paper The Sunday Times are published by Times Newspapers Limited, a subsidiary since 1981 of News International...
called the reform "one of the few undisputed triumphs of American government in the past 20 years." However, critics of the reforms sometimes point out that the massive decrease of people on the welfare rolls during the 1990s wasn't due to a rise in actual gainful employment in this population, but rather, was due almost exclusively to their offloading into workfare
Workfare
Workfare is an alternative model to conventional social welfare systems. The term was first introduced by civil rights leader James Charles Evers in 1968; however, it was popularized by Richard Nixon in a televised speech August 1969...
, giving them a different classification than classic welfare recipient. The late 1990s were also considered an unusually strong economic time, and critics voiced their concern about what would happen in an economic downturn.
Aspects of the program vary in different states. Michigan
Michigan
Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....
, for example, requires recipients to spend a month in a job search program before benefits can begin. Saying that it is “unfair for Florida taxpayers to subsidize drug addiction”, Florida
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
Governor Rick Scott signed the Welfare Drug-Screen Measure which requires welfare applicants to undergo drug screening. The law went into effect on July 1, 2011. Ita was later revoked by a Federal Judge.
National Review
National Review
National Review is a biweekly magazine founded by the late author William F. Buckley, Jr., in 1955 and based in New York City. It describes itself as "America's most widely read and influential magazine and web site for conservative news, commentary, and opinion."Although the print version of the...
editorial
Editorial
An opinion piece is an article, published in a newspaper or magazine, that mainly reflects the author's opinion about the subject. Opinion pieces are featured in many periodicals.-Editorials:...
ized that the Economic Stimulus Act of 2009 will reverse the welfare-to-work provisions that Bill Clinton signed in the 1990s, and will again base
federal grants to states on the number of people signed up for welfare rather than at a flat rate. One of the experts who worked on the 1996 bill said that the provisions would lead to the largest one-year increase in welfare spending in American history. The House
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
bill provides $4 billion to pay 80% of states' welfare caseloads. Although each state received $16.5 billion annually from the federal government as welfare rolls dropped, they spent the rest of the block grant
Block grant
In a fiscal federal form of government, a block grant is a large sum of money granted by the national government to a regional government with only general provisions as to the way it is to be spent...
on other types of assistance rather than saving it for worse economic times.
Eligibility for welfare depends on a variety of factors, including gross and net income, family size, and other circumstances like pregnancy, homelessness, unemployment, and medical conditions.
Arguments on the Social and Economic Benefits of Welfare
Welfare is a form of social protection
Social protection
Social protection, as defined by the United Nations Research Institute For Social Development, is concerned with preventing, managing, and overcoming situations that adversely affect people’s well being...
, as it is concerned with overcoming adverse situations that affect needy individuals. Although social protection was established to assist the working classes and to address transient poverty, it has come to encompass a greater variety of issues surrounding poverty.
The purpose of welfare is to assist individuals in need. The ultimate goal is to lift welfare recipients out of poverty and make them self-sufficient. Séverine Deneulin and Lila Shahani have considered welfare as a mode of economic development, terming it the human development and capability approach. The capability approach focuses on people and not simply on economic growth. While this approach still considers economic growth and macroeconomic stability, the aim is to “expand what people are able to do and be”. This people-centered focus is “one that enables people to enjoy a healthy life, a good education, a meaningful job, physical safety, democratic debate and so on”.
Amartya Sen
Amartya Sen
Amartya Sen, CH is an Indian economist who was awarded the 1998 Nobel Prize in Economic Sciences for his contributions to welfare economics and social choice theory, and for his interest in the problems of society's poorest members...
argues that enhancing an individual’s capabilities results in the greater likelihood for individual success and society's success. Enhancing freedoms is one means for development. Sen discusses “unfreedoms,” which can include famine
Famine
A famine is a widespread scarcity of food, caused by several factors including crop failure, overpopulation, or government policies. This phenomenon is usually accompanied or followed by regional malnutrition, starvation, epidemic, and increased mortality. Every continent in the world has...
, lack of healthcare, and gender
Gender
Gender is a range of characteristics used to distinguish between males and females, particularly in the cases of men and women and the masculine and feminine attributes assigned to them. Depending on the context, the discriminating characteristics vary from sex to social role to gender identity...
discrimination. In this regard, welfare provides individuals with the basic needs necessary to live a healthy life with the capability to enjoy the freedoms that are inherently available to all. Therefore, it is essential to note the importance of welfare for underprivileged individuals who need governmental assistance in the form of welfare.
Welfare Misperceptions
Welfare has come to be associated with poverty. Additionally, blacks have overwhelmingly dominated images of poverty over the last few decades. As Martin Gilens, assistant professor of Political Science at Yale University, states, “white Americans with the most exaggerated misunderstandings of the racial composition of the poor are the most likely to oppose welfare”. This perception possibly perpetuates negative racial stereotypes and could increase Americans’ opposition and racialization of welfare policies.
Since the implementation of TANF, the percentages of black and Hispanic
Hispanic
Hispanic is a term that originally denoted a relationship to Hispania, which is to say the Iberian Peninsula: Andorra, Gibraltar, Portugal and Spain. During the Modern Era, Hispanic sometimes takes on a more limited meaning, particularly in the United States, where the term means a person of ...
families have increased, while the percentage of white families has decreased. In 1992, blacks represented 37 percent of those on welfare; by 2002, this number increased slightly to 38 percent. In that same time period, the percentage of Hispanics rose from 18 percent to 25 percent. On the other hand, the percentage of whites on welfare decreased from 39 percent to 32 percent in that same time frame.
Additionally, because TANF gave individual states increased flexibility in imposing time-limited welfare policies, the reforms implemented vary by state. Recent policy studies have found a statistically significant relationship between the racial makeup of a state’s welfare population and whether the state adopts tougher welfare policies. Aggressive get-tough reforms include full-family sanctions, short time limits, and family cap policies. Essentially, as the percentage of blacks in the welfare population rises, the probability that the state will adopt full-family sanctions increases from 54 to 97 percent; the probability that the state will adopt a family cap increases from 5 percent to 96 percent; and the probability that the state will adopt a shorter time limit than five years increases from 10 to 88 percent. Moreover, nonwhites are more likely to live in states with tougher policies.
Timeline
1880s-1890s: Attempts were made to move poor people from work yards to poor houses if they were in search of relief funds.
1893-1894: Attempts were made at the first unemployment payments, but were unsuccessful due to the 1893-1894 recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
.
1932: The Great Depression had gotten worse and the first attempts to fund relief failed. The “Emergency Relief Act”, which gave local governments $300 million, was passed into law.
1933: In March 1933, President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
Franklin D. Roosevelt
Franklin D. Roosevelt
Franklin Delano Roosevelt , also known by his initials, FDR, was the 32nd President of the United States and a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war...
pushed Congress to establish the Civilian Conservation Corps
Civilian Conservation Corps
The Civilian Conservation Corps was a public work relief program that operated from 1933 to 1942 in the United States for unemployed, unmarried men from relief families, ages 18–25. A part of the New Deal of President Franklin D...
.
1935: The Social Security Act was passed on June 17, 1935. The bill included direct relief (cash, food stamps, etc.) and changes for unemployment insurance.
1940: Aid to Families With Dependent Children (AFDC) was established.
1964: Johnson’s War on Poverty
War on Poverty
The War on Poverty is the unofficial name for legislation first introduced by United States President Lyndon B. Johnson during his State of the Union address on January 8, 1964. This legislation was proposed by Johnson in response to a national poverty rate of around nineteen percent...
is underway, and the Economic Opportunity Act was passed. Commonly known as “the Great Society
Great Society
The Great Society was a set of domestic programs in the United States promoted by President Lyndon B. Johnson and fellow Democrats in Congress in the 1960s. Two main goals of the Great Society social reforms were the elimination of poverty and racial injustice...
”
1996: Passed under Clinton, the “Personal Responsibility and Work Opportunity Reconciliation Act of 1996” becomes law.
History
The 1980s marked a change in the structure of Latin American social protection programs. Social protection embraces three major areas: social insurance, financed by workers and employers; social assistance to the population’s poorest, financed by the state; and labor market regulations to protect worker rights. Although diverse, recent Latin American social policy has tended to concentrate on social assistance.The 1980s had a significant effect on social protection policies. Prior to the 1980s, most Latin American countries focused on social insurance policies involving formal sector workers, assuming that the informal sector would disappear with economic development
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...
. The economic crisis of the 1980s and the liberalization
Liberalization
In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. In some contexts this process or concept is often, but not always, referred to as deregulation...
of the labor market led to a growing informal sector and a rapid increase in poverty and inequality. Latin American countries did not have the institutions and funds to properly handle such a crisis, both due to the structure of the social security system, and to the previously implemented structural adjustment
Structural adjustment
Structural adjustments are the policies implemented by the International Monetary Fund and the World Bank in developing countries. These policy changes are conditions for getting new loans from the International Monetary Fund or World Bank, or for obtaining lower interest rates on existing loans...
policies (SAPs) that had decreased the size of the state.
New welfare programs have integrated the multidimensional, social risk management
Social risk management
Social risk management is a new conceptual framework assigned and designed by the World Bank. The objective of SRM is to extend the traditional framework of social policy to the non-market based social protection of which its three primary strategies include prevention, mitigation, and coping. ...
, and capabilities approaches into poverty alleviation. They focus on income transfers and service provisions while aiming to alleviate both long- and short-term poverty through, among other things, education, health, security, and housing. Unlike previous programs that targeted the working class, new programs have successfully focused on locating and targeting the very poorest.
The impacts of social assistance programs vary between countries, and many programs have yet to be fully evaluated. According to Barrientos and Santibanez, the programs have been more successful in increasing investment in human capital
Human capital
Human capitalis the stock of competencies, knowledge and personality attributes embodied in the ability to perform labor so as to produce economic value. It is the attributes gained by a worker through education and experience...
than in bringing households above the poverty line. Challenges still exist, including the extreme inequality levels and the mass scale of poverty; locating a financial basis for programs; and deciding on exit strategies
Exit strategy
An exit strategy is a means of leaving one's current situation, either after a predetermined objective has been achieved, or as a strategy to mitigate failure. An organisation or individual without an exit strategy may be in a quagmire...
or on the long-term establishment of programs.
Latin America’s most recent shift in social policies
The economic crisis of the 1980s led to a shift in social policies, as understandings of poverty and social programs evolved (24). New, mostly short-term programs emerged. These include:- ArgentinaArgentinaArgentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
: Jefes y Jefas de Hogar - BoliviaBoliviaBolivia officially known as Plurinational State of Bolivia , is a landlocked country in central South America. It is the poorest country in South America...
: Bonosol - BrazilBrazilBrazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
: Bolsa Escola and Bolsa FamiliaBolsa FamíliaBolsa Família is a social welfare program of the Brazilian government, part of the Fome Zero network of federal assistance programs. Bolsa Família provides financial aid to poor Brazilian families; if they have children, families must ensure that the infants attend school and are vaccinated... - ChileChileChile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...
: Chile Solidario - EcuadorEcuadorEcuador , officially the Republic of Ecuador is a representative democratic republic in South America, bordered by Colombia on the north, Peru on the east and south, and by the Pacific Ocean to the west. It is one of only two countries in South America, along with Chile, that do not have a border...
: Bono de Desarollo Humano - HondurasHondurasHonduras is a republic in Central America. It was previously known as Spanish Honduras to differentiate it from British Honduras, which became the modern-day state of Belize...
: Red Solidaria - MexicoMexicoThe United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
: Oportunidades (earlier known as Progresa) - PanamaPanamaPanama , officially the Republic of Panama , is the southernmost country of Central America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The...
: Red de Oportunidades - PeruPeruPeru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
: Juntos
Major aspects of current social assistance programs
- Conditional Cash TransferConditional Cash TransferConditional cash transfer programs aim to reduce poverty by making welfare programs conditional upon the receivers' actions. The government only transfers the money to persons who meet certain criteria...
(CCT) combined with service provisions. Transfer cash directly to households, most often through the women of the household, if certain conditions are met (e.g. children’s school attendance or doctor visits) (10). Providing free schoolingFree educationFree education refers to education that is funded through taxation, or charitable organizations rather than tuition fees. Although primary school and other comprehensive or compulsory education is free in many countries, for example, all education is mostly free including...
or healthcare is often not sufficient, because there is an opportunity cost for the parents in, for example, sending children to school (lost labor powerLabor powerLabour power is a crucial concept used by Karl Marx in his critique of capitalist political economy. He regarded labour power as the most important of the productive forces of human beings. Labour power can be simply defined as work-capacity, the ability to do work...
), or in paying for the transportation costs of getting to a health clinic. - HouseholdHouseholdThe household is "the basic residential unit in which economic production, consumption, inheritance, child rearing, and shelter are organized and carried out"; [the household] "may or may not be synonymous with family"....
. The household has been the focal point of social assistance programs. - Target the poorest. Recent programs have been more successful than past ones in targeting the poorest. Previous programs often targeted the working class.
- Multidimensional. Programs have attempted to address many dimensions of poverty at once. Chile Solidario is the best example.
Critiques
Income transfers can be either conditional or unconditional. There is no substantial evidence that conditional transfers are more effective than unconditional ones. Conditionalities are sometimes critiqued for being paternalisticPaternalism
Paternalism refers to attitudes or states of affairs that exemplify a traditional relationship between father and child. Two conditions of paternalism are usually identified: interference with liberty and a beneficent intention towards those whose liberty is interfered with...
and unnecessary.
Current programs have been built as short-term rather than as permanent institutions, and many of them have rather short time spans (around five years). Some programs have time frames that reflect available funding. One example of this is Bolivia’s Bonosol, which is financed by proceeds from the privatization of utilities—an unsustainable funding source. Some see Latin America’s social assistance programs as a way to patch up high levels of poverty and inequalities, partly brought on by the current economic system.
Others argue that the effectiveness of the programs relies on the ability of mostly free-trade oriented economic systems to address poverty.
See also
- Bet Tzedek Legal Services – The House of Justice
- Cloward–Piven strategy
- Constitutional economicsConstitutional economicsConstitutional economics is a research program in economics and constitutionalism that has been described as extending beyond the definition of 'the economic analysis of constitutional law' in explaining the choice "of alternative sets of legal-institutional-constitutional rules that constrain the...
- Corporate welfareCorporate welfareCorporate welfare is a pejorative term describing a government's bestowal of money grants, tax breaks, or other special favorable treatment on corporations or selected corporations. The term compares corporate subsidies and welfare payments to the poor, and implies that corporations are much less...
- Dynamic welfare
- Economic terminology that differs from common usage
- Jobseeker's AllowanceJobseeker's AllowanceJobseeker's Allowance is a United Kingdom benefit, colloquially known as the dole . It is a form of unemployment benefit paid by the government to people who are unemployed and seeking work. It is part of the social security benefits system and is intended to cover living expenses while the...
- Selective welfare
- Social DemocracySocial democracySocial democracy is a political ideology of the center-left on the political spectrum. Social democracy is officially a form of evolutionary reformist socialism. It supports class collaboration as the course to achieve socialism...
- Social LiberalismSocial liberalismSocial liberalism is the belief that liberalism should include social justice. It differs from classical liberalism in that it believes the legitimate role of the state includes addressing economic and social issues such as unemployment, health care, and education while simultaneously expanding...
- Social Market EconomySocial market economyThe social market economy is the main economic model used in West Germany after World War II. It is based on the economic philosophy of Ordoliberalism from the Freiburg School...
- Unemployment benefits
- Universal welfare
- Welfare's effect on povertyWelfare's effect on povertyThe effect of social welfare on poverty is controversial. Since the goal of welfare programs is to reduce poverty, it has been debated, primarily in the United States, whether or not welfare programs achieve this goal....
- Welfare stateWelfare stateA welfare state is a "concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those...
- Welfare trapWelfare trapThe welfare trap theory asserts that taxation and welfare systems can jointly contribute to keep people on social insurance because the withdrawal of means tested benefits that comes with entering low-paid work causes there to be no significant increase in total income...