Approaches to Welfare

1. Approaches to Welfare The Focus Areas Perspectives A Problem Approaches or Solutions (super powers)

2. SCHIP Prescriptions for seniors FDA CDC UI Food Stamps HUD EITC SSI As we will discuss, federal employees and railroad employees don’t participate in social security. “Welfare” Public School College Loans One Stop Centers VESID

3. These are taxes to yourself – to pay for your personal insurance

4. Social Policy and Framework for Understanding The Welfare State Corresponds with Jansson Chapter 2

5. Social Policy • Collective strategy to address social problems. • Includes policies which governments use for welfare and social protection. • It is fashioned by 6 components (See Jansson) which are enactments that affect or bind the actions of: • Citizens • Government Officials • Professionals • The staff of social agencies Source: Jansson and http://www2.rgu.ac.uk/publicpolicy/introduction/socpolf.htm

6. Policy, Social Policy, & Social Welfare Policy in Relation to Each Other PUBLIC POLICIES SOCIAL POLICIES SOCIAL WELFARE POLICIES • Source: Katz MSU

7. Jansson’s 6 Aspects of Social Policy Strategy • Stations around the Room: • U.S. Constitution • Americans with Disabilities Act or ADEA • Affirmative Action Michigan Case • Presidential Budget • Preamble to PRWORA • NYS TANF Manual • MDRC Book

8. For Each: • 1. Identify it. • 2. What is it about, what does it do? • 3. Which of the 6 aspects Jansson identifies is it? Hint I added a 7th. • 4.Why is it important to overall social policy.

9. Jansson’s 6 Aspects of Social Policy Strategy • Constitutions • Public policies • Court decisions • Budget and spending programs • Stated or implied objectives • Rules, Procedures, and Regulations • (Evaluation)?

10. Jansson’s 6 Aspects of Social Policy Strategy • Constitutions • what the federal gvt can and cannot do • Public policies • legislation or acts of congress • Court decisions • overrule, uphold, or interpret legislation • Budget and spending programs • what initiatives actually get $

11. Jansson’s 6 Aspects of Social Policy Strategy • Stated or implied objectives • preamble to laws convey purposes • Rules, Procedures, and Regulations • tell agency staff how to implement • (Evaluation)? • Tells policy makers what works

12. Describing Policy Changes Over Time • Policy Direction: • An era that describes the general nature of policies enacted then. (Can Refer to Starobin) • Conservative, liberal etc. (will discuss shortly) • Substance: • General strategies favored by decision makers • Which of the 5 mechanisms used? • Regulatory/minimum standards • Redistributive/ameliorate resource inequality • Cash vs. Services • Intensity: • The rate of policy activity • Few vs. many

13. Now that we are familiar with:1. what the Welfare State is2. Its 4 major areas3. Its 5 main types of approaches/mechanismsWe can review the ideologies that often lead to preferences of what areas to focus on, and how (i.e. by which mechanisms)** These ideal types will help us in thinking of the US WS comparatively and in understanding the history of the “Reluctant Welfare State.”

14. ARRA- Stimulus Funds Hiring Tax Credits Cash for Clunkers 4 Principle Areas Invest to Innovate Fund (I-3) Race to the Top Income Maintenance/ Economy, Jobs and Poverty Education Health (& Nutrition) Social Insurance (Social Security) Universal Healthcare reform Social Security Reform

15. Now let’s talk about perspectives– lets identify each and then discuss how each of these might feel about the following social problem

16. Starobin • Nanny State= • social justice concern • Daddy State= • public order concern • Minimal State= • do as little as possible.

17. Reading Q # 4 What are the 4 different ideologies profiled by Jansson? Ideal Types • Libertarians • Conservatives • Liberals • Radicals • 8 grps of 3 or 4, guess ideology then unite a’s and b’s to see if they match and decide on final answer.

18. 1a A CONSERVATIVE PERSPECTIVE “MY CONCLUSION IS …[THAT] IN ADDITION TO ITS STRONG MORAL BASE IN PERSONAL FREEDOM, CAPITALISM AND COMPETITIVE MARKETS WORK TO DELIVER SUBSTANTIAL ECONOMIC PROGRESS;…BUREAUCRATIC WELFARE STATE[S] DO NOT WORK. THEY SAP INDIVIDUAL INCENTIVE, INITIATIVE AND CREATIVITY AND ULTIMATELY CANNOT DELIVER SUFFICIENTLY RISING STANDARDS OF LIVING TO MEET THE EXPECTATIONS OF THEIR CITIZENS….” MICHAEL BOSKIN CHAIRMAN OF THE COUNCIL OF ECONOMIC ADVISERS DURING THE BUSH ADMINISTRATION • Source: Katz MSU

19. 1b CONSERVATIVES • XXX’s argue that, especially in its more advanced European forms, the WS has become a dangerous anachronism. By requiring high taxes, the WS deprives society of needed investment resources and saddles employers with workers who feel that they are “owed” a living---by the state if not by the boss! • XXX’s concede that the WS may once have been fiscally tolerable (if never politically or economically desirable) but argue that it should now be dismantled because its extravagances are unsustainable in our age of intensified global competition. Indeed advanced nations that continue to adhere to old-style “welfarism” risk permanent inferiority within the emerging postindustrial division of labor. • XXX’s believe, that federal government in welfare is not good, however, involvement in international policy and in supporting business through subsidies etc. is good. • Source: Katz MSU

20. 2 a A LIBERAL PERSPECTIVE “I’m often asked if I’m a XXX, and I say, ‘Well, if Jack Kennedy was a XXX or… Franklin Roosevelt was a XXX, then I’m a XXX.’ This is not 1960, and it’s not 1932. We’re in a completely different world than then. But I believe in opportunity, and I believe in…fairness. The only way this country prospers is if everybody is sharing in the prosperity. I think my party has uniquely stood for that…,where government can be an active partner with the private sector in moving the country forward….” RICHARD GEPHARDT DEMOCRATIC LEADER, US HOUSE OF REPRESENATIVES. • Source: Katz MSU

21. 2 b LIBERALS • XXX support a moderately high level of social services, but tend to favor equality of opportunity more than equality of social condition. They do believe that society has a duty to help the poor and oppressed, and to make appropriate arrangements for the young and elderly, but they would not go as far as social democrats and other radicals in the pursuit of these goals. • Many XXX also believe that the educated elite should lead society and that the power of rational persuasion (“ideas” again) are sufficient to convince voters of the moral correctness of their aims; they are thus “idealists” in the strictly philosophical sense of the term. • The dominant political ideology during certain periods of 20th century American history, classic reform XXX reached its high tide during the Johnson years (1963 - 68). While still strongly supported by minorities, intellectuals, femininists, and various other groups, XXX has essentially been on the defensive ever since. Indeed, the “X” word is now often shunned even by XXX’s themselves, who are afraid of alienating voters. Many XXX’s accordingly now prefer to be called “progressives.” That has not increased their electoral popularity, however. • Source: Katz MSU

22. 3 a A RADICAL PERSPECTIVE “THE CENTRAL QUESTION…IS WHETHER AND UNDER WHAT CIRCUMSTANCES THE CLASS DIVISIONS AND SOCIAL INEQUALITIES PRODUCED BY CAPITALISM CAN BE UNDONE BY [LEGISLATIVE] DEMOCRACY.” GOSTA ESPING-ANDERSEN RADICAL WELFARE STATE ANALYST • Source: Katz MSU

23. 3 b RADICALS • To understand the WS, XX’s contend you must first understand the relative political strength of the principal classes (“forces”) in capitalist society:---on the one hand, the asset-owning rich (“capitalists”) and the top managers who work directly for them; on the other, ordinary wage - dependent workers in potential political alliance with the “new middle class” of technical/professional workers. • Distinct social classes can have distinctly different perceptions of their interests and, hence, different attitudes towards social welfare programs and the Welfare State. Blue-collar workers may well look to the WS for socially – financed protections against the uncertainties of life under capitalism, whereas owners see the WS as blocking their quest for a “free market” system in which worker resistance & government intervention are minimized. • XX’s thus view politics largely in terms of coalition-building, since failure to form such alliances means that, as in the US, the WS is likely to be limited. • Source: Katz MSU

24. 4 a A LIBERTARIAN PERSPECTIVE IMAGINE AN AMERICA WHERE CHILDREN HAVE ACCESS TO A BROAD SPECTRUM OF WORLD-CLASS EDUCATIONAL OPPORTUNITIES. WHERE SCHOOLS SPARK THE IMAGINATION AND TEACH THE FUNDAMENTALS— CONSISTENT WITH YOUR VALUES. IMAGINE AN AMERICA WHERE POLITICIANS DON’T DOLE OUT BILLIONS OF TAX DOLLARS TO WEALTHY COMPANIES LIKE GENERAL MOTORS, AT&T, AND EXXON. WHERE THE RICH NEVER GET RICHER WITH YOUR TAX MONEY. IS THAT THE KIND OF AMERICA YOU WANT TO LIVE IN?…. IT’S TIME TO KICK RONALD MCDONALD OFF WELFARE. THE RED-HAIRED CLOWN IS THE MASCOT FOR MCDONALDS -THE FAST-FOOD CORPORATION THAT RUNS 30,000 RESTAURANTS IN 121 COUNTRIES AND EARNS $40 BILLION A YEAR IN REVENUE. BUT EVEN AS MCDONALDS RAKES IN MASSIVE PROFITS, IT’S ALSO CASHING WELFARE CHECKS FROM THE GOVERNMENT. A FEW YEARS AGO, POLITICIANS GAVE THE CORPORATION $1.6 MILLION TO HELP IT ADVERTISE BIG MACS IN EUROPE....IT’S CALLED CORPORATE WELFARE, AND IT’S HOW DEMOCRATIC AND REPUBLICAN POLITICIANS ENRICH THEIR BIG-BUSINESS FRIENDS — AT TAXPAYERS’ EXPENSE. Libertarian Viewpoint Newsletter, Issue 1 Volume 1. Source: http://www.lp.org/services/files/libviewpdf.pdf

25. 4 b LIBERTARIANS • Because of their emphasis on free markets, many XX are called conservative. But XX also think people should be free to pursue "sex, drugs, and rock & roll," if that's what they want to do. This live-and-let-live attitude makes XX very difficult to pigeonhole in the traditional left-right paradigm. • As one publication explains: [THE DECLARATION OF INDEPENDENCE SAYS]“GOVERNMENTS ARE INSTITUTED AMONG MEN, DERIVING THEIR JUST POWERS FROM THE CONSENT OF THE GOVERNED...” NOTE WHAT COMES FIRST:YOUR UNALIENABLE RIGHTS. THE GOVERN-MENT FOLLOWS. TODAY, THAT EQUATION HAS BEEN REVERSED. TOO FREQUENTLY, THE GOVERNMENT COMES FIRST. AND OUR “UNALIENABLE RIGHTS” COME SECOND. OR NOT AT ALL. XXX’S ARE WORKING TO CHANGE THAT. IN FACT, WE HAVE SOME BOLD, INNOVATIVE IDEAS ABOUT HOW TO START BUILDING A BETTER AMERICA. Source: http://www.lp.org/services/files/libviewpdf.pdf

26. Even though these ideal types tend to be aligned with major political parties… • There is much variation within parties and, • There is much variation over time

27. How would each feel about this video? Is it a social problem or not? Should we do anything about it?

28. http://neweconomy.net/content/wealth-inequality-america

29. Economic Inequality and Government’s Role (if any) in Mitigating it • How do we measure economic inequality? • How has inequality changed over time? • What factors have driven this change? • Should we care, and why? • What is fair? • Does economic mobility lessen concerns about inequality? • What is the optimal level of inequality? (What are the trade-offs?) • How can it best be alleviated? • The 5 Powers of the Welfare State and the Policy Documents that Create Them • Political Perspectives on Social Welfare (Libertarian, Conservative, Liberal, Radical)

30. How do we measure inequality? Source: Paige Stillwell and Tanya Picinich www41.homepage.villanova.edu/.../Gini%20Index%20Presentation.ppt ‎

31. Gini Index • Gives information about the income inequality of a country in one number • Ranges from 0 to 1 the higher the number the greater inequality • Calculated as the area between perfect equality (y=x) and the Lorenz curve Source: Paige Stillwell and Tanya Picinich www41.homepage.villanova.edu/.../Gini%20Index%20Presentation.ppt ‎

32. The Gini Index for perfect equality is 0 • The Gini Index for total inequality is 1 Source: Paige Stillwell and Tanya Picinich www41.homepage.villanova.edu/.../Gini%20Index%20Presentation.ppt ‎

33. Why is the Gini Index so important? • Compiles information about income inequality into 1 number • Allows for comparisons with other countries • Shows how income inequality changes over time • This information has great social, political, and economic implications Source: Paige Stillwell and Tanya Picinich www41.homepage.villanova.edu/.../Gini%20Index%20Presentation.ppt ‎

34. Gini Coefficient World Central Intelligence Agency (CIA) Report 2009 https://www.cia.gov/library/publications/the-world-factbook/fields/2172.html https://en.wikipedia.org/wiki/File:Gini_Coefficient_World_CIA_Report_2009.svg

35. “Under the Gini index, zero represents perfect income equality (all households have equal incomes) and 1 represents perfect inequality (one household has all the income). The index has risen in almost every year since 1993, even if its rise in any one year failed to meet the test of statistical significance. When it comes to inequality, the trend is clear. The United States experienced strong economic growth and shared prosperity for the immediate post-World War II generation, followed by slower growth and growing inequality since the 1970s. And our tax code and government benefit programs do less to offset inequality than many other countries’. These facts help explain why we need to preserve and improve the safety net, and why we should raise taxes on people at the top as part of a balanced approach to deficit reduction.” Using Gini to advocate policy http://www.offthechartsblog.org/gini-index-confirms-rising-inequality-over-several-decades/

37. Now that we have a sharedunderstanding of what social welfare policy is in some concrete forms, let’s look at the primary ways in which it is accomplished.Even if all agree on the problems, much debate remains over the best way (approach/Mechanism) for a solution. Or Super Powers Think Mechanisms or Approaches

38. THE 5 COMPETING APPROACHES Western Societies Rely on to Structure Social Welfare Programs I. Social Insurance II. Means-Tested Programs of Cash or Provider Payments III. Employer Mandates IV. Tax Expenditures V. Universal programs http://en.wikipedia.org/wiki/The_Three_Musketeers http://trucks.about.com/library/bl/bl_ford_rosie.htm http://www.lib.rochester.edu/camelot/RH/rhhome.stm http://captain-america.us/comicbookwallpaper.htm Source: Lawrence H. Thompson (1994) http://en.wikipedia.org/wiki/Karl_Marx http://www.house.gov/budget/waste.htm

39. THE 5 COMPETING APPROACHES: I. Social Insurance examples: • Old Age, (Social Security) • Survivors and Disability Insurance • Hospital Insurance (Medicare part A) • Unemployment Insurance • Displaced Workers Insurance?? A proposal http://en.wikipedia.org/wiki/The_Three_Musketeers Source: Lawrence H. Thompson (1994)

40. I. Social Insurance: 7 Characteristics that Vary by Program and Nation http://en.wikipedia.org/wiki/The_Three_Musketeers • Compulsory Participation: Most people participating because its a legal requirement. • Government Sponsorship: Gvt creates and supervises but doesn’t necessarily manage it. • Contributory Finance: worker’s contribution usually a fixed % of their income • Eligibility derived from prior contributions: have to contribute for a minimum period, also makes family eligible • Benefits Prescribed by Law: all “entitled” get them, little administrative discretion • Benefits not directly related to contributions: poor get proportionally more than they put in. • Separate accounting and long-range financing plan: contributions are earmarked, sent to a fund. Source: Lawrence H. Thompson (1994)

41. THE 5 COMPETING APPROACHES Western Societies Rely on to Structure Social Welfare Programs I. Social Insurance II. Means-Tested Programs of Cash or Provider Payments III. Employer Mandates IV. Tax Expenditures V. Universal programs Source: Lawrence H. Thompson (1994)

42. THE 5 COMPETING APPROACHES: II. Means-Tested Programs of Cash or Provider Payments examples: • TANF • Supplemental Security Income (SSI) • Food Stamps (FS) • Medicaid http://www.lib.rochester.edu/camelot/RH/rhhome.stm Source: Lawrence H. Thompson (1994)

43. II. Means-Tested Programs: Common Characteristics • Paid to claimants who demonstrate limited economic resources. • Not dependent on whether claimants have had prior earnings or have ever paid taxes. • Does not link eligibility for benefits to prior economic behavior. • Assistance can be concentrated on the few who need it the most. • Financed from government general revenues. http://www.lib.rochester.edu/camelot/RH/rhhome.stm Source: Lawrence H. Thompson (1994)

45. THE 5 COMPETING APPROACHES: III. Employer Mandates examples: • Workers Compensation Insurance, mandated in some states • Health Insurance in Hawaii http://trucks.about.com/library/bl/bl_ford_rosie.htm Source: Lawrence H. Thompson (1994)

46. III. Employer Mandates : Common Characteristics • Employers required to provide or finance specific social welfare benefits for their employees. • Eligibility for benefits is based on employment • Participation is compulsory • Benefits financed primarily from employer and employee contributions • Benefits are financed according to an explicit plan • A minimum benefit package usually specified • Not redistributive, workers benefit commensurate with what they pay in. http://trucks.about.com/library/bl/bl_ford_rosie.htm Source: Lawrence H. Thompson (1994)

47. THE 5 COMPETING APPROACHES: IV. Tax Expenditures examples • tax policy (regressive or progressive) • Earned Income Tax Credit (EITC) • STAR Home Owner Tax Credit • Childcare tax credit http://www.house.gov/budget/waste.htm Tax incentives to create Jobs Source: Lawrence H. Thompson (1994)

48. Austin Goulsbee whiteboard – income tax cuts http://www.whitehouse.gov/blog/2010/09/30/white-house-white-board-cea-chair-austan-goolsbee-explains-tax-cut-fight

50. Austin Goulsbee Video – whiteboard – example of Tax incentives etc. http://www.youtube.com/watch?v=QmybtPlga1U