SOCIAL WELFARE POLICYMAKING

1. SOCIAL WELFARE POLICYMAKING

2. Social Welfare Policies • Provide benefits to individuals • Based on either Entitlement (regardless of need; Social Security/Medicare) or Means-Tested programs (based on need; Food Stamps or Medicaid)

3. Means-Tested Programs • Controversial due to philosophical differences • Deserving Poor vs. Undeserving Poor • Social Darwinism vs. Cyclical / Structural Poverty

5. Income Distribution: describes how the national income is divided

6. Relative Deprivation: perception by an individual that they are not doing well economically in comparison to others • Income: amount of money collected between two points in time • Wealth: Value of all assets owned (stocks, bonds, bank accounts, cars, houses, etc.) • 1/3 of wealth held by 1%, • 1/3 by next 9%, • remaining 1/3 by the other 90%

7. Poverty Line • Income threshold below which people are considered poor • 1 person = 11,170 • 4 persons = 23,050 • 43.6 million, about 14.3%, officially poor in 2009 • ‘Feminization of Poverty’: increasing concentration of poverty among women

8. Gov’t.’s Affect on Income • Government can affect income via two ways: • Taxation & Expenditures

9. TAXATION • Progressive Tax: bigger % from rich • Proportional Tax: same % from all • Regressive Tax: bigger % from poor • Earned Income Tax Credit (EITC): refundable credit for working people who earn low incomes

10. EXPENDITURES • Transfer Payments: benefits directly to individuals • cash, food stamps, low % loans

11. Evolution of “Welfare State” • 1789-1935: parents care for children who take care of parents as they age • 1935: Social Security Act created as part of FDR’s New Deal • $ for retired, disabled • Aid for Families with Dependent Children (AFDC) • 1964: LBJ’s “War on Poverty” • Medicare/Medicaid

12. 1980’s: De-funding of social welfare programs under Reagan • 1996: Welfare Reform Act, WJ Clinton • Must find work within 2 years • Total of 5 years welfare • AFDC changes to TANF (“Temporary Assistance for Needy Families”)

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

14. Americans tend to see welfare recipients as overwhelmingly African-American, lazy, and undeserving • Feelings on race affect feelings on welfare • Media portrays recipients as minority when majority are White

16. Source: Census Bureau - Table H-3, 2010

17. What percent in taxes does each pay after paying for basic necessities like food and shelter, rather than total income?

18. If you subtract this $2,000 a month or $24,000 per year from the various quintiles' incomes, the following pre-tax disposable incomes result:

19. And here are the actual average taxes paid by quintile:

20. And so, here are the tax percentages that each quintile actually pays as a percent of their true disposable incomes, assuming everyone needs at least $2,000 a month just to get by:

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

22. INSOLVENCY • Life expectancy: 1935 = < 65; 2009 = >78 • Baby Boom = fewer workers-to-recipients ratio • Fund has been ‘raided’ over the years to pay for other programs

23. SOLUTION(S)? • Increase Payroll Taxes • Decrease benefits for recipients • Increase age at which benefits are recived • Means-Testing recipients

24. Efficacy of Groups re: Social Welfare Policymaking • Elderly: well-organized with a high amount of resources = effective • Poor: vote less, less money, fewer organizations = less effective