SOCIAL WELFARE POLICYMAKING

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

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

Income Distribution: describes how the national income is divided

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

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

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

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

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

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

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

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

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

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

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

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

And here are the actual average taxes paid by quintile:

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

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

INSOLVENCY Life expectancy: 1935 = 78 Baby Boom = fewer workers-to-recipients ratio Fund has been ‘raided’ over the years to pay for other programs

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

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