Transcript Outline - Widener University

Outline
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Review Questions…many were lacking…your grades reflect it.
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Deadline for class withdrawal without academic penalty is Wed, Mar 31,
2010
Fundraiser…what happened?
Trip to campus…making it happen.
Edin and Kefalas Research
Jencks and Fairytales
Public Policy and Welfare
The American Welfare State
 Public Assistance and Social Insurance
Social Security Act of 1935
Social Security Today
Capitalism, Society and “Safety
Nets”
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We already noted the following: “
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Market is chief source of well being
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In capitalist society labor (one’s ability to work) is a commodity that is sold for a
wage (income) which is used to buy food, shelter, clothing, child care, health care,
etc.
Family is another source of well being
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“In a capitalist society, a person’s well being/standard of living will primarily be
determined by their participation in the labor market BUT different societies possess
different institutional arrangements that will also impact well being/standards of
living”
Kin help each other by pooling money, transferring money, passing money on, and
by providing services such as child care
Government can be another source of well being
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Role of government in insuring well being will vary, for instance government might
provide universal access to child care as a right
Capitalist Democracy: Politics Can
Replace Markets
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Social Market Economies vs. Liberal Market Economies
Capitalist Economies are Embedded in
Larger Societies
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Different societies possess different institutional arrangements
that will impact things like inequality and poverty
Liberal Market Economies (Can think Free Market)
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Limited government regulation, few universal government programs and
more means tested public assistance programs
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Free day care for low income, the rest purchase in market
Limited child allowances for children provided to low income household
Social Market Economies supplement labor market with social
wage
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Significant government regulation, many universal government run social
insurance programs
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Free day care for all citizens
Generous Child allowances provided to all from government
“Welfare States”
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Welfare State
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Government insurance, public assistance, education and medical
programs designed to maximize the economic and social welfare of the
society’s population
What do you know about the American welfare state? When
did it emerge and grow?
What are some key programs?
How does the welfare state in the US compare to other
advanced industrial capitalist states?
US Poverty in Perspective, 18702004
50
45
40
35
30
25
20
15
10
5
0
1870 1890 1910 1935 1944 1955 1970 1982 2004
Percent in Poverty
States respond to poverty…
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Poor houses give way to a government response as
members of society more:
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“…fully recognize the multifaceted causes of poverty,
which included not only individual failings but also such
factors as accidents, poor health, low wages, and
involuntary employment” (Iceland 2003: 122)
Early 20th century, states start to pass legislation to
help disabled workers, mothers, kids etc…
Welfare State by state by state…
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By 1920s, a patchwork of programs around the
nation that vary from state to state
 Social
Safety Net was spotty
 Owner
of textile mill in PA has to pay disability insurance
 Owner of textile mill in Missisppi doesn’t have to…
 Many
businesses were aggravated by the unevenness
of the system…why?
Welfare State by state by state…
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By 1920s, a patchwork of programs around the
nation that vary from state to state
Un-level playing field
 Programs
 Firm
funded through taxes
in PA at a competitive disadvantage relative to a
firm in Mississippi
1930s…Crisis
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Great Depression
Large segments of society simply unable to provide
for themselves…
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Nobody wants to buy their labor power for a wage
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Without wages, people are in trouble…
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25 percent of nation is unemployed
Poverty level estimated to be between 40% and 50%
States and Charities unable to meet demand
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Tens of millions in need
A Glimpse of Need in Philadelphia…
“One woman went along the docks and picked up
vegetables that fell from wagons. Sometimes fish
vendors gave her fish at the end of the day. On two
different occasions the family was without food for a
day and a half. Another family did not have food for
two days. Then the husband went out and gathered
dandelions and the family ate them.”
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Social worker testifying to US Senate Committee
Charity or Government?
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Is there a role for the federal government, or should
we depend on private organizations and the
states…positions emerge that remain until today?
“You cannot extend the mastery of government over the daily
lives of the people without at the same time making it the
master of their souls and thoughts.”
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President Herbert Hoover
“Trying to turn back this tide of distress through private
philanthropic contributions is about as useless as trying to put
out a forest fire with a garden house.”
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Observer of Depression America
FDR’s New Deal…Government must
play a role.
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“Modern society acting through it government owes
the definite obligation to prevent starvation or dire
waste of any of its fellow men and women who try to
maintain themselves but cannot…Aid to jobless
citizens must be extended by government, not as a
matter of charity, but as a matter of social duty.”
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Franklin Delano Roosevelt
Faced with the Great Depression…
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FDR and Democratic Majorities in Congress increase
the Government’s Role in providing for people’s
welfare
Social Security Act of 1935
Committed the Fed. Govt. to providing Social
Insurance & Public Assistance to certain groups
What’s the difference?
Public Assistance via means testing vs.
Social Insurance
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Public Assistance
 “…policies specifically target the low income population”
(Iceland 2003: 126)
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Means tested
 income tested… “person or family has to earn below a
certain amount to qualify” (Iceland 2003: 126)
Social Insurance
 “…broad universal…that generally do not impose eligibility
criteria based on one’s income”(Iceland 2003: 126)
Social Security Act of 1935
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Significant expansion in the Federal Government’s provision of social insurance
& public assistance
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“…introduced the idea of entitlement into national policy and made the
federal government assume responsibility for the welfare of its citizens”(
Iceland 2003: 123)
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Anyone remember the three main programs?
Old Age Insurance (aka Social Security)
 Public Assistance or Social Insurance?
Social Insurance…a universal benefit…but initially with an important
exception…Anyone?
Social Security Act of 1935
Old Age Insurance (aka Social Security)
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Public Assistance or Social Insurance
Social Insurance…universal, but with some
exceptions…
Southern Elites fight to exclude agricultural workers,
domestic workers and others…Why would they do this?
Social Security Act of 1935
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Social Insurance…universal, but with some
exceptions…
Southern Elites fight to exclude agricultural
workers, domestic workers and others…Why
would they do this?
Fear old age pension will make Blacks less
subordinate
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80% of Blacks initially excluded from social security
Social Security Act of 1935
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Aid to Dependent Children
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(Later Aid to Families with Dependent Children
[AFDC]…what many commonly think of as “Welfare”)
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Public Assistance or Social Insurance?
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Public Assistance
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Means tested for women with children
Social Security Act of 1935
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Unemployment Insurance (SI or PA?)
Public Assistance for those who meet criteria…but funded
as an insurance program
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“…reserves are accumulated during periods of employment to be paid out
as benefits to workers during periods of unemployment…Those workers
who have been employed and on whose behalf contributions have been
paid into an unemployment insurance fund may draw benefits for a
definite period of time relative to the length of their previous employment
(usually 1 week of benefit to 4 weeks of employment). In normal times, the
great majority of workers will be able to find other work before their right
to benefits is exhausted.”http://www.ssa.gov/history/reports/ces/cesvol9unemploy.html
Outline
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Edin and Kefalas &
Teachable Moments
The American Welfare
State
 Public Assistance and
Social Insurance
Social Security Act of
1935
Social Security Today
AFDC AKA Welfare
Myths About the Welfare
Population
From AFDC to TANF
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Saturday (1/4 pt for activity)
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Table- Bernard
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Coolers & ice- Heather
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Poster – Heather
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Money- Adam
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Buying- John H.
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11-12, Jamie & John
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12-1, Jen & Jamie
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1-2, Jen & Selena, Snow
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2-3, Selena & Snow
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April 10th Spring Carnival
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Money for rides?
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Sing up to be there? 1 point EC on assignments
Thinking Sociologically
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The importance of sample size
My neighbor Joe rides a unicycle, he taught his son to
ride one.
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Two of the neighbors kids wanted to learn so he taught them
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Mrs. Smith looks out her window and always sees kids riding
unicycles…she concludes that most American kids these days
don’t ride bikes, they ride unicycles
Is this a reasonable conclusion?
Thinking Sociologically
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Personal experience
might spawn research
interest
But research consists of
more systematic
exploration
To generalize with
confidence, one needs
a larger sample
Edin and Kefalas…Adam and John
and the readings…
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Adam recounted his personal experience that girls get
pregnant by accident
E&K find that 40% call their births accidents
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But half of the accidents knew unprotected sex would likely
lead to pregnancy…making them wonder how “accidental” it
really was
Pregnancies are usually not described as accidents,
but usually aren’t done by design either…“Not exactly
planned”…but as discussed in prior lectures, the girls
report they wanted to have babies
John says maybe they say that in retrospect…I think
that is a fair concern to raise…
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Their interpretation was always after the fact
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Survey data on importance of mother hood was not
Expanding the Welfare State…
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Modern American Welfare State Emerges in the 1930s
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Will be supplemented overtime, particularly in the 1960s during President
Johnson’s “War on Poverty”
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New Public Assistant Programs
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New Social Insurance Program
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Head Start- pre-school program for low income children (FOUNDED TWO YEARS
BEFORE BLACK PANTHERS)
Food Stamps- funds for low income people to purchase food
Medicaid- health care for the poor
Medicare- health coverage for the elderly
President Nixon adds programs
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Earned Income Tax Credit- tax rebate for low income workers
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Becomes an effective tool for helping the “working poor"
Welfare Programs constitute about 14% of the
budget…AND THESE PROGRAMS DO REDUCE
POVERTY
Percent of Pre-transfer poor Lifted Out of
Poverty, by type of Safety Net, 1996
60
50
51.6
40
30
31
Out of Pov
20
10
5.1
7.5
8
MT Non
Cash
Tax
EITC
0
All Prog Soc Ins
MT
Cash
Welfare State Reduces Poverty
“Poverty rates are higher in the US because many jobs,
even full time jobs, pay low wages and because public
benefits are more limited.”
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Comparative Impact of Welfare State on Relative Poverty, 1989-1994
US
Germany
Italy
England
Canada
Denmark
Belgium
Sweden
Poverty Pre Poverty Post
Welfare
Welfare
26.7%
19.1%
22
7.6
18.4
6.5
29.2
14.6
23.4
11.7
26.9
7.5
28.4
5.5
34.1
6.7
p.261 Kerbo
Percent
Reduction
-28.5%
-65.5
-64.7
-50
-50
-72.1
-80.6
-80.4
The American Welfare State
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Addressing poverty
among the elderly
Please describe the
impact of Social
Security on reducing
poverty among the
elderly.
The American Welfare State
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Please describe the impact
of Social Security on
reducing poverty among
the elderly.
Too old to work, too young
to die…Social Security
greatly reduces poverty
among the old
Old Age…US Welfare State
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1935, Social Security
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Federal Insurance Income
Contribution Act (FICA)
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Supplemental Income to Retirees
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Born after 1938…Full at 65
Born after 1960…Full at 67
1972, Cost of Living Adjustment
(COLA) provided
On avg., 40% of pay is received
by retiree
Pensions
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Welfare states and senior
citizens…a source of
ongoing conflict around the
globe…
Why do you think pensions
are a huge economic
problem for General
Motors, but not for
Volkswagen (Germany),
Volvo (Sweden) or Fiat
(Italy)?
Benefits: Government
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How does Social Security work?
Benefits: Government
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“Pay as you go”
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Current generation taxed to pay current retirees
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Current Crisis:
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6.2% payroll tax on earnings up to $102,000
Employer and Employee both pay
1950, 16 contributors for each recipient
1999, 3 contributors for each recipient
2020, 2 contributors for each recipient
Fewer contributors means cash flow problems
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Too few of you…too many “baby-boomers”
Solutions?
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Cut benefits or raise eligibility age
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Raise Payroll Taxes
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All workers & employers take a hit
Since regressive, low and middle income take biggest hit
Lift $106,800 cap & tax more earnings
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Old take a hit
In 2000, 12% of US households made more…hey take a economic hit
Change system to Personal Retirement Account
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Workers invest % of payment in stock market & bet that market investments
grow
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How fund current retirees as money is diverted?
What if retire when market is down? Many retirees are currently in a world of hurt…
Fixing Social Security
Poverty Among Women and
Children…what to do?
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Social Security Act of 1935
Aid to Dependent Children…typical benificiary of program
was a widow with kids
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Why not make the women of 1935, 1945, etc…go to work to support
themselves?
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(Later AFDC…what many commonly think of as “Welfare”)
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Means tested public assistance targeted at poor children
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“under the age of sixteen who has been deprived of parental support or
care by reason of the death, continued absence from the home, or physical
or mental incapacity of a parent.” http://www.socialsecurity.gov/history/35activ.html
The “Welfare” Debate
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AFDC becomes a controversial program
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Changed Society Leads to Debate About AFDC
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“…By the 1996, less than 2 percent of recipients were widows and 60% had
never married their child’s parent”
(Jencks 2005: 2)
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2/3 of all mothers in society in general were working
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Birth control widely available, so questions raised about out of wedlock families
Lots of questions, debate, resentment emerge…
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Debate over welfare drove my professors in WI, many of whom worked at the
Institute for Research on Poverty, nuts…
What percent of the federal budget do you think was spent on the program
that is generally referred to as “welfare”?
Welfare: Fact and Fiction
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AFDC spending was less
than 1% of federal budget,
1993
Welfare: Fact and Fiction
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Despite small size…it was a very
controversial program for many
reasons…
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Discouraged
marriage…benefits cut if
married
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Discouraged work… “AFDC
recipients reduced their
benefits by about 70 cents for
every dollar they earned. As a
result, an unskilled mother who
had to pay for child care was
usually better off staying
home.” (Jencks 2005:2)
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5. You meet a guy name Joe at a party. He tells you that he
has learned a lot of people on welfare by listening to talk
radio. He notes that “welfare is composed primarily of young
black women who have lots of children, are long term
dependent, and pass this dependency from generation to
generation.” You are a sociology student who believes that
evidence matters, and have just read a book excerpt by Joel
Handler. Please explain why Joe is mistaken, being sure to
incorporate at least THREE pieces of statistical evidence (one
for each claim) into your answer.
Program’s Problems combined w/
Misconceptions fuel Debate…
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Stereotype: “Young black women who have lots of children, are
long term dependent, and pass on this dependency from
generation to generation”
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Reagan made speeches about “welfare queens in Cadillacs”
Reality: “…most welfare recipients are not African American,
that few are teenagers, especially young teenagers,; that
welfare families have about the same number of children or
fewer than non-welfare families; that most are on welfare for
relatively short periods; but that most remain quite poor, and that
this probably accounts for their children being more likely to
have welfare spells when they are older as compared to children
whose parents did not experience welfare.”
Welfare: Fact and Fiction, 1993
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Fewer than 5% of population received AFDC and 67% of those on
welfare were kids
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Race
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The rest were their guardians…mostly moms
Whites 38.9%
Blacks 37.2%
Latinos 18%
Family Size: Avg. AFDC family was the same size or smaller than
typical family
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Avg. of 2.9 kids
73% had 1 or 2 kids
Welfare Fact and Fiction
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“Nearly half the children on welfare in any given
month were born to parents who were married at
the time of their birth, and most of these parents
had enough money to scrape by while they were
married”(Jencks 2002)
Welfare: Fact and Fiction
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Welfare Dependency
Just how long did a typical recipient stay on
welfare…?
Hospital Metaphor?
Welfare Dependency: Fact and
Fiction
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Hospital Metaphor
13 beds hospital, 12 filled with chronic cases
 13th bed used by 52 people in a year
 Any given day, 85% were long term welfare recipients
 Over course of year, 80% were short term recipients
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For most, welfare helped them through “spells of
poverty”
30% received welfare for less than 2 years
 50% off in less than 4 years
 15% are more than 5
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Welfare: Fact and Fiction
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Generational Welfare
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80% of daughters who grow up in highly dependent homes did not
become dependent.
64% never received welfare.
But there was a correlation between having been on welfare as a
kid and the likelihood of being dependent on welfare as an adult.
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Children who grow up in households that receive welfare are more likely than
people who don’t to receive welfare
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Why?
Welfare: Fact and Fiction
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Generational Welfare
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80% of daughters who grow up in highly dependent homes did not
become dependent.
64% never received welfare.
But there was a correlation between having been on welfare as a
kid and the likelihood of being dependent on welfare as an adult.
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Children who grow up in households that receive welfare are more likely
than people who don’t to receive welfare
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Why? For all the reasons we’ve been discussing, they’re more likely to be
poor
“Welfare” today…
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What happened to AFDC in 1996?
“Welfare” state redefined
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Personal Responsibility and Work Opportunity Reconciliation
Act (PRWORA)
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Federal guarantee (AFDC) was abolished and replaced with
Temporary Aid for Needy Families (TANF)
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Federal Government Now Provides Grants to States in effect
creating 50 different programs
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Work requirements
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States are required to move people into workforce
5 year lifetime maximum
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Federal money ends after 5 years
State can make exceptions for hardship cases
TANF…
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What impact did the new policy have on the
number of people receiving “welfare?”
 Numbers
go up, down, stay the same?
Rolls dropped…
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Welfare rolls have
dropped significantly
 1994
5 million
families
 2004
families
2 million
TANF today
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Race
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Beneficiaries
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Family Size
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Avg. 1.9 kids
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78% have two or less
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49 % have 1 kid
28% have 2
TANF Money Spend Differently,
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Approximately 60%
of TANF recipients now
work
In best case scenarios,
money is spent on
efforts to support work
 Child
etc.
care, training,
Welfare and Work
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A) Did this act seem to reduce the number of
people on the welfare rolls?
 Yes
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B) What types of jobs do you think ex-welfare
recipients ended up with?
People enter low wage labor market…
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Employment Rates are up for single mothers
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1990 61.7% to 69.1% in 2005
Income was “often only slightly above what it had been while
they were receiving welfare benefits”
(Icleand 2003: 132)
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Urban Institute finds median hourly wage of a former welfare
recipient: $6.61
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$8,000 to $12,000 annually (Iceland, p.132)
The most successful programs have been those that increase
assistance to working mothers…break the hustling backward
syndrome
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More $ for Child care, Health-care, etc.
Welfare and Work
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A) Did this act seem to reduce the number of people
on the welfare rolls?
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B) What types of jobs did ex-welfare recipients end
up with?
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Yes
Low wage
C) Did the transition from welfare to work pull most
people out of poverty?
Poverty has not been reduced…
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Off of welfare, but not out of poverty
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Many still depend on other government programs (Food
stamps, Medicaid, Housing Vouchers, etc.)
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86% of those leaving welfare in Milwaukee were still in
poverty
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FL study finds 40% can not put food on table at some point
during year
Welfare Reform?
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“…more than half — 57 percent — of the caseload decline
during the first decade of welfare reform reflects a decline
in the extent to which TANF programs serve families that are
poor enough to qualify, rather than to a reduction in the
number of families who are poor enough to qualify for aid.”
http://www.cbpp.org/8-17-06tanf.htm#f1
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“A recent report from the U.S. Department of
Health and Human Services shows that just 48
percent of families who are poor enough to qualify
for TANF cash assistance and who meet the other
eligibility requirements receive that assistance”
http://www.cbpp.org/1-22-02tanf2.htm
Less people receiving Aid…Poor but not
getting help
Bottom Line of Welfare Reform
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“Moved a good many mothers off of the welfare
rolls, but that nearly all are still struggling to live on
meager incomes” (Jencks 2005: 11)
Research puzzle…
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Rolls Remain low, despite difficult economy for
working class
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Welfare down…YET food stamps, poverty and
unemployment up…
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“One of the great mysteries of social policy in the last few
years is why welfare caseloads have stayed essentially flat
or declined in much of the country despite the economic
downturn.”
A puzzle…? How come…Any theories?
A Puzzle…
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Change in culture and norms
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Skills: Former recipients are more entrenched in labor
market?
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New work ethic
Greater Stigma attached to welfare
Gained real work experience including skills
Policy: New rules and regulations intimidate people?
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“In some states, the application process is so difficult or complex
that it may discourage people from seeking public assistance for
which they are eligible.”
Federal Budget
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6. Handler concludes that the “problem of welfare
dependency is not the recipients. Rather, the
problems are the job market and the conditions of
work.” Please explain what this means, being sure
to incorporate a quote or evidence from the text.
Another Important Public Policy
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Earned Income Tax Credit (EITC)
a
tax credit for people who work, but do
not earn high incomes.
 If
they qualify and claim the credit, they
could pay less federal tax, pay no tax or
even receive a refund beyond the amount
of tax withheld.
http://www.irs-eitc.info/SPEC/
Effect of EITC
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In 2003, 22.1 million households received $39.2 billion in
EITCs — or an average of $1,782 per household (or $2,100
for a family with children).[8]
Census data show that without the EITC, everything else
being equal, an additional 4.4 million people would have been
in poverty, including 2.4 million children.
According to the Center on Budget and Policy Priorities,
“Census data show that the EITC lifts more children out of
poverty than any other single program or category of
programs.”[9]
Bipartisan Support for the Earned Income
Tax
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President Ronald Reagan once called the EITC “the
best anti-poverty, the best pro-family, the best job
creation measure to come out Congress.” http://www.cbpp.org/410-06tax.htm
Next…
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Poor People’s Movements