Welfare

Welfare is a public policy concept in which government programs are introduced to help a society’s poor or disabled population reenter the workforce and care for themselves. This paper will take an in-depth look at the institution of welfare in the United States. Proceeding from a brief history of modern welfare programs, this essay will then review many of the issues that have arisen concerning this form of public policy as well as the ongoing attempts in Congress to correct these issues.

Keywords Aid for Families with Dependent Children (AFDC); Cash Transfer; Personal Responsibility & Work Opportunity Reconciliation Act (PRWORA); Welfare Dependency; Welfare State

Stratification & Class in the U.S. > Welfare

Welfare

Overview

In 1977, the budget director for the state of New York, Peter Goldmark, offered his thoughts regarding social welfare programs. "Welfare," he said, "is hated by those who administer it, mistrusted by those who pay for it and held in contempt by those who receive it." Goldmark was certainly not alone in his assessment of social welfare programs. Indeed, while the notion of using public funds to help the destitute get back on their feet is a noble concept for left-leaning idealists, in practical application, it has generated more controversy from both sides of the American political aisle than it has addressed poverty in the United States. In the later twentieth century, this controversy became even more heated in light of two recessions, unpredictable economic development and subsequent budget austerity.

This paper will take an in-depth look at the institution of welfare in the United States. Proceeding from a brief history of modern welfare programs, this essay will then review many of the issues that have arisen concerning this form of public policy as well as the ongoing attempts in Congress to correct these issues.

A Brief History of Welfare in the United States

Welfare, a public policy concept in which government programs are introduced to help a society’s poor or disabled population reenter the workforce and care for themselves, is by no means a new idea. However, the government was not always the primary donor to the poor—in the Middle Ages, the impoverished looked to churches and other charities for help rather than to political leaders.

While most societies viewed the poor in a negative light, in the sixteenth century, public attitudes concerning the poor began to change. In Great Britain, the introduction of the "English Poor Law" cast a light on the plight of the poor, calling for the reform of the impoverished population as well as eliminating poverty itself. The English Poor Law remained in effect for more than two and a half centuries. Its significance cannot be understated, as it represented a major shift in government policy toward the poor, creating institutions and programs designed to reduce the number of impoverished people and restore economic balance among the people (Slack, 1995).

While the English Poor Law cast a light on the need seen by many to help rather than isolate the impoverished, the stigma of poverty has persisted throughout history. An interesting change of attitude, however, occurred during the early twentieth century, when the stock market crashed in 1929.

The Depression & the New Deal

When Wall Street collapsed on what was coined "Black Tuesday," individual shareholders saw their holdings dwindle into negligible sums. However, the tumble was not limited to investors—assets of countless businesses also shrank, sending 11,000 banking institutions into insolvency. Within three years of Black Tuesday, stock market prices were 20 percent of what they were worth prior to 1929. Consumer confidence collapsed concurrently with the stock market, which meant production also fell off. By 1932, manufacturing output was halved, and up to 30 percent of the American workforce lost their jobs (Nelson, 2008).

The stigma of poverty was suddenly lifted during the Great Depression—there were simply too many members of the U.S. population who could be classified as below the poverty line to be considered social pariahs. The economic tumult of the Depression, the impotence of policymakers to rebuild economic institutions and systems and, above all, the increasing number of American poor vaulted Franklin Delano Roosevelt into the presidency in 1933. With his election came a mandate to help people get back to work.

Roosevelt introduced the "New Deal" while accepting the Democratic nomination for the presidency, and he made good on his vow upon entering office. In addition to filing legislation to stimulate industrial recovery and prevent future collapses from taking place, Roosevelt also pushed for unprecedented billions in federal spending to help create jobs and provide relief for the poor. While industrial and infrastructure recovery was an important part of this New Deal, the driving force behind the initiative was poverty relief and recovery. Political concerns were certainly expressed about the focus and effectiveness of this set of proposals, but in the face of public demands for relief, such concerns were marginalized (Bonatti & Thomsson, 2007).

In 1944, FDR also introduced the notion of a "Second Bill of Rights," which lent a philosophical ideal to his proposed policies. Stemming from his concept of the "four freedoms," freedom of speech, religion, fear and want, the Second Bill of Rights was designed to emphasize the latter of these freedoms by working to ensure that every individual had a right to make as comfortable a living as possible (Sunstein, 2006).

One of the longest-lasting aspects of Roosevelt's "welfare state" (a system in which the government assumes responsibility over the health, education, employment, and social security of the people) was that of Social Security, which is used to help the handicapped and elderly remain free from want. Thirty years after the Roosevelt administration, the leadership team of President Lyndon Johnson took charge to build upon the legacy of FDR. Johnson managed to invest $6 billion in Medicare and another $1.3 billion in education reform appropriation. Johnson, addressing both U.S. Capitol chambers, declared a "war on poverty," prompting more people to get involved and the federal government to get more active in servicing the people's needs.

In addition to his Medicare and education measures, Johnson's "war on poverty" included the introduction of the Head Start program, work study initiatives, food stamps, and the health care insurance program for the poor, Medicaid. In the years that immediately followed, Johnson's war seemed to be fomenting a return, as poverty levels dropped and living standards improved. Less than a decade later, however, poverty levels remained steady. In fact, Sheldon Danzinger of the University of Michigan said in 2004 that Americans have allowed poverty to again fall off the public's national agenda (Siegel, 2004).

Indeed, while the nobility of Roosevelt and Johnson reinvigorated the debate on the need to help the poor return to the rolls, there remains controversy about whether the government's role of managing the distribution of public funds to offset poverty is necessary. This paper will next look at the controversy over the modern welfare state.

Further Insights

Civic Responsibility or Budget Drain?

There are many different aspects of the American welfare state. As the definition provided earlier in this essay demonstrates, it is manifest in a broad range of areas. Most of these arenas are, however, somewhat benign in terms of their political sensitivity—after all, public education, Social Security, and health care are universally applied programs. Alternatively, "welfare" often evokes more attention from both advocates and critics alike, in large part because of the stigma that remains attached to the nation's poor. However, another critical factor is a simple matter of dollars and cents.

When one of the cornerstones of FDR's New Deal, the Aid for Dependent Children (as it was known then), was initiated, its payments to eligible children were only about $32 per month (equal to around $36 in the early 2020s), and only one of three children actually received the benefit. By the 1960s, however, the program was renamed "Aid to Families with Dependent Children" (AFDC), and benefits were expanded to include grants for mothers. The benefit itself grew as well, a 60-percent increase in only twenty years. Furthermore, the number of people receiving the benefit more than doubled during the 1940–1960 timeframe. What was even more troubling to budget monitors was what transpired in a mere ten-year period, between 1965 and 1975: AFDC recipients tripled in volume, from 2.2 percent of all American families to 6.4 percent in 1975. Spending naturally skyrocketed as well, from $10 billion in 1965 to $27 billion in 1975 (Lyon, 2001).

With such significant expenditures on welfare programs getting such attention, particularly during times of fiscal austerity (as was the case in the early 1970s), it is only understandable that scrutiny would grow not only about these programs' effectiveness in combating poverty but in how such programs are managed in the first place. Three magazines in 1972 and 1973 published stories that depicted fraud among recipients as well as mismanagement and waste. Adding to the public consternation about social welfare, some observers suggest, was the fact that these stories depicted mostly Black people benefiting from such missteps (Neubeck & Cazanave, 2001). Although the racial constitution of welfare recipients had not changed significantly, there remained a perceived connection between poor, Black people and the bloated "welfare mess," while poor, White people were seen as recipients of "unemployment benefits" that are typical during a down economy.

The 1980s were not much friendlier to welfare programs, but it was not because of overwhelming public outcry against welfare. Rather, it was the administration of Ronald Reagan, who, in his efforts to rein in domestic spending, dramatically cut funding for many welfare programs. The cuts were so deep in some cases that their impacts on poor people remained for nearly a decade. Still, even though many of those in leadership agreed with Reagan, many private citizens felt that the cuts were too drastic. In 1981, the same year in which Reagan passed his cuts through his seminal "Omnibus Budget Reconciliation Act," there was a noticeable spike in the number of letters to the editor in the New York Times and the Washington Post speaking out against the cuts. Clearly, the public saw the proposed cuts as excessive. Then again, that spike was short-lived, as public sentiment seemed to calm down shortly thereafter. Such a "return to normalcy" suggests that although people at first objected to the severity of Reagan's cuts, their attitude did not last for the long term (Cook & Barrett, 1992).

Despite the waxing and waning nature of public sentiment regarding welfare, there remains an imperative, as there is for any long-standing public program, to correct the system's shortcomings. This paper will next take a look at some of the changes to the American welfare program and the forces that created them.

Welfare Reform in the 1990s

While running for president in 1976, Ronald Reagan often spoke of a "welfare queen," a woman who lived on the South Side of Chicago who had fraudulently obtained $150,000 in welfare payments using "eighty aliases, thirty addresses, a dozen Social Security Cards and four fictional dead husbands" (Dreier, 2004, par. 10). This woman's existence was never proven, but the impact of Reagan's story was powerful nonetheless, not just in perpetuating the stigmas attached to welfare programs, but in terms of generating calls for a complete overhaul of the social welfare system.

There were a great many stories told about the fraud committed by welfare recipients prior to the 1990s, when comprehensive welfare reform took center stage. Arguably, one of the most talked-about issues pertaining to the inconsistencies of public aid was one that was less anecdotal and more easily quantified: welfare dependence. In this arena, welfare recipients became reliant on their monthly payments, in many cases eschewing returning to the workforce because such a move would cause the cessation of those payments. The Pulitzer Prize–winning series about Rosa Lee Cunningham, a confirmed welfare-dependent woman with eight children and thirty-two grandchildren, only fanned the flames of controversy by telling the story of "a three-generational family of welfare-dependent petty criminals" (Zuckerman, 2000).

Several studies cite the deleterious effect such long-term welfare dependence can have on children. One study concluded that prolonged reliance on welfare places at risk a child's intellectual development. "Dependence also reduces a child's earnings in future years; the longer a child remains on AFDC in childhood, the lower will be his earnings as an adult," the study suggested. It also added, "Analysis shows that these effects are caused by welfare per se, not simply poverty; a poor child without welfare will do better than a similar poor child with welfare" (Rector, 2001).

In 1996, Democrats and Republicans joined forces in the middle to pass the first major overhaul of the country's welfare program by seeking to transform welfare from a "payout" program to a "workforce redevelopment" system. Designed to target welfare dependence and eliminate fraud and abuse, the Personal Responsibility and Work Opportunity Reconciliation Act required that payments be limited in terms of time, and that within that time limit, recipients must make a concerted effort to return to work. The law gave states "performance bonuses" to move welfare recipients into the workforce again and gave recipients incentives for bringing their children to daycare while they went to work. Two years after the law's passage, President Bill Clinton went before a joint session of Congress, during his State of the Union address, taking credit for the improvements to the law, he said:

Nevertheless, with an issue that has historically been a lightning rod for criticism, the controversy over the effectiveness of this comprehensive reform measure rages on. The focus of the law was to transfer the unemployed and poor off of welfare-dependent circumstances and into income-generating status as gainfully employed members of the American workforce. In one regard, the law has done just what it was supposed to do: take people off welfare rolls. Of course, the time limits for payments made this trend possible, as people had no choice but to be removed from the rolls after a cumulative period of sixty months expired. In this respect, Clinton's reform measure was satisfying the public outcry about "welfare queens" and "welfare mothers."

Then again, the question of whether those who no longer received cash transfers would in fact become less welfare-dependent and increasingly part of the income-dependent workforce remains debatable. A 2008 study by Iowa State University tracked eighteen families who had been removed from the cash transfer system under the 1996 law. The results of this study revealed that eleven of those families remained heavily dependent on food stamps, Medicaid, and other need-based programs to supplement low-wage jobs. Many also relied on federal Supplemental Security Income or Social Security Disability Income in addition to their work wages. Even the work was inconsistent, as many families experience frequent job changes (Fletcher, Winter, & Shih, 2008). This study therefore suggests that dependence on welfare cash transfers may have been lowered as a result of the 1996 law, but dependence on other forms of state and federal aid outside of the cash transfer program continues and may even be increased as a result of the law.

Although welfare rolls have been shrinking and more former "welfare mothers" are entering the workforce, it may still be too soon to assess whether the 1996 welfare reform law is truly reversing welfare dependency and its perceived drain on federal and state budgets. One important change that seems to be occurring is that the liberal ideals of social justice and civic responsibility that correspond with social welfare advocacy are being replaced by the idea that there are no longer any "free rides." As political scientist Robert Cox summarizes, one of the most distinguishable effects of welfare reform is that the notions of universality and solidarity are giving way to selectivity and individual responsibility as the dominant characteristics of the American welfare state (Cox, 1998).

Welfare in the Twenty-First Century

Social welfare systems in use in the United States as of 2023 include "health care, food assistance, unemployment compensation, housing assistance, and child care assistance." These assistance programs are funded through federal taxes and recipients may receive benefits through an EBT card, or monthly/biweekly payments. The level of assistance an individual or family receives depends on the size of the family, the state in which they live, income level, disability status, and other factors (Hayes, 2023).

Conclusion

Canadian media mogul Conrad Black is known in his nation as a hard-nosed writer with a right-wing lean. He has taken to task many of the liberal systems of Canada; it is no surprise, therefore, that he has been outspoken about that country's social welfare programs. That system, he said, is "an overgenerous reinsurance policy for an underachieving people" (Plotz, 2001).

Black may be viewed as an unabashed conservative in terms of his political ideology, but his criticisms of social welfare programs are not localized to the extreme right. In reality, those who have lived below the poverty line have been cast in a negative light by countless societies throughout history. It was not until the sixteenth century that Western society saw a reasonable venture in helping the less fortunate through state-sponsored payments. Nevertheless, the poor have been typically regarded as something like social pariahs, making a conscious choice not to improve their social standing.

This attitude persisted until the Great Depression, when the poor were not simply a subgroup of society—it was a condition affecting an enormous segment of the American population that clearly had not chosen it. Thus, when President Roosevelt looked to spend extraordinary state resources to improve the lives of the victims of the Depression, public sentiment was behind him. Then again, the victims of the Depression and those who were living in abject poverty before Black Tuesday still seemed to be two distinct groups.

Not long after the Depression came to an end, this separation remained clear, as public sentiment again turned against welfare recipients. Populist opinion held that those who received cash transfers had made it part of their lifestyles and were unwilling to give up those payments. Stories of "welfare queens" and "welfare mothers" only added fuel to the fire.

It was this sentiment that truly drove the effort that culminated in 1996 with the Personal Responsibility and Work Opportunity Reconciliation Act. The goal of that law was simple: remove as many as individuals as possible from the system of monthly cash payments and get them to join the workforce as an alternative. As this paper has shown, that law has indeed succeeded in drawing more people out of welfare dependency. Still, there is no definitive evidence showing that this law has been either a total success or a total failure. Nevertheless, as the public view of welfare seems to be changing from one of charity to one of personal responsibility, the American welfare state, as it is known, may evolve with it.

Terms & Concepts

Aid for Families with Dependent Children (AFDC): An American social welfare program in which impoverished participants receive federal monthly payments.

Cash Transfer: Monthly welfare payments to impoverished and unemployed individuals.

Personal Responsibility & Work Opportunity Reconciliation Act: Requires that welfare recipients move into the workforce after a 60 month period of monthly payments.

Welfare Dependency: A condition in which a welfare recipient relies on monthly cash payments as his or her sole source of income.

Welfare State: A system in which the government assumes responsibility over the health, education, employment, and social security of the people.

Bibliography

Bonatti, A., & Thomsson, K. (2007, June). Bargaining over a new welfare state. Conference Papers—Midwestern Political Science Association, 1–29.

Brown, H. (2013). The new racial politics of welfare: Ethno-racial diversity, immigration, and welfare discourse variation. Social Service Review, 87, 586–612. Retrieved November 6, 2013, from EBSCO online database SocINDEX with Full Text: http://search.ebscohost.com/login.aspx?direct=true&db=sih&AN=91589918

CNN. (1998, January 27). President Bill Clinton's State of the Union Address part 2 [Transcript]. Retrieved September 17, 2008, from http://www.cnn.com/ALLPOLITICS/1998/01/27/sotu/transcripts/clinton/index2.html

Cook, F. L., & Barrett, E. J. (1992). Support for the American welfare state. Columbia University Press.

Cox, R. H. (1998). The consequences of welfare reform. Journal of Social Policy, 27, 1–16. https://doi.org/10.1017/S0047279497005163

Dreier, P. (2004, May/June). Reagan's legacy: Homelessness in America. Shelterforce Online, 135. Retrieved September 18, 2008, from the National Housing Institute. http://www.nhi.org/online/issues/135/reagan.html

Fletcher, C. N., Winter, M., & Shih, A-T. (2008). Tracking the transition from welfare to work. Journal of Sociology and Social Welfare, 35, 115–132. Retrieved September 18, 2008, from EBSCO online database SocINDEX with Full Text: http://search.ebscohost.com/login.aspx?direct=true&db=sih&AN=33750912&site=ehost-live

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Hayes, Adam. (2023, February 17) Welfare: What It Is, Different Types, Who Qualifies. Investopedia. Retrieved June 20, 2023, from https://www.investopedia.com/terms/w/welfare.asp

Lyon, E. S. (2001). Race and the American welfare state. Ethnic and Racial Studies, 24(1), 125–130. https://doi.org/10.1080/014198701750052532

Nelson, C. (2008). About the Great Depression. Modern American Poetry. Retrieved September 16, 2008, from University of Illinois Urbana-Champaign: http://www.english.illinois.edu/maps/depression/about.htm

Neubeck, K. J., & Cazenave, N. A. (2008). Welfare racism. Routledge.

Plotz, D. (2001, August 31). Conrad Black. Slate. Retrieved September 18, 2008, from http://www.slate.com/id/114605

Rector, R. E. (2001, March 15). The effects of welfare reform. Heritage Foundation. Retrieved September 17, 2008, from: http://www.heritage.org/Research/Welfare/Test031501b.cfm

Siegel, R. (2004, January 8). Lyndon Johnson's war on poverty [Audio]. All Things Considered. Retrieved September 16, 2008, from National Public Radio: http://www.npr.org/templates/story/story.php?storyId=1589660

Slack, P. (1995). The English Poor Law, 1531–1782. New Studies in Economic and Social History, 9.

Sunstein, C. R. (2006). The Second Bill of Rights. Basic Books.

Viladrich, A. (2012). Beyond welfare reform: Reframing undocumented immigrants’ entitlement to health care in the United States, a critical review. Social Science & Medicine, 74, 822–829. Retrieved November 6, 2013, from EBSCO online database SocINDEX with Full Text: http://search.ebscohost.com/login.aspx?direct=true&db=sih&AN=72596303

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Suggested Reading

Besharov, D. J., & Germanis, P. (2007). Public policy and the reform of the welfare system: An introduction. Gender Issues, 24, 3–12.

Daguerre, A. (2008). The second phase of US welfare reform, 2000–2006: Blaming the poor again? Social Policy and Administration, 42, 362–378. Retrieved September 19, 2008, from EBSCO online database SocINDEX with Full Text: http://search.ebscohost.com/login.aspx?direct=true&db=sih&AN=33017563&site=ehost-live

Gatta, M., & Deprez, L. (2008, Sept.). Women's lives and poverty: Developing a framework of real reform of welfare. Journal of Sociology and Social Welfare, 35, 21–48. Retrieved September 19, 2008, from EBSCO online database SocINDEX with Full Text: http://search.ebscohost.com/login.aspx?direct=true&db=sih&AN=33750908&site=ehost-live

Greenberg, D., & Cebulla, A. (2008). US welfare-to-work programs: The good, the bad and the ugly. International Journal of Public Administration, 31(10/11), 1354–1379. Http://doi.org/10.1080/01900690801973535

Pilkauskas, N. V., Currie, J. M., & Garfinkel, I. (2012). The Great Recession, public transfers, and material hardship. Social Service Review, 86, 401–427. Retrieved November 6, 2013, from EBSCO online database SocINDEX with Full Text: http://search.ebscohost.com/login.aspx?direct=true&db=sih&AN=82571651