Although people in countries around the world know about the aid provided by the government and people of the United States to other nations in times of need, many are unfamiliar with the public welfare system which exists within the United States itself. Because the economic system of the country is one of private, individual, free enterprise, even those who have studied about the United States believe, in many cases, that American citizens must always fend for themselves. While it is true that Americans are expected to provide for their own needs— and for most American citizens it is a point of honor to be able to do so without accepting help from other individuals or from the government—the United States has had, since the 1930s, an extensive system of social welfare to help those who cannot help themselves.
HISTORY OF AMERICAN WELFARE
From the days of British colonial rule in North America until the 1930s, there was little disagreement about the proper role of government with regard to the welfare of the American people. Local government gave a small amount of money to the very poorest, but most people refused to accept this help unless they were desperate. The feeling that one should work hard and be self-reliant was strong—and remains so today. People provided for themselves as well as they could. They expected to do this, and it was expected of them by society. The needy could get help from churches, charitable organizations or their family and friends, but most Americans believed that anyone who was willing to work could find a job. Immigrants arriving in the New World with little or no money depended on others from their old homeland to help them get started on a new life.
In the late 19th and early 20th centuries, a number of nations in Europe were establishing and administering government-funded public welfare programs. No equivalent movement existed in the United States until the beginning of the 20th century, due largely to the availability of abundant and fertile land, industrialization providing limitless jobs for immigrants, and no social hierarchy to prevent them from competing for such jobs.
Millions of European immigrants had almost limitless opportunities to establish a good life for themselves, and many of them, through applied intelligence and hard work, succeeded beyond their wildest dreams. Such opportunities were not always available to black Americans (most of whom were held in slavery until the end of the Civil War in 1865) and Native Americans. The majority of Americans could, if they worked hard, establish themselves in comfort, both socially and economically within a generation or two. Government aid was unnecessary for this majority.
By 1900, however, there began a public recognition that part of the population was disadvantaged and there was a need to do something for those citizens. A social movement known as "Progressivism," which preached the reform of society through government intervention, gradually began to replace the "laissez-faire" philosophy of the preceding century. The needs of the poor and disadvantaged were, for the first time, attended to by government-employed social workers. Health and recreational services were established for the poor living in urban tenements. Many states passed laws restricting child labor, protecting workers, limiting work hours and providing workmen's compensation. Government at all levels came to accept responsibility for the general welfare of every citizen.
In 1929, the United States and the rest of the industrialized world entered a period of severe economic decline known as the Great Depression. With lessened demand for products, industries shut down. Tens of thousands of people lost their jobs; the amount of money in circulation shrank. For the first time in the history of the United States, many people who wished to work were in need of help in order to provide food for their families, but there was no federally organized system to provide that help. The President, Herbert Hoover, introduced programs to solve the problem, but changing a system takes time, and most people felt that not enough was being done.
This difficult situation called for changes, and to most Americans the first step in this direction was to replace the leaders of their government. In 1932 the people elected Franklin D. Roosevelt president and gave his party majorities in both houses of Congress.
Within days after Roosevelt took office in 1933, the old idea that direct federal government support was not a useful way to help people faded into history. Suddenly, Congress was establishing many public welfare programs which were radically different from any earlier activities undertaken by the American government. The government began using its money and power to provide jobs for people on public projects such as nature conservation, building dams, repairing roads, renovating public buildings and establishing new electrical systems for rural areas.
Among the programs that began during the Depression years was the Social Security program, approved in 1935. The program, assuring that retired people have a small regular income each month and providing unemployment insurance, disability insurance, public assistance to the needy and child welfare, has been a major program in the United States ever since.
In the years since Roosevelt, other presidents have established other government social welfare activity. One of them, Lyndon B. Johnson, asked Congress in 1964 to declare a "war on poverty." Another set of government programs was enacted. As with those established under Roosevelt, some of these (such as the Medicare program), are now an accepted aspect of American life. Medicare helps elderly people pay medical bills. In addition, Medicaid provides medical help for the poor, and the food stamp program provides subsidized food to poor families.
Since the 1930s, however, many Americans have felt that though some public welfare programs are needed and beneficial, they can, when taken to excess, become too costly and can weaken individual initiative.
In 1980, as a Republican presidential candidate, Ronald Reagan argued that one cause of unemployment, rising prices and government deficit spending was that too much money was being spent by the federal government, including on its social welfare programs. He was elected in 1980 and then reelected in 1984 by an electorate seeking a remedy for economic problems which had become steadily worse during preceding administrations.
President Reagan asked Congress to decrease the number and scope of social welfare programs, and at the same time, to decrease taxes. In the wake of the president's actions, inflation declined and employment increased. As the economic situation improved for the majority, many came to accept the idea that public welfare on too broad a scale may cause economic problems throughout the society. Two questions arose: "Can even a rich nation afford broad public welfare programs?" And "are public welfare programs the most effective way to address problems of economic or social inequality?" The debate over affluence, economic policies, public welfare, individual initiative and what might be done to solve the problem of poverty seems destined to continue for quite some time.
The majority of Americans—about 85 percent—are neither wealthy nor poor. They belong to the broad economic category considered to be "middle class." This means that they have jobs in factories or offices, run stores, or are trained professionals such as teachers, nurses, farmers, police officers and salespeople. Middle class people ordinarily live comfortably, own cars, spend some time each year on holiday and can pay—at least in part—for a university education for their children. Economically above this middle class are some very wealthy people; below the middle class are the poor. Poverty in the United States is difficult to define. Generally, a family of four with a yearly income of $11,600 or less is considered to be poor by American standards. Many of the poor have less income than this "minimum" amount. Daily life is
difficult for the very poor. Without the welfare system they would not earn enough money to buy enough food or other necessities. Many would live in inferior housing and would not be able to pay for medical treatment or higher education for their children.
Most Americans are troubled by the fact that poverty exists in their land. The United States is, after all, known for its wealth, its abundance of food and its opportunity for all tc build a good life. The goal is to operate a free enterprise economy in which everyone who wants to work can find employment at which he or she can earn enough money to live comfortably. Despite that goal, there is always a percentage of people who want to work but who cannot find employment for which they are suited. The percentage of the population unemployed varies with the national economic situation. In recent years, the official figure for unemployment has averaged between five and seven percent.
The plight of the poor and unemployed would be much worse than it is if it were not for help that they can and do receive from the federal and state governments. The public welfare system in the United States is so large that in the early and mid-1980s nearly one half of all money spent by the federal government was for "social payments"—money used to help people. The percentage has doubled since the 1960s, when only about 25 percent of the money spent by the federal government supported these welfare needs.
In addition to federal programs, there are programs in each of the 50 states which are designed to help people in need.
Among the many programs that help people living in poverty are:
• Welfare payments—sums of money which are given by the government each month to those whose income is too low to provide necessities such as food, clothing and shelter.
• Medicaid—free medical and hospital care.
• Food stamps—books of special stamps which can be used to buy food at any store.
• School breakfast and lunch programs providing free meals to schoolchildren.
• Surplus food programs, under which food is purchased in huge quantities by the government and distributed free of charge to the poor.
In addition, the poor—and even people who are not poor—can become eligible to live in public housing. Public housing developments are groups of apartment buildings built at government expense. Federal, state and city government agencies are in charge of seeing that the apartments are made available to people with low incomes. Government agencies also take care of the buildings, providing guards, maintenance and heat.
When public housing is not available, poor people who need a place to live are sometimes placed in privately owned apartments or in hotels for which the rent is paid by the government.
There are many other government programs that provide help to people. The Social Security program remains the largest. It is financed by a tax paid by all working people. Virtually everyone who works in the United States has seven percent (in 1990) of his or her
wages deducted to support the Social Security program. This money is used in several ways:
When people reach retirement age—they must be at least 62—they can stop working and receive a monthly Social Security payment. (Most Americans do not retire until after age 65, however, when the payment is slightly higher.)
When a worker becomes disabled and cannot work, he or she is usually eligible for Social Security payments. Social Security payments are available to widows and young children of workers who die before retirement age.
Older Americans (over age 65) are also eligible for medical and hospital care under a federal government program called Medicare. Although this program does not pay all medical expenses, it does help a great deal. On average, it pays about 74 percent of the money needed for hospital care and about 55 percent of the money needed to pay doctors' fees.
There are a number of other ways in which the federal or state governments help people:
Unemployment Insurance: Each state provides money to workers who lose their jobs through no fault of their own. The unemployed worker can receive weekly payments for up to six months while he/she looks for a new job. In times of recession—times when jobs are very hard to find—payments are sometimes made over a longer period, up to a year. Payments vary from state to state and federal money is also used to supplement the payments. The states also have agencies which retrain workers or help them find new jobs, using information about available work provided by private companies.
Veteran's Benefits: Persons who have served in the armed forces can receive inexpensive or cost-free hospital care at special veteran's hospitals. Those wounded or disabled while serving the nation in the military also receive pensions and free medical care.
Education: Public schools are located in all states. There is at least one in every city neighborhood. Every town, no matter what size, and all rural areas have them. All children—even children who are not American citizens—must be given a completely free education at these schools for up to 12 years, ending when the young person is 17 or 18 years old. Higher education at a college or university is not free in most cases, but all states and many cities operate colleges and universities at which the cost of an education is much lower than that at privately operated schools. Young people who qualify because their family's income is low can get loans or grants through government programs. Loans must be repaid when the student is working after graduation.
All states and cities also have free public library systems. Anyone can come to these libraries to read or borrow books, magazines or phonograph records.
Business: There are certain government agencies which help people who run businesses or who wish to run a business, sometimes by providing loans to business people. The idea is that by helping business, the government can help others, too, because businesses provide jobs as well as needed goods and services.
Job Training: Government programs help young people and adults from poor families or minority groups learn a skill that will get them a good job. These programs, which are designed to help young people with talent in mechanics, the arts or certain other trades, are in addition to the free public high schools.
MIDDLE CLASS LIVING
A part of any discussion of the public welfare system in the United States must be a mention of how those Americans who do not receive aid from this program—i.e. those who are not poor, aged or disabled— manage to provide for themselves in a society in which few services are subsidized by the government.
People from many countries find it difficult to understand how the majority of Americans live comfortable lives without the support of a public welfare system. Medical care in the United States is expensive; university education can cost $20,000 per year; living well after a worker retires requires more money than will be paid through the Social Security system. Most Americans prepare for these needs by saving a part of their salaries in savings banks; others invest in industries or service corporations in hopes of receiving greater profits.
Most Americans also buy insurance. Private companies sell insurance of many kinds. In buying insurance, a working person agrees to pay a set sum of money every month or at other regular intervals. In exchange, he or she receives money when needed. Life insurance guarantees a sum of money to survivors of the person in case of death. Medical and hospital insurance guarantees payment of large medical and hospital bills. There is also dental insurance and insurance that pays money when a home bums down. An American can also insure a car, furniture or other personal belongings.
Other benefits for working Americans are provided by the companies they work for or the labor unions to which they belong.
All large businesses and many smaller ones offer their workers benefits. These benefits can include free or low-cost medical insurance and life insurance. Many companies also have retirement plans. The companies put money aside to pay their workers when they retire. There are also profit-sharing plans through which extra money is put aside for workers when the company makes a great deal of money in any one year.
Many labor unions also have special funds from which workers can receive monthly checks when they retire or if they become disabled and cannot work. Some unions also pay for medicine that the workers need but which may not be purchased by medical insurance. Some pay workers a small amount of money if they lose their jobs.
The cost of higher education is usually paid by a combination of private savings, income from a part-time job held by the student, and low interest loans or grants of money given to needy students by the federal government but administered by the university.
VOLWTARISM AND PHILANTHROPY
In addition to receiving aid from the public welfare system, funded through taxation and administered by the federal and local governments, Americans in need can depend on help from a broad spectrum of private charities and voluntary organizations. Some of these organizations are supported by business and industry. Three of many major organizations funded by industry—the Carnegie Foundation, the Ford Foundation and the Rockefeller Foundation—have provided tens of millions of dollars to programs for teacher education, the strengthening of libraries, biomedical research, social science research and the improvement of public administration. American companies have provided 50 thousand million dollars for the promotion of the public welfare during the past 25 years.
On a smaller scale, 55 percent of all American adults do some form of volunteer work, donating a total of 84 thousand million hours to the public welfare each year. On an average, each American also donates 1.8 percent of his income to charity. This money supports privately operated colleges and universities, hospitals, orphanages, homes for the blind and aged, and such internationally active organizations as the Red Cross. Both businesses and private individuals may record the amounts of their contributions to charity and decrease their tax obligations. This system constitutes a public policy in support of private policy.
DERATE OVER WELFARE
The future of public welfare programs and the public welfare system in the United States is not in question. The direction in which the system will move and its scope will depend on the consensus at which the American people arrive regarding its overall benefits and disadvantages.
Some believe that increased direct expenditure by the federal government is the best means to eliminate poverty.
Others believe that there should be limits on government-funded public welfare programs. Public welfare programs, critics argue, are too costly, ineffective, and above all remove incentives for poor people to work to attain the education, training and jobs which could allow them to help themselves escape poverty.
They speak of "empowering" America's poor to help themselves. They say the welfare system does not reward individual initiative—it encourages people to stay unemployed and spend, rather than save, money. They favor programs that help poor people buy their own homes. In several cities, these programs have helped tenants buy—and run—public housing projects. They also favor "enterprise zones," in which businesses are encouraged by tax incentives to provide jobs to inner city residents.
Still other people propose maintaining a minimal "safety net" program for the disabled and the truly needy, and look to continued general economic growth as the best means of aiding the poor.
All of the studies and the arguments about poverty and public welfare programs clearly show that Americans are concerned about a problem that has not been solved. They differ only in their view as to how much the federal government should do about it directly