THE WELFARE REGIME OF THE US

Some unorganized thoughtsBy Vache Gabrielyan

WELFARE REGIME TYPES

CORPORATIST SOCIAL-DEMOCRATIC LIBERAL

Basic Principle Solidarity Mutual responsibility is shared through social networks. Welfare is based on individual contribution. Those not belonging are excluded.

InstitutionalNeed is accepted as a normal part of social life that should be addressed through institutions. Welfare is provided for the population as a whole, i.e. is universalist.

Residualist Welfare is a safety net for the poor.

Representative Countries

France Based on Solidarity

Germany Social Market

UKInstitutional Welfare State

SwedenInstitutional-redistributive

USPluralist in Practice, Liberal in Ideology

Solidarity

Inclusion of the excluded

Social state

Corporatism

Subsidiarity

Minimum standards

Social protection

Best services possible

Broad social provision

Egalitarianism

Individualism

Laissez-faire Residualism

Punitive view of poverty

WELFARE EXPENDITURE FOR OECD MEMBER STATES (AS A PERCENTAGE OF GDP) IN THE 1990s

Denmark 29.2 Portugal 21.1

Sweden 28.9 Luxembourg 20.8

France 28.5 Czech Republi

c

20.1

Germany 27.4 Hungary 20.1

Belgium 27.2 Iceland 19.8

Switzerland 26.4 Spain 19.6

Austria 26.0 New Zealand 18.5

Finland 24.8 Australia 18.0

Italy 24.4 Slovak Republi

c

17.9

Greece 24.3 Canada 17.8

Norway 23.9 Japan 16.9

Poland 23.0 United States 14.8

United Kingdom 21.8 Ireland 13.8

Netherlands 21.8 Mexico 11.8

South Korea 6.1

Measuring Poverty

US EU

Poverty threshold is defined by identifying the cost of a food basket and estimating from that how much income is necessary.

Poverty is defined through a comparative measure which sets a poverty line at 50% of the median income.

The U.S. Liberal Welfare System

• a low degree of decommodification (i.e. the relative independence of the system towards the compulsion and risks of the capitalistic market) and a dominant role of the free market and the family;

• little social rights, a low level of benefits, little redistribution of wealth, social stigmatization and a high degree of private welfare;

• a strong institutionalized working-culture, where social insecurity is used as a motor of economical development (Esping-Andersen 1997).

The Clinton administration (New Left) policies

• Flexibilization and deregulation of labor;• The low-wages-high-employment strategy;• Protecting the family as the basic moral

institution.

The Ideal Concepts (Leitbild)Behind the US Welfare System

• Welfare capitalism (i.e. the notion that social problems can be solved without any state intervention by the economy and society itself) is the predominant Leitbild behind American welfare politics. Alternative Leitbilder (e.g. communitarianism) only reach the core of welfare politics if they fit into the liberal philosophy of the U.S.A.

• Moral individualism (i.e. the notion that every individual has a responsibility towards the "truly needy" and he’s supposed to get involved somehow in political or civil associations which care for the poor, rather than delegate his responsibility to the government) is the general Leitbild in the American society. It keeps up the private dimension of welfare and makes Welfare Capitalism possible (Matthias Zeylmans).

THE UPSIDE

Many intellectuals in the US and Asia believe that European social welfare policies should be a blueprint for action in their own countries. But those policies, financed by high taxes and costly mandates on business, are mainly responsible for the enormous increase in European unemployment during the past decade and a half. This ‘European disease’ is hardly a model for other nations.

Gary Becker, 1992 Nobel laureate, Chicago UniversityBusiness Week, 8 April 1996

THE DOWNSIDE

Yet, as the UK and western Europe contemplate adapting more to the ‘American model’ it is worth noticing a more menacing side. Economic inequality has continued to widen. All the rungs on the economic ladder are now further apart than a generation ago, and the space between them continues to spread. This widening of inequality leads to distress and misery for those at or near the bottom and anxiety for those in the middle. Left unchecked it could also undermine the stability and moral authority of the nation.

Robert Reich, former U.S. Secretary of Labor, Brandeis UniversityFinancial Times, 3 March 1997