US Government Programs to Reduce Social and Economic Inequality Describe two of the main US Government programs that aim to reduce social and economic inequality in the US (Welfare to Work and TANF) Evaluate the success of Welfare to Work and TANF in reducing social and economic inequality in the USA

US Poverty Statistics The official US poverty rate in 2010 was 13.2% (US has tighter definition of poverty than UK). This is a rise from 12.5% in 2007 and was mainly attributed to the economic recession. In 2010, 39.8 million people were in poverty up from 37.3 million in Poverty rates by race in 2008 were: non-Hispanic Whites 8.6%; Blacks 24.7% and Asians 11.8%. The poverty rate increased for Hispanics to 23.2% up from 20.6% in 2006.

2007 US Poverty Statistics – Some Notes 1.38% of those on welfare are Black, 33% White and 24% Hispanic. 2. Since 2003, richest 1% of US population have seen income grow more quickly than bottom 50% % of the current US population (37m) are in poverty with 40% experiencing poverty in any 10 year period % of US children live in poverty (more than 12m); 30% amongst Black American children 5. Many poor groups turn to charity for help. These groups play a much bigger role than similar groups in the UK. 6. However, 46% of ‘poor Americans’ (family of four earning less than $20,614 in 2007) own their own home, only 6% are overcrowded, more than 70% own a car and 62% have cable or satellite TV.

US Government Programs to Reduce Social and Economic and Inequality Welfare to Work The main US Government strategy to reduce poverty is called ‘Welfare to Work’. Under this strategy, the poor are expected to ‘work their way out of poverty’. ‘Welfare to Work operates by the Federal and State Governments tying support to finding work. Welfare support such as Medicaid health insurance, child care, food stamps and Earned Income Tax Credit (EITC is worth up $2853 per child) is only available to those actively seeking employment or who have taken up employment.

Success of ‘Welfare to Work’ Reaction to Welfare to Work has been mixed. Supporters of Welfare to Work claim that more people have been ‘encouraged’ into work and this has increased the incomes of the poorest. It has also reduced the cost of the welfare budget (50m Americans will claim $614bn in welfare payments 2008). Opponents of Welfare to Work claim that is has forced many people out to work for very low wages (‘burger flipping jobs’) and that it has not reduced inequality or poverty levels in the USA.

Temporary Assistance to Needy Families (TANF) The main policy to reduce child poverty in the US is called Temporary Assistance for Needy Families. This program, which is Federal financed but State run, is aimed at getting as many single parents back to work as possible. Again, welfare benefits are linked to finding or looking for work. TANF is only available for a maximum of five years in a person’s life.

Success of TANF? Since TANF was introduced in 1996, the child poverty rate among single parents has fallen. Clearly, the ‘push’ provided by TANF to get single parents into work has been a success. Overall, less families today receive TANF as eligibility rules have tightened. However, some commentators argue that the fall in US child poverty rates is because of an improvement in the US economy and not because of TANF. It is also pointed out that the level of child poverty in the US is one of the highest in developed world.

US Government Programs to Reduce Social and Economic and Inequality 1.Take the heading “US Government Programs to Reduce Social and Economic Poverty”. 2. Explain what is meant by ‘Welfare to Work’. 3. To what extent has Welfare to Work been a success? Make at least two points for and two points against the success of Welfare to Work in your answer. 4. Explain what is meant by TANF. 5. To what extent has TANF been a success? Make at least two points for and two points against the success of TANF in your answer. Reading: ‘International Issues’ pages or Leckie and Leckie: ‘Course Notes’ pages 237.