Inequality and social policy

Growing Inequality since ‘74

International comparison

1980: CEO pay 40X worker, now: 400X

why? less progressive taxation since 80s? “progressive” vs “regressive” taxes--income tax, sales tax, estate (death) tax globalization? decline in unionization? changing technology?

Social Programs Most benefits go from middle class to middle class Social Security and Medicare are the big items, and growing

Social Security Before 1935, poverty among the elderly was much higher than the rest of the population, today lower. How it works: Not means tested You pay 7% of paycheck, employer matches. (Up to income of $87,000).

Financing social security in the future “Pay as you go” program. Problem: Baby boom approaching retirement age people living longer ratio of workers to beneficiaries dropping benefits higher. What to do? Delay payment age? Reduce payments? Raise tax rate? Privatize?

Bigger problem--medical care costs US pays more for health care than other developed countries Medicaid and Medicare costs growing faster than Social Security

Medical care delivery Over 40 million Americans without insurance lower life expectancy and higher infant mortality than developed countries on average

A Hard Nut to Crack

Poverty Today 13%, up from 11% in 2000 “Feminization and infantalization of poverty” -1/5 kids poor, twice rate of other developed countries

Women and family structure Moynihan report 1965: black kids raised in female-headed families up to 26% Today 68% Lower rates but similar trend among whites Bush admin reaction: Healthy Marriage Initiative

“Welfare” From AFDC to TANF in 1996 states greater leaway, 2 years at a stretch, 5 total reducing welfare roles--by over half nationally since mid 90s Shift in states’ approach: from cash to transportation assistance, childcare, job training, etc. politically popular, but is it helping the poor?

Public Housing Senior/Family Section 8 Hope VI

Other programs Food stamps, WIC SSI, SSDI (Disability) Unemployment insurance Utility and heating assistance Earned Income Tax Credit etc.

EITC