Welfare state

American exceptionalism

In terms of welfare, American exceptionalism refers to the idea that the United States offers a unique approach to providing welfare due to its history.
-Some argue that US exceptionalism comes our founding ideals of republicanism and limited government, and the fact that we never developed a strong left party like much of Europe because we didn't have a revolution to overcome feudalism.
-As a result, we have a much weaker belief in the working class and have developed a welfare system that is uniquely individualistic and provides meager benefits to those that need welfare the most and generous benefits to those more well-off. -While our history and the design of our institutions through limited government may influence our welfare design, not everyone accepts this idea that America has a unique welfare state.

Two‐tiered welfare state

The notion that the American welfare state has a lower tier and an upper tier.

-The upper tier: social insurance such as social security and medicare that are usually uniform across states and generally more generous than programs in the lower tier.

-The lower tier: Social assistance such as welfare and food stams. These lower tier programs usually offer less benefits and have varying eligibility due to means-testing criteria. This is important because people may fall into different tiers which has a massive impact on well-being and economic equality - Marcella being in the bottom tier with income tests and asset tests preventing her family from producing generational wealth.

Medicare vs Medicaid

care=old, people 65+, basically health insurance for when you retire; aid=poor, welfare for people earning less than 18,754 a year; talked about this in our book we read for class

Deservingness

This is an idea related to WS by insinuating a degree of deserving assistance from programs. For example: who is more deserving? A McDonald's worker who wants unemployment benefits during covid or a software engineer under the same circumstance?

Policy feedback effects

The idea that many citizens don't recognize the hidden WS benefits the government gives. When people don't realize they benefit, it changes their perception on whether the government helps them and can alter their political attitudes. So, these people who benefit from the hidden WS think they don't receive their fair share and are less apt to support expansions in the visible welfare state. Also, groups that benefit from generous programs like medicare come together to protect their pgorams and rally against the expansion of other programs that might increase their taxes - like the elderly with medicare and social security. This has important implications for the welfare state in the US and a reason why it is so hard to make changes - these groups are mobilized in opposition.

Tax expenditure

This is an exchange between the government and the provider of a service. The government's tax rates for a service are reduced according to how well/often the service is provided-Health Insurance is the largest in the US.

Hidden/Submerged welfare state

The idea is that we have a bunch of policies through the tax code that indirectly provide support for individuals and families. For instance, tax expenditures are an example of this where we give tax breaks for companies who provide health insurance to their employees.

Private welfare state

This is when private entities such as corporations, nonprofits, or other organizations provide welfare programs that the government usually provides. Pensions are an example of this where companies ensure retirement to their workers instead of individuals relying on social security. Moreover, healthcare plans and private insurance are provided from companies instead of a universal system.

America's Great Risk Shift

In our discussion of the private welfare state, Hacker argues that there has been a significant shift in the United States and some other advanced economies from a system where economic risks were broadly shared to one where individuals and families bear more of the burden of risks associated with healthcare, retirement, and employment.

Income and asset tests

N/A (mitch didnt do it yet)

Principle of Less Eligibility

originated in British poor laws of the 19th century which deterred paupers from work houses by making them worse than the worst job. In America this is where the means-tested programs have to be worse than the worst jobs with the lowest wages. This is because it would be too hard to get people to do bottom of the barrel jobs if welfare was too generous and stigma free. This discourages potential applicants and incentivizes work in low level jobs.

Responsiveness

One of the 3 critiques of WS from Campbell(Innovation and Effiiency are the other 2). Refers to the velocity of WS agencies. Responsive agencies would act, react, and adjust quickly to meet the needs of a WS beneficiary.

Policy Innovation

Another critique from Campbell's article, which refers to the degree with which a government's policy is updated or changed. Innovative policies would include the creation of social security vs. pensions.

Efficiency

In public policy, it means increased or improved outputs for identical or decreased input. Supposed to mean that individuals and businesses can leave the state in which they reside will cause states to optimize their performance and give residents more value for their tax dollars.

-In social assistance though, interstate competition may not cause efficient outcomes and may induce states to create less redistributive policy to keep taxes low.

-This produces savings today, but greater cost in the long run or savings in one area and more expense in another.

Fifty Worlds of Welfare Campbell

This concept refers to the idea that there is not a single, uniform welfare system in the United States but rather a fragmented and complex array of social safety net programs at both the federal and state levels.

-These programs can vary significantly in terms of eligibility criteria, benefits, and administration from one state or locality to another.

-Campbell uses the term "Fifty Worlds of Welfare" to emphasize the diversity and complexity of social assistance programs in the United States, and how navigating this fragmented system can be challenging for individuals and families seeking support.

Typologies of welfare state

Typologies are just systems of categorization used to simplify and sort concepts. In the world of welfare states, two typologies have been used. For Old Central Europe, typologies were divided into Bevridgean vs Bismarckian welfare states. Today, we commonly refer to Esping-Andersen's three typologies - Liberal, Social Democratic, and Christian Democratic. While these typologies are useful for understanding broad trends within different groups of WS's, it can blur the individual nuances within each countries design and shouldn't be taken as an end all be all.

Beveridgean welfare state

The Beveridgean welfare state is characterized by universal benefits, funded through taxation, and provided by the government to ensure access to essential services like healthcare and education for all residents. Regardless of occupation, this system sought to end all of the five wants for EVERYONE. Currently, the UK's National Health Service still uses this system.

Bismarckian welfare state

A Bismarckian welfare state is a social welfare system characterized by mandatory contributions from both employees and employers to fund social insurance programs. These programs provide benefits like healthcare, unemployment support, disability coverage, and pensions. The system aims for universal coverage, often organizing benefits by occupation, and may involve private providers for services like healthcare. This model is named after Otto von Bismarck and is prominent in countries like Germany, France, and the Netherlands.

Liberal welfare state

These emphasize market-driven approaches and rely more on means-tested benefits. They provide a safety net but often have lower levels of social spending and a greater role for private insurance. Examples include the United States and the United Kingdom.

Christian Democratic/continental welfare state

Belle

Social Democratic welfare state

Swedish WS model. Dominant force behind reform. Principles of universalism and de-commodification of social rights extended to new middle classes. Pursuit of a welfare state that promotes equality of the highest standards, not of minimal need or dualism between state and market or working class and middle class. Guaranteed workers of full participation of quality of rights that the middle class has. Services and benefits are comparable to that of the middle class. Income security. Middle class are not too fond of this

Five Wants

The five wants represent the social and economic challenges that Beveridge aimed to address through the establishment of a comprehensive welfare state. These five wants are:
1.) Want: Refers to poverty and the lack of an adequate standard of living.
2.) Disease: Encompasses issues related to public health and healthcare access.
3.) Ignorance: Pertains to the lack of access to education and opportunities for personal development.
4.) Squalor: Focuses on substandard housing and living conditions.
5.) Idleness: Refers to unemployment and the need for meaningful employment opportunities.

Welfare State as a Rabbit Hole

The Rabbit-hole refers to the obscurity and depth of the Welfare State, mainly because of how difficult it can be to leave. Rabbit-Hole is not an official term

Unemployment as a structural problem

Belle

Middle Classes: UK vs Sweden

Belle

Sugar Plum and the Whip

Associated with Bismarck and the 19th century. Otto von Bismarck's national policy. He extends rights (the Sugar Plum) to his people while also brutally repressing (the Whip) any dissenters (socialists). Examples of the Sugar Plum include disability and pensions while examples of the Whip include arresting socialist leaders and dismantling unions. This is important since it was the birth of social programs.

Christian Democracy vs Liberalism

Comparison of 2/3 Esping Andersen's 3 worlds of welfare, Liberal systems are more limited and more means tested, CD systems include protections that are universal, but segmented, and keep focus onto the familial responsibility of care.

Familialism

Christian Democratic systems embodied familism, which describes the degree of involvement the immediate family has on its own care. More familial systems would likely not provide services related to family care, but finance them. Example: mandatory maternity/paternity leave vs. an allowance for every parent.

Solidarism

This term hails from the socialist school of thought, in which laborers unite to achieve equality rather than equity. "Equal work for equal pay". The risk with solidarism is freeloading.

Sufficientarianism and the Just Wage

Sufficientarianism and the just wage is a theory that refers to the most worse off person in society having just enough to lead a decent life. Under this model distributive justice is achieved when everyone has a baseline and further redistribution is not needed, so inequality still does exist.

-Typically wage decisions are not based on the market but on what what the worker needs to live a decent life. This concept is important because it is one of Christian Democracy starkest differences with Social Democracy - social democracy focuses on more redistribute policies to achieve an egalitarian outcome, while sufficientarianism only seeks to give baseline support, not provide any egalitarian measures.

Class conflict

Wage class conflict refers to the social and economic tension or conflict that arises between different classes of workers or employees based on their income levels or wage disparities. It often reflects disparities in income, benefits, and working conditions between different groups of workers within a society or organization.

Liberal individualism vs social collectivism

These paradigms refer to the collective attitudes of different ideological groups, as they are outlined by Esping-Andersen. Liberal Individualism refers to the individual risk associated with a Liberal WS (such as the US). Social Collectivism refers to the socislist view of broadly-shared risks.

Social Democracy vs Liberalism

Another comparison of ⅔ Esping Andersen's worlds of welfare. Social Democracy emphasizes a more universal system, focused on decommodifying. This is compared to liberalism's means-tested method.

Social Market Economy

Middleground between capitalism and laissez faire liberalism. Centered on competitive markets but utilized welfare policies to create an acceptable baseline to the working class and protect workers - wanted to make capitalism more appealing. The goal was to reduce class conflict between the working class and the wealthy. This concept is important because it is the one used by Germany and is a critical development as countries tried to find a middleway between socialism and capitalism.

Sweden the Bumble Bee

Bumblebees are commonly believed to have wings that are too small to allow to its big body to fly. Similarly, many people characterize the Swedish welfare state as a bumblebee - its economic competitiveness should not be possible because the country spends so much on its welfare state. In other words, people wonder how Sweden can thrive economically (fly with small wings) despite having a massive welfare state(a big body). This concept is important because it shows how a country can havea generous welfare state while also being economically competitive.

Fiscal churning

This is a concept in Sweden that all income is taxed — even income from the government. The idea is that all Swedish citizens should pay the same tax rate no matter who they are. In this view, it shouldn't matter where you generate your money, and all that matters is that you pay your fair share into the system

Folkhemmet

Swedish term that translates to "the people's home." It represents the Social Democratic leaders' efforts to create a more equitable, caring society based on a welfare state taht would provide a safety net to all citizens. This helped Sweden grow into a coeity that acts as a family and everyone is willing to contribute to take care of one another. Important to the enduring success of the SD welfare state and an example of how the universalization of welfare can reduce class conflict and bring the middle-class in political unison with the lower class.

Saltjösbaden

An agreement in the 1930s between employers and Unions for setting wages nationally. Brought more solidarism in wages, but employers interested because it keeps the export sector competitive. First step in the development of labor market cooperation in Sweden and critical moment in creating the SD welfare state.

Democratic Corporatism

Social partnership between employers and workers involving collective bargaining - institutionalized negotiations between employers and unions. Collaboration and cooperation between these two groups rather than competition. Employers believed bloodletting would be too expensive so they forced union centralization to make them become partners which paved the way for future labor agreements.

Two‐Tiered Welfare State. What are some of the political implications of it?

The two-tiered welfare state consists of the upper and the lower tiers. The tiers are compared based on three factors:
-Uniformity/Eligibility
-Generosity
-Who Benefits
The lower tiers are typically more stigmatized and politicized as those who 'don't deserve' it because they do not pay into it (the concept of deservingness).
-Having a two-tier welfare state means we have separate constituencies that require different representation which divides the classes, and the groups are divided first by policy and then additionally by race. (ex. working and middle class).

Explain in further detail the three factors that differentiate the upper vs. lower tiers of the two-tiered welfare state.

-Uniformity/Eligibility: In upper-tier programs, everyone tends to get the same benefits. More uniformity in the upper tier and less in the lower tiers.
-Generosity: How much is given.
-Who Benefits: Minorities and people of color are less represented in upper-tier welfare programs. Race and gender.

Medicare vs. Medicaid

Medicare covers patients older than 65 (or those with end-stage renal disease or ALS) and Medicaid covers those who are in significant financial need. These two programs are the closest we have to a universal healthcare system in the U.S.
(We CARE about the elderly and we AID the poor.)

Deservingness

The more generous a program, the more we tend to think its beneficiaries are deserving. If we contribute to a program, like social security, we think we deserve it because we earned it. For the lower tier, the idea is that they didn't 'deserve it'. The US prioritizes personal responsibility, the ethos of individualism in a liberal WS, and the implicit message of deservingness is that of judgement and a culture of egoism.

Policy Feedback effects

How the design of a (welfare) policy in turn affects the politics around an issue. Policy-makers vs. Policy-takers.

Tax Expenditures

Government subsidies are provided to employers and employees through tax deductions for amounts spent on health insurance and other benefits. Part of the Hidden Welfare state. This system of tax cuts benefits the wealthy because it reduces taxes on things like mortgages and health care. The largest tax expenditure in the US is employer-sponsored health care.

Hidden/Submerged Welfare State

Referring to the fact that the U.S. has a cluster of policies that operate through the tax code and these tax breaks channel benefits disproportionally to affluent citizens. We must look past social spending (the amount a country spends on Social Benefits) and look into these 'hidden' ways the Government gives out benefits.

Private Welfare State

In the US, we spend about 17 to 20% on social programs, but we subsidize a lot of private-sector welfare provision. Pensions and healthcare are big parts of the private welfare state. Getting social benefits through the employer.

What are the political consequences of the Private Welfare State?

Increased political polarization, difficulty in mobilizing support for a universal healthcare system due to fears that private benefits will be taken away, limited job mobility (due to dependency on private welfare programs such as Healthcare), and the continuing propagation of class differences.

America's Great Risk Shift, as argued by Jacob Hacker.

Argues that Americans' rights are not based on being American, but on being a worker (This idea is transcribed in Bismarckian concepts of the welfare state that form their WS around working status). Because such a substantial chunk of benefits are tied to employment status, there is no guarantee that you will have social support when something goes wrong. One of the underlying economic problems of our reliance on the private welfare state is that when things get difficult for firms, they shift it so that those 'risks' and problems are shifted onto families who are generally less able to handle those risks.

Principle of Less Eligibility

making receiving social assistance less attractive than the lowest-paying job in the labor market. Attempting to push people towards the labor market by making social assistance a last resort.
As we have seen in Adrea Campbell's account of her family's struggle with the welfare system, specifically in the Healthcare space, they had to actually give up assets to be able to qualify for certain benefits they required.

Fifty Worlds of Welfare and Andrea Campbell's argument as to why there is so much difference.

Each state has different policies and procedures about welfare. Campbell Argued that there is so much difference in the States because of the racial politics of the early American Welfare State. Southern elites and politicians opposed the idea that we would give, even very basic benefits, to low-income Americans, because they were worried this could be channeled back to black domestic and farm workers. They worried that providing income to black people in the South would undermine their class structures. At the time, Southern Senators chaired key committees, so they decided that Social Security could be federal, but not apply to farm workers, and that Social Welfare would be determined by States.

Andrea Campbell reflects on three justifications of why WS's differ and how that is a good thing. What are they?

Responsiveness: States are closer to the ground, so it is better for them to design a policy that makes sense for local-level needs.
Policy Innovation: Given a problem, there might be multiple solutions, giving states the capacity to innovate and give a sense of different options that might work better or worse than another.
Efficiency: Economic argument that highlights that at the base, businesses and individuals choose where they live, and we can get to more efficient outcomes if states design their own programs because states have incentives to attract people to where they live.

What is a typology? What are the two typologies of the welfare state that we discuss at length within the readings and lectures?

A typology is showing differences between things but pointing to the fundamental attribute that puts them into a certain group. Typology can help us think of the fundamental differences in terms of structures and benefits that they provide. The typologies we looked at were: Beveridgean vs. Bismarckian and Esping-Andersen's Three worlds of Welfare Capitalism.

Beveridgean welfare state

Benefits are given to you as a result of citizenship. Beveridge, a British man, was convinced of the social reformist idea during World War II that was universal, relied on general taxation, and a social safety net that would extend to all citizens of the nations. It was very radical in its conception but was unable to be maintained in Britain (where it had originally been convinced), however, it was able to make progress in countries like Sweden.

What were some of the main features of the Beveridge welfare model? (Think the three U's)

-Universality: Based on the idea that all citizens, irrespective of their circumstances, should have access to the benefits of the welfare state. This took advantage of the solidarity felt after the end of the war. Universality also created a large constituency that would allow for the adaption of such social policy.
-Unity: Taking care of large administration programs but also combating the "Five Giants'.
-Uniformity: Everyone is covered, and everyone gets the same benefits.

The British Welfare State (WS) became residual and more liberal over time. Why is that? What were some of the big contributors to the shift? Mention Peter Baldwin's argument.

-Economic Limitations: Butter-Guns trade-off. The UK was spending a lot of money on the military (both due to war and to maintain its imperialist motivations), which meant less money to spend on domestic ambitions.
-Program limitations/Competing systems (Peter Baldwin): Baldwin's insight was that Beveridge himself had been trying to reconcile two different models of Social solidarism and Liberal Individualism
-There was an ideological limit in Britain that didn't exist in places like Sweden. Tt didn't offer a rising floor that integrated the welfare state into an economic strategy.

Explain further Peter Baldwin's examination of Social Solidarism and Liberal Individualism that resulted in the breakdown/shift away from the Beveridgean system in Britain.

Beveridge wanted to give everyone the right to universal benefits (Solidarism), but he also didn't want to create too many incentives that would lead to people not wanting to work (Liberal). So programs like pensions were universal, but they were meager. The liberal idea of self-reliance that was sprinkled into the Beveridgean model resulted in a lack of money being contributed towards the programs, which led the middle class to turn to the private sector.

How did the loss of middle-class support/use of Britain's social welfare programs result in cuts made to British programs? Discuss the Swedish Middle Class.

The loss of the middle class (In Britain) meant that the social programs became susceptible to cuts. The UK and Sweden were on a similar path until the late 1950s when Sweden had been facing a crisis regarding their social systems due to transitions away from large-scale farming. The Social Democrats, in Sweden, used the WS to appeal to the middle classes so that they could garner enough support for their public systems. They created high-quality public services for the poor and the middle class alike. Losing the middle class makes WS programs very vulnerable to cuts. Sweden kept the middle class involved and invested, whereas the British lost the middle class to the private sector.

Bismarckian WS

In contrast to the British Beveridgean model, the goal for this was to politically demobilize and dampen social unrest in the wake of industrialization in 19th-century Germany (In response to the rise of socialism). The Bismarckian system didn't operate on the principle of citizenship but operated on social insurance. Your benefits reflected your working class.

Who was Bismarck?

Prussian, military man who feared democracy. He essentially created welfare programs as a way to give citizens social, but not political rights.

What is the Iron and Blood rule?

Basically, go to war. Be aggressive.

What is the Whip and the Sugar Plum?

Bismarck's response to the rise of socialism and unrest in workplaces.
The whip: negative consequences. Arresting prominent socialist leaders and taking down newspapers. Threatening the rise of socialism.
The Sugar Plum: Social insurance programs like disability, pensions, and healthcare systems for workers. He didn't do it because he thought they deserved it, but he did it to demobilize the working class and prevent social unrest.

Esping-Anderson's three welfare states

-Liberal welfare state
-Christian Democratic/Continental WS:
-Social Democratic welfare state

Liberal welfare state

Liberal/Market-Oriented Welfare State (US and other Anglo States).
-Stratification: Inequality in the market is exacerbated by the WS.
-Decommodification: Low.
-Limited, means-tested, and market-based. The risk is on the individual; stratifying

Christian Democratic/Continental WS:

Think Germany
-Stratification: Inequality between groups is maintained by the WF state
-Decommodification: Medium
-Universal but segmented, groups have rights. Risk-sharing in those groups.

Class Conflict

Part of the CDU (Christian Democratic Party/Union/State). Class conflict can be eliminated because the natural order of things is harmony, and conflict is because of bad policy. Adopted an organic view of society. It is not one where everyone is equal, instead, we need one where everyone has a role to play and each individual should be treated with respect and dignity.

Social Democratic WS

Nordic countries.
-Stratification: Less economic division.
-Decommodification: High
-Universal, individual citizen rights. Broad-risk sharing.

De-commodification

The strength of social entitlements and citizens' degree of immunization from market dependency. The extent to which an individual can support themselves independently of participation in the labor market. Central to Esping's arguments. Decommodification gives people the right to say no.

Welfare State as a Rabbit Hole

Andrea Campbell characterizes how the American WS keeps people poor. For example, in the case of her sister-in-law, she wasn't allowed to have over $3000 dollars in assets not including a house and a car. She couldn't make a certain amount of money (or her husband) or she would go over the limit of how little she was allowed to make. We have classic mean tests, income tests, and asset tests. Steep marginal tax rates when going from welfare to work: If your income goes over a line, you lose your benefits (a fiscal cliff). This traps people into being poor because they lose access to key social programs if they show motivation.

Unemployment as a structural problem

The idea that unemployment is not an individual issue, but a result of the economy and different factors such as trade or international corporations. This led to employment being addressed as a problem inherent to the system.

Social Democracy vs Liberalism

Social democracy is the belief that democratic politics can and should be used to temper market forces and make markets work for the service of people. Normative underpinning that democracy is the right thing to do. The key difference between liberalism is that liberalism is too idealistic. Social democrats have a skepticism of the market. Liberalism and Social democracy are NOT opposing forces, however. SDs thought that the market couldn't take care of problems without the help of the government, and often would provide the WS as the cushion for market problems.

Social Market Economy

A system that aims to combine the efficiency of market economies with a concern for fairness for a broad range of citizens. Social Democrats trying to change the labor market to make capitalism more egalitarian; the idea that capitalism can exist within a social democratic welfare state.

Sweden the Bumble Bee (Steinmo)

Bumblebees should be able to fly because of their big bodies and little wings, but yet they prevail. The same is considered in Sweden. The Swedish shouldn't be productive, efficient, one of the highest per capita AND take the longest vacation, be taxed at a really high rate, have the highest unionization, and heaviest taxes. Yet... they do! Sweden has high taxes and high spending, and they have a dynamic economy.

Fiscal Churning

When the government pays out a benefit to the citizen but then taxes the benefit. Essentially, everything in taxed.

Saltjösbaden

The historic compromise between labor and private industry in Sweden between 1936 and 1938, Significance:1. Unions and Private Industry can share goals (increasing productivity and employment goals) 2. Developed a symbiotic relationship (cooperation over wages and employment), 3. Government policy in Sweden (SDs saw the opportunity to state appeal to the middle class)

Democratic corporatism

Business/trade unions work together on a regular basis on things like policy. Unions are one part of the body politic and employers are the other.

Andrea Campbell's four 'tiers' of social provision in the US: the bottom tier (social assistance), the middle tier (social insurance programs), the bottom tier (private welfare system), and the 'icing on the cake tier'. Discuss each one.

The bottom tier:
The middle tier:
The Upper tier:
The 'icing on the cake tier'

What are the strengths and weaknesses of the Liberal System (The United States)?

Individualism means less support. Risk-shifting. Stigma surrounding welfare systems. Low decommodification.

What are the strengths and weaknesses of the Continental/Christian Democratic System?

Weakness: Traditional Family roles

What are the strengths and weaknesses of the Social Democratic System

Weakness: High taxes (but they benefit)

What is the economic rationale for the Welfare State? How does it benefit the economy?

Christian Democratic and Social Democratic ideals of the welfare state as a cushion for a capitalist system. Labor Market Efficiency.