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