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Purpose Of Welfare

A picture with a boat and the saying "give a mand a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.

The purpose of welfare is to help poor Americans climb the ladder of success and achieve financial independence.   It is a lofty and worthy goal.   It comes from perhaps the most well-known saying on poverty and charity – “Give a man a fish, and you feed him for a day; teach a man to fish, and you feed him for a lifetime.”  So, the goal is to help people fend for themselves, not merely to help them endure being poor.   

A  Simpler Welfare Purpose

The direct purpose of welfare is to provide resources to the poor to help raise their quality of life.   While we love the idea of helping our fellow man achieve success, our welfare system isn’t structured for that.   Instead, the welfare system is designed to distribute resources to low-income and qualified people.   The recipient is merely a name and address.   Welfare is almost exclusively about tangible things, not personal development. 

Pie chart showing Pell Grants and Job Training as 6% of total welfare expenditures.

There are, however, two welfare programs that address personal development.   They are the Job Training and Pell Grant (college tuition) Programs.  But they represent two of thirteen programs and only 6% of welfare expenditures.  The welfare system is established with the hope that if people have more resources, they will use their ingenuity to advance their personal lives and ultimately leave welfare behind.  This works for some people, but not all.   Year after year, the poverty rate hovers between 11% – 14%, as shown below.  

For the poor who are not of sound mind and body, the purpose of welfare is to provide enough resources to help provide a comfortable life.   For many of these disabled poor, they can’t attain financial independence.  

The Scope and Goals of Welfare

Is the purpose of welfare to help those in poverty, or should it stretch beyond that?   For instance, should it reach the middle class?  Or should it expand to address social justice by performing income redistribution?  If so, should the target be a “living wage”? 

Picture of Milton Friedman

Milton Freidman, the conservative economist, summarized the purpose of welfare in his book Capitalism and Freedom.

He said, “… we might all of us be willing to contribute to the relief of poverty, provided everyone else did.  We might not be willing to contribute the same amount without such assurance….. Suppose one accepts, as I do, this line of reasoning as justifying governmental action to alleviate poverty; to set, as it were, a floor under the standard of life of every person in the community.”  More.  

Mr. Freidman called this idea a “Negative Income Tax”.

Dr. Martin Luther King proposed the same idea in his book Where Do We Go From Here: Chaos or Community?  

He said, “I am now convinced that the simplest solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.”

“A host of positive psychological changes inevitably will result from widespread economic security.  The dignity of the individual will flourish when the decisions concerning his life are in his own hands, when he has the assurance that his income is stable and certain, and when he knows that he has the means to seek self-improvement.”  More  

Picture of single family home.

There is a broad consensus that the purpose of welfare is to provide relief to those in poverty.   That means people with income below the poverty line.    But over the past 50 years, welfare has been increasingly aimed at the lower middle class.   For example, the SNAP Program targets benefits to those up to 130% of the poverty threshold.   The Child Nutrition Program is available to families up to 185% of the Poverty Threshold.  Because these benefits are aimed at people above the Poverty Threshold, they are defined here as available to the lower middle class.   This expands the purpose of welfare beyond poverty.   More   

Many Americans believe that the federal government should adopt programs to address income redistribution.    This argument is as much about social justice as it is about living standards.   The argument is that too many ultra-rich Americans, often labeled as the 1%, take too much from other citizens.    The idea is the federal government should tax the rich and redistribute the proceeds to other citizens.  This argument often includes a welfare theme.     That is, the income disparity hurts those in poverty and the middle class and needs relief.   The root of the argument is that the free enterprise system is dysfunctional, and the government should step in to fix the problem.

The scope of income redistribution is ill-defined.   Sometimes, it is aimed at solving poverty, such as Dr. King’s proposal.   However, it usually aims at something higher than the poverty level, such as a “living wage.”   This is a level of income that provides an individual or family with a comfortable life.   Income redistribution is sometimes referred to as Universal Basic Income.

History of Welfare

Picture pf a mom holding baby.

There were no welfare programs in the United States for the first 159 years of the nation.  The views of James Madison prevailed.  He believed benevolence made no sense in the national government as it was not sanctioned under the constitution (more).   But then the great depression hit, and views changed.  The first program, entitled Aid to Dependent Children, was formed as a three-page insert in the legislation that formed Social Security. The stated purpose was to provide financial assistance to needy children. 

Housing Assistance was formed in 1937 to enact slum-clearance projects and construction of low-rent housing.  Child Nutrition was formed in 1946 to provide school lunches.   All three programs were small, and even by 1960, they only spent $2 billion combined.  This equates to $18 billion in today’s dollars compared to $1.055 trillion in total welfare expenditures in 2021.  More

Picture of President Johnson signing SNAP legislation.
President Johnson singing Food Stamp legislation.

Welfare expanded dramatically in Lyndon Johnson’s Great Society Programs of the 1960s.   Housing Assistance and Aid to Dependent Children were expanded, and five new programs were created, sometimes just as tests.  They were expanded over the next 50 years and are all a part of today’s welfare landscape.   They are Medicaid, SNAP, Pell Grants, Head Start, and Job Training.  

Richard Nixon signed SSI and WIC into law in 1972 and Ronald Reagan the EITC program in 1975.  LIHEAP was founded in 1980, the Child Care Program in 1990, and the Lifeline Program in 1997.    

Pie chart showing the make up of the welfare system.

There are 13 Welfare Programs plus Medicaid that comprise the Welfare System today. In addition, the welfare system includes Medicaid, which is health insurance for the poor. Here is a description of the entire system, including each program.

The first controversy with welfare started with the first program, Aid to Dependent Children.  The program became controversial because it focused on only one caretaker and not a married couple, and births to unmarried mothers had risen from 14% in 1950 to 22% in 1960.   The debate led to the program’s expansion in 1961 to include two-parent households, and the name was changed to AFDC – Aid to Families with Dependent Children.    But, the controversy over the unintended consequences of welfare, especially that it causes dependency, has been with us ever since.  More.

As Lyndon Johnson established his Great Society programs, he declared a “war on poverty.”   But 20 years later, in 1988, President Reagan vowed, “We declared a war on poverty and poverty won.” Even so, we fought on, increasing spending and creating more programs. Eight years later, in 1996, President Clinton passed welfare reform.  The focus was on AFDC.  The program was moved to state control with federal oversight, a work requirement was added, and the name changed to TANF (Temporary Assistance to Needy Families).   In just one year, the welfare rolls dropped, and the costs decreased by 50%.   Many people hailed it as a great success.  More. But others argued it simply kicked people off the welfare rolls and increased hardship.  More.  Regardless, welfare continued to expand in virtually all the other programs.    By 2021, TANF was less than 2% of the overall welfare system.  

Graph of the poverty level from 1074 to 2022.

FDR, Kennedy, LBJ, Reagan, and Clinton all struggled with policies to help the poor transcend poverty. More.

The poverty rate was 11.9% in 1972 and 11.5% in 2022. The rate has hovered between 11% – 14% for 50 years. We have made lives more comfortable for 50 years but haven’t lowered the poverty rate.

More.

The Controversy of Welfare

The main controversy with welfare is that it has not lowered the poverty rate in the nation.  Welfare spending has increased dramatically, but poverty hasn’t lessened. The issue is as old as the nation. Benjamin Franklin said,  “In my youth, I traveled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course, became poorer. More. The term of the past was pauperism – as explained in an old book on charity: “There is scarcely any one of the great problems affecting the public good which has taken as strong a hold upon the national mind … as the question of the prevention of the pauperization of the poor”. The problem the book says is “…. that by making no attempt to distinguish between the deserving and the undeserving, no attempt to discover and remove the causes of distress, it was actually corrupting the morals and swallowing up the resources of the country.”

That explanation is 140 years old but is a good description of the welfare controversy of today. The term has just changed from pauperism to dependency. More.

Public Opinion on the Purpose of Welfare

Over the years, there has been a vast array of surveys giving us a good view of public opinion regarding welfare.   One survey that directly addresses the purpose of welfare was done with people in poverty.  That is, 55% of those in poverty believe the main purpose behind welfare is to help poor people get back on their feet again.   39% believe the purpose is to provide for the needs of poor people while they are poor.   

Most Americans believe welfare has not been effective.   For example, poverty and homelessness finished last in a ranking of satisfaction with the nation’s efforts on 22 separate issues.  Only 25% of Americans were satisfied with the nation’s efforts.   That is consistent with public opinion on work.   For example, 90% of voters support requiring able-bodied adults to work, train, or volunteer at least part-time to receive welfare. 

When forced to choose between two statements, 47% of Americans believe poor people have hard lives because government benefits don’t go far enough, versus 44% that believe the poor have it easy because they can get government benefits without doing anything in return.  More on public opinion.

A Confused Welfare Purpose Leads to Uncertain Results

Poverty is a blight on the American psyche. That is because we believe a nation as wealthy as the United States should not have so many people living in poverty. In our hearts and souls, we believe we can fix that.  We don’t understand why, with big hearts and big money, we don’t win the war on poverty.   Such feelings have their root in the confused purpose of welfare.  

The challenge with evaluating welfare is that we do not have information on welfare’s impact on the poverty population.   The Census Bureau doesn’t report this information.   Without this data, we are flying blind.  

We have a good starting point to measure poverty.   The Census Bureau does the “official” measure of poverty, which compares people’s income against a Poverty Threshold and reports the percentage of the population in poverty.   People’s income excludes any welfare benefits, so the calculation can be considered a measurement of people’s financial independence.  

The Census Bureau does a second measure of poverty called the Supplemental Poverty Measure (SPM), which includes welfare as a resource to the individual or family.   This is a measure of how people live after welfare.   However, the aggregate impacts of welfare on the poverty population are not reported.   It would be helpful to know this.  

The SPM measure includes items inflating the poverty threshold compared to the Official measurement, such as childcare expenses, out-of-pocket medical costs, and housing differentials by area.   The differences mask the ability to compare the results as to welfare’s impact on poverty.   In 2022, the SPM poverty rate was 12.4%, and the Official measurement was 11.5%.   All that can be deduced from comparing the numbers is that all the welfare paid in the country did not make up for the higher expenses in the SPM calculation.   Welfare’s impact is not apparent.  More.

Conclusion On The Purpose of Welfare

Picture of a man holding sign saying "refine the purpose."

Perhaps no issue in the U.S. is as controversial as welfare. It has a storied past fought on political battle lines decades old.   Everyone agrees the higher ideal is to teach a man to fish rather than just giving him a fish.   But with welfare, the ideal is lost, and the system is structured merely to hand out resources.   The debate then narrows to how much is needed.  Public opinion is split down the middle – half say more and half say less.

Meanwhile, poverty remains a blight on the American psyche.   No matter what we do, we have a persistent 10% of our population in poverty.  It bothers us all.  We don’t recognize that if we are going to make progress on lessening poverty, we will have to reflect on the purpose of welfare.