By Robert Rector
Among affluent nations, contrary to the conventional wisdom, the United States has one of the highest levels of social welfare spending per capita. Using a uniform measure to compare poverty levels in the United States and Europe shows that the poverty rate is lower in the U.S. than in the United Kingdom and roughly the same as the rates in most other West European countries. The official U.S. poverty measure tells very little about the actual living conditions of the poor because the vast majority of means-tested welfare spending is not included. Government data show that the living standards of the poor are very different from common notions of poverty. In working to reduce poverty, the goal should not be to outspend other nations in government programs, but rather to promote self-sufficiency and true well-being.
It is generally argued that the U.S. has a small social welfare system compared to other rich nations and far more poverty. Contrary to conventional wisdom, however, noted liberal scholars Irwin Garfinkel, Lee Rainwater, and Timothy Smeeding conclude in Wealth and Welfare States: Is America a Laggard or Leader? that “Welfare state programs are quite large in the United States.”[1]
Garfinkel, Rainwater, and Smeeding examine social welfare spending and poverty in rich nations. They define social welfare as having five components: health care spending; education spending; cash retirement benefits; other government cash transfers such as unemployment insurance and the earned income tax credit (EITC); and non-cash aid such as food stamps and public housing.[2]
The authors find that the social welfare system in the U.S. differs widely from the systems in the other advanced industrial nations they surveyed. In the U.S., social welfare spending draws on both public and private resources; in Europe, government mainly controls the resources and benefits. For example, in the U.S., government health care spending is targeted to elderly and low-income persons; the American middle and working classes rely primarily on employer-provided health insurance. The U.S. government health care system is, therefore, more redistributive than the systems of most other developed nations.
Elderly middle-class Americans also are more likely to have private pensions than are Europeans. Middle-class parents in the U.S. pay for much of the cost of their children’s post-secondary education; in Europe, the government pays. Overall, in Europe, the upper middle class is heavily dependent on government benefits; in the U.S., it relies much more on its own resources.
Setting aside the private sector, the U.S. still has a very large social welfare system. In fact, among affluent nations, the U.S. has the third highest level of per capita government social welfare spending.[3] This is striking given that government spending is more tightly targeted on the poor and elderly in the U.S.
When private-sector contributions to retirement, health care, and education are added to the count, social welfare spending in the U.S. dwarfs that of other nations. In fact, social welfare spending per capita in the U.S. rises to nearly twice the European average.[4] As Garfinkel, Rainwater, and Smeeding conclude, “For those who believe the absolute size of the US welfare state is small, the data presented…[in the book] are shocking and constitute a wake up call. Once health and education benefits are counted, real per capita social welfare in the United States is larger than in almost all other countries!”[5] Only one nation (Norway) spends more per person than the U.S. spends.[6]
A Uniform Standard of Comparison
How much of this spending reaches the poor? The left often claims that the U.S has a far higher poverty rate than other developed nations have. These claims are usually based on a “relative poverty” standard in which being “poor” is defined as having an income below 50 percent of the national median.[7] Since the median income in the United States is substantially higher than the median income in most European countries, these comparisons establish a higher hurdle for escaping from “poverty” in the U.S. than is found elsewhere.
To measure the poverty-fighting success of the United States versus Europe according to this uneven standard is like having a race in which the European sprinters run 100 meters and the American runner runs 125 meters. The Europeans reach the finish line first and are declared faster. Using such non-uniform standards to compare countries can obviously be misleading.
A more meaningful analysis would compare countries against a uniform standard. To their credit, Garfinkel, Rainwater, and Smeeding provide this.[8] They measure the percentage of people in each country who fall below the U.S. poverty income threshold ($24,008 per year for a family of four in 2014)[9] and reasonably broaden the measure of income to include “non-cash” benefits such as food stamps, the earned income tax credit, and equivalent programs in other nations.[10] They also subtract taxes paid by low-income families, which are heavy in Europe.[11] (The poverty comparison does not include health care and education.)
By this uniform measure, the U.S. was found to have a poverty rate in 2000 that was lower than the United Kingdom’s but higher than the poverty rates of most other West European nations. But the differences in poverty according to this uniform standard were very small. For example, the poverty rate in the U.S. was 8.7 percent, while the average among other affluent countries was around 7.6 percent. The rate in Germany was 7.3 percent, and in Sweden, it was 7.5 percent.[12]
Many liberals prefer a higher income cutoff for determining whether a family is poor. To that end, Garfinkel, Rainwater, and Smeeding also compare countries against a higher uniform standard. In each country, individuals were judged poor if their income fell below 125 percent of the U.S. poverty threshold (or $30,000 for a family of four in 2014). By this standard, the U.S. in 2000 was found to have a poverty rate of 13.9 percent, slightly lower than the average of other rich countries (14.8 percent). Germany matched the U.S. at 13.9 percent, while Sweden had a higher poverty rate of 15.4 percent.[13] Neither of these comparisons supports the conventional notion that poverty is far more extensive in the U.S. than in other developed nations.
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◾Eighty percent of poor households have air conditioning. By contrast, at the beginning of the War on Poverty, only about 12 percent of the entire U.S. population enjoyed air conditioning.
◾Nearly three-quarters have a car or truck; 31 percent have two or more cars or trucks.[20]
◾Nearly two-thirds have cable or satellite television.
◾Half have a personal computer; one in seven has two or more computers.
◾More than half of poor families with children have a video game system such as an Xbox or PlayStation.
◾Forty-three percent have Internet access.
◾Forty percent have a wide-screen plasma or LCD TV.
◾A quarter have a digital video recorder system such as a TIVO.
Poverty, Nutrition, and Hunger. Despite impressions to the contrary, most of those who are designated as poor by the U.S. government do not experience undernutrition, hunger, or food shortages.[21] Information on these topics is collected by the U.S. Department of Agriculture’s household food security survey. The USDA survey shows that in 2009:
◾Ninety-six percent of poor parents stated that their children were never hungry at any time during the year because they could not afford food.
◾Some 82 percent of poor adults reported that they were never hungry at any time in the prior year due to lack of money to buy food.
◾As a group, America’s poor are far from being chronically undernourished. The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle-class children and in most cases is well above recommended norms. Poor children actually consume more meat than do higher-income children and have average protein intakes 100 percent above recommended levels.[22]
◾Most poor children today are in fact supernourished and grow up to be, on average, one inch taller and 10 pounds heavier that the GIs who stormed the beaches of Normandy in World War II.[23]
So what these gentlemen are saying, is America, like her socialist European counterparts, has created a sub set of the middle class that doesn’t have to bother with working for a living. Assistance shouldn’t become a freeticket to a lifestyle.
When a nation redistributes to this level it’s absolutely shameful. It sets people on course to become dependent and uninspired from generation to generation.
“Most poor children today are in fact supernourished and grow up to be, on average, one inch taller and 10 pounds heavier that the GIs who stormed the beaches of Normandy in World War II. ”
Wow! Of course they had gone through the Depression. They were used to eating less and doing without. Clearly today’s dependent poor have much more than most of the GI’s in terms of food, housing, cars, and entertainment.
Tina: “So what these gentlemen are saying, is America, like her socialist European counterparts, has created a sub set of the middle class that doesn’t have to bother with working for a living”
I didn’t see that in the article. Where did it say anything about the percentage of people on welfare who don’t work? There were a lot of statistics about people on welfare but I didn’t see that one. I think you’re acting as if if someone is on welfare that means they don’t also work for a living, which is not necessarily true.
Chris, do you not see you are validating Tina’s statement, “…has created a sub set of the middle class that doesn’t have to bother with working for a living …”?
No, I don’t. Can you explain?
My my, the always literal (when it serves his agenda) Chris cannot read between the lines and thus thinks he finds an avenue of attack on Tina. Like no one has ever seen this before. Chris lives to crap on Tina at every possible moment he thinks he has a finger hold — by his own rules. Especially when she expresses an opinion he does not much care for.
Tell you what Chris, provide some comparative statistics between those on welfare who work and those who do not. Be exhaustive, otherwise shut your yap.
I’m not sure what you mean by “exhaustive,” but there is a lot of data showing that the majority of welfare benefits go to working families. The Wall Street Journal reported on one Berkley study:
“The study found that 56% of federal and state dollars spent between 2009 and 2011 on welfare programs — including Medicaid, food stamps and the Earned Income Tax Credit — flowed to working families and individuals with jobs. In some industries, about half the workforce relies on welfare.”
http://blogs.wsj.com/economics/2015/04/13/get-a-job-most-welfare-recipients-already-have-one/
Politifact reported:
“Roughly 60 percent of food stamp recipients who were of working age and weren’t disabled were employed while receiving benefits, according to a Census Bureau sample calculated by the liberal Center for Budget and Policy Priorities.
This matters because working recipients of means-tested benefits would be counted on both sides of the comparison, casting doubt on the notion that there’s a strict divide between people who work and people who are on welfare.”
http://www.politifact.com/punditfact/statements/2015/jan/28/terry-jeffrey/are-there-more-welfare-recipients-us-full-time-wor/
I wasn’t being overly literal. Critics of welfare recipients often conflate “people on welfare” with “people who don’t work,” and that’s exactly what Tina did when she wrote this:
“So what these gentlemen are saying, is America, like her socialist European counterparts, has created a sub set of the middle class that doesn’t have to bother with working for a living”
But the fact is that most people on welfare do still have to work to survive.
The problem isn’t welfare. The problem is low pay; working hard is no longer enough for millions of Americans.
It takes an English Major to not know what the word “exhaustive” means.
Re: “The problem isn’t welfare. The problem is low pay; working hard is no longer enough for millions of Americans.”
And what factor is driving down wages? Could it possibly be the flood of illegal immigrants from south of the boarder?
Obviously I know what the word exhaustive means, Pie, but it’s also obvious that the term is somewhat subjective; I could probably give you links to ten sets of data that all show the majority of those on welfare are in working families, and you could say that’s not exhaustive enough.
“And what factor is driving down wages? Could it possibly be the flood of illegal immigrants from south of the boarder?”
Of course it could possibly be that, but there’s very little evidence that’s the case.
From the Cato Institute:
There is simply no evidence that immigration drives up the U.S. unemployment rate or that it drives down wages for American workers.
America’s current unemployment rate of nearly 9 percent has nothing to do with immigration. The rate was below 5 percent four years ago when, according to the Pew Hispanic Center, there were 1 million more illegal immigrants in the United States than today.
In fact, immigration helps to soften swings in the unemployment rate by acting as a kind of safety valve for the U.S. labor market. When jobs are plentiful and labor markets tight, immigrants tend to come in greater numbers. When jobs are scarce and unemployment high, immigrants arrive in fewer numbers and more choose to return to their native countries, an option not open to native-born Americans.
The large majority of Americans have no reason to fear losing their job to an immigrant. Immigrants typically fill niches in the labor market at the high end and the low end of the skill spectrum, from farm workers and dishwashers to computer scientists and physics professors. Of course, Americans perform those jobs as well, but not in sufficient numbers needed to meet demand during years of normal growth. As a result, immigrants complement most American workers rather than compete against them.
Numerous studies have found a generally positive impact of immigration on native-born wages. The only two groups that do suffer some wage losses because of immigration are other recent immigrants, and the small and shrinking pool of native-born adult Americans laboring without a high school diploma.
A comprehensive study by the National Research Council in 1997 concluded that immigration boosts the income of American workers overall by as much as $10 billion, but that it does slightly reduce the wages of the lowest skilled Americans. The NRC found that immigration had no negative effect on the wages of black Americans as a group.
More recent studies have confirmed the benign impact of immigration on U.S. wages. In a 2006 study for the National Bureau of Economic Research, economists Gianmarco Ottaviano and Giovanni Peri estimated that immigration from 1990 to 2004 had reduced the wages of Americans without a high school diploma by 1 to 2 percent, while boosting the wages of the more than 90 percent of American adults with a high-school education by 0.7 percent in the short run and 1.8 percent in the long run.
http://www.cato.org/publications/commentary/immigration-doesnt-hurt-nativeborn-workers
When did it become America’s responsibility to provide jobs for Mexico’s citizens?
Cesar Chavez understood the negative impact the illegal workers coming across our southern border was having on the native born form workers. He formed a union to protect US farm workers and even went to the border to stop the “wetbacks” (his words) from coming cross to take his workers jobs for less pay.
Cesar Chavez Used The Term “Wetbacks” and “Illegals” to Describe Migrant Workers from Mexico:
https://www.youtube.com/watch?v=lQ9jIXHhFJI
Cesar Chavez: Anti-Immigration to His Union Core:
“Call it the whitewash of Cesar Chavez. Yes, that Cesar Chavez: the late farm worker unionizer (he died in 1993) honored repeatedly by President Obama. The man the Left loves to name drop for his role in organizing all-those grape and lettuce and melon pickers in the day.
But there is a considerable twist to the story. In fact, Cesar Chavez believed ferociously in the border of the United States — because that border protected his union. So ferociously did he hold this view that the New York Times ran a story detailing an accusation that the union Chavez founded, the United Farm Workers, set up a 100 mile “wet line” to keep “wetbacks” and “illegals” — yes, all of those are Chavez’s words — out of the United States. So let’s go back in the time machine to the period when Chavez was rocketing to fame.
It was just after midnight on June 5, 1968. Forty-six years ago. Senator Robert F. Kennedy, the brother and confidante of the martyred JFK, now himself a candidate for the Democratic presidential nomination, had just won the California primary. The Democratic National Convention was set for August, and, President Lyndon Johnson having withdrawn from the race, what lay ahead were two and a half months of political combat with Minnesota Senator Eugene McCarthy and LBJ’s vice president, Hubert Humphrey.
But this night in June, RFK had stepped to the podium in front of a cheering crowd in the ballroom of the Ambassador Hotel in Los Angeles to claim victory. Long forgotten now is the diminutive woman who was at his side, and the man for whom she worked. Both of whom were acknowledged by Bobby Kennedy before he left the podium, shortly thereafter to be assassinated by Sirhan Sirhan.
Here’s the video of the first part of RFK’s victory speech from that night. At about 5:20, RFK says: “I want to thank Cesar Chavez, who was here a little earlier.”
That would be the Cesar Chavez who was already a Hispanic icon. Founder of the National Farm Workers Association (later renamed as the United Farm Workers or UFW), Chavez was the Martin Luther King of Chicanos who, like King and their mutual hero Gandhi, believed and supposedly practiced non-violence. Chavez was a member of Kennedy’s victorious California slate of delegates elected in the primary. Chavez wasn’t on the platform because he’d stepped away to look for his wife. But that didn’t stop the crowd from chanting at RFK’s arrival at the podium: “We want Chavez! We want Kennedy! We want Chavez!”
Continued..
http://spectator.org/articles/59956/cesar-chavez-anti-immigration-his-union-core
America needs a modern day Cesar Chavez to protect the jobs of Americans and make the other countries provide jobs for their citizens.
Chris the number of people receiving food stamps (and working part time when they want to work full time) has grown significantly since Obama took office. The number of people not working at all because they can;t find work is phenomenally high. The amount of cash and benefits, including healthcare since Obamacare was enacted, has created a much larger dependent class and a situation where people who cannot find work, or choose not to work, would not fall into poverty. This describes a “sub-set” of the middle class…people formerly of the middle class who can maintain a lower middle class lifestyle without working…people who were once working full time and were contributors rather than takers. European style socialism creates this subset by killing opportunity and creating dependency due to the fact that benefits are so generous.
Re: “When a nation redistributes to this level it’s absolutely shameful. It sets people on course to become dependent and uninspired from generation to generation.”
Damn straight.
Agreed! We have that percentage that doesn’t work at all. They are the roll model their children emulate in far too many cases so institutionalized dependency persists. Then we have those who work but still qualify for benefits. Not all but many of these have lost the incentive to acquire greater skills to earn more. The personal urge to be independent has been blunted…why bother when a parson can be well fed, heat and cool his home, afford big screen TV’s, cars, X-Box games, iphones and even “party” if he chooses? Yes, some use the help while they work to put themselves in a better place, but too many don’t. This is the tragedy of socialism>
Over one third! In a nation of opportunity never seen before in the world! Whites and blacks make up the majority of Welfare recipients (38.8% and 39.8% respectively). If our Welfare laws were written to encourage people to obtain skills and get off Welfare, the percentage would be more like those of Hispanics (15.7%) or better, yet Asians (2.4%).
We are doing something wrong when so many of our citizens are choosing or forced to accept welfare rather than being productive, independent, contributing citizens.
It’s time we addressed the root causes of this tragedy, including the social and values based problems and the educational problems that have ripped families asunder and failed so many kids.
America continues to be a land where “poor people are fat” (I don’t remember where the original quote came from).
Instead of continuing to throw money at the problem, much of which gets soaked up by the agencies that administer, we need to help the poor in this country live by better standards. For lack of a better description, all poor homes have TV’s when what they need are treadmills. Government assistance needs to be kept short term ( a safety net not a hammock or a spider web) and those receiving need to meet certain standards. Drug testing would help them to make better choices and treat their children better, for one. Standards for health and nutrition could be implemented or enforced better. As it is now, we’re failing these people.
Steve: “Drug testing would help them to make better choices and treat their children better, for one.”
Steve, this has been tried, and it was an utter failure. The drug tests ended up costing far more than the actual welfare. Since so few welfare recipients tested positive, there was no net benefit to the drug tests at all. The policy was not fiscally conservative and it didn’t save states a penny. It was a nice way to show contempt and distrust toward poor people, though.
Well said Steve!
Excuses, excuses, excuses.
Instead of altering when and how and to whom tests are done, the issue is used to dismiss the idea that something must be done. Typical attitude from those who support Welfare and redistribution and can see only socialism as the way forward.
Here’s the bottom line. When a nation encourages larger and larger portions of the population to dependency sooner or later you end up with too many people riding in the cart…and you run out of other peoples money.
Maybe this is a good time to remind us all of the trouble with dependency government.
Tina: “Instead of altering when and how and to whom tests are done, the issue is used to dismiss the idea that something must be done.”
Well, how would you alter it? And what is the proof that “something must be done” to stop welfare recipients from using drugs? That sounds like a solution in search of a problem. It sounds like a big government idea, actually.
I don’t know how testing was done before and I don’t have time now to look into it.
Maybe we should just stop funding people who continue to abuse drugs and as a result our system…if caught, two strikes your out. It would be more compassionate than enabling their bad habit.
Well, the army requires its members to stay drug free in order to receive a paycheck, so it seems only fair for those on government assistance? And, at my own unit’s last drug testing, I can tell you that we had zero members come up positive. To me, this signals that the testing is successful in helping members continue to make good choices. I don’t recall anyone feeling that the army had contempt or mistrust of them either.
I would like to know what state tried this and saw it as a failure. As I recall there are two state (Oklahoma and Florida?) that recently started doing this. Are there some stats now from these programs?
As for the cost-effectiveness, well, if we wanted that to be part of the equation then welfare wouldn’t be administered by government employed members of public employee unions, now would it?
Well, the first thing I discovered when researching this was that the number of left leaning media and blogs that poo poo the idea filled up pages and pages of links.
“Drug tests would be a massive waste of resources and would stigmatize the poor.” – Washington Post
“Drug testing welfare recipients has been found to be costly and ineffective in other states, but Mississippi will go ahead anyway. – thinkprogress.org
“Drug tests for welfare is a huge waste.” – Salon
“Several states had a theory: mandating drug tests for welfare applicants would save taxpayer money. The results have been nothing short of a fiasco.” – MSNBC
“Utah Welfare Drug Testing Results Find Only 12 Drug Users at Cost of Over $30,000,” by Jordan Johnson • August 25, 2013 – Occupy Democrats
I continued to search for information.
“A new state program (Utah) requiring drug screening for welfare applicants has saved more than $350,000 in its first year, officials said.” – Deserete News
An old survey from the nineteen nineties by the US National Library of Medicine National Institutes of Health found that, “…drug use is 50% more common in households with welfare recipients than in nonwelfare households.”
Apparently dozens of states have enacted drug testing laws for welfare recipients. Few have reported the results…at least that I could find spending at least an hour looking.
Current studies indicate prevalent use of drugs among welfare recipients:
The Federalist Papers
Study Mode
2013
Something is off. The lefties say we don’t find many users through testing (Could be they use other peoples urine). They say we don’t save anything by testing. But studies have found fairly heavy drug use by welfare recipients…sounds like we need a better test (some suggested hair rather than urine).
Does anyone really believe that there are only a handful of drug users among welfare recipients?
Other arguments, including court decisions, find the law unconstitutional because it singles out a portion of society unfairly. So why is it not challenged, Constitutionally, when other groups within our society are required to test? Businesses that do business with the government (State or fed) and come under OSHA regulations have to certify that they run a drug free workplace, for instance. There’s no way to do that without testing.
Tina,
It could be that when states implement drug testing, those who know they are guilty don’t show up for the tests and lose their benefits. The result is that you get very few positive tests but the state saves money in decreased recipients.
Let’s not forget that California is a welfare magnet. We have only 12% of the national population but over 30% of the national welfare burden. So when other states make it harder to receive benefits, there is always the likelihood that some recipients move to CA where it is easier to receive and may actually get higher benefits.
The solution to this, of course, is to elect someone to the White House who will actually work to create jobs in this country. Economic growth means better paying jobs, which will help get people out of government dependency. Of course, they also tend to leave the ranks of reliable democrat voters. Makes one wonder….
Good paying jobs will definitely move many people from dependency to contribution and satisfaction. (See my post this morning for a popular trend and hope on the horizon)
The institutionalized welfare recipient group will require more than opportunity. I’m not sure we can expect change in the embedded adults but we sure could help their children to move up the ladder if our educational system did a better job and we offered incentives for people to get and remain married.
California will probably remain a wasteland as long as the cities continue to be bastions of leftist thinking.