Responses to economic inequalities in the US
What is Welfare to Work?
Welfare to Work is the main US Government policy to reduce poverty. It is operated by the federal and state governments.
Welfare support which is means-tested (eligibility is dependent on income), such as鈥疢edicaid health insurance coverage, childcare financial assistance (vouchers, certificates or subsidies) and Earned Income Tax Credit (EITC) which is a reduction in income tax, is linked to finding work. For example, EITC is worth up to $4,213 (2024) for the first child, ($7,830 for up to three children) and is only available to those actively seeking employment or who have taken up employment.
Successes of Welfare to Work
- Supporters claim more people have been 'encouraged' into work. The number of welfare claimants has steadily fallen for over 20 years.
- This has increased the incomes of the poorest and reduced the cost of the welfare budget.
Criticisms of Welfare to Work
- Opponents claim it has forced many people to work for very low wages. Many programmes are also time-limited.
- It has not reduced inequality or poverty levels in the USA. In 2022, the OECD measured the US poverty rate at 18%. The UK figure was 11.7%.
What is Temporary Assistance to Needy Families (TANF)?
TANF is a federal financed but state run programme aimed at getting as many single parents back to work as possible. It is means-tested and costs the federal government $16.5 billion per year (this has not changed since 1996 although individual states top-up funding). TANF offers a mixture of both employability and childcare support depending on how different states choose to implement. Welfare benefits are linked to finding or looking for work. TANF is only available for a maximum of five years.
Support of TANF
- TANF provides important financial help for families when they have very low or no other income.
Criticisms of TANF
- The level of child poverty in the US is one of the highest in the developed world. In 2022 the official child poverty rate was 16.3% (Source: United States Census Bureau).
- Poverty research groups in the US argue that TANF benefit levels are low and are not sufficient for families to meet all their basic needs.
What is the Supplemental Nutrition Assistance Programme (SNAP)?
The SNAP provides food benefits to low-income families to help pay for their food shopping needs so they can afford nutritious food. SNAP is means-tested. In 2022, SNAP cost the federal government $113.9 billion, helping 41 million low-income people. (Source: Pew Research Center)
Has SNAP been successful?
Research has shown that the SNAP has reduced the number of people who are food insecure (inadequate income to cover food costs) by as much as 30%, particularly helping low-income families with children. However, the average value of SNAP to each eligible individual was only $4.16 per day.
Trump and Biden and welfare policies?
Trump welfare policies
During the years of the Donald Trump presidency (2016-2020), he aimed to reduce federal support for a range of welfare including cuts to SNAP, Medicaid and housing programmes. His focus was on cutting taxes, especially for those on the highest incomes.
Biden welfare policies
Current President, Joe Biden has moved to increase welfare support. For example, the Child Tax Credit was expanded in late 2023, to a greater number of poorer income families, which will benefit as many as 16 million children. The Biden administration is also in the process of reforming TANF, to ensure increased support for those eligible going forward.