Welfare reforms are changes in the operation of a given welfare system aimed at improving the efficiency, equity, and administration of government assistance programs. Reform programs may have a various aims; sometimes the focus is on reducing or increasing the welfare state and at other times reforms may aim to ensure greater fairness and effectiveness at the same total welfare spending. Classical liberals, neoliberals, right-wing libertarians, and conservatives generally criticize welfare and other tax-funded services for reducing incentives to work, exacerbating the free-rider problem and redistribution. On the other hand, in their criticism of capitalism, both social democrats and other socialists generally criticize welfare reforms that minimize the public safety net and strengthen the capitalist economic system. Welfare reform is constantly debated because of the varying opinions on a government's need to balance providing guaranteed welfare benefits and promoting self-sufficiency.
From the 1970s, welfare systems came under greater scrutiny around the world. Demographic changes such as the post-war "baby boom" and the subsequent "baby bust", coupled with economic shifts such as the 1970 oil shocks, led to aging populations, a dwindling workforce, and increased dependency on social welfare systems, which inevitably brought up the issue of welfare reform. U.S. systems primarily focused on reducing poor single parents' need for welfare assistance through employment incentives. The United Kingdom focused primarily on reducing general unemployment through the New Deal introduced by the New Labour government in the 1990s. The Netherlands emphasized reforming disability programs, and Latin America focused primarily on pension reforms.
History
Many historians trace the beginnings of contemporary welfare in Europe and America to Germany's health insurance laws introduced in the late 19th century. German Chancellor Otto von Bismarck introduced government healthcare and approved the 1883 Health Insurance Act, which was the first to introduce compulsory government-monitored health insurance. The German legislation ensured contributory retirement and disability benefits. Participation became mandatory.
By country United States
In the United States, the Great Depression led to President Franklin D. Roosevelt's introduction of the Aid to Families with Dependent Children (AFDC) program and the Social Security Program through the Social Security Act, which created a public welfare system to provide assistance to various dependent persons in need. In 1964, President Lyndon B. Johnson introduced pieces of legislation collectively known as the War on Poverty in response to a persistently high poverty rate of approximately 20%. This initiative funded welfare programs such as Social Security, Food Stamps, Job Corps, and Head Start. The war on poverty included new federal programs such as Medicare and Medicaid, which provided seniors, low-income individuals, and other disadvantaged groups with health insurance. Furthermore, the U.S. Government began providing direct assistance to school districts, passed sweeping environmental protections, instituted urban renewal projects, furthered civil rights protections, and expanded funding for the arts and humanities.
President Richard Nixon's administration proposed the 1969 Family Assistance Plan, which instituted a work requirement for all welfare recipients except mothers with children under three years of age. This requirement was removed in 1972 amidst criticism from liberals that the plan provided too little support and having excessively stringent work requirements. Ultimately, the Nixon Administration presided over the continued expansion of welfare programs, however the Family Assistance Plan facilitated greater debate over the state of the welfare system and began the rhetoric for anti-welfare sentiment. In 1981, President Ronald Reagan cut spending for the Aid to Families with Dependent Children (AFDC) program, and allowed states to require welfare recipients to participate in workfare programs. Charles Murray's book Losing Ground (1984) argued that the welfare state actually harms the poor, especially single-parent families, by making them increasingly dependent on the government, and discouraging them from working. Murray proposed that current welfare programs be replaced by short-term local programs."Welfare." In his 1992 presidential campaign, the Democratic candidate Bill Clinton running as a New Democrat promised to "end welfare as we have come to know it". The Personal Responsibility and Work Opportunity Act was crafted as a response to the perceived failings of AFDC. Concerns about AFDC had started in the 1960s, at the same time when anti-poverty solutions and programs were being debated and created. Some of these concerns included that it: caused family dysfunction among the poor (especially among poor black families as a result of the Moynihan Report), discouraged marriage and promoted single-motherhood, and discouraged poor women from seeking employment by encouraging dependency on government aid. The 1980s concerns about the budget and spending on welfare also intensified with the growth of AFDC caseloads. Concerns about fraudulent welfare claims, dependency, and misuse by recipients created the stereotypical trope of the "welfare queen". Between the late 1980s and early 1990s, growing public concern about out-of-wedlock births and teen pregnancy also fueled concern towards AFDC. Despite the public and political concerns, "sociologists, poverty analysts, and ethnographers have demonstrated that AFDC itself had little impact on women’s marital or childbearing decisions and the program acted for most recipients as a supplement to earnings or as a temporary source of support between periods of employment."
In addition to public and political perception of welfare, also important to welfare reform is the drastic change in women's labor market participation since ADC was first enacted. By the 1990s it was more common for women to engage in waged work, and this change contributed to the expectation that women receiving welfare should be required to do work outside the home. The economic and social context of the labor market had changed as well. Jobs that provided a steady and livable family wage had declined over the decades, the growth and expansion of the low-wage labor market had created jobs that provided little economic security or chance for upward economic mobility. The idea of the work-first approach to work requirements prioritized getting recipients to quickly enter the job market, with the work programs offered focusing on job readiness and immediate job placement at the first available job. These concerns about the women receiving AFDC and the impact of the program on marriage and motherhood, as well as the increased demand for low-wage, low-skilled workers in the job market and the expectation for women to participate in the labor-market provide the context for the 1996 welfare reform act. The 1996 PRWORA ended AFDC and replaced it with Temporary Assistance for Needy Families. The most significant change from AFDC to TANF is the end to an individual entitlement for poor families to receive federal aid.
United Kingdom New Deal
In recent years reform of the welfare system in Britain began with the introduction of the New Deal programme, which was introduced by the Labour Party government under Tony Blair in 1997. The aim of this programme was to increase employment through requiring that recipients make serious efforts to seek employment. The Labour Party also introduced a system of tax credits for low-income workers.
Welfare Reform Act 2007
The Welfare Reform Act 2007 provides for "an employment and support allowance, a contributory allowance, [and] an income-based allowance". The objectives of the Welfare Reform Act of 2007 were to increase the employment rate to 80% from 75%, to assist 300,000 single parents find employment, to increase the number of workers over 50 by 1 million, and to reduce the number of people claiming incapacity benefits by 2 million.
Welfare Reform Act 2009
This welfare reform proposed an increase of personal responsibility within the welfare system. The reform eliminated Income support, and allocated funds over to the Jobseeker's allowance, to encourage employment. It also encouraged increased parental responsibility by amending child support laws, and requiring births be registered jointly by both parents.“Welfare Reform Act 2009.” Welfare Reform Act 2009 - UK Parliament, services.parliament.uk/bills/2008-09/welfarereform.html.
Welfare Reform Act 2012
This welfare reform proposed changes to the Housing Benefit, which reduced the benefit paid to recipients depending on the size of their living space. This act got the nickname of the "Bedroom Tax". from the media. It was stated that similarly to other welfare reforms, this act would reduce welfare dependency.
France Beginning in the mid-1970s, a deficit in the social insurance program began to appear. The deficit saw peaks at 27.75% of the social insurance budget in 1992. This led to a major push by the government to cut back spending in the welfare program. By the end of the 1990s the deficit had been almost completely eradicated. The often large deficits that the program has endured has led to a tremendous amount of opposition to the program as it stands. In February 2020, a pension overhaul was adopted by decree using Article 49 of the French constitution.
Brazil During the 2015–2018 Brazilian economic crisis, there was both economic and political turmoil. President Dilma Rousseff, who was later impeached and replaced by President Michel Temer, strived to expand the social welfare program Bolsa Família instated by her predecessor Luiz Inácio Lula da Silva. As a social democrat, Rousseff pledged that "Brazil will continue to grow, with social inclusion and mobility." When Michel Temer took office, to cope with the severe economic recession, he proposed social welfare reforms to change labor rules and the social security pension system. Temer's plan included limiting pension benefits and raising the retirement age in order to save money and fix the economy. Additionally, under his reform, companies have greater power to require longer work days and use part-time workers. In response to this reform, labor unions, rural workers, and government employees held protests all over Brazil. The vote to approve the pension reform was first suspended until February 2018, and now has been further postponed as a campaign issue in this year's election. Temer's critics believe that the reason for the postponed reform is its vast public disapproval.Boadle, Anthony (19 February 2018). "Brazil Government Acknowledges Pension Bill Going Nowhere". U.S. News & World Report. Retrieved 30 November 2019.
India