The welfare system in the United States began in the 1930’s, during the Great Depression. After the Great Society legislation in the 1960’s for the first time a person who was not elderly or disabled could receive aid from the American government. Aid could include general welfare payments, health care through Medicaid, food stamps, special payments for pregnant women and young mothers, and federal and state housing benefits. In 1968, 4.1% of families were headed by a woman on welfare; by 1980, the percentage increased to 10%. Food stamp costs are paid by the federal government and, in 2008, 28.7% of the households headed by single women were considered poor.
Welfare is a form of social protection. Although social protection was established to assist the working classes and to address transient poverty, it has come to encompass a great variety of issues surrounding poverty. The purpose of welfare is to assist individuals in need. The ultimate goal is to lift welfare recipients out of poverty and make them self-sufficient. The problem with welfare is that once you establish of stream of income payments, the recipients become dependent upon this cash flow. Michigan is currently wrestling with the loss of welfare benefits to some 41,000 people. Over 21,000 of these recipients live in the greater Detroit area. As recently stated,” the benefits have always been intended as a safety net, not a long term solution. More than 30% of those affected by this proposed change have been receiving benefits 10 years or more.”
A similar dilemma exists in the case of unemployment benefits. Unemployment compensation is a method of safeguarding individuals against distress for a short period of time after they become unemployed. In Michigan, the unemployment compensation law was enacted and approved on December 29, 1936. Over the years, the amounts paid and the number of weeks that a worker was eligible to collect benefits has changed. Twenty-six weeks was the period initially provided but in some cases, an additional 26 weeks was added. In Michigan, the weekly dollar cap is $362.00. The problem associated with unemployment compensation is that, in many cases, it exceeds the weekly take home pay of many jobs in the current economy. Many workers may, in fact, turn down offers of employment that are less than their weekly unemployment compensation. Many part-time positions are automatically ruled out.
With the current unemployment rate hovering at 9.1%, over 14.1 million people still remain unemployed. Of the unemployed, 42.9% are considered long-term, 27 weeks or longer. As our economy continues to deteriorate, there is no exact amount of time that it will take an individual to find employment. An earlier estimate was approximately 211 days but this has to be factored by education, experience and age. Older workers tend to take longer to find employment. Many workers, with limited skills, can be unemployed for years.
Many of our solutions are short term. As both the federal government and the states wrestle with declining budgets and declining revenue, the problem becomes even more exacerbated with a rise in unemployment claims and increased applications for welfare and food stamp assistance. The poverty level in the United States in 2011 is $22,350 annual income for a family of four. It is estimated that 43.6 million American currently live at or below the poverty level. This figure matches the number of Americans today that rely on food stamps. It is ironic that Washington, D.C. has one of the highest rates in the nation of residents on food stamp assistance with over twenty percent (20%). This is the same Washington, D.C. where our legislators struggle to get by on $174,000 per year plus benefits.