A standard criticism of the welfare state might go like this: an ineffective bureaucracy, burdened with paperwork and red tape, makes payments to lazy citizens, all of which proceeds with total unaccountability and balloons the federal budget deficit. Whispers of “socialism” might follow. Regrettably, the American perception of the welfare state has suffered under modern austerity measures and deficit hawking, but the concept remains aspirational.
With the passage of President Joe Biden’s American Rescue Plan, a historic bill providing $1.9 trillion to help alleviate the effects of the COVID-19 pandemic, we must continue to increase economic support. The bill signals a revolutionary expansion of the U.S. government’s willingness to help its citizens during the crisis and builds on the progressive shift we have seen in social spending during the pandemic. But now is the time to take a decisive stand against growing wealth and income inequality and ensure that the expansion of the U.S.’s welfare measures continues long past the end of the pandemic.
The welfare state is often criticized as an unnecessary expansion of the federal government’s role in the public life. Perhaps this was a worthy concern half a century ago, but the economic outlook for the American worker is bleak today. Despite strong employment numbers over a year ago, the pandemic ravaged these statistics, leading to over 20 million job losses in April 2020. The unemployment rate hit 6.2% at the end of February 2021, well above 3.5% a year ago. Job losses were not proportionate across the economy; younger workers lost strikingly more jobs than older workers, and the lowest earning jobs were hit much harder than higher earning jobs. Analysis by the Federal Reserve Bank of St. Louis found that the unemployment rate among workers earning less than $34,963 shot up by 20.4% from January to April 2020, compared to only 3.2% among those earning more than $83,807. While the service industry was able to weather the storm, workers in the retail and manufacturing industries were especially at the mercy of the pandemic.
Workers who lose their jobs during the pandemic suffer the burden of a job hunt in an anemic economy, all while having to worry about rent, groceries, childcare and education, among other necessities. These worries disproportionately affect different racial groups. The Center on Budget and Policy Priorities found that among the 11% of Americans (22 million individuals) reporting that their household did not have enough to eat in the past week, 22% were Black and 16% Latino, while only 7% were white. The pandemic has revealed inequities ranging far and wide, and minorities have suffered disproportionately under the economic misery unleashed by COVID-19.
Times of crisis like these require bold action. The Coronavirus Aid, Relief, and Economic Security (CARES) Act created a $2.2 trillion stimulus bill most notable for providing direct cash payments of $1,200 to individuals and weekly $600 unemployment benefits. The CARES Act provided relief to millions of Americans and gave targeted funds towards small businesses, state and local governments, and other entities. The legislation, along with other actions such as eviction moratoriums, have provided specific protections necessitated by the crisis. Were it not for the federal government’s intervention, American workers’ misery would have been much worse. These provisions, bold in measure, have infused a significant amount of wealth into those populations that most need it, and this must continue long past the pandemic.
Regardless of when the pandemic will come to an end, normal life in economic terms is changing rapidly. Real wages are stagnant, with today’s average wage having the same purchasing power it did in the late 1970s. Automation is threatening up to 25% of American jobs. McKinsey Global Institute found that 429 American counties, overwhelmingly located in rural parts of the country and so-called “distressed” local economies, could experience marked disruption and worker displacement in the coming economy. Additionally, around 40% of American jobs are in sectors that could be significantly downsized in the coming decades, encompassing broad swathes of the economy, such as food service, production, retail and consumer service. No industry will be totally insulated from the changes to come.
As we’ve seen from the success of the CARES Act, increased social spending works. So what can protect workers and families from the ever-changing employment climate? An expanded and continued welfare state, one that provides not only social security payments to seniors but protections such as expanded tax credits, sick and maternity leave, pensions, monthly stimulus payments and universal basic income. Regular intervention by the federal government could infuse stability and confidence into the economy, ensuring that workers and families have the actual means to support themselves in times of rapid change. The Economist notes that American real disposable income rose by 15.6% in April 2020 despite the plummeting employment numbers, thanks to the stimulus shoring up savings accounts. The general public clearly welcomes progressive economic policies. Some 80% of Americans have voiced support for economic stimulus packages, and support for other progressive policies cross party lines. Last November, 60% of Florida voters supported raising the state minimum wage to $15 per hour, when in the same election the majority of the state voted for Donald Trump. It is time we acknowledge the popularity of welfare programs.
When push comes to shove, what people want and need is help from the government. Instead of haranguing about deficits and balanced budgets, we must realize that welfare programs are the necessary tools for the government to support workers. In an ever changing world that continues to leave low wage workers behind, we need bolder action to right the ship of income and wealth inequality and ensure that our population has the means to live healthy, productive lives. When we look past the detestable austerity framing and see just how effective and popular welfare policies are, it’s clear that the welfare state is not something to be feared, but embraced.
Spencer Moore (22C) is from Rochester, MN