III.

History of Welfare

Welfare systems are formalized versions of types of social support that societies have always maintained. In all societies since the beginning of civilization, able-bodied adults have worked to support themselves as well as to provide for young, elderly, and disabled family members and, often, nonfamily members. In ancient societies nonproductive members (the elderly, the disabled, and weaker children) seldom survived for long; in some cases, they were sacrificed for the good of the whole. By the Middle Ages in Europe, such vulnerable individuals were surviving longer and societies began to establish formal economic arrangements for giving charity to those in need. Donations by churches and from local feudal lords and other wealthy individuals supported hospitals, orphanages, and almshouses (publicly funded homes for the poor).

A.

The English Poor Laws

The English Poor Laws, a system set up by the government of England in the late 16th and early 17th centuries, attempted to establish a clear public responsibility for care of the poor. Under these laws, government authorities divided the poor into two groups. The “deserving poor” were those deemed unable to work—primarily the disabled, blind, and elderly. The able-bodied unemployed were labeled the “undeserving poor.” Those considered unable to work were generally eligible for cash or other forms of assistance in their homes, known as outdoor relief. Those who could work were provided with what amounted to public-service employment. Such government-funded work was known as indoor relief, because it was usually done inside large public facilities called workhouses. As a last resort, some of those unable to work and provide for themselves sought refuge in poorhouses or almshouses, publicly funded institutions that offered food and shelter.

The Poor Laws made local government the primary administrator of welfare. To keep welfare beneficiaries under the supervision of their providers, the laws also discouraged the migration of the poor among administrative regions, or parishes. From their inception, the Poor Laws generated controversy. Opponents of the laws argued that if the poor received public assistance, some of them might avoid work, not work hard enough, or not save any of their earnings.

Despite such criticism, some Poor Law administrators hoped they could prevent welfare dependency by making people work for benefits. In a major work initiative begun in the late 1700s, administrators assigned relief recipients to work at private farms and businesses. Public funds were used to supplement the wages of those assigned to this work requirement and to those privately employed at starvation wages. This plan became known as the Speenhamland System, after the British parish in which it was pioneered.

In the late 1830s, many local governments also established workhouses, where the able-bodied poor worked when no private work was available. Workhouses were often made to be unpleasant places, so that people would seek even meagerly paid menial jobs before taking workhouse employment.

B.

Other Early Programs in Europe

In the late 19th century several European countries instituted social insurance programs. These programs alleviated some of the risks of living and working in rapidly industrializing societies. Governments typically financed social insurance programs with tax funds and direct levies on the wages of potential recipients. Social insurance replaced part of incomes lost when workers became disabled, were laid off, or had reached an age that forced them out of the labor market.

Later, governments of Germany, France, Belgium, Sweden, and other countries developed forms of social insurance that provided population-wide, or universal, coverage. Such forms included children’s allowances, universal health coverage, broadly available childcare, generous aid to those seeking post-secondary education, and other programs that provided income and other essential supports to all citizens. In much of Europe, social insurance programs came to be seen as desirable alternatives to forms of welfare associated with the Poor Laws.

C.

Early Welfare Programs in the United States

The American colonists essentially imported the framework of the British Poor Laws. By the early 19th century, states required that counties or municipalities provide for the poor and needy. The local governments carried out this responsibility in one of four ways: by auctioning off the poor to bidders who could use them as workers; by contracting with wealthier families to take care of them, either as charitable acts or for pay or free labor; by placing the poor and needy in public institutions (workhouses); or by providing them with assistance in cash or goods.

Citizens and politicians publicly expressed their concerns about welfare from the country’s beginnings. In the 1820s and 1830s, a reform movement swept many states. Local communities tried to replace all outdoor relief—the giving of cash and goods to the poor—with workhouses. These reforms were intended to rehabilitate the poor and replace frivolous welfare use with a work ethic.

In the 1880s and 1890s, a second wave of reform efforts designed to curb the use of outdoor relief emerged. The scientific charity reform movement emphasized counseling the poor to improve their social functioning. Reformers also encouraged independence through social casework. In this approach, caseworkers visited poor people regularly and instructed them in morality and a work ethic. Supporters of scientific charity opposed the idea of unconditional relief. In some parts of the country these reformers were able to temporarily halt distributions of cash relief almost entirely.

Welfare did not disappear, however. From the mid-1800s to the early 1900s, the Congress of the United States sponsored various programs that expanded public provision for the poor. In 1862 Congress passed legislation for a Civil War Pension Program, which eventually made economic, disability, and old-age benefits available to all Civil War veterans and their families. Between 1911 and 1921, 40 states established mothers’ pensions. In these programs, states offered income support to poor mothers, mostly widows, upholding the notion that motherhood was appropriate as a sole occupation. In the early 20th century, a handful of states experimented with workers’ compensation programs to insure workers against industrial accidents and with unemployment compensation programs to insure workers against labor market uncertainties.

D.

Development of the Modern U.S. Welfare System

The modern U.S. welfare system dates to the Great Depression of the 1930s. During the worst parts of the depression, about one-fourth of the labor force was without work. More than two-thirds of all households would have been considered poor by today’s standards (adjusted for inflationary changes in the value of the U.S. dollar). With a majority of the able-bodied adult population experiencing severe financial distress firsthand, Americans no longer could view poverty simply as a personal failing.

U.S. president Franklin D. Roosevelt led a social and economic reform movement as a response to the depression. Part of his New Deal program was the Social Security Act, enacted by Congress in 1935. This act and its 1939 amendments established a number of social welfare programs, each designed to provide support for different segments of the population. Programs included Old-Age and Survivors’ Insurance (OASI) for retired people and their families (to which disability insurance was added in 1954, forming OASDI); Unemployment Compensation for those who lost work temporarily; Aid to Dependent Children (ADC), later known as Aid to Families with Dependent Children (AFDC); and grants to states to provide medical care. In 1946 the government created the Social Security Administration (SSA) to oversee the provisions of the act.

A succession of federal agencies have administered social security programs since the act’s inception. The Federal Security Agency was established in 1939; the Department of Health, Education, and Welfare in 1953; and the Department of Health and Human Services (HHS) in 1980, when the SSA became a separate organization. The government created the Department of Housing and Urban Development (HUD) in 1965. It replaced the former Housing and Home Finance Agency, and provides public housing support for low-income families. The U.S. Department of Labor—created in 1913, predating the Social Security Act—and its Pension and Welfare Benefits Administration manages workers’ benefits programs. Its Employment and Training Administration manages some welfare-to-work programs, as well as job training and placement programs. Other federal government agencies, including the Department of Education, the Department of Agriculture, and the Department of the Treasury, also administer welfare programs.

Funding for welfare programs has significantly increased in recent decades, particularly for working families who remain poor. In 1999, for example, the U.S. government spent $52 billion on a range of supports for low-income working families through tax credits, help with childcare, and other assistance. By contrast, the government spent only $6 billion on comparable programs in 1984, even after accounting for inflation.