Chronicles of a Broken System

Session 9: Historical and Current Policy Responses: Social Welfare and Tax Policies

Although, the United States is recognized worldwide for the wide range of laws that protect workers, the truth is that these laws did not always exist.  During the period of Industrialization, laborers were subject to exploitation because our government employed a laissez-faire policy towards large industries.  This hands-off government policy allowed wealthy business owners to sacrifice fair working conditions in order to maximize profits. Eventually lack of government regulation, over-expansion of industry, and banks giving out risky loans led our economy directly into the Great Depression. During the Great Depression, Americans witnessed a significant shift in the role of the federal government.  Three significant pieces of legislation emerged from President Franklin D. Roosevelt’s New Program.  The Federal Emergency relief act (1933) gave federal grants to the states for destitute workers. This act put money in the hands of the people.  The Fair Labor Standards Act (1938) established minimum wage, maximum working hours, and banned child labor. Finally, the Social Security Act (1935) provided unemployment insurance and retirement compensation. These laws provided the foundation for the current governmental initiatives to fight poverty.

•  How well you think poverty is being addressed currently in the United States and globally.  In the United States, poverty is being addressed through the implementation of several government programs that aid families whose salary falls under the poverty line.  For instance, the Personal Responsibility and Work Opportunity Reconciliation Act, also known as the 1996 Welfare Reform, was expected to break the cycle of poverty by proving jobs for welfare recipients.  This act was a reform because previously welfare recipients were not required to work in order to receive cash benefits. The bill also included a maximum of 60 months to receive cash assistance and states have the right to determine the length of assistance. Another prohibition is that only minor parents enrolled in school are eligible to receive help. POWRA created Temporary
  Assistance For Needy Families (TANF) which is responsible for assisting needy families so that children can be cared for in their own home, reducing dependency of needy parents, reduce out-of-wedlock pregnancies, and encourage the formation of two parent households. The effect of this legislation from 1994 to 2000 indicates that the program served to decrease poverty and child poverty rates and increased employment rates for single mothers.  However, the poverty rate for single mothers has increased by 26.4% in 2001, 26.5% in 2002, and 28% in 2003.  Simultaneously, the child poverty rate has increased every year since 2001-16.3%; 2002-16.7% and 2003-17.6%. Overall, we have not invented a piece of legislation that deals effectively with the poverty issue.