Responding to Poverty: The Welfare System
• All high-income nations have enacted some type of social welfare program, an organized effort by
government, private organizations, or individuals to assist needy people defined as worthy of assistance.
• The largest government welfare programs 1) are paid for by the public through their taxes, 2) direct
money to many different categories of people, and 3) do not significantly change income inequality.
• Although people in the U.S. like to think that we are compassionate, the public remains divided over
whether the poor deserve a hand. Part of the problem lies in the widespread assumptions and beliefs
that the poor are undeserving.
Welfare in the United States: Myths and Realities
1. People on welfare are lazy and have no work ethic
- Single parents on welfare already do work—they do the work of parenting, which is invaluable even
though we do not place a monetary value on it. Secondly, most adults receiving public assistance are
either employed or in the labor force looking for work. Nevertheless, there are not enough jobs—
especially for low-skill workers.
2. Welfare encourages single women to have children
- Mothers receiving welfare have no more children, on average, than women in the general population.
Research consistently shows that receiving welfare does not significantly increase out-of-wedlock births.
3. Once on welfare, always on welfare
- In 1998, one-third (34 percent) of welfare families have stayed on welfare for 1 year or less; 27 percent
stayed on welfare for 1 to 3 years, 15 percent for 3 to 5 years, and 22 percent for 5 or more years.
4. Most welfare benefits are granted to people who are not really eligible to receive them
- Although some people obtain welfare benefits through fraudulent means, it is much more common for
people who are eligible to receive welfare to not receive benefits. A main reason for not receiving
benefits is the lack of information; people do not know that they are eligible. Also, many do not want to
apply for it because they do not want to be stigmatized as lazy people who just want a “free ride” at
taxpayers’ expense. Others want to avoid the administrative and transportation hassles involved in
5. Public assistance to the poor creates an enormous burden on taxpayers - Public assistance to the poor is a small part of government spending. In the 1999 federal budget, 6
percent was allocated to Medicaid and another 6 percent was allocated to other assistance to the poor.
Meanwhile, 15 percent of the budget was allocated for national defense and another 23 percent was
allocated for Social Security. Moreover, the estimated cost of tax breaks to corporations and wealthy
individuals in 1996 was $440 billion, more than 17 times combined state and federal spending on AFDC.
Despite the public perception that welfare benefits are too generous, assistance for the poor does not
meet the basic needs for many individuals and families who receive such benefits.
• Corporate welfare refers to laws and policies that favo