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date: 17 August 2017

Social Policy: History (1950–1980)

Abstract and Keywords

Between 1950 and 1980, the United States developed a welfare state that in many ways was comparable to those of other advanced industrial nations. Building on its New Deal roots, the Social Security system came to provide a “social wage” to older Americans, people with disability, and the dependents of deceased workers. It created a health-care insurance system for the elderly, the disabled, and the poor. Using the tax system in innovative ways, the government encouraged the expansion of pension and health-care protection for a majority of workers and their families. By 1980, some Americans could argue that their identification as a “laggard” in the field of social provision was no longer justified.

Keywords: welfare state, Social Security system, social wage, social provision, elderly, disabled, poor, pension, health insurance

Toward a Welfare State

The 1950 amendments to the Social Security Act—signed into law by President Truman in August of that year—marked a notable “modernization” of federal social welfare programs. The amendments dramatically expanded the number of workers covered by old age and survivors' insurance by adding most self-employed, domestic, and agricultural workers and by expanding benefits. In addition, survivors' benefits became more gender-neutral with the addition of benefits for widowers and their children. The expansion of coverage to women and African Americans (who had been disproportionately excluded from the system because of the restrictions on domestic and agricultural workers) began a steady process of benefits and coverage expansion that would continue for the next 3 decades. The amendments changed public assistance as well, most notably by adding benefits for the permanently and temporarily disabled and by providing benefits for parents or other caretakers under Aid to Dependent Children (ADC).

Although historical memory of the 1950s under Republican President Eisenhower usually focuses on the role of capitalism in fueling consumerism and “traditional” family life, public policy and shifts in personal life were critical to the social history of the era. Poverty declined dramatically during the 1950s, falling from about a third to a fifth of the population, but rising wages were only part of the story. Women's labor force participation—although little noted at the time—expanded from and had a decisive role in the decline in poverty. At the same time, social insurance protection for the older Americans, the unemployed, and the people with disabilities was critical to the decline in poverty. Taken together, women's work and social insurance account for about two thirds of the decline in poverty during the decade.

The other significant sociodemographic event of the era was the internal migration of African Americans. In the years between World War II and the 1960s, the African American population shifted from the rural South to the urban North. The postwar African American migration had two important impacts on social welfare. First, because of the almost universal disenfranchisement of black Southerners, the migration turned African Americans into a significant voting bloc for the first time since Reconstruction. Second, the discrimination Blacks experienced in the North assured that they would become a disproportionate share of the urban poor. Within a decade African Americans became a significant proportion of the public assistance population. Combined with the exit of widows and their children from ADC because of survivors' benefits in the Social Security program, the Black migration effectively racialized public assistance by the 1960s.

Between 1950 and 1965, the American welfare state continued to expand. Guided by the leadership of the Social Security Administration, and with the support of organized labor, Congress added new groups and programs. Although the effort to add disability insurance to old age and survivors' benefits was thwarted in 1950, by 1956 the program had won Congressional approval. Over the next decade, the major objective of social insurance advocates was the enactment of medical coverage for the elderly and the poor (Medicare and Medicaid in 1965).

The late 1950s and early 1960s marked the zenith of the social work profession's influence in social welfare policy. The expansion of income support programs reduced the role of “charity” in social workers' interaction with clients. Increasingly, social workers focused their professional engagement on the provision of services. Two emerging social problems contributed to social work's increasing influence. First, changes in urban labor markets and the life-course led to the emergence of juvenile delinquency as a social problem. Second, the number of ADC recipients rose from 2.2 million in 1955 to 3.7 million in 1962. As these social problems emerged in the late 1950s, they both were framed around issues of human development and psychology. Policy makers turned to social workers to develop programs that would address the counseling and service needs of these populations. In response to the ADC increase, Congress renamed the program Aid to Families with Dependent Children (AFDC) and enacted the Public Welfare Amendments of 1962, which provided funding for expanded services and training for welfare recipients. Policy development to address juvenile delinquency eventually led to an expansion of youth services, incorporated into the Economic Opportunity Act of 1964—the major legislation of President Johnson administration's War on Poverty.

The Public Welfare amendments led to a vast expansion of services for welfare recipients but failed to produce the promised reduction in welfare rolls. Indeed, the “uptake” rate—the proportion of eligible persons who actually apply for benefits—increased during the 1960s as welfare lost some of its historical stigma. The number of AFDC recipients rose from 3.7 million in 1962 to 8.4 million in 1970. Although a conservative reaction led to Congressional adoption of a “welfare freeze” in 1967, social work and public welfare advocates continued to wield influence. Congress's decision to separate benefits or determining eligibility from services completed the transformation of the relationship between social workers and clients by the early 1970s.

While casework advocates influenced the transformation of public assistance during these years, another branch of social work—group workers and community organizers—showed more commitment to a part of Johnson's War on Poverty—community action. Community action had its origins in a psychological perspective on poverty. Influenced heavily by Lloyd Ohlin and Richard Cloward's study of delinquency, Delinquency and Opportunity: A Theory of Delinquent Gangs (1960), President Kennedy's Committee on Juvenile Delinquency established several pilot projects to test the theory that providing legitimate opportunities for urban youth would reduce the attraction of delinquency. The original intent of community action was to allow the poor to move away from apathy and powerlessness that hampered their ability to take advantage of opportunities.

After President Kennedy's assassination in November 1963, the political and social contexts of the War on Poverty changed profoundly. Originally conceived as a top-down effort to increase the consumption capacity of “islands of poverty” in isolated rural areas and declining cities, the War on Poverty emerged as a melding of a traditional “services” strategy with a new belief that involving the poor in creating and overseeing programs could overcome the inertia of unresponsive bureaucracies. At the same time, the civil rights movement had a catalytic impact on both poor African Americans and community organizers, resulting in the passage of the Voting Rights and Civil Rights Act by the mid-1960s. Finally, President Johnson's unwillingness to support the tax increase necessary to pay for the expanded jobs program advocated by the Department of Labor led the new Office of Economic Opportunity to turn to the community action program as its primary mechanism for engaging poor neighborhoods. The War on Poverty also included several other major pieces of social legislation to foster or promote equality of opportunity, including Head Start for early childhood enhancement, Neighborhood and migrant health centers, rural and urban health initiatives, and the legal services program to provide access to attorneys for poor people in the civil courts for the first time in American history.

In this dynamic context, the meaning of community action seemed to change. From a small program focused on improving the social functioning of the poor, it became a major insurgent social movement to shake up existing public bureaucracies. At the same time, the welfare rights movement pursued both a community organizing and legal strategy to expand the involvement of and due process protection of welfare recipients. Many landmark 1970 Goldberg v. Kelly decision.

By 1966, controversies associated with community action programs; riots in Los Angeles, Detroit, Newark, and other cities; and the opposition of local officials brought much of the War on Poverty to a halt. Within a few years, the Nixon administration's call for “law and order” rather than ending poverty became the dominant theme in domestic politics. The eclipse of the War on Poverty represented as well the end of social work's broad influence over social welfare policy.

Although the War on Poverty has a significant place in political history, it created relatively few programs that outlived it, relatively few long-lasting programs. Rather, the expansion of social welfare during the Nixon and Ford administrations established the lasting American welfare state. Supplemental Security Income (1972) federalized assistance for the aged and people with disability. Food Stamps expanded nutritional assistance for poor families and individuals. The Rehabilitation Act greatly expanded services and the civil rights of people with disabilities. The largest public employment program of the postwar years—the Comprehensive Employment and Training Act (CETA)—created a variety of work training programs as well as provided federal funding for public service employment. The Community Development Block Grant program and the Community Reinvestment Act channeled new federal funding to America's ailing cities.

In terms of social services and benefits, expanded spending for social services led to the addition of Title XX providing federal funding for social services. The most far-reaching and expensive expansion, however, was the increase in benefit levels of Old Age, Survivors, and Disability Insurance. Between 1969 and 1972 benefit levels increased by over 60%, and in 1974 benefits were indexed to protect them from inflation. Taken together, these efforts caused a historic shift in the nature of government spending. In 1968, the year Nixon was elected, the federal government spent more than twice as much on defense as it did on social welfare. The year Ford left office, the proportions had been reversed.

Certainly by one measure—the poverty rate—social welfare policy between 1960 and the mid-1970s was a success. In 1959, the first year for which an “official” poverty rate was calculated, poverty stood at 21%. Fifteen years later, the rate stood at only 11.1%, the lowest figure in history. The success of these years demonstrated that poverty had no single cause. Only a set of policies that targeted different elements of the problem—old age, disability, joblessness, lack of work skills, and geographic concentration, could bring the overall rate of poverty down.

Yet, as welfare expanded, a conservative critique of public policy gained momentum. Two failed efforts of the 1970s were emblematic of the rising tide of conservatism. First, Nixon's proposal for a Family Assistance Program, which would have replaced AFDC with a federalized program. It failed because of conservative opposition, its cost, concerns about its effect on work incentives, and fears of the increasing number of female-headed families, particularly among African Americans. Nixon also proposed what would have amounted to a universal health-care coverage by expanding Medicaid and Medicare to cover all Americans. At the same time, Nixon vetoed the Comprehensive Child Development Act of 1971, which would have professionalized early childhood education; Nixon's veto message warned that child care was a threat to the American family as an example of communist-type Soviet influence.

Less noticed than the expansion of direct public spending on social welfare, but no less important, was the expansion of employer-provided benefits. Three trends sparked this expansion. First, beginning with the Revenue Act of 1942, the Federal government provided tax incentives to corporations for providing these benefits. In 1948, the Supreme Court ruled (Inland Steel v. NLRB) that unions could negotiate benefits. Finally, the significant organizing setbacks for labor unions after the War, especially “Operation Dixie”—a failed attempt to expand unionization in the South, convinced many unions that it was wiser to push for employer-based systems for health care and pensions than to count on the expansion of the Social Security system.

The importance of private health and pension benefits expanded during the 1970s. The Employee Retirement Income Security Act of 1974 established Individual Retirement Accounts for workers who did not have employer-provided pensions. In 1978, the revisions of the Internal Revenue Code established 401(k) plans—defined contribution pension plans—that soon became the most common form of employer-provided retirement benefit. The flaw of employer-based approaches to social was that they disproportionately help higher-income groups. As a result, this aspect of social welfare expansion may have accelerated economic inequality by the late 1970s.

The program expansions of the 1970s did not require tax increases because of the decline in spending on the Vietnam War. However, by the late 1970s, the true costs of the new programs began to exert new pressures of social welfare spending. The recession of the mid-1970s slowed the expansion of projected revenue in the Social Security trust accounts at the same time as inflation increased benefit outlays. Between 1974 and 1980, the combined OASI and DI trust funds fell from just under $46 billion to $26.4 billion. Congress made some minor revisions to benefit formulas and accelerated tax increases in 1978, but it was not until the more sweeping reforms of 1983 that the decline in the trust funds was reversed.

By the late 1970s under President Carter, the wave of welfare expansion that had gathered strength during the 1950s and crested during the 1960s was ebbing. The Carter administration's efforts at welfare reform failed. Efforts to develop a national family policy that may bridge the emerging cultural gaps in American society only exacerbated them. Even the title of the White House conference on family policy created divisions as conservatives demanded a conference on the “American family” while liberals advocated one for the “nation's families”. His Human Rights agenda for conducting foreign policy was attacked by the growing right wing politicians. The election of 1980 brought to power President Ronald Reagan and a conservative coalition with an antientitlement and social spending point of view.

In spite of these successes, by 1980, American social welfare programs found themselves increasingly vulnerable. The economic costs of social welfare programs provided grist for the mill of those who advocated reducing taxes. At the same time, the real and imagined impacts of social welfare on family life made it a target of social conservatives who saw government action as undermining the traditional family. As a result, social welfare, and especially public assistance, was a central means through which the two wings of American conservatism—fiscal and social conservatives—were able to fuse their beliefs into a single program, one that would be the nation's dominant ideological force for the years to come.

In the end, the history of social welfare between 1950 and 1980 was one of institutional success and political failure. By the end of the Carter administration, social welfare programs provided greatly expanded aid to a variety of needy groups. At the same time, the pressure those programs placed on the federal budget and the opposition they sparked among many conservative Americans placed them squarely in the site of an ascendant conservative movement in the last years of the 20th century.