Notes for March 11, 1999
Who Pays for the Kids? - Conclusion and Review
Historical Example. Social Security in the United States (Ch. 5, pp. 197-210).
This program became the cornerstone of social welfare in the United States since the time it was legislated in 1935. Developed in the Great Depression of the 1930s, when there was widespread unemployment and poverty, the aim of the program was to provide a social safety net that would prevent older and disabled Americans from being completely destitute. The program was revised many times, but the essential components of the system remain much the same as when it was first set up – to establish a system of social insurance with widespread coverage. Contributions to the program came in the form of a payroll tax, jointly paid by employees and employers. Initially the tax rate was 1 per cent for each of employers and employees, but this has increased over the years to around a total of 12 per cent by the 1990s. The funds collected go into a trust fund. Those eligible for payments are retired people over age 65, disabled people, the unemployed in some states, and survivors of deceased workers. Attached to the social insurance program are other programs such as Medicaid, supplementary benefits for the needy, and some aid to families with dependent children. The program has greatly widened its coverage, so that many more employees have been included in the program.
Social security is still an essential social insurance program in the United States. It has proved very popular, and provides a basic source of income to many elderly and disabled. Without the program, poverty rates among the elderly would be much greater. Attempts by the federal government during the Reagan era in the 1980s to limit the program and reduce benefits were not popular and the main aspects of the program continued, although with higher payroll taxes.
Currently there are proposals to privatize the Social Security system by developing individually controlled retirement savings accounts, much like RRSPs in Canada. This would turn the public social insurance program into compulsory private plans. To date, these are merely proposals, but ones that have achieved considerably authority among policymakers. Debates are also occurring over the level of social security payroll taxes, social security benefits, deficits and shortfalls in the program, and inter-generational transfers.
In Canada, the issues are much the same, with debates on the future of th Canada/Quebec Pension Plan. Here the issues of the viability of the plan, how much to tax, how much to pay out, age at which to begin payout, deficits, and inter-generational transfers are also being debated. In addition, issues related to poverty of the elderly and the proper distribution of costs and benefits for men and women are all at issue.
The U. S. plan had earlier precedents in pensions for veterans and some other groups, state unemployment insurance, and assistance to some mothers. These were limited in amount, and often did not go to African-Americans. In the U. S., such racial and ethnic differences and conflict created a somewhat different history than in Europe and Canada. Class unity across racial and ethnic lines was more difficult to achieve than in European countries with a more homogeneous working class. Folbre argues that one of the ways this was worked out in the U. S. was that organization on the basis of age and gender were somewhat more successful than in Europe. That is, rather than the development of social welfare systems which would be available to all, white people rallied around programs to assist the elderly (p. 196).
Folbre also notes that gender based movements sometimes made major gains in the political arena and in obtaining financial support. Women were less successful in attempts to redistribute the cost of children, and generally had to continue bearing this themselves. With respect to the latter, the argument that a family wage existed meant that male household heads tended to control household income (p. 196). Folbre notes that widows, single mothers, unmarried women, and some racial and ethnic groups suffered a lot in these circumstances. One of the long term results of the Social Security program was that the elderly have continued to improve their situation, while child poverty expands. That is not to say that all the elderly are well off, but social insurance programs such as Social Security have generally been reasonably successful in reducing old age poverty.
The Social Security system is similar to the Canada/Quebec pension plan, with payments made to retirees, based on the extent of prior employer and employee contributions. This means that those with jobs (males and regularly employed) build up a considerable fund to support themselves in old age. Women and those with irregular employment or low wages (often people of colour) have difficulty building up sufficient retirement insurance to support themselves in old age. Various other parts of the program provide special assistance to those who are poor, disabled, or in need of medical care, and these latter parts are the social insurance aspect of the system. That is, in return for paying premiums during working years, each contributor is assured a reasonable payout upon retirement. Those who pay in more also receive more, but all contributors receive a certain minimum payment.
Married women without employment can obtain a reasonable retirement income if their husbands had considerable earnings during the husband’s working years. Folbre argues that the social security system subsidizes marriage, not non-market work. That is, those women who work in the paid labour force and do equivalent work to stay at home women may not receive any different retirement income. In fact, if single or divorced women can only find jobs with poor pay, they may actually get less than stay at home wives (p. 199). Folbre also notes that benefits are not based on the number of children, so that the system does not do a good job of assisting in that aspect of social reproduction. The attractiveness of the system means that the elderly, and those who stand to benefit from it, may defend this system at the expense of other parts of social welfare. Over the last thirty or so years, many elderly have done very well as a result of this system, at the same time as child poverty has increased and programs that are more directly aimed at assisting children have been cut. Over the long term this may undermine the viability of the Social Security system (p. 200).
In recent years, one problem that has received more attention is the long term viability of the retirement system, given the declining birth rate and the large number of elderly. The taxation system is inequitable in that it is generally regressive (p. 207) rather than progressive. In terms of the future, questions relate to how these taxes are invested, what the future tax levels will be, what will be the benefits, and who will do the work to support the elderly. Questions concerning inter-generational transfers become especially important. Future generations will have to take care of their elderly, and the question is how and to what extent they will do this.
Folbre also argues that families lose out relative to those without children. The situation may be exacerbated as the elderly grow in numbers and become politically more powerful. In addition, with birth rates lower among whites than African-Americans, Hispanics, and immigrant groups, at the political level there may be reduced support for children.
Folbre notes that while some of these issues may be tackled by neoclassical economists, and some are class issues, the clash among other social categories may be more important as a way of understanding the developments. Similar issues dominate the debate in Canada.
Summary of Folbre’s Analysis
In the last chapter of Who Pays for the Kids? Folbre concludes that individuals and societies should have a commitment to meeting the costs of social reproduction. This means developing rules, norms, and preferences consistent with this. Social programs that can assist in distributing these costs equitably need to be developed. On the part of both individual males and females, this means efforts to share the costs of social reproduction equitably.
Review for Midterm Examination
1. Sociological theory
a. Logically connected aspects
b. Connection with experiences, testing, creativity. Construction of theory.
c. Issues and approaches in contemporary social theory.
Rooted in changes in society. Social movements
Revision of earlier models. Interdisciplinary
2. Who Pays for the Kids?
Past societies - variety of social arrangements.
Current problems - poverty, family, community, state programs.
How are choices made?
Identification with certain groups.
Claim 1 - Not enough attention to M/F and parent/child relations.
Claim 2 - Collective action and structures of constraint shape prod and reprod.
Claim 3 - Historical narratives
Issues: FLFP, fertility decline, social welfare programs.
Conclusion - Patriarchal power persistent. Family labour penalized.
Handout on costs, who pays, costs not met.
Variation in who pays.
Costs not met - shift of costs to others or costs of some items never met
3. Production and Reproduction
Production - commodities, markets, exchange, value.
Social Structures and Relations
Simple and Expanded Reproduction
4. Neoclassical Economic Model
a. Individual, rational choice
Example - balance utility of income with disutility of employment.
Maximize utility within constraints by choosing hours of work.
Overtime pay greater.
Backward bending supply curve of labour
Different male and female preferences.
b. Economic and Social Result
General good promoted
Competition and economic efficiency
Production and productivity improve. Capital accumulation and wealth.
But - limited competition, equity not examined, Marxian critique.
c. Features of REM and IRSEP
Positive and negative features.
Selfish or altruistic
Individual, household, collectivities. Individuation. Boundaries.
Tastes and preferences given.
Personal and financial assets given.
Competition? Bargaining, barriers to entry, broken contracts.
5. Marxian Structural Approach
a. Summary of Marxian approach.
b. Marxian analysis of women and the family.
Separation of production and reproduction.
Commodity, work, value.
Inadequate analysis of reproduction.
Value of labour power and population incomplete.
Analysis of patriarchy. Not just private property.
Overemphasis on economic.
Economic vocabulary and origins.
Interests or identities?
Class and false consciousness.
Work and Labour.
Value of labour power and value of non-market work
Exploitation in production. In household?
View of rationality
Individual choice underemphasized.
6. Folbre Feminist Approach
General issues related to Who Pays for the Kids
Methodology that is applicable to other issues.
Assets. Many different types.
Collective Action and Structures of Constraint
Constraints, allegiances, strategic behaviour.
Feudal patriarchy. Agricultural, rural, dispersed.
Children and women
Late age at marriage
Industrialization and urbanization
Women, children, feminism.
U. S. history
Pensions and social security
Mothers allowances and AFDC
Notes for March 11, 1999. Last edited on March 11, 1999.
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