The next distinguishable collection of modifications took place between the 1950s and 1970s, with the majority of new initiatives focusing on the labour market as the primary method for increasing equality. The shift some years earlier from previously held Marxist deflationary economic policies to Keynesian counter-cyclical policies became significant at this point, as the latter emphasised full employment achieved through government investment (Ginsburg, 2001). The introduction of active labour policies took the form of occupation flexibility, increased emphasis on education and mobility support. The shift of the labour force from the countryside to cities was encouraged by state subsidies and the creation of jobs, with the public sector expanding to employ 80% of workers by the early 70s (Korpi, 1978). Additionally the amount of women in the labour market increased considerably, a consequence of the government passing laws that ensured equality in all aspects of public life, equal wages for both genders in similar jobs and identical parental leave for both parents (Arnot et al, 1999). The availability of financial benefits was also extended significantly to include the middle class, securing support for the welfare state from the majority.
From the 1980s onwards it has been suggested that the Swedish welfare state was in crisis, largely due to economic instability, political unrest and globalisation that lead to low inflationary policies receiving priority over full employment (Timonen, 2002). The Social Democratic Parties political reign was challenged for the first time in decades as they failed to secure enough votes to achieve a majority in the proportional representation system, leaving them alternately in opposition or requiring the support of other parties (Hort, 2009). This had a detrimental effect on the aforementioned collaboration consensus, with the understanding between the Confederation of Trade Unions and Swedish Employers Federation undermined by decentralized decision-making and policy plans to increase the power of employees over private companies (Olsen, 1992). This was coupled with the economic crisis of the early 90s, compounded by macroeconomic mishandling and an industrial lack of competitiveness, leading to a reduction of 5% Gross Domestic Product (GDP) and an substantial increase in unemployment rising from 1.6% in 1989 to 9.6% in 1994 (Salonen, 2009). This curbed the growth of welfare for the first time, demonstrated by the reduction of parental leave and public day care, two elements that had been instrumental in expanding the workforce. Sickness and unemployment benefits were also scaled back, as were pensions.
This continued until the SDP regained majority power in 1994, and despite belief that joining the European Union in 1995 would have a detrimental effect on the welfare state, with many women and manual workers voting against in the referendum for this reason, it appears to have had no such outcome. The economy recovered at relatively fast pace (roughly 4% per annum) and with this welfare once again expanded, most notably in education, childcare and care for the elderly (Hort, 2009). Accepting that this is indeed an ideal welfare state (or as close as it may be realistically possibly to achieve) it is therefore necessary to consider the development of American welfare, both to reflect if the latter can be defined as such and also to identify why the two are different.
In America the first recognisable endeavour to create something akin to a welfare state was the introduction of the New Deal initiatives between 1933-6 under the presidency of Democrat FD Roosevelt, an attempt to combat the economic depression the nation was experiencing (Noble, 1997). Amongst its socialist creations was the Works Progress Administration, which employed millions of unskilled labourers on public infrastructure projects, the Social Security Act 1935 that provided financial assistance for the elderly, unemployed, widows and the disabled and the United States Housing Authority that attempted to eradicate slums by building houses reserved for those that lived in them (Clarke, 2009). Although the New Deal represents a positive impact on the disadvantaged it can be argued that it further entrenched segregations already apparent in American society, with any support for women largely derived from their marital status and black people excluded from programmes such as Social Security as a matter of policy (Noble, 1997).
The next key advance in welfare development is the Great Society reforms of the 1960s and 70s that changed the nature of welfare provision, substituting payments in cash with services in-kind wherever possible. The reforms focused primarily on racial equality, poverty, education and healthcare. The African American Civil Rights movement had been growing since the mid 50s, culminating in the passing of the Civil Rights Act 1964 and the Voting Rights Act 1965, outlawing amongst other issues job discrimination, segregation in public and voting prejudice (Amenta, 1998). With regard to education the creation of the Elementary and Secondary Education Act 1965 provided financial assistance for schools with large quantities of impoverished children, whilst the Higher Education Act 1965 allowed for the creation of a scholarship fund and low interest loans for those that qualified (Reisch, 2009). Healthcare was accounted for under the Social Security Act 1965, which created Medicare for the elderly and Medicaid for those who’s income was sufficiently low to be deemed eligible (Clarke, 2001). These initiatives expanded the numbers that were entitled to benefits considerably by removing their conditional and discriminatory nature, although they still lacked the universal nature exemplified by the Swedish model. This was also undermined somewhat by a consequence of the split in healthcare provision, with Medicare accepted as an entitlement of Social Security whilst Medicaid was stigmatised as public assistance, arguably reinforcing the concept of deserving and undeserving poor that dominates American welfare policy to this day (Reisch, 2009).
The approach to tackling poverty has been described as flawed because poverty itself was believed to be a consequence of historically formed barriers that prevented those in poverty from participating in the opportunities offered by America, and not of structurally enforced economic inequalities (Clarke, 2009). Regardless an increase in welfare spending occurred, rising from 7.7% of GDP in 1965 to 16% in 1974 (Clarke, 2009). It does appear though that the amendments may have removed racial barriers only to replace them with those related to single mothers, demonstrated by the reforms made to the Aid to Families with Dependent Children (AFDC) federal assistance programme. This stipulates that mothers must divulge the identity of their child’s father as a prerequisite for obtaining welfare, which allows for the state to demand child support and suggests a belief that the family should be the primary welfare support not the state (Gilens, 2000). Additionally the introduction of the Family Assistance Plan in 1969 further targeted single mothers by providing financial incentive that greatly favored two parent families (Phillips, 1999). The rise in demonizing single mothers as a welfare burden appears to fulfill a role that the American government required, namely that of a scapegoat to publicly blame for their ability to eradicate poverty, as although the poverty rate dropped to 12% by 1979 it did not reduce any further (Phillips, 1999).
The 1980s found a retreat from welfare, partly due to its high costs appearing undesirable amid a global recession and partly because the era was under the control of the right wing Republican Party (Stoesz, 2009). The approach diverges considerably from that of Sweden, who actually increased the welfare state during the global recession. This highlights the attitude of both towards welfare, with Sweden perceiving it as a necessity and America as an expense. The Republicans attacked the makeup of the state, citing interventionism as the key reason for Americas declining competitiveness. An aspect that was highlighted was the negative effect public assistance had on citizens, as its expansion had communicated that there was no longer social stigma associated with welfare dependency (Stoesz, 2009). One particular social demographic this was said to have influenced hugely was young black men, as demonstrated in the work of Charles Murray (1984). In 1954 85% of black men over the age of 16 were members of the labour force, equal to that of white males. By 1976 this figure had fallen 8% for black men whilst remaining relatively stable for white men. It was argued that this was the consequence of interventionism, that “the poor had become pauperized” and lost any incentive to improve their lives (Murray p219, 1984). Whilst this approach blamed the system for instigating such changes it did focus entirely on black people, portraying the idea of ‘black’ and ‘poor’ as synonymous to the extent that the it has remained prevalent (Quadagno, 1996). Overall the belief in and spending on public assistance declined substantially in the 80s, with the AFDC funding lowering by 12.7%, food stamps declining by 12.6% and housing assistance lowering by 4.4% (Katz, 1986).
The 1990s found considerable welfare reductions for the first time under a Democratic President, with Bill Clintons 90s administration aiming to change welfare fundamentally. The introduction of the Personal Responsibility and Work Opportunity Reconciliation Act 1996 (PRWO) signified a shift in the manner and objective of welfare cash payment, representing what appears to be an attempt to codify Charles Murrays belief that a combination of positive and negative inducements is required to change human behaviour (Murray, 1994). The PRWO set a two-year time limit on benefit claimants, and resumed the attack on single mothers started by previous administrations. This was done through a combination of raising the requirement of poor mothers to find employment and legislating the nuclear family as the desired model, ensuring marriage was the only viable option for mothers that could not find or did not desire employment (Phillips, 1999). The rise of attempts to legislate morality in such an overt manner shows an indication of leaning away from a welfare state and towards a police state, the latter of which is not compatible with a liberal regime and represents a shift from the lassaiz-faire belief that the market will take care of social problems. Such developments suggest that whilst America does have welfare, it does not have a welfare state, possibly the most fundamental way it differs from Sweden.
In conclusion two key reasons can be derived from the welfare history as to why America and Sweden differ; the first is organized labour movements. The consensus between trade unions, employers and the state is defining in Sweden’s history for creating a platform for both of the former to influence related policy, and the lack of success of trade unions in America has not allowed for such. This could be considered a consequence of a deeper cultural ethos, as the America commitment to individualism may not foster the will to create a public good such as a trade union (Friedman, 2010). The final reason as to why the countries may differ is the nature of citizenship, the status granted to those who are full members of a society (Marshall, 1964). In Sweden citizenship is consistent, the rights of such are available to all and the relationship between the citizen and the state is clearly defined. America on the other hand appears to have more flexible citizenship, derived from its historical segregation and commitment to capitalism, which allows people to be stratified into first and second-class citizens to whom welfare has a different entitlement. Overall it appears that the Swedish and American welfare states are dichotomous in every way that matter; from universality to selectivity and equality to stratification.
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