Most people have an inaccurate assessment of who is "on welfare." Two decades have passed since Social Work published the original version of this article, which applied Titmuss's framework of a three-tiered social welfare system and showed that nearly "everyone is on welfare." Based on new data and a more in-depth analysis, this article re-examines who benefits from and who pays for social, fiscal, and corporate welfare and concludes that all three welfare systems continue to serve and to favor the middle class, wealthy households, and large corporations. Social workers can work to transform the system from one that rewards power and privilege to one that ensures distributive justice for all.
Key words: corporate welfare; fiscal welfare; public assistance; social welfare; tax redistribution
Two decades have passed since Social Work published the original version of "Everyone Is on Welfare" (Abramovitz, 1983). The article appeared just as Ronald Reagan launched a historic shift in social welfare policy. Marked by massive social program cuts, lower income taxes, and higher military spending, his new conservative agenda replaced postwar liberalism with hostility to social welfare programs. To counter the emerging antipathy to the welfare state, "Everyone Is on Welfare" showed that government spending benefited people from all walks of life as well as major corporations.
Several trends suggest that the time is ripe to revisit this question of who is "on welfare." First, new and improved data is available from think tanks, advocacy groups, and government agencies that regularly report on the flow of government dollars to various sectors of society. Second, if social work students reflect the norm, few people realize that social welfare programs are not limited to serving poor people. Third, heated public debates over tax cuts, devolution, welfare reform, the privatization of social security and Medicare, and how to spend the federal budget surplus suggest that the policies of Presidents Bill Clinton and George W. Bush also raise fundamental questions about who pays for and who benefits from government spending. Finally, the frequent appearance of the 1983 version of "Everyone Is on Welfare" on course syllabi and in anthologies suggests the importance of this issue to the profession.
Three Welfare Systems
The 1983 version of this article was based on a framework developed by the well-known British social policy analyst, Richard M. Titmuss. According to Titmuss (1965), our techniques of social diagnosis and our conceptual frameworks have been too narrow. We have, he stated:
compartmentalized social welfare as we have compartmentalized the poor. The analytic model of social policy that has been fashioned on only the phenomena that are clearly visible, direct and immediately measurable is an inadequate one. It fails to tell us about the realities of redistribution which are being generated by the processes of technological and social change and by the combined effects of social welfare, fiscal welfare and occupational welfare.
[italics added] (p. 20)
Titmuss saw traditional social programs as the tip of the social welfare iceberg of a three-tiered social welfare system. Beneath the surface he found a "fiscal welfare system" that offers income support to individuals and families through the tax code and an "occupational welfare system" that offers similar aid to workers through fringe benefits.
Table 1 illustrates how each of the three welfare systems in the United States is "concerned with changing the individual and family pattern of current and future claims on resources set by the market, set by the possession of accumulated past rights and set by the allocation made by Government to provide for national defense and other non-market sectors" (Titmuss, 1965, p. 20).
The social welfare system is administered by the Departments of Health and Human Services, Education, Housing and Urban Development; the fiscal welfare system by the Internal Revenue Service, and the occupational welfare system by individual firms. …