The American Challenge in
The economic crisis that arose in 2008 poses a formidable challenge to social welfare policymakers throughout the world. In examining the nature of this challenge and its policy implications for modern welfare states, it is useful to begin with a review of several trends that place the immediate economic predicament in a broader social context. Since the 1980s, modern welfare states have experienced a number of important policy-related developments that involve public and private expenditures, labor force participation, welfare demand, and employment measures. These developments reflect the shifting degrees of responsibility for managing economic risk among governments, individuals, and employers. This chapter analyzes these shifts from a comparative cross-national perspective, with a particular focus on how U.S. experiences compare to those of other advanced industrial democracies and the various implications for risk and insecurity therein. In conducting a wide-angle survey of the social landscape, the picture that emerges provides more of an impressionist’s rendition of the world than a sharply focused photograph—which is to say that the trends I summarize may be a bit fuzzy around the edges, but nevertheless convey a reasonable approximation of the empirical experiences they seek to trace.1
In order to understand the current U.S. experience from a cross-national perspective, it is important to first examine the relationship between social expenditure and taxation, which differs greatly across nations. This section will detail the history of social expenditures in the Organisation for Economic Co-operation and Development (OECD) member countries and will explore how the recent economic crisis has affected nations’ abilities to spend on social welfare programs.