Wednesday, August 15, 2012

Words change because reality changes: "the welfare state" vs. "the social safety net"

I noticed also that Bryan referred to the "modern welfare state". Virtually no proponents of what he's calling "the modern welfare state" use this sort of language. It's much like how most people concerned about climate change call it "climate change" rather than "global warming".

It's important to understand why these words change, because they usually change for a good reason - not because of some political whim.

By the 1980s everyone started realizing the many problems with the welfare state that was erected about two decades earlier. The labor supply and family formation decision incentives were obvious to everyone. So over the next two decades we started to fix the welfare state.

1. We initiated programs like the EITC to make benefits contingent on work and have them phase out more slowly so that people wouldn't be trapped in a low-wage or low-work equilibrium.

2. We introduced work requirements to welfare and changed the program from AFDC to TANF.

3. SSI abuse was cracked down on thanks in part to the researh of my old labor economics professor Don Parsons.

4. We restructured the workforce development system - not exactly welfare but often accessed by the same sort of people - to have more local flexibility and to get input from local businesses. Sectoral initiatives were started (also guided by business needs) so that we were training people for jobs that were actually out there.

Most people in the circles I'm involved in refer to this new constellation of policies as the "social safety net". You rarely hear them call it the "welfare state". It's not just a political thing; it's because the term"the welfare state" is misleading. "Welfare state" refers to AFDC, no-EITC, CETA, etc. "Social safety net" refers to TANF, EITC, WOTC, and WIA.

And all of this is very different from "social insurance" like unemployment insurance and workers' comp.

People who refer to the "welfare state" like Bryan are obscuring the enormous differences between what we had in the sixties, seventies, and into the eighties, and what we have in the eighties, nineties, and 2000s.

Why is he obscuring that?

Maybe because he's not aware of the differences, but I doubt that. Perhaps it's easier to tar people as not understanding or perhaps denying basic economics if you ignore these sorts of policy evolutions.


  1. I thought "welfare state" meant broad programs like social security, medicare, all the stuff introduced by Bismarck.

  2. What we have today is still a welfare state while also being a social safety net. The choice of words is simply designed to emphasize different aspects of the programs in order to gather support to bolster or repeal them. Neither term is inaccurate.

    1. Welfare state has much different implications and doesn't capture any of the differences.

      I'm not trying to castigate Bryan for using "welfare state". Many people use that phrase. I do think "social safety net" or some other term used to describe the post-1980s situation is an indisputably better term, though. Just like it's not terrible when people use the phrase "global warming", but "climate change" is indisputably better.

  3. Who refers to EITC as part of the social safety net?


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