United States Welfare System - A History: Part 2

The Great Depression in the 1930's brought about the need for the creation of a national welfare system in the United States. In part 1 of this 2 part series, we covered the birth of this welfare system into World War II. In this, part, 2 we will follow that history into the present-day. For the most part, the welfare system grew slowly but steadily during the 40's and 50's in financial aid, but there was little in the way of real change of its basic structure.

All of that changed when John F. Kennedy assumed office in 1960. JFK intended to wage a "War on Poverty" by training Americans and putting them to work by creating educational, functional programs such as the Job Corps. After JFK's assassination, Lyndon B. Johnson carried the mantle in his place. In 1965, Medicaid and Medicare were established to provide medical assistance for the elderly and disabled and those on welfare. This change meant that 1 out of every 4 Americans received some form of federal assistance.

History

Nixon aimed higher, looking to establish the Family Assistance Plan to guarantee a minimum income to all families in 1972, though SSI (Supplemental Social Income) was passed, establishing a base income for the disabled. Welfare rights were expanded and held up by the Supreme Court. It was to help support minorities and women that were being unfairly denied benefits in the segregated Deep South.

United States Welfare System - A History: Part 2

By the mid 1970's, another financial crisis assaulted the United States. Unemployment soared. Energy prices rose, and inflation came into being. The requirement that single women without the presence of a father in the home were the only ones who could qualify for welfare was lifted. The welfare system and those aided by its benefits grew substantially. By 1980, Ronald Reagan and the conservatives took power because many Americans believed that the welfare system had become swollen. In the mid 80's, unemployment insurance decreased nearly 7%, and the welfare system lost much of its federal subsidy.

In the 90's, the welfare battle continued. Bill Clinton promised to end welfare, though he attempted to launch a sweeping federal healthcare system, while the Republicans vowed welfare reform, led by Speaker of the House Newt Gingrich who stated that the Congress would: "replace the welfare state with the opportunity society."

This led to the passage of the Personal Responsibility and Work Opportunity Reconciliation Act in 1996. Essentially the Act replaced open-ended federal assistance with TANF (Temporary Assistance for Needy Families), setting a maximum amount that the federal government would set aside to assist states with in regards to needy families being aided by the welfare system. This Act put much of the responsibility for welfare back on the states, off of the federal government. The thought was that no one is entitled to assistance and that the welfare system had created a welfare mentality. States were urged to train people and reduce their welfare budget, as well. This put many people back into the workforce, but meant they had to take jobs that paid them an income that provided for a life below the federal poverty line. By 1999, 2.2 million families or single parents were receiving welfare assistance. That was 2 million fewer families or single parents than received such aid in 1994.

The economy boomed in the 90's, but in October of 2008, the United States and the world faced a crushing economic crisis, the largest since the Great Depression of the 1930's. The housing bubble burst, unemployment percentages spiked to double-digit figures, banks and the stock market crashed, and America once again saw its unemployment ranks and welfare system swell. The end of the Bush Administration and the beginning of the Obama Administration have seen the federal government once again assist its citizens and its corporations with bail outs, increased welfare benefits, and unemployment duration extensions. The President Obama Administration had passed a national healthcare act at long last, known as Obamacare, though it is unclear if or when the Act will be instituted as a conservative backlash is still fighting the policy. Once again America is faced with financial crisis, and once again the federal government is expanding welfare assistance.

Opponents of a welfare state deride welfare as a bloated system that rewards the weak and robs the productive. They say that welfare burdens businesses. They also claim it causes taxes to increase, and inflation to rise, and that much is historically accurate. Proponents of a national welfare system argue that sometimes people need help, and some people simply cannot fend for themselves. That also is true. Nonetheless, somewhere there must exist a happy medium. Though no one can predict the future, history of the welfare system in this country is clear enough and easy enough to follow and one thing is for sure since its origination in 1935, it hasn't disappeared. It has swelled, and it has slimmed down over the past 7 decades, but it hasn't gone away, and history never lies. Perhaps it is time to stop bickering over whether or not we need a welfare system, it is here, and history says it isn't going anywhere. The advantage of history is that we can acquire knowledge from it. If we agree that welfare in some form is here and here to stay, maybe we can examine what has worked and what hasn't. We can also try to establish a better system that works for the most important institution, not the Congress, not the Presidency, not the Republicans or the Democrats, but the United States of America and its persevering citizens; who, through good times and bad have remained one nation, indivisible, seeking truth and justice for all.

United States Welfare System - A History: Part 2

With 13 years of research experience, History in all its manifestations is Miriam B. Medina's passion, and she loves nothing more than sharing what she learns with everyone. So be sure to check it out at http://thehistorybox.com/, a one-stop resource center for writers, journalists, historians, teachers and students.

Economic Status of the United States in 1950

Introduction

Emerging victorious from World War II five years earlier, the United States in 1950 was reaping the benefits of a growing economy - benefits that were actually derived out of the country's participation in the War. The destruction and mayhem brought by the global conflict also brought with it several positive contributions to the economy. Some would even argue that the country's participation in World War II actually saved it from the Great Depression.

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To understand the economic boom of the 1950s it is necessary to appreciate the positive impacts that were borne out of World War II. The foundation for the economic expansion and growth experienced in 1950 and several years after that were laid during World War II.

To fund and support the country's war time efforts, it had to recruit millions of American soldiers to be sent to the war front as well as to be stationed at home. Factories had to be built to produce war materiel - guns and ammunitions, military transport, tanks, fighter planes and bombers, etc. To man the factories women and older people had to be recruited as most of the able-bodied men were at war. WWII created jobs and gave life to many industries and energized a nation. Among the industries that prospered during and immediately after the war were the newspaper industry, the agriculture industry and even Hollywood. Industries that produced transport and plant machineries also prospered. Throughout the War, women, for the first time, were given the opportunity to work outside their homes and participate in nation building. The participation of the women in the labor force started to increase during this time.

The War also provided opportunities that would later be manifested in the 1950s. Take for example many of America's products went overseas - introducing themselves to new markets.

Many had actually feared that the end of the War would lead the country back to depression. With production of military supplies coming to an end, this fear had its basis - for the entire economy was propped up by all that had to do with the global conflict.
Fortunately, this was not the case. The victory relished by the nation brought about confidence in the government and the economy. The common consumer best exhibited this confidence as the strong consumer demand spurred economic growth after the War.

Leading towards the 1950s, industries that experienced a surge in growth included the automobile industry and the housing industry, and new industries experienced fantastic births - industries such as aviation and electronics.

There was also another outcome of WWII that contributed to post War growth - the Cold War between U.S. and the U.S.S.R.

Many of the military industries that sprouted during the war continued to do big business after it. As communist block emerged as a military power in Europe, America had to arm itself against what it considered as a threat. Huge investments were made in the defense of the country. Such investments meant jobs, factories, huge spending - all contributed to the boom of the 1950s.

The economic success of the country probably influenced its leaders to advocate the replication of an open economy at the international level. This is best evidenced by the country's spearheading the establishment of the International Monetary Fund and the World Bank.

Gross Domestic Product and Per Capita GDP

In 1950, the country's GDP was at 3.8 Billion (in current dollars). At that time, Per Capita GDP was ,573.00 - making the United States the number one country world wide in this aspect. By 1996, GDP was at .194 Trillion. Per Capita GDP was at ,800.00 - however, the country ranked only at 10th place world wide in this respect.

Post World War II scenario showed that too few economies survive the war while a great majority, especially in Europe, was greatly affected. Many developments starting in the late 1970s toward the early 2000s enabled other countries to overtake the U.S. in terms of Per Capita GDP.

As Per Capita GDP is influenced by population, countries that had significant economic growth coupled with low birth rate were able to surpass the U.S. in this indicator. However, the U.S. remains the most powerful economy in 2007 taking into consideration other indicators.

Employment and Unemployment

In 1950, the civilian labor force was about 58 million strong. Only 5.3 percent of the labor force was unemployed. 41.6 million of the labor force at that time were males, while only 17.34 million were females. By 1996, the labor force grew to about 142 million while unemployment rate as at 5 percent. 76 million were males while 66 million were females in the labor force. In the 1950s, the number of workers in the services sector caught up with workers in goods production industries. The same time also saw the rise of white-collar jobs and the strengthening of labor unions. Awareness on labor rights was on a rise. The biggest impact experienced by the labor force was the increase in women's participation in employment activities. Accordingly, women have literally poured into the labor force starting in 1950. By 1990, women's participation in the labor force would nearly double. On the other hand, men's participation would drop over time.

Per Capita Personal Income

In 1950 the Per Capita Personal Income was pegged at ,501.00. By 2006 this rose to about ,600.00. Though marked by huge difference in amount, it can be noted that ,501.00 in 1950 could by more goods and services than the ,600 in 2006 as illustrated by the CPI rates for both years.

Consumer Price Index and Inflation

With 1967 as base year, CPI in 1950 was registered at 72.1 - meaning that a basket of goods and services bought in 1950 were 72.1 percent of the price of the same goods and services bought in 1967. By 2006, the CPI was at 603.5. This meant that the same basket of goods and services bought in 1967 would cost 603.5 percent more in 2006. Inflation rate in 1950 was at a steady 1.09 percent. In 2006 the rate was at 3.24 percent.

Emerging Industries

1950 saw the emergence of new industries that were anchored on new technologies. Among these is the aerospace industry. The great success of the heavy bombers during the war emphasized importance on innovation. Improvements in engine design, metallurgy, and arms technology helped advance the industry as well as improve manufacturing procedures.

The onset of the Cold War ensured that the industry was there to stay. At its peak, the industry hired hundreds of thousands of workers in four major factories. The industry was also fueled by a billion government spending.

Other industries that grew during this time were boosted by other industries. Take for instance the housing boom experienced after war. New homes meant additional furniture and appliances as well as new cars. The consumer-led growth likewise spread to other areas. The introduction of television to the masses spurred the growth in electronics.
There were also after effects in the growth of industries. As the demand for homes and cars increased, many Americans were lured out of central cities to the suburbs. The construction of better highways also contributed to these phenomena.
Farmers though were facing tough times. As people left farm lands, lesser people were left behind to do farm work. This led to a drop in the productivity of the farm sector.

Innovations and the Transformation of Business

At a personal level, 1950 saw the introduction of the first hand held T.V. remote control - a device that would be seen as a necessity in many households for years to come. Color TV also emerged through the issuance of a license to CBS Network. Another innovation is the introduction of the first credit card - Diners - also an item that would come across as a necessity in modern times.

The first pagers were also developed in 1950.

In the business front, 1950 would usher in an era marked by consolidation of large companies. Businesses would combine to create bigger, greater businesses. Example, International Telephone and Telegraph bought Sheraton Hotels, Continental Banking, Hartford Fire Insurance, Avis Rent-a-Car, and other companies.

Notable Events and Personalities

Notable events of 1950 included the following:

Start of the Korean War - influenced greatly by the U.S. and USSR at opposite sides, North and South Korea would tangle in a three-year war that highlighted the tension during Cold War regime.

Development of the Hydrogen Bomb - raged by the atomic bomb testing by USSR, the government pursued the development of a hydrogen bomb.

Senator Joseph McCarthy - started the Red Scare in halls of the U.S. Senate - making accusations that the State Department was filled with Communists or their sympathizers. The Senator's actions led to the adoption of the term McCarthyism - describing intense anti-Communists sentiments.

This period coincided with and fueled the onset of the Cold War between America and the USSR. Thousands of Americans were accused of being Communists or sympathizers during this time - Americans in various sectors of the society. History would later judge these accusations as reckless and baseless. While Senator McCarthy gained considerable media mileage at the start of his "campaigns," he would be later unmasked as a grandstanding antic who had little or no evidence to back up his accusations. Many of the people Senator McCarthy accused suffered greatly. Many loss their jobs, had their careers ruined while some were even unjustly imprisoned.

Conclusion

The end of World War II led to the end of the Great Depression and the start of a long period of economic expansion through the 1950s. It is quite ironical that the most destructive war in history would contribute to the emergence of the strongest and biggest economy in the world. The confidence on the economy was obviously brought about by the country's victory in the War. Tempered by strong collaboration between the government, businesses and the consumers, the U.S. emerged from the War a lot stronger and economically strengthened. Industrial expansion during wartime brought economic impetus that would be carried on even after WWII. The fact that most of the major economies were slow to recover from the after effects of the conflict placed the United States at absolute and relative advantage over both its allies and its enemies.

Economic Status of the United States in 1950

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