The pandemic has exposed the systemic failures of America’s inadequate welfare state. It’s time to start over.
By: MIMI ABRAMOVITZ, DEEPAK BHARGAVA
The economic crisis that accompanied the COVID pandemic pushed the safety net into the spotlight—and millions of Americans have found it threadbare. People seeking help for the first time are learning what poor and working-class people—mostly women and people of color—have long known: that in times of crisis, the net doesn’t catch you when you fall. In this year’s adaptation of the iconic soup and breadlines from the Great Depression, people all around the country arrive at church-run food pantries or line up in cars for food; 10,000 cars sat for hours at a San Antonio food bank in April. Some two million people in New York City alone are now food-insecure. By July, 40 percent of all Americans earning less than $40,000 had lost their jobs, and 40 percent did not have even $400 in cash on hand for an emergency.
The time is right for one of those epochal revolutions in American social policy where we start over and build anew. Relying just on small improvements cannot fix the separate and unequal systems that provide minimal relief to people who need more. The systems are too corroded by racism and sexism, too friendly to corporate exploiters. They are too abusive to purported beneficiaries—and their bureaucracies too often harass and police rather than help. Many who seek government help are intimidated and surveilled, forced to navigate an obstacle course to get paltry levels of support, or simply turned away. These are not glitches but rather defining features of the operating software of the system. From the point of view of people who need help, the welfare state is terribly broken. After a storm of protest by newly unemployed Floridians who waited months for benefits, even their right-wing governor, Ron DeSantis, acknowledged that the system was a “clunker” and that “it was designed, with all these different things, to basically fail, I think.” (That DeSantis was trying to deflect blame from his administration doesn’t negate the truth of his characterization.) From the point of view of elites who rewrote the rules to make an already inadequate system even less responsive, the system is indeed working exactly as intended.
The progressive visionaries who created our welfare state set out to help people in need, to protect them from the slings and arrows of the market economy.
Amidst the country’s unfolding public-health and economic catastrophes, Republicans have worked to deepen the system’s structural inadequacies. White House Chief of Staff Mark Meadows explained Republicans’ opposition to extending the $600-per-week federal benefit as an incentive to encourage people to return to the workforce. At the same time, the Trump administration barreled ahead with new rules tying the receipt of food stamps and Medicaid to work—in the middle of a pandemic and record-high unemployment.
The progressive visionaries who created our welfare state set out to help people in need, to protect them from the slings and arrows of the market economy. But conservative policymakers, without whose votes that system would not have been enacted, feared that even modest cash aid would embolden the poor to resist low-paid and dangerous jobs. From the beginning, they set benefits so low that no one would choose welfare over work and workers would do almost anything to avoid falling back on the system. Women and people of color faced reduced benefits or were excluded altogether. The fact that millions more people now must contend with this dysfunctional system may, paradoxically, force bold and long-needed changes.
These epic failures have caused many people, including those turning to the state for the first time, to wonder why it’s so hard to get help. Isn’t this why we have a government? For many years, advocates and policy wonks objected to and protested the shortcomings of social-welfare programs. They tried—sometimes with modest success—to repair the safety net with patches here and stiches there, and to save what they could of the rest from withering conservative assaults. Amidst several decades of austerity, a few victories have put money in poor people’s pockets, allowing them to survive. While these partial achievements should not be dismissed, we now need a fresh start, one that breaks with the failures of the past and gives people who need it money—lots of it—without conditions, exclusions, or lectures. Most important, we need to remove the cornerstone of the welfare state: the rules that link cash assistance to having a job. Plain and simple, we need Social Security, literally and figuratively, for all. Social Security, the most progressive and beloved part of our welfare state, can and should be expanded beyond older adults to provide vital support to everyone.
American social policy often undergoes change in big leaps analogous to what scientist Stephen Jay Gould called “punctuated equilibrium” in the context of biological evolution. Change happens imperceptibly until abruptly there’s a huge reversal that challenges the legitimacy of governing elites and the systems they’ve created. We may be at one of those historic ruptures now with the confluence of the pandemic, mass movements in the streets, vast and growing hardship reaching into the ranks of the middle class, a catastrophic governance failure, and a threat to democratic institutions.
Most important, we need to remove the cornerstone of the welfare state: the rules that link cash assistance to having a job.
Crises often lead people to break with old orthodoxies. The assumptions of the past 40 years—that inequality motivates hard work, that government spending is always bad, that “color blindness” produces racially just outcomes, and that “personal responsibility” determines people’s fate—are crumbling. Even before the pandemic, proposals for a Green New Deal, Medicare for All, universal child care, and paid family leave gained considerable traction. Support for socialism has surged, especially among younger people. While Sens. Bernie Sanders and Elizabeth Warren lost the Democratic presidential primary, nominee Joe Biden has adopted some of their agenda.
Policies once beyond the pale of respectable discourse—most notably, deciding to spend trillions of dollars handing out checks to millions of people with few strings attached in the opening months of this year’s recession—have been enacted (though Republicans refuse to renew them). Conservative gospel notwithstanding, the world did not end. The New Deal, we should remember, began as a set of improvised relief programs that were eventually made permanent. That could happen again with the better elements of the COVID-19 initiatives.
What new system should arise from the ashes of the old? Social Security for All.
The idea of a universal cash benefit such as Social Security for All is not altogether new in the United States. Earlier proposals such as the negative income tax (NIT) paved the way for a bolder approach. The NIT gained steam as early as 1962 with the publication of conservative economist Milton Friedman’s book Capitalism and Freedom. A key part of the proposal was its transfer of cash aid programs to the Internal Revenue Service (IRS) as a way to seemingly shrink the welfare state. Most of us pay taxes to the government based on our income. In contrast, under the NIT the government would send a check to low-income workers based on their earnings, making it seem like a tax break rather than a welfare check. Due to concerns that the program’s work incentive was too weak, however, the NIT never saw the light of day.
In 1969, President Nixon’s house intellectual, Daniel Patrick Moynihan, convinced Nixon to call for a Family Assistance Plan (FAP) that would provide all families—regardless of whether they had a job or not—with an annual guaranteed minimum income that phased out at a defined earnings level. It’s remarkable now to consider that 50 years ago, a Republican president proposed giving poor people cash without conditions. The plan attracted widespread popular support, easily passed the House of Representatives, but was narrowly defeated in the Senate. Attacked by the right as a work disincentive and by the National Welfare Rights Organization for its low benefits, the FAP never made it to the president’s desk.
Policymakers then devised a politically ingenious solution that solved multiple problems. In the wake of the failed NIT and the FAP, President Gerald Ford authorized the Earned Income Tax Credit (EITC), another disguised welfare check, which like the negative income tax increased income by reducing the tax liability of the employed poor—at the same time enabling employers to continue to pay rock-bottom wages. By providing a backdoor wage subsidy for low-wage employers like Walmart and Amazon, the EITC allows such companies to attract workers at lower wages than they otherwise would have to pay. Some progressive economists remain less taken with the EITC, arguing that it may depress wages, cost more to administer than it appears because of the use of tax prep centers, and benefit low-wage employers more than their workers.
Targeted to low-income taxpayers, the EITC gained traction in the 1980s under President Ronald Reagan, with strong bipartisan support. From its modest start in 1975, by 2018 almost 25 million tax filers received some $63 billion in benefits, making the EITC one of the pillars of the American income support system. Only available to those who work, file a tax return, and meet certain requirements, the benefit reduces a household’s tax bill or provides a tax refund amounting, on average, to $3,191 to a family with children.
By using the tax system to deliver cash assistance, the EITC escaped both public scrutiny and the politicized congessional budget debates that plague direct spending. Nor do beneficiaries see the EITC as a government program like Social Security or welfare—which suited the market ethos of the times. It reduces taxes, and replaces and thereby reduces direct government spending, two conservative priorities. Crucially, the EITC reinforces the work ethic, since you get nothing from it if you don’t work—which has proved to be a major design flaw, especially in times of high unemployment. Rather then shoring up the economy in hard times, the EITC is a pro–cyclical poverty program—an oxymoron if ever there was one.
Nonetheless, anti-poverty advocates supported the EITC to make up for the shrinking welfare state, because putting more money in the pockets of low-wage workers stimulates the economy, and because no other program to reduce poverty was going to be enacted so long as Reagan Republicans governed and Reaganesque values prevailed. In 1986, Reagan called the EITC “the best anti-poverty bill, the best pro-family measure, and the best job-creation program ever to come out of the Congress.”
We actually have a practical architecture through which to realize the best elements of the UBI framework, without carrying all its baggage: the Social Security system.
Just as the economic crisis in the 1930s led to the birth of the modern welfare state, and just as the profitability crisis in the mid-1970s led to its contraction, today’s multiple crises have put the issue of economic security back on the table. The concept of a universal basic income (UBI)—an unconditional cash payment provided by the government to everyone regardless of income—got traction before the crises and is gaining lots of momentum now. Countries around the world have piloted the idea, as have some U.S. cities, most prominently Stockton, California. The basic findings from the experiments should shock no one: Poor people prefer no-strings cash to complex programs that seek to modify or control their behavior; they are less poor after getting the cash; and they put the money to good, practical use. The idea was popularized by Democratic presidential candidate Andrew Yang, who wanted to give every U.S. citizen over 18 a “freedom dividend” of $1,000 per month.
As a big idea, UBI has very strange parentage. Variants of this idea have cropped up over the last two centuries, as a citizen’s dividend, a social credit, a national dividend, a “demo-grant,” a negative income tax, and a guaranteed minimum income. Some of its most ardent backers today are Silicon Valley types, motivated by the view that the combination of artificial intelligence and robotics (their products) will cost the nation millions of jobs that will not be replaced. In the absence of the jobs that they are destroying, they argue that people will need income from sources other than employment.
Progressive UBI advocates see it as a step toward ensuring a basic standard of living and rooting out the stigma and harassment built into the current welfare state. Everyone, employed or not, receives a government check. The payments do not phase out with rising income. No strings attached. No means test. No bureaucrats examining your personal lifestyle or looking for hidden income. No politicians demanding that you seek out even a menial job or leave the children in the hands of caretakers before getting the money. Former labor leader Andy Stern argues that UBI would function like a “permanent strike fund,” giving workers the ability to refuse unsafe or poorly paid work.
Conservative supporters, like racist Bell Curve author Charles Murray, see it as the way to demolish what remains of the welfare state. He would replace all the current cash assistance programs with a single UBI payment. And therein lies the UBI dilemma. As The Atlantic’s Annie Lowrey points out, “UBI is an ethos as much as it is a technocratic policy proposal.” Some of the actual proposals, like Yang’s and Murray’s, would cut anti-poverty programs so much that many poor people would be worse off than they were before UBI. Indeed, UBI could be and is often designed as a form of redistribution from the poor to the middle class and wealthy. And because the $1,000-per-month proposal costs so much—nearly $4 trillion per year—it can be a vehicle for conservatives to launch yet another assault on the size and scope of government.
When it comes to income security, we really don’t need the latest app. Our vision should not rely on the nostrums of Silicon Valley titans who help bring the crisis about. There are better intellectual and political traditions that we can draw upon as we construct an alternative to UBI. In 1797, radical American revolutionary Thomas Paine proposed to tax land and distribute the proceeds widely, arguing that there are two kinds of property: that created by human effort and that which should be treated as our common inheritance. (One state has long followed, partially, Paine’s advice: Alaska distributes a share of the state’s lucrative oil profits to all residents.) The National Welfare Rights Organization proposed a guaranteed annual income well before Silicon Valley existed, set at a level high enough to give every poor person enough cash to lift them above the poverty line without any moralizing distinctions. Both the Rev. Martin Luther King Jr. and the Black Panther Party also argued for a guaranteed annual income.
The feminist movement has argued for many years that care work should be recognized and compensated fairly, that the problem is in the narrowness of our conception of “work” and the value we ascribe to different kinds of work. French socialist André Gorz proposed—as a way to prefigure an alternative to capitalism—sending everyone a government check that would equal the cost of living. All these traditions have rooted their claims not in fear of a dystopic future but in a positive vision of human flourishing.
We actually have a practical architecture through which to realize the best elements of the UBI framework, without carrying all its baggage: the Social Security system. We propose turning Social Security into a guaranteed income program for every person and family regardless of age, employment, or immigration status, based solely on U.S. residency. We call it “Social Security for All.”
We propose to delink eligibility from work, which would reduce the gender and race inequality built into the current system.
Social Security currently lifts more people out of poverty than any other program; without Social Security, 40 percent of older adults would be poor (in 2018, only 9.7 percent were). It is also our most efficient program: 99 cents of every dollar goes to benefits. The infrastructure of Social Security distributes checks through the mail, or makes direct deposits, to millions of people, and without stigma. Though we typically associate the program with retirement benefits, it already has a far broader scope. It helps disabled and unemployed people and provides survivor benefits to children, among others. It is a massively popular program, and many (though far from all) of its racialized and gendered exclusions have been fixed, or can be. In fact, the program is progressive with respect to benefits—contrary to popular belief, you do not get what you paid in. Lower-wage workers get a higher benefit relative to their average earnings than wealthy people do. Moreover, as a federal program with national rules, Social Security protects recipients from race and gender discrimination by state and local governments.
Social Security is not perfect—the tax paid by employers and employees to fund the program is regressive. Due to compounding injustices, Black people have lower life expectancies than whites do, but the system doesn’t account for this. Because what you get depends on what you earned, women who spend time out of the labor force are penalized; people of color and others who’ve been paid lower wages, and those with short work histories or none, get minimal benefits. Disabled people find it hard to get the Supplemental Security Income (SSI) benefits they deserve and are restricted from working when they want to. Undocumented immigrants pay into the system, but get nothing back.
Nevertheless, we have a homegrown program on which to build that is fundamentally progressive and widely supported. The program has evolved dramatically over the years and grown to meet new demands and realities. Expanding it now would be consistent with the radical vision of its founders. In 1935, the Committee on Economic Security that designed the New Deal explained: “The one almost all-embracing measure of security is an assured income. A program of economic security, as we vision it, must have as its primary aim the assurance of an adequate income to each human being in childhood, youth, middle age, or old age—in sickness or in health. It must provide safeguards against all of the hazards leading to destitution and dependency.” By creating assured income that is not tied to work, Social Security for All would be the fulfillment of that original vision.
The system’s most expert defenders agree. The National Academy of Social Insurance (NASI) argues that the past model of insured income (i.e., social-insurance benefits linked to employment) no longer works. Pointing to record-high inequality, they state, “The same forces that have given rise to massive companies and concentrated wealth have made it more difficult for working people to benefit from the economic opportunities they expect and deserve … Something is profoundly wrong in our economy and in our country, and we have to fix it.” NASI’s fix is an assured income by which “the state would provide regular cash grants, ideally sufficient to meet basic needs.” Understood as a “fundamental right, basic income would be unconditional, not means-tested and not contingent on previous or current employment. It would help sever the link between work and welfare, provide income security for all who are eligible, and perhaps mitigate growing inequality.” It would “also support unpaid care work or community service, help people start new businesses, or get an education” and make sure that “nobody falls through the cracks.”
Imagine a system that guaranteed that everyone in the country got an income of at least 200 percent of the poverty line, which would be just over $43,000 for a family of three. The system could be designed progressively, so benefits would be greater for people with lower incomes and minimal for the wealthy. Unlike most UBI proposals, therefore, Social Security for All would explicitly address inequality, not just poverty.
All existing recipients, including the elderly and disabled, could be guaranteed the same benefits, and most would get higher monthly checks. The universality and progressivity of such a system would avoid the vulnerability of narrowly targeted welfare programs that benefit a small, politically weak population and are therefore readily stigmatized and easily attacked.
The financing would target the outsize gains of the super-rich over the past 50 years. The range of potential funding pools is vast: a wealth tax, higher corporate taxes, a financial-transaction tax, increased income taxes for high earners, or increasing taxes on unearned income to the levels the nation had during Dwight Eisenhower’s presidency. A substantial wealth tax—an idea that seemed radical just a few years ago—is supported by three-quarters of registered voters and among people of all ages and races and from both political parties.
We propose to delink eligibility from work, which would reduce the gender and race inequality built into the current system. If, indeed, the “robots are coming,” we need an alternative system to provide people the income they need to live and thrive. The “gig economy” of precarious work and multiple jobs means that many people needing help don’t qualify for the full benefits they deserve. Social Security for All would take account of these new realities of work. A strong macroeconomic case also exists for expanding Social Security: It will stimulate the economy; people will be likely to spend the extra income on necessities and thereby create jobs.
With Social Security for All, fear of destitution would not govern choices about how we live our lives, and our best impulses to create and care for each other would be liberated.
Another crucial and controversial aspect of our proposal is to delink eligibility for benefits from immigration status. Excluding immigrants would perpetuate the racialized systems that made our current welfare state so scattershot and ineffective. If native-born workers can reject the worst jobs because they have access to Social Security but immigrant workers can’t because they don’t, labor standards will decline for everyone. We should take to heart the profound lessons of the deep history of racism and sexism in social-welfare policy, and build a system that includes everyone from the beginning.
The power of Medicare for All as a demand is that it proceeds from a concrete, familiar, beloved existing reality in the lives of many people and proposes to make it more widely available. Social Security for All has the same appeal. It draws on the best of existing structures and traditions, and is rooted in people’s lived experience.
Social Security for All recognizes that the ups and downs of life are experienced by everyone living and working in modern society. Today’s safety net is supposed to be called upon when people experience personal failings or the economy hits bumps in the road. Social Security for All locates the problem in the inherent defects of a capitalist economy which, at any given time, has no way of providing huge numbers of people with the jobs, income, and services that they need.
Another argument for delinking work and government income is rooted in a positive, progressive vision of freedom—a value too often conceded to the right. This year, when jobs disappeared and many people received replacement income, many were free to care for their neighbors and engage in community service. Millions more took to the streets to protest racial injustice. If such widespread civic engagement is a nightmare for elites, it can be our dream of what a genuinely democratic society looks like.
With Social Security for All, fear of destitution would not govern choices about how we live our lives, and our best impulses to create and care for each other would be liberated. FDR famously said that “the only thing we have to fear is fear itself” at the beginning of the Depression—and toward the end of his life, he proposed his justly famous “Four Freedoms,” which included freedom from want and freedom from fear. It’s time to excise both fear and want from their central role in our economic system and too many people’s lives. It’s time for Social Security for All.
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Mimi Abramovitz is Bertha Capen Reynolds Professor of Social Policy at the Silberman School of Social Work at Hunter College and the CUNY Graduate Center.
Deepak Bhargava is a distinguished lecturer at CUNY’s School of Labor and Urban Studies and a fellow at the Roosevelt Institute.
