Inequality is Weakening Social Security. Here’s How We Fix That.
When Congress set the cap on Social Security contributions in 1983, they didn’t anticipate forty years of rising inequality. And it’s cost us — a lot.
Expanding, not cutting, the social safety net remains the key to creating a more just and peaceful society. But safety nets wither in deeply unequal nations.
I tend to harp on the difference between policy and ideology. Good policy making depends significantly upon trial and error, learning from experience and careful empirical observation. Ideology dismisses poor results and unfortunate side-effects as irrelevancies or insufficiently thorough implementation.
Congressional Republicans led by House Speaker Paul Ryan, with the likely concurrence of the Senate GOP and Mitch McConnell, are determined to make drastic changes to American social policy. To the extent they are not prompted by corruption (that is, acting on behalf of and at the behest of their donor base), their desired changes to Social Security, Medicare, and Obamacare are entirely ideological.
It has long been an article of right-wing faith that welfare programs — indeed, social insurance of any sort — creates unhealthy dependency. (Somehow, that belief does not extend to corporate welfare. But that is a post for another time.)
The evidence, not unsurprisingly, suggests otherwise.
Substantial research suggests that countries with more robust social safety networks experience fewer socially undesirable behaviors: less crime, less divorce, less child abuse . . . the list goes on. Rates of murder, robbery, burglary, rape, and other serious crimes are generally much higher in the United States than in industrialized nations offering universal health care and other social supports. Homicide rates in the United States have consistently ranged between three and twenty times those of other industrialized countries.
Of particular note: Canada’s murder rate runs far below the U.S. rate, around a fourth of our levels. For homicides committed by youth, the U.S. rate has been as much as ten times the Canadian levels. Yet Canadians watch American television, log onto American websites, read American publications. Canada even has widespread gun ownership. [pullquote]Countries with more robust social safety networks experience fewer socially undesirable behaviors.[/pullquote]
What differentiates us? According to Daniel Friedenberg, the United States is more economically stratified than any other advanced country. American levels of income inequality and relative poverty triple those of other wealthy nations. Friedenberg characterizes the dramatic gap in material equality as “economic apartheid.”
Scholars tell us that developed countries having relatively low levels of income inequality have low crime rates. But in countries where one segment of the population has great wealth while another segment is in extreme poverty, crime rates run high.
As a 2015 article in The Week as noted, the differences in approach to social welfare are ideologically based.
Conservatives often want to tie safety net programs to having a job, so that people aren’t tempted by handouts to hold off working. There are work requirements for food stamps. More heavy requirements were added to traditional welfare in the late 1990s. And now Republicans are suggesting requirements for Medicaid as well. This makes little sense. The much more generous European systems have higher labor force participation, and the U.S. economy has done progressively worse over the last three decades at actually creating enough jobs for everyone to have.
Add it all up, and it’s not surprising that most other advanced Western countries have much lower poverty rates than America.
Recent research has tied declining rates of marriage to poverty and has confirmed that “failing schools” are typically those trying to educate children from impoverished homes—that growing up in poverty creates identifiable physical and emotional impediments to learning.
Overwhelming evidence shows that a strong social safety net reduces crime and other social dysfunctions — and does not discourage workforce participation. Apparently, however, evidence is no match for zealous.
Sheila Suess Kennedy teaches law and public policy in the School of Public and Environmental Affairs at Indiana University Purdue University at Indianapolis. Her scholarly publications include eight books and numerous law review and journal articles. Kennedy, a frequent lecturer, public speaker, and contributor to popular periodicals, also writes a column for the Indianapolis Business Journal. She blogs at www.sheilakennedy.net.