chapter nineteen social welfare. connection-social regulation gov’t correction to wide variety of...

Chapter Nineteen

Social Welfare

Connection-Social Regulation

• Gov’t correction to wide variety of effects brought about by economic regulation. Includes equal rights in employment, education and housing– EPA– Consumer Product and Safety Commission (CPSC)– Occupational Safety and Health Administration

(OSHA)-watches out for safety and health of 60,000,000 workers in the US

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Types of regulatory agencies

• Executive Branch-– FDA– National Highway Traffic Safety Administration

• Independent Regulatory Agencies-separate from Executive Branch and Congress-members appointed by president and confirmed by Senate– Federal Reserve Board


Regulation Debate

• Over when/how to regulate• Cost-to-society-side effects of industry with non-

economic aspects (pollution, civil rights)• Prices rise with regulation• Antitrust regulation-destroys monopolies to create

competition in the market• Monopoly-situation where one company dominates one

industry• Oligopoly-situation where a few companies dominate

an industry• Conglomerate-a firm that runs businesses in many

unrelated industries


Sherman Anti-trust Act (1890)

• “to protect trade and commerce against unlawful restraints and monopolies”


Clayton Act (1914)

• Outlawed: charging different prices to buyers to destroy competition– Rebates– Buying up supplies to stifle competition– Bribing competitor’s employees– Interlocking directorates-where an officer or

director in one corp. serves on the board of a competitor

– acquiring stock and assets in competing concerns


Labor

• Three important federal regulations to protect labor:1. Walsh-Healy Act (1936) minimum wage, max

work hrs. a week

2. Fair Labor Standards Act (1938)-prohibits child labor, max work week of 40 hours

3. Occupational Safety and Health Act (1970): 1st federal industrial safety program


Unions• Yellowdog contracts prevent new workers from unionizing• However, by 1930s unions start gaining power

1. Norries-LaGuardia Act (1932): outlawed yellowdog contracts and gave unions the right to organize (again)

2. National Labor Relations Act (1935): Fully legalized unions, gave them fedearl backing. Additionally outlawed 5 types of employer actions:

1. Interfering with workers in attempts to unionize2. Supporting company unions3. Discrimination against union membersCreated National Labor Regulations Board

3. Taft-Hartley Act (1947)- Laws for unions and employers1. Outlaws closed shop2. Outlaws jurisdictional strikes, secondary boycott, excessive unions dues and

federal employee strikes3. Makes unions refusing to negotiate with employers unfair practice4. Permits employers and unions to sue each other in federal court for contract

violation5. Limited use of labor injunction6. Permits states to outlaw union shops

Federal Action for Major Labor Strikes:President->fact committee->attorney general->80 day court injunction-

>NCRB->secret vote->no settlement=CongressCopyright © Houghton Mifflin Company. All rights reserved. 19 | 8

Environment:

• National Environmental Policy Act (1969)– Must issue environmental impact statements

• Air Quality Act (1967)– Establish national air standards for states– Loosely enforced

• Clean Air Act (1990)– Regulates 196 toxins– Phasing out of CFCs

• Acid rain– Regulate this but how?


Deregulation

1. Airlines in 1978-fares are lower

2. Trucking and Railroads-1980: Staggers Rail Act and Motor Carrier Act

-Teamsters and trucking companies angry, business happy

3.Banking and Saving and Loans Institutions

1930: Great Depression brings about FDIC (Federal Deposit Insurance Corp.)-successful

4.Telecommunications1996: Telecommunications Act signed to deregulate


Regulation

• Inefficiency

• Reduction in competition = less small business

• Lack of innovation

• Costs $

• Do regulatory agencies do their jobs?


Deregulation

• Lax industry policing

• Increased confusion in the marketplace

• Increases in regulation by the states instead of Feds



Types of Programs

• Benefit most citizens, no means test (e.g., Social Security and Medicare)

• Benefit a few citizens, means tested (e.g. Medicaid and Food Stamps)


Social Welfare in the United States

• America has been slower than other nations to embrace the welfare state

• State and private enterprise play a large role in administering welfare programs

• Non-governmental organizations play a large role


Who Benefits?

• The public insists that it be only those who cannot help themselves

• There is a slow, steady change in popular views, distinguishing between the deserving and the undeserving

• The American public prefers to give services, not money, to help the “deserving poor”


Social Security Act of 1935

• Insurance for the unemployed and elderly—workers contribute and benefit

• Everybody is eligible for insurance programs

• Assistance for dependent children, the blind, and the elderly

• Assistance programs are means tested


Medicare Act of 1965

• Medical benefits were omitted in 1935 in order to ensure passage of the Social Security Act

• Covers medical care for the poor and pays doctors’ bills for the elderly


Reforming Welfare Programs

• Problem: there will soon be insufficient people paying Social Security taxes to provide benefits for every retired person

• Most solutions are opposed by the public

• Health care issues will remain on the political agenda


Table 19.2: Health Care Spending in the United States and Abroad, 2001


Possible Solutions for Social Security

• Raising the retirement age to 70, freezing retirement benefits, and raising Social Security taxes

• Privatizing Social Security

• Combine the first two reforms, and allow citizens to invest a portion of their Social Security taxes into mutual funds


Table 19.1: Public Views on Reforming Social Security


Temporary Assistance for Needy Families (TANF)

• Block grant program

• Had strict federal requirements about work, limited how long families can receive federally funded benefits

• By 2003, welfare caseloads had declined nationally by 60%


Figure 19.1: SSI, TANF, and Food Stamp Recipients, 1980-2002

U.S. Census Bureau, Statistical Abstract of the United States, 2003, 371, 374.

chapter nineteen social welfare. connection-social regulation gov’t correction to wide variety of...

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company unionsdiscrimination

equal rights

health act

clayton act

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legalized unions

walshhealy act

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