The Assets Perspective

The Rise of Asset Building and its Impact on Social Policy

R. Cramer, T. Shanks

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137384881
• Topic: Politics & International Relations
• Subtopic: European Politics
• Index: Politics & International Relations

The economy's struggles to overcome the lingering effects of the Great Recession presented unique but essential questions.The book considers a full range of data which considers how this recent experience has impacted households, providing a thorough and contemporary treatment of how the assets perspective has prompted changes within social policy.

PART I

THE CHANGING LANDSCAPE

CHAPTER TWO

THE EVOLUTION OF ANTIPOVERTY PROGRAMS

Trina R. Williams Shanks

America’s approach to assisting poor families and individuals has changed substantially over its history. In America’s early years, there was little federal policy directed toward lower-income people. However, over the course of the twentieth century, a unique welfare state emerged, despite the reluctance of many federal policymakers to fully embrace it. Within the past two decades, policy approaches to addressing poverty have shifted again and now encompass concepts from the field of asset building. This recent evolution of antipoverty programs reflects a different social policy landscape from that which prevailed during either the Great Society period of the 1960s or the welfare reform debates of the mid-1990s. By summarizing broad trends in US antipoverty programs, this chapter aims to place the asset-building perspective into a larger policy context. Today there is much more attention given to providing low-income families with a set of appropriate supports that permit social development and upward mobility. In this chapter, the concept of social development refers to opportunities for educational attainment, household economic stability, and the ability to plan for the future, especially promoting children’s economic mobility. A survey of existing programs and policies demonstrates that the federal programs best suited to this purpose have the lowest participation rates and least funding. The discrepancy between social policy intention and practical policy implementation is indicative of both the current limitations of the welfare state as well as the potential of the “assets perspective” to inform future social policy efforts.

Historical Overview

The original colonies and early United States closely followed British Poor Laws, most notably the Elizabethan Poor Law of 1601, in defining three major categories of dependents: children, the able-bodied, and the incapacitated or “worthy” poor (Trattner 1999). Over time, the United States developed a particular set of preferences that shaped the general outline of antipoverty programs. These include the following:

• a limited federal role with most authority at the city or county level and great variety across states;

• widespread perception that voluntary and private charitable institutions were preferable to public (i.e., government-funded) ones;

• the idea that trained professionals were needed to provide appropriate aid to the poor; and

• a long-standing tradition for funding child welfare and public health, but less willingness to aid able-bodied, working-age adults.

In times of economic stability and within smaller communities where people knew one another, local county systems functioned relatively well. Yet when economic downturns hit or cities grew to hold large urban populations, local systems (both private and public) became quickly overwhelmed.

In the history of the United States, there were two periods of major policy change that substantially shifted options available to the poor. The first followed the Great Depression when President Franklin D. Roosevelt created a set of programs and agencies collectively known as the New Deal. The second was during a period of relative prosperity when President Lyndon B. Johnson declared a “war on poverty” and instituted the Great Society programs of the 1960s.

The New Deal era transformed the US policy landscape at the federal level. With unemployment rates as high as 25 percent in 1933, the federal government definitively took on the role of providing relief to struggling families. The response included large infrastructure projects such as the Tennessee Valley Authority, public works programs to provide jobs to the unemployed, the establishment of fair labor standards, as well as programs to help reform the banking system to protect small savers and investors alike, with the creation of the Federal Deposit Insurance Corporation and the Securities and Exchange Commission. Many long-standing programs to assist the poor established under the New Deal continue to exist in some form today: Social Security, unemployment insurance, commodities programs that became food stamps and are now known as SNAP (Supplemental Nutrition Assistance Program), Aid to Dependent Children, which became the TANF program (Temporary Assistance for Needy Families), and the Federal Housing Authority that is now part of the cabinet-level Department of Housing and Urban Development.

The Great Society programs were announced as an effort to eliminate poverty, which remained persistently high at levels around 19 percent leading up to 1964. During this period, Congress passed the Economic Opportunity Act, which established the Office of Economic Opportunity designed to expand the role of the federal government to directly provide programs and services to assist poor families. Many criticized the programs for being woefully underfunded and for not actually creating jobs or giving income to the poor, but rather supporting education, training, and social services that would only be relevant in a time of continued economic growth (Trattner 1999). However, medical insurance coverage expanded during this time with the creation of Medicare and Medicaid. In addition, many of the core programs established in the 1960s continue to exist today: community action agencies, Head Start, Volunteers in Service to America (VISTA), Legal Aid, Job Corps, and Upward Bound.

Both of these periods of policymaking have exerted a lasting legacy on the American welfare system and the manner in which social policy is conceived and implemented. Recent history has been characterized by a set of minor additions and discrete “tweaks” that have reformed the delivery systems or modestly expanded benefits for programs that were created during earlier periods. For example, the Earned Income Tax Credit (EITC), which offers a refundable tax credit to low-income working families that functions as a wage subsidy, was introduced by the Tax Reduction Act of 1975. The value of the EITC has periodically been expanded over the years, but its basic form has remained the same since it was created. In an effort to reduce malnutrition, the WIC (Special Supplemental Nutrition Program for Women, Infants, and Children) Program was introduced in 1972 as a focused addition to existing food programs and made permanent in 1975. An addition to the Higher Education Act in 1972 brought assistance to low-income students and eventually came to be known as the Pell grant program, which has also been reformed and expanded in subsequent years. Additionally, almost every presidential administration has its own approach to providing training for low-income youth and adults. Under Richard Nixon, the Comprehensive Employment and Training Act (CETA) was passed in 1973. Under Ronald Reagan, the Job Training Partnership Act (JTPA) was passed in 1982. Under Bill Clinton, the Workforce Investment Act (WIA) was passed in 1998. At times even when the actual program remained essentially the same, there have been shifts in eligibility making enrollment either easier or more restrictive.

A larger policy debate around public assistance occurred during the 1990s and culminated in the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, an act now known as “welfare reform.” Signed by President Clinton, this law transformed the largest federal welfare program from an entitlement program that offered cash benefits to families into a state-run block grant program called TANF. Under TANF, means-tested cash benefits are no longer an entitlement, and lifetime limits for receipt have been imposed. States typically responded to these changes by keeping enrollment and benefit levels low. The new limitations embodied in the TANF program provided an impetus for considering alternative antipoverty approaches. A new political space emerged in the wake of these changes to explore programs that better supported self-sufficiency, asset building, and economic empowerment.

One result of this political shift was the 1998 passage of the Assets for Independence Act (AFIA), which provided a small amount of federal funds to support IDAs. These accounts are designed to help participants save resources that can eventually be used to pay for training, education, small business development, or a downpayment on a home. While the scale of this effort has been modest, it reflects an emerging interest in policy options that emphasized social development and long-term economic mobility rather than immediate consumption and an emergency safety net. Additional experimentation has occurred at the state and local level. For example, conditional cash transfer (CCT) programs, which offer direct cash support linked to specific actions or behaviors, are popular both in developing countries and in the United States. CCTs have been tested in New York City, although they are not yet part of the federal policy landscape. In fact, CCTs may illustrate one of the fundamental characteristics of recent social policy discourse. New policy ideas and approaches have been incubated with applicability for all levels of government, but few large-scale changes have been enacted at the federal level. Instead, experimental pilot and demonstration programs have been implemented, funded by private philanthropy, which have led to policy insights that are further informing policy discussions.

Social Welfare Typologies

To make sense of the evolution of US social policymaking and programs, it is useful to compare the United States and its approach to social welfare policies for the poor to other developed nations. In his original typology, Esping-Andersen (1990) classified the United States as a pure type of the liberal model of welfare capitalism characterized by market dominance and private provision, where the state rarely interferes to address poverty or provide for basic needs, relying primarily on means testing when it does. This is in contrast to the pure social-democratic model in countries such as Sweden where universal access to benefits and services is the norm, with greater individual autonomy and less reliance on the family and markets. Although many other countries (such as Canada, the United Kingdom, and Australia) have also been classified as liberal, this category is less cohesive (Ferragina and Seeleib-Kaiser 2011). According to this classification scheme, it is often presumed that the federal government in the United States will remain unlikely to expend many resources to protect individuals, poor or otherwise, from being dependent on market forces and that there will be high levels of inequality and social stratification. Even if this classification were an accurate portrayal of US policy priorities in the past, it is possible for them to evolve toward a greater emphasis on social development given changing conditions.

Others have questioned the idea that the United States has a small welfare state as well as the underlying assumption that a larger welfare state undermines economic growth. When Garfinkel, Rainwater, and Smeeding (2010) include public education and employer-provided benefits as part of social welfare expenditure, the United States is no longer a laggard in the proportion of GDP spent, and becomes very similar to other rich English-speaking nations. Considering this more expansive definition of social welfare, the United States spends more per capita than almost all other countries (Garfinkel, Rainwater, and Smeeding 2010).

If spending on cash relief and public benefits for the poor are combined with spending on public education and social insurance to comprise all social welfare spending, the United States spends a substantive amount on its welfare state, similar to other rich nations (Garfinkel, Rainwater, and Smeeding 2010). Yet, the US system is a patchwork of programs that supports certain designated populations with cash and in-kind benefits, but leaves out portions of the poor and allows some to remain in deep poverty—defined as less than 50 percent of the federal poverty line (Ben-Shalom, Moffit, and Scholz 2012). The demographic groups most helped are the elderly and disabled; the groups most underserved are nonelderly, nondisabled families without some member continuously employed (ibid.). Thus, the question becomes whether social welfare expenditure in the United States could be adjusted to reach more people in need and do a better job of reducing inequality and enabling social development. The best point of analysis may not be simply dollars spent on social welfare, but how well this expenditure reaches those at the very bottom of the economic ladder and does so in ways that promotes economic mobility and improved life chances.

A policy emphasis on social development can be explained in the way that Amartya Sen and Martha Nussbaum describe investment in expanding capabilities or the “real opportunities you have regarding the life you may lead” (Sen 1987, 36). Sen (1999) notes how individual agency and social arrangements complement each other. When social action (or policy) offers genuine opportunity, this provides a context wherein individuals have the freedom to take initiative to overcome poverty and deprivation. Nussbaum (2011) builds upon this work to highlight that a society promotes human capabilities by supporting the development of internal ability within individuals as well as the political social and economic environment that allows them to thrive. Thus, rather than just accepting what market forces allow, policies with a social development focus will intentionally strive to increase individual capabilities by creating structures that expand and even accelerate mobility.

Similarly, john powell [sic] (2012) prioritizes targeted universalism as a way to enable greater social development. Given that there are social and economic inequalities in the United States (historically along racial and ethnic lines), some people will naturally begin at different starting points and may...

Table of contents

• Cover
• Title
• One  The Rise of Asset Building and Its Impact on Social Policy
• Part I  The Changing Landscape
• Part II  Pathways to Asset Building
• Part III  Directions for the Future
• About the Authors
• Index