Urban Injustice: How Ghettos Happen (16 page)
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Authors: David Hilfiker,Marian Wright Edelman
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There is also the generally ignored question of what happens to the fabric of society when that society refuses to care for its poorest. Welfare reform’s five-year limitation on TANF benefits sends a crystal-clear message: no matter how poor you are, no matter what the external conditions causing your poverty, after five years you are on your own! It is true that the law contains some provisions allowing the states to extend benefits for a limited number of people, but there is no requirement that they do so. When the richest country in the world simply says “No more!” to its poorest, the delicate fabric that holds a society together is torn. It does not bode well for our future.
There are other options.
Five
WELFARE ELSEWHERE
We Americans have largely convinced ourselves that not only will we always have the poor with us, but also nothing can really be done about it. It’s just part of the human condition, we tell ourselves, that more than 10 percent of Americans—even in the best of times—are desperately, even hopelessly poor and living in a kind of misery unimaginable to the rest of us. The idealistic hope that inspired the War on Poverty for those few short years is gone, replaced by the cynical view that any serious attempt to alleviate severe economic inequality is either doomed to failure, like the war on poverty, or another example of hopelessly utopian dreaming.
Our cynicism is unfounded. It’s not as if we needed to take steps never attempted before on the face of the earth. Most of what we could do to radically improve the lives of the those most greatly in need and, indeed end poverty as we know it, has already been done and done successfully in other parts of the world. We need only take a look at the actions (which can no longer even be called experiments) of other advanced industrial countries.
The developed nations of Western Europe and Canada have taken a very different approach to social welfare. Their emphasis is on social insurance, not public assistance. There is nothing similar to Medicaid, for example, since
everyone
has access to tax-supported health care. In most of these nations, every family with children receives an allowance of some sort, so a special program directed only at needy families is less necessary. Even those programs that are specific to people living in poverty are still seen as “insurance” against the possibility of
anyone’s
falling through the safety net. In the United States, the emphasis is on assistance to the needy; in most other industrialized nations the emphasis is on a social contract. In return for participating in society to the extent an individual is capable, the nation guarantees everyone a certain basic standard of living.
everyone
has access to tax-supported health care. In most of these nations, every family with children receives an allowance of some sort, so a special program directed only at needy families is less necessary. Even those programs that are specific to people living in poverty are still seen as “insurance” against the possibility of
anyone’s
falling through the safety net. In the United States, the emphasis is on assistance to the needy; in most other industrialized nations the emphasis is on a social contract. In return for participating in society to the extent an individual is capable, the nation guarantees everyone a certain basic standard of living.
One aspect of social insurance common to all other Western industrialized nations is universal health care. In Finland, for example, the system is a mixture of public and private medicine. (Cold-war stereotypes to the contrary, Finland’s economy is capitalist, as are the economies of the other Western industrialized nations.) Physicians work thirty-seven hours a week as state employees, either in public clinics or hospitals, but are allowed to have private practices as well, which most do. Any individual may use the public clinics for a nominal fee of approximately $15
1
a year. Necessary hospitalization costs several dollars a day. Finns may also decide to use the private system, in which case the state will pay approximately two-thirds of charges for covered services. In other Western countries the mechanism for providing the coverage varies. In Canada, for example, physicians are in private practice and the state acts as a single large insurance company that physicians then bill for services. England, on the other hand, has a completely socialized system of medicine in which all physicians are state employees. In each country, however, all citizens receive basic health care as a right. In Finland, health care is also available to anyone with permanent resident status.
1
a year. Necessary hospitalization costs several dollars a day. Finns may also decide to use the private system, in which case the state will pay approximately two-thirds of charges for covered services. In other Western countries the mechanism for providing the coverage varies. In Canada, for example, physicians are in private practice and the state acts as a single large insurance company that physicians then bill for services. England, on the other hand, has a completely socialized system of medicine in which all physicians are state employees. In each country, however, all citizens receive basic health care as a right. In Finland, health care is also available to anyone with permanent resident status.
To American ears perhaps the strangest parts of the Finnish system are the programs of family support and home-childcare support. All families, regardless of income, receive family support allowances from the Finnish government for each of their children up to the age of seventeen. Stranger still to American minds, the
per-child
allowance increases with every additional child, in part because of government policy to encourage a higher birth rate. A family receives approximately $90 a month for a first child, but $131 a month for a third. A family with three children, for instance, would receive $330 a month in total child support payments.
per-child
allowance increases with every additional child, in part because of government policy to encourage a higher birth rate. A family receives approximately $90 a month for a first child, but $131 a month for a third. A family with three children, for instance, would receive $330 a month in total child support payments.
A single mother receives an additional $44 a month per child. A single mother is also guaranteed at least $107 a month in child support from the child’s father. Unlike in the United States, where few poor single parents receive child support, in Finland the government guarantees payment by taking responsibility for collecting child support payments and supplying the mother any unpaid balance if the state is for any reason unable to collect from the father.
2
2
In addition to receiving basic child support, one of the parents (or the single parent) of pre-school-age children can choose to stay home to provide childcare and receives a $250-per-month base “salary.” The stay-at-home caregiver receives an additional $85 a month for each child up to the age of four and $50 a month for each older child. Single parents who choose to stay home (and thus have no other income) or poor two-parent families receive an additional payment of up to $170 a month, depending on family size and income.
3
3
A single parent of two small children can, therefore, choose to “work at home” and receive a basic income of over $12,000 a year, in a country where a poverty level income for that person is $15,000.
4
Additional assistance to pay rent, which is also available, would bring the income well above the poverty level.
4
Additional assistance to pay rent, which is also available, would bring the income well above the poverty level.
For parents who choose to return to work, the state provides childcare for a charge of $200 a month for the first child, $200 a month for the second child, and $40 a month for each additional child. This charge is reduced for low-income families and is free for families with an income less than $12,000 a year.
While the numbers work out differently elsewhere, family support in other industrialized countries is similarly generous. In Finland, France, Sweden, and several other countries in Europe, maternity allowances pay an amount almost equal to regular salaries for up to a year. In fact, the United States is the only industrialized country that does not have universal preschool, family assistance, and parental leave programs.
Unemployment insurance benefits are approximately half of one’s previous salary, which is about the same amount as in the United States, but almost everyone who loses a job receives it (in the United States less than half do), and an unemployed worker can receive those benefits for up to two years, compared to six months in the United States.
All Finns, regardless of income, are also eligible for allowances for almost any kind of adult education, be it university classes, vocational or job training, continuing job-related education, or retraining for a new profession. In addition, tuition is free at all Finnish schools for everyone. Students (including full-time adult students) also receive a living support of $260 a month as well as rent support, which is two-thirds of monthly rent up to a maximum of $150 a month.
Retirement benefits are handled much as in the United States, with a combination of private retirement funds through employers and state-financed social security benefits which would be considered generous by American standards.
In addition to these benefits, available to everyone regardless of income, there are two programs specifically designed for the economically needy. The first is rent assistance, which is available at up to 80 percent of monthly rent, depending on one’s income and the cost of rent. Renters can choose housing wherever they can find it, preventing the kind of economic ghettoization that is common in the United States. The names of those receiving such assistance are confidential, which avoids any stigma.
Finally, there is a catchall benefit that social workers can authorize for people who still fall through the cracks. The amount one should need to live on is determined by a schedule that factors in family size, cost of living in the area, and any special needs.
5
If all of one’s income, including salaries, allowances and supports, is less than the determined amount, the social worker may, on a case-by-case basis, authorize an extra allowance to bring one up to the predetermined level, which is approximately the poverty level. A single mother with two children who rents an apartment for $600 a month, for example, is considered to need an amount almost identical to our poverty level of $15,590 for a family of three. Unlike the other entitlements, these catchall allowances are administered individually by assigned social workers to make sure that funds are being used appropriately.
6
If other special needs do develop, one can return to the social worker and apply for additional assistance.
5
If all of one’s income, including salaries, allowances and supports, is less than the determined amount, the social worker may, on a case-by-case basis, authorize an extra allowance to bring one up to the predetermined level, which is approximately the poverty level. A single mother with two children who rents an apartment for $600 a month, for example, is considered to need an amount almost identical to our poverty level of $15,590 for a family of three. Unlike the other entitlements, these catchall allowances are administered individually by assigned social workers to make sure that funds are being used appropriately.
6
If other special needs do develop, one can return to the social worker and apply for additional assistance.
When we, as Americans, look at such a social welfare system, invariably our first response is, “With benefits like that, who would want to go to work?” We wonder how many people are simply playing the system. When I tried to voice that concern in an interview with a Finnish social worker, she at first didn’t even grasp what I was getting at. She finally responded that in her city of sixty thousand people, a study had indicated that approximately one hundred people were receiving benefits who “should have been working.” She went on to say, however, that the agency had just done a more in-depth study of these one hundred individuals. Extensive medical and psychological testing had determined that approximately half had subtle disabilities that actually did prevent them from working. In that particular city, then, the agency believed that less than one person in a thousand was abusing the system. Although no similar systematic nationwide study has been done, a high-level administrator in Helsinki agreed that such abuse was rare.
Because virtually all Finns belong to the same racial and cultural group, racial segregation is not an issue in Finland, nor is there much economic segregation. Rich and poor live in the same neighborhoods; their children go to the same schools. As a consequence, the disparity in services like education, police protection, or trash pickup provided to rich and poor, so prominent in the United States, is largely absent.
The result of this system is that Finland has little poverty as we in the United States would define it. There is certainly inequality, but low-income people’s incomes are generally not allowed to fall below our poverty levels. Even the most needy, then, would not be “poor” by our definition.
There is, of course, a cost to such a way of organizing society. In the United States, average Federal and local taxation rates—exclusive of social security payroll taxes—are about 21 percent of income, and many Americans consider these rates high. Taxation rates in Finland and other Western nations range from 40 percent to 50 percent of income, although not all of the difference is due to social insurance programs.
A commonly expressed objection is that America’s problems are different from Finland’s. Finland is a small country. The population is much more homogeneous and therefore people tend to identify with one another. The overwhelming issue of segregation (and the legacy of slavery) does not exist. Immigration is only a minor issue. Furthermore, it is pointed out that European countries themselves have recently been scaling down their own social programs because of the expense. But the objections are not as persuasive as they first appear.
Finland is indeed a small country, but much larger countries like Germany and France have programs that provide similar social insurance for the needs of children, as well as for illness, maternity, retirement, and unemployment. While there is certainly poverty in these countries, it does not reach the level of destitution familiar to us here, and children tend to be the best-off demographic group, not the poorest, as in the United States. Why should size alone constrain the development of an adequate safety net, especially if federal funding and standards are combined with local administration?
It is true that the other developed countries are not burdened by America’s history of racism and that some, like Finland, are much more homogeneous than we are. Because our population is highly segregated by race and class, the affluent do not have the poor as friends or even personal acquaintances, so the poor tend to remain “the other,” believed to be responsible for their own destitution. It is, therefore, difficult to mobilize political support for social insurance. But this explains only America’s political reluctance to embrace an adequate social safety net. It is not an argument against social insurance in itself. Furthermore, not all developed countries are as homogeneous as Finland. Canada, Germany, and England all contain diverse populations yet manage to prevent destitution far better than the United States does.
While some European countries have limited their social programs in recent years, these cutbacks have been overemphasized in the American press. After the breakup of the Soviet Union, Finland experienced several years of severe recession as commerce with its major trading partner all but collapsed and the official unemployment rate reached 22 percent. Despite this extraordinary stress on the safety net, however, there were no significant reductions in benefits. Over the past ten years, I have several times read in the American press allusions to cutbacks in Finland’s social insurance. As I have asked Finns about each “cutback,” however, either no one knew anything about it or the cutback was a minor tweaking of the system. The European safety nets remain largely intact.
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