Government responses to economic inequalities
Welfare to Work
Welfare to Work is the main US government strategy to reduce poverty. It is operated by the federal and state governments. Welfare support, such as Medicaid health insurance, childcare, food stamps and Earned Income Tax Credit (EITC), is linked to finding work. For example, EITC is worth up to $3,618 for the first child and is only available to those actively seeking employment or who have taken up employment.
Successes of Welfare to Work:
- supporters claim more people have been 'encouraged' into work
- this has increased the incomes of the poorest and reduced the cost of the welfare budget
Criticisms of Welfare to Work:
- opponents claim it has forced many people to work for very low wages
- it has not reduced inequality or poverty levels in the USA
Temporary Assistance to Needy Families (TANF)
TANF is a federal financed but state run programme aimed at getting as many single parents back to work as possible. It offers both employability and childcare support. Welfare benefits are linked to finding or looking for work. TANF is only available for a maximum of five years.
- since TANF was introduced in 1996, the child poverty rate among single parents has fallen. Overall, however, fewer families today receive TANF as eligibility rules have tightened
Criticisms of TANF
- the level of child poverty in the US is one of the highest in the developed world
- the block-grants given to states have few restrictions on how the money is used. Michigan spends most of its TANF grant on college (university) scholarshipA prize of money to pay for education fees and/or living costs. while Texas uses the money to fund foster care