There is a strong strain of US political culture that is vehemently opposed to social spending. These opponents generally imagine welfare recipients to be able-bodied, lazy young people who simply
don’t want to work. Conservative opponents of social programs often seize on this imagery, who try to inflame voters into supporting efforts to dismantle the welfare state.
What is interesting is that a core constituency of these anti-welfare initiatives are in fact society’s biggest welfare recipients: the elderly. We can illustrate that fact by digging into data from the Survey of Consumer Finances.1
Varieties of Welfare
Our first step involves asking, what is welfare? Here, it includes economic transfers from taxpayers to households that qualify for government programs designed to help families who do not earn enough money on their own. There are three major types of social payments programs in the US:
- Welfare, which is given to some households with very low income. Examples include the Temporary Assistance for Needy Families (TANF) program or the Supplemental Nutrition Assistance Program (SNAP) program (food stamps), or the Supplemental Security Income (SSI) program. The government extends other non-payment support to the poor, like housing vouchers or Medicaid, which is not considered here.
- Workers’ Programs, payments to workers’ whose employment is disrupted, like Unemployment Insurance or Workers’ Compensation.
- Social Security, which provides payments to the elderly and disabled.
Many readers might object to the inclusion of Social Security as a type of welfare program, on the grounds that it is a system into which its recipients have paid. In fact, Social Security is a PAYGO system, in which today’s seniors’ checks are principally funded by the payroll deductions taken from the working populations’ paychecks. Today’s recipients’ payroll deductions were used to pay for the Social Security checks of those who were elderly during their working years. These are current transfers from the working to (largely) non-working population.
One way to gauge how much people are getting from these programs is to look at their costs. The figure to the left was taken from Center on Budget and Policy Priorities
Number of Recipients
The figure below describes the percentage of households receiving any money from these three social payments programs:
The number of people receiving all three types of assistance fell in numbers over the 1990s. In part, this was a byproduct of an extraordinarily long prosperity and strong labor markets. When jobs are bountiful and better paid, fewer people need public assistance.
Since 2001, America’s welfare system – at least the part of it that provides money to poor people – expanded considerably. Social Security recipients grew as a group since the mid-1990s. The proportion of households receiving welfare as cash payments (e.g., TANF, SNAP, traditional welfare checks) has grown steadily since 2001. Workers’ benefits have grown since the 2008 crisis.
The figure below describes the median take from each of these three program types. This is the median receipts from each program type among all households receiving any money.
The median take from Social Security is by far the biggest and fastest-rising. In 1992, it was just over $8100. By 2013, it stood at $16,740. Payments more than doubled, and did so at a time when incomes stagnated.
The take from workers’ programs also doubled, from $2,480 to $5,120. This growth has been fueled by largely temporary expansions after the 2008 financial crisis (e.g., extending eligibility for Unemployment Insurance). Many of these program extensions have since expired, and they will probably be lower when the 2016 survey’s results are released.
Welfare, on the other hand, has not grown. In 1992, median welfare take stood at $2940. By 2013, it was $2,660.
Poor Young People Aren’t Major Social Assistance Recipients
America has a large welfare state, but it primarily serves the elderly. Social payments to the working age population and the poor are far less generous. Payments to the poor are low and have been shrinking, probably as a result of the political demonization of these programs.
In contrast, senior-targeted social programs have been generous. This generosity has been growing at a time when the government has been trying to cut other assistance programs.