Social_Welfare_Policy

Comparative: Comparing Social Welfare Policy |ID |C015 | |Date of Revision |9/1/06 | |General Topic/Chapter |Comparing Social Welfare Policy | |Author |Sunday P. Obazuaye | Introduction (NOTE CHANGES IN RED) In this exercise, you can compare U.S. social welfare policies with those of four other countries: Great Britain, France, Japan, and Germany. We shall focus on three types of social welfare policies: old age pensions (social security), health care, and education. Through this comparative exercise, you can gain a better comprehension of how social welfare policies vary across nations and you can better understand the distinctive features of U.S. social welfare policies. Add to “Social Welfare Policy around the World” Germany P143 Germans see their economy as a social market economy, that is, one that combines a capitalist mode of production with the belief that society should protect all its members from economic and social need. Such protection is provided by a system of social insurance to which people contribute according to their incomes with the understanding that they may someday need its assistance. The belief that society is responsible for the well-being of its members is called solidarity, or Solidarität , and is a key concept of German social policy. The development of social policy in Germany has followed a unique historical path. During a long process of growth and social experimentation, Germany combined a vigorous and highly competitive capitalist economy with a social welfare system that, with some exceptions, has provided its citizens cradle-to-grave security. The system's benefits are so extensive that by the 1990s annual total spending by the state, employers, and private households on health care, pensions, and other aspects of what Germans call the social safety net amounted to roughly DM1 trillion and accounted for about one-third of the country's gross national product. Unlike many of the world's advanced countries, however, Germany does not provide its citizens with health care, pensions, and other social welfare benefits through a centralized state-run system. Rather, it provides these benefits via a complex network of national agencies and a large number of independent regional and local entities--some public, some quasi-public, and many private and voluntary; many of these structures date from the nineteenth century, and some from much earlier. The legislation that established the basis of this system dates from the 1880s and was passed by imperial Germany's parliament, the Reichstag, with the dual purpose of helping German workers meet life's vicissitudes and thereby making them less susceptible to socialism. This legislation set the main principles that have guided the development of social policy in Germany to the present day: membership in insurance programs is mandated by law; the administration of these programs is delegated to non-state bodies with representatives of the insured and employers; entitlement to benefits is linked to past contributions rather than need; benefits and contributions are related to earnings; and financing is secured through wage taxes levied on the employer and the employee and, depending on the program, sometimes through additional state financing. In the mid-1990s, representatives of Germany's political parties, businesses, unions, and voluntary social services agencies continued to wage a vigorous debate over social policy. At issue is the role to be played by state and/or nongovernmental voluntary charitable agencies, churches, and other social service providers and how to find a politically acceptable mix of public and private institutions. Ever since the nineteenth century, especially during periods of economic and social crisis, there has been a recurrent demand to shift from insurance-based programs to a universal flat-rate and tax-financed program in order to secure a minimum income for all. However, there has never been sufficient political support for eliminating insurance-based programs. In the postwar period, business groups and the Christian Democratic Union (Christlich Demo-kratische Union--CDU), with the exception of the left wing within the CDU, tended to support the continued segmentation of the labor force into separate insurance-based programs for various occupational groups. In contrast, the labor unions and the Social Democratic Party of Germany (Sozialdemo-kratische Partei Deutschlands--SPD) tended to support unitary programs for the entire labor force. Education is an important concern of all three levels of government – federal, state, and local – accounting for about one-tenth of all public spending. Tidbits about Germany • In Germany, the rate of personal taxation rises with income level, from a base of 17 percent to a maximum of 47 percent in 2003. • Germans are much likely than Americans to consider that the state is responsible for addressing social needs and to support government policy actively. • In Germany government expenditures at the federal, state, and local government levels have increased over the years, from less than DM 100 billion in 1960 to DM 741 billion in 1980, and over DM 1.866 trillion for a united Germany in 2000. This accounts for nearly 50 percent of the gross domestic product. NOTE CHANGES (in red) TO Compare Social Welfare Policy” This part of the exercise allows you to compare various features of the social policies of Great Britain, France, Japan, Germany, and the United States. You can compare social welfare policies, health care policies, and education policies. Add to “What proportion of Gross Domestic Product is committed to social security spending'” Germany P143 54% Add to “Who administers social security, and how is it financed'” Germany P143 Social Security is administered by the national government. The program is financed through very substantial payroll taxes paid by both employees and employers. These taxes bring in about 46% of all public revenues. NOTE CHANGES (in red) TO “Check Your Understanding” In which country is the smallest percentage of Gross Domestic Product committed to social security spending' • Great Britain • France • Germany (instead of Sweden) • Japan • United States Add to “What is the average social security payroll tax rate (paid by employer and/or employees'” Germany P143 66% Add to “What proportion of the Gross Domestic Product is committed to government health care spending (2000)'” Germany P143 8% Add to “What proportion of the Gross Domestic Product is committed to all health care spending'” Germany P143 10.5% Add to “What is the average life expectancy (2000)'” Germany P143 78.8% Add to “What is the role of government in providing and regulating education'” Germany P143 Education is an important concern of all three levels of government, accounting for about one-tenth of all public spending. Conclusion (NOTE CHANGES IN RED) Through this exercise, you learned about such social welfare policies as social security, health care, and education. You compared the United States in these respects to four other countries: Great Britain, France, Japan, and Germany. NOTE CHANGES (in red) to “Test Yourself” Question #4 and #5 Question 4 Which country has the highest proportion of GDP committed to all health care spending' • Germany (instead of Canada) • Japan • Great Britain • France • United States Question 5 Which country spends the most on education as a percentage of gross national income per capita' • United States • Japan • Germany (instead of Canada) • France • Great Britain