Social Welfare During Great Depression

At the end of the 1920’s, America was faced with the Great Depression. Unemployment rates went from 20% to 60% in some city’s populations (Module 9 podcast). During the beginning of the Great Depression, the United States was run by a conservative, Herbert Hoover. This leader did not believe it was the government’s responsibility to intervene in this crisis.

According to authors of blank, Axinn and Stern, (2018), the Great Depression demonstrated that “one could be poor and unemployed because of social, not individual, dysfunction.

” It was not until the 1932 presidential campaign that Franklin D. Roosevelt (FDR) took a more innovative approach to the economy by pledging a “New Deal.” FDR was a Democratic nominee, and his wife, Eleanor, was a social welfare and civil rights activist (Stern & Axinn, 2018). Together they created FDR’s “New Deal.” This set fair labor standards as well as setting a minimum wage and prohibiting child labor.

Social Welfare Reforms

Many social welfare reforms were created to try to alleviate blank at this time.

The Federal Relief Emergency Administration (FERA), is a program that was created to attempt to help state and local social welfare agencies get money to unemployed citizens and help them with job training. This was one of the first attempts at a major federal policy, which set an example for the government to get involved in the welfare of the country. This program was put in place to try to get people back into the workforce, providing cash assistance as well as “monies for job training, loans for students and assistance to farming cooperatives” .

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Among many others, FDR also started the Civil Works Administration, giving people jobs fixing highways, building roads, and public construction. Also during FDR’s reign came the Social Security Act and the Federal Relief Emergency Administration.

Post-Great Depression, FDR executed three types of remedial legislation: “grants to states for direct relief, public work programs to stimulate investment, and immediate public employment programs” (Axinn & Stern, 2018). Although many of these programs did not prove as successful as he wanted, FDR set the bar high for following leaders, making a powerful impact on welfare reform and governmental involvement. According to author of blank, Eichengreen (2015) stated, “radical reform, 1930s style, may have appealed in principle, but it proved impossible in practice.” FDR aimed high, and although it proved difficult to keep reforming at the pace society was changing after that, many of these programs survived.

FDR believed society was the reason poverty existed. He believed in a “Keynesian approach,” which meant that putting government funding into the hands of the poor during times of recession will in turn improve the economy. This is also referred to as demand-side economics. This kind of economics holds the belief that inflating the economy happens by increasing demand, with government regulating. This heightened consumer confidence and boosted employment at first, which helped end the Great Depression. The down side of this approach, however, was that unemployment and inflation began to rise. This is where Ronald Reagan came into office with differing views and ideas. On the opposite side of demand-side economics was supply-side economics, holding the perspective that lower taxes and deregulation will ultimately create more wealth in the economy. The idea was that if big corporations are not taxed, they will invest more, which promotes economic growth and could create more jobs. This influx would then trickle down to the lower classes, creating a better standard of living for those who work for these corporations. The major problem with this approach was that it created an even bigger gap between the rich and the poor.

Ronald Reagan’s Approach

Ronald Reagan was a conservative Republican. This was shown in his lack of support for social programs. His belief was that poverty was the fault of the victim and investing in social welfare was ineffective. Supply-side economics involved cuts to social and federal welfare spending as well as non-profit agencies. The food stamp program was cut, as well as housing programs, Social Security, and Medicare.

Reagan came into office with the knowledge that FDR’s strategies were failing. In response, he tried to combat these failures by drastically changing the economic and social policies which ended up hurting the economy more. While both presidents failed at creating programs that can withstand an ever-changing economy, they both attempted to address financial and social welfare challenges of their time, creating lessons for future governmental decisions. The problem is that, as a nation, we still have not been able to get to the root of the issue of poverty. As seen in the past, society is still at a disagreement with whom is responsible for poverty, who deserves welfare and how much, and to what extent the government should intervene. As stated by Milton Friendman, money that should have been helping combat poverty “doesn’t go to the poor, it goes to you and me, and programs that are meant to benefit the poor, but also to government, salaries, and overhead” (1978). The country is still very divided and recent politicians take advantage of that.