Table of Content
2. Historical Development of Social Policy
2.1. United States
3. Definition of Political Culture
4. Dominating Cultural Values
4.1. Liberal Principles: Individualism, Equality, Freedom and Protection of Property
4.2. The Cultural Values Religion and Civic Duty
5. Social Policy in the United States: Latecomer or Exceptionalist?
Social Policy is a current and often discussed topic in the United States as well as in Germany. Although both countries are now confronted with the same difficulties concerning the provision of social security in the future, in view of the reversal of the age pyramid for example, the states’ social policy has developed in different ways. “The United States is an outlier (exceptional) in practice as well as belief. Its taxes amount to a much lower proportion of GDP compared to European Community countries and Japan,” emphasizes Seymour Martin Lipset (1996: 73). It is obvious to compare a country with an ‘un-European’ development of social policy to one which can be seen as an ideal of a conservative welfare state regime, as Germany is described by Esping-Andersen (1990: 27).
The historical development of social policies is an extensive field which has been researched by numerous scholars, also with regard to international comparisons. A variety of literature with different approaches exists. Therefore it is important to focus just on one aspect of social policy making.
In this paper, it should be examined in which ways the difference in creating a social system by the state can be connected to cultural values which shape the political culture of the respective country. Of course, there are many other components which influence the development of social security in the United States like industrialization or economic growth. In the media one gets the impression that individualism is responsible for the unusual kind – from a German point of view – of social policy in the United States (Murswieck 1988: 8). Also David McKay emphasizes the fact that “nothing more accurately seems to represent Americanism than a stress on individual rather than collective action” (2001: 11). But is individualism the only reason within cultural values for the belated public social policy in the United States?
Despite the well researched field of social policy, a brief historical overview of the origins of social policy in the United States and in Germany is necessary and serves as foundation for the following examination.
2. Historical Development of Social Policy
2.1. United States
“The welfare state is as old as America itself”, claims Edward D. Berkowitz on the first page of his work “America’s Welfare State” (1991: 1). To understand this statement correctly, a common definition of the term “welfare” is necessary. The Oxford Advanced Learner’s Dictionary says: “practical or financial help that is provided, often by the government, for people or animals that need it.” As public social policy, which means social policy provided by the federal state, started relatively late, “welfare” in Berkowitz’ example stands for social activities organized privately or by the single states. Numerous scholars mark the era between 1933 and 1936 as the beginning of public social policy in the United Sates like Berkowitz for example (1991: 2). This era can be seen as the beginning of a social security system as it is known in Europe. Before that time, only incoherent programs were brought up. One of these programs for example focussed on veterans who received a pension. Between 1911 and 1920 so-called “mothers’ pensions” were established in 40 single states (Murswieck 2004: 622). Especially widows received financial support for the education of their children (Ibid.). Because of the lack of public financed welfare programs, private welfare organizations, like the “Charity Organization Society” or the “Settlement Houses”, came into life by the end of the 19th century (Murswieck 1988: 13). Altogether in-kind benefits dominated cash benefits at that time (Ibid.: 15).
During the presidency of Woodrow Wilson, discussions about minimum wage and social insurance came up (Ibid.). But there was a strong belief in unlimited economic growth. The following prosperity would solve problems like poverty and unemployment. Thus a social security system would not be necessary. After the Great War, welfare capitalism dominated in the United States. Employees were committed to their company by fringe benefits (Seeleib-Kaiser 2001: 269). This optimism found its end in the Black Friday in 1929. As saving money had been the main part of old-age insurance, it became now clear that other forms of social insurance were required. In 1930 only 10% of the senior citizens received any kind of pension, most of them were veterans (Lipset 1996: 71). There was still no unemployment or health insurance.
The era from 1933 to 1936 can be seen as a different approach to social security (Berkowitz 1991: 2). The Social Security Act, which is passed in 1935, is originally an emergency program of the New Deal, but then turns into a permanent program (Murswieck 1988: 22). The components of this program are a pension scheme, benefits for needy children, the elderly, and the blind as well as the beginning of national unemployment compensation (Berkowitz 1991: 2). The federal state is responsible for the pension scheme. Benefits are dependent of work which means that only employees are covered; farmers and people who have their own business for example are not included (Murswieck 1988: 25). For unemployment compensation, the single states are responsible whereas social security is partly managed by the federal state and the single states. As social security is limited on needy children, the elderly, and the blind, other forms of poverty are not covered (Ibid.: 26).
Reactions to the Social Security Act within the American society are not positive at all; recipients have to wait at least until 1942 to receive any kind of compensation (Ibid.: 25). Later on, there is a high mistrust of the system because it is not transparent enough to see if it pays full benefits (Berkowitz 1991: 3).
In 1950, 50% of the Americans receive a pension (Murswieck 1988: 27). On the one hand, this is progress in comparison to 1900 but on the other hand, defects still exist. With his book “The Other America” which is published in 1962, Michael Harrington draws people’s attention to poverty, for example minor mothers. An expansion of the social program is probably not possible as Kennedy has no majority in the Congress. In 1963 the Food Stamp Program is introduced which is a program against the still existing poverty and famine (Murswieck 1988: 29).
The second striking event in the history of social security is President Johnson’s “War on Poverty”, and herewith the origin of Medicare and Medicaid in 1965. Thanks to these programs, the elderly and those on welfare are protected by health insurance (Berkowitz 1991: 4). Although the United States spend in comparison to all other democratic industrialized countries the lowest part of the GDP for social security, the amount is doubled between 1960 and 1970 (de Swaan: 231).
In 1972 the “Cost-of-Living Adjustment”, a law which adjusts the pension payment each year dynamically, is passed. It is completed by the introduction of a minimum pension (Murswieck 1988: 28). With the Supplemental Security Income Program, which is passed 1972, all programs that existed hitherto are brought together and will be organized by the federal state (Ibid.: 29). During the oil crisis 1974/75 welfare spending is reduced (Ibid.).
In 1996, a welfare reform is passed. Welfare recipients now have to undertake a work activity to receive benefits (King 1999: 1). Clinton also favours a Health Security Act, but he cannot persuade the Congress although there is a democratic majority (Schild 2003: 15). With his successor George W. Bush, republican principles come up again. The intention is to reduce the influence of the state on social policy (Ibid. 16).
To sum up, American public social policy concentrates on old-age insurance whereas health insurance remains in the private sector apart from Medicare and Medicaid. Berkowitz marks the lack of public health insurance and the lack of long-term care as two significant gaps of public social policy (1991: 6). Furthermore, not all citizens have a social insurance so that people, who are faced with a difficult social situation, are dependent on welfare (Ibid. 7). Only citizens who have an open-ended working contract are supported by the public social system (de Swaan 1993:231). Therefore it is indispensable to take out a private insurance. As there is such a limited governmental action in regard to social security, fringe benefits and private philanthropy play an outstanding role in the United States. This fact will be taken into consideration in Chapter 4.
The beginning of public social policy in Germany can be marked in the middle of the 19th century, when industrialization begins and the work force arises (Pilz 2004: 22). In 1871, the social insurance of the German Empire provided insurance for specific professional branches like civil servants, the military and miners (Ibid.: 24). Only ten years later, the emperor Wilhelm I. announces in his Imperial Message to ensure an enforced security for his subjects (Ibid.). In 1883 health insurance is established; in 1884 accident insurance follows. Old-age insurance as well as an invalid insurance is established in 1891. These forms of insurances concentrate on employees whereas non-employed citizens are not covered (Ibid.: 25). At the end of the 19th century, three of today’s five basic insurances already existed. The fourth one, the unemployment insurance, was not added until 1927, as there was not yet found a way to compensate unemployment (Seeleib-Kaiser 2001: 75).