If We Turn to Other forms of Social Policy, how does the United States care for its old, its poor, its unemployed, and its disabled? Here, most outcomes place the United States in the lower half of the spectrum, but within European norms and standards. The primary weakness of American social policy is its reluctance to deal resolutely with poverty. If we measure outcomes before redistribution, the United States starts with an economy that produces less poverty than most European nations. According to one calculation, only Finland and the Netherlands have lower “natural” poverty rates. But after taxes, social benefits, and other mechanisms of redistribution have worked their magic, the American poverty rate (as measured relatively, i.e., as a fraction of median income) is higher than anywhere in Western Europe. We will come back in more detail to the question of poverty and inequality. In what one might call the middle-class entitlement aspects of the welfare state, however, America is less of an anomaly. As is widely known, the American state is more modest in size and scope than its European peers. Yet as an employer of civil servants, it ranks in the middle of the European scale (figure 50). France and Finland employ proportionately more civil servants, but at least five other countries, including Germany, hire fewer. Correspondingly, the percentage of America’s GDP spent on government employee salaries is higher than in six of the nations we are examining. The size of the American state, as measured by government expenditure as a percentage of GDP, also fits into the European span. Ireland and Switzerland spend less (figure 51). For most social policies and benefits— which together make up what is usually called the welfare state—the picture is analogous: the United States ranks low, but within the bottom half of the European spectrum. All figures given here and elsewhere (unless otherwise indicated) are phrased in internationally comparable terms. Sometimes this means benefits rates are measured as a percentage of median income, allowing a sense of what proportion of a standard of living is maintained. Sometimes they are calculated in Purchasing Power Parity (PPP) terms, which means that differences between the cost of living in poorer and richer nations have been factored in.
Generational conflict, consumption and the ageing welfare state in the United Kingdom
