The Great Depression affects attitudes on poverty.

A major shift in cultural attitudes toward poverty occurred in the United States in the 1930's.

Millions of workers lost their Jobs or worked only part-time. Local government and private charities could not meet the crisis, and the Federal government had to step in. We came to accept an economic conception of causation. Great Britain began a major overhaul of its welfare legislation early in the century. And in 1910 sociologist Edward T. Devine in a pioneering study of poverty “Misery and Its Causes”, advanced the theory that poverty is primarily economic - the outgrowth of maladjustment's which result directly from conditions for which society is responsible. He challenged the prevailing idea that poverty is ordinarily due to shiftlessness, drunkenness, having too many children, or other personal faults. He stressed the view that the true causes of poverty should be sought in the social system, not in the personality of the individual. This assumption has come to be the accepted philosophy of our day and poor-relief practices now conform to it.

As more and more people have become wage earners rather than working for themselves, our idea of who is responsible for a man's misfortune has changed greatly. We know now that misfortune - sickness, loss of a job, or failure to find a job in one's particular vocation - may not be due mainly to any personal fault.

We also know that not everyone can save for a comfortable old age. A long period of sickness may wipe out savings, as may an automobile accident or a period of unemployment. Inflation may cut in half the value of the money put 'aside for retirement, So, although unemployment is perhaps the most important of the social-insecurity' problems, it is not the only one we face.

Millions of aged, unable to work and without reserve funds, must depend upon others for support. Besides there are thousands who because of physical handicaps are unable to compete in an economic system which cannot always produce enough work even for the able-bodied. This group includes the blind, the crippled, and the enfeebled. There are also widowed mothers with children to support, for whom modern industry and commercial agriculture make little provision.

The new discovery of poverty. Out of the Great Depression came the Social Security Art of 1935 and other measures for helping the less fortunate Americans. Soon after these reforms became operative. World War 11 broke out in Europe. Unemployment virtually disappeared in the United States during the war, and the postwar years were ones of general prosperity. For many years poverty was not much of a public issue.

Courses in poverty disappeared from sociology department offerings, and in their place came courses in public welfare and social security. It was assumed that the problem of poverty was taken , care of by these new institutions so far as American society was concerned. The nation had overlooked the fact that many had not shared in the rising standard of living and were in fact living in poverty. It became clear during the 1960's that even those receiving benefits of the Social Security Act were not, in many instances, adequately provided for even by minimum standards. A "war on poverty" was declared.

Changing Ideas on Poverty

Poverty is a lack of the means for meeting the needs of life: food, shelter, clothing, and medical care. Mankind has had much experience with it, for throughout history there has been more want when plenty.

Views of the American people on the causes and treatment of poverty are extremely diverse. Nevertheless, over the past forty or fifty years a significant change in general attitudes has taken place.

Traditional views on poverty. Views on poverty of the early American settlers reflected the treatment of the poor in an English society just emerging from feudalism. In feudal society the serf eked out a meager existence, but the landed aristocracy had a clear conception of its responsibility for protecting the welfare of those at the bottom of the social pyramid. This sense of social respon­sibility was buttressed by the Catholic Church. It taught the Christian ethic of charity and made some systematic arrangements for the care of the poverty-stricken. The decline of feudalism and the Protestant Reformation led to a new emphasis on individualism. The end of serfdom meant that the landowner no longer had the same social obligations toward those living on his estate. And Protestantism also emphasized individual responsibility. During the sixteenth century England devised a number of measures for dealing with the rising number of vagrants and the "idle and disorderly." These measures were codified in the Poor Law of 1601. It required that able-bodied vagrants be banished or stripped naked from the "middle upward and shall be openly whipped until his or her body be bloody." Local parishes were required to appoint four overseers who worked with the churchwardens to improve the "miserable state of the godly and honest sort of poor subjects of this Realm." Overseers were vested with power to tax for poor relief. They bound poor children out as apprentices, provided raw material for the unemployed to work with, and built workhouses for the most destitute. This is the system which eventually diffused to America.

The English Poor Law - and subsequent arrangements worked out in colonial America -attempted to provide differential treatment for the "deserving" and the "undeserving" poor. The deserving poor were the "godly and honest sort" who were victims of some misfortune. The undeserving were those who failed to live by the cultural norms. Among these were the able-bodied vagrants who were to be banished or whipped.

America it was somewhat easier to locate the "undeserving" poor than in England, for land and jobs were readily available in the New World. American Protestantism tended to equate virtue with work. Idleness and time-wasting were sinful. Among the Puritans these values reached their extreme expression. Their belief in "rugged individualism" taught that each individual had an equal chance. If he did not fare well, he alone shouldered the blame. If he failed, it was felt he was lazy, lacked judgment, drank too much, or was in some other way deficient as a person.

Under this philosophy the "undeserving" poor could be neglected, or even punished. The "deserving" poor could be cared for by a combination of governmental and private programs. But a common view was that the treatment should not be too generous because "poverty is good for people; it builds character; it makes them humble and honest." These moralistic views on poverty and the poor are still voiced today.

Unit III.

Social Welfare

As Russia makes the transition from a command economy to a partial free-market system, the provision of an effective social safety net for its citizens assumes increasing urgency. A 1994 World Bank report described the current social-protection system as inappropriate for the market-oriented economy toward which Russia supposedly was striving. Among the major shortcomings noted in the report were the continued major role played by enterprises as suppliers of welfare services, as they had been in the Soviet period; the absence of any coverage for large groups of people and the inadequate level of benefits in some regions; a growing disparity between a shrinking wage base and the demands placed on the system; and the failure to target the neediest recipients. As the economic transition of the 1990s forces more of Russia's citizens into poverty, the state has tried to maintain the comprehensive Soviet system with severely constrained resources.

The system's inefficiency is exacerbated by its fragmentation. As in the Soviet period, allowances and benefits are administered and financed by diverse agencies, including four extrabudgetary funds, several ministries, and the lower levels of government. The Ministry of Social Protection is the primary federal agency handling welfare programs. However, that ministry focuses almost exclusively on the needs of people who are retired or disabled; other vulnerable groups receive much less attention. The four extrabudgetary funds that provide cash and in-kind social welfare benefits at the federal level are the Social Insurance Fund, the Pension Fund, the Employment Fund, and the Fund for Social Support.

Social security and welfare programs provide modest support for the most vulnerable segments of Russia's population: elderly pensioners, veterans, infants and children, expectant mothers, families with more than one child, invalids, and people with disabilities. These programs are inadequate, however, and a growing proportion of Russia's population lives on the threshold of poverty. Inflation has a particularly deleterious effect on households that rely on social subsidies. Women traditionally have outnumbered men in such households.

The Fund for Social Support supplements a variety of in-kind social assistance programs in Russia. It is financed through the Ministry of Social Protection and supplements social welfare programs at the subnational level. The federal government has transferred most responsibility for social welfare, health, and education programs to subnational organs but has failed to ensure their access to adequate revenue. The total allocation of transfers from the federal budget to localities amounted to less than 2 percent of Russia's gross domestic product (GDP) in 1992. Thus, the quantity and quality of social services at the local level-including the provision of food vouchers and cash payments to cover specific items such as heating bills- are far from certain as time passes. Under these conditions, local jurisdictions have come to rely increasingly on extrabudgetary sources, the instability of which makes long-term planning difficult.

Pensions

Pensions are the largest expenditure of the social safety program. The Pension Fund accounts for 83 percent of Russia's extrabudgetary allocations. At the end of 1994, about 36 million citizens, or 24 percent of the country's population, were receiving pensions, an increase of about 5 percent in the first three post-Soviet years. Two broad categories of pensions are paid in Russia: labor pensions, which are disbursed on the basis of a worker's payroll contributions, and social pensions, which are paid to individuals who have worked for less than the five years needed to qualify for a labor pension. All Russian citizens who have worked for twenty years are entitled to at least a minimum pension. In 1994 about 75 percent of all pensioners received labor pensions. The Pension Fund also finances some child allowances and other entitlements.

The Pension Fund is administered by the Ministry of Social Protection and financed by a 29 percent payroll tax and by transfers from the state budget. Between 1991 and 1993, the real income of pensioners was cut in half as prices rose rapidly and pension indexation failed to keep pace. Inflation also severely eroded the value of the life savings of retirees, and a disproportionate number of pensioners were victimized by financial scams. A 1994 law requires quarterly indexation of pensions, but the law was not observed consistently in its first year, and in mid-1995 the average pension fell below the subsistence minimum for pensioners. Beginning in 1994, the government's failure to pay pensions on time led to large rallies in several cities. In August 1994, an estimated 10 million pensioners did not receive their checks on time, and pension arrears mounted in the two years that followed. By mid-1996 the payment backlog was estimated at US$3 billion. The present system includes an important provision that has kept many pensioners above the poverty line: it allows workers to draw pensions while continuing to work. In 1995 as many as 27 percent of Russian pensioners continued to work after retiring from their primary job.

Russian and Western experts agree that the pension system requires comprehensive reform--although its rate of payment compliance by enterprises is substantially better than that of the State Taxation Service. The most pressing needs are an effective system of indexation of pensions to purchasing power, an insurance mechanism, individualized contributions, higher retirement ages, and the closing of loopholes that allow early retirement. In 1995 the Ministry of Social Protection began work on a reform that would establish a three-tier pension system including a basic pension, a work-related pension in proportion to years of service, and an optional private pension program. In 1995 Prime Minister Viktor Chernomyrdin admitted that the state budget lacked the money to continue indexing pensions according to living costs. In November 1995, a decree by President Yeltsin, On Additional Measures to Strengthen Payments Discipline for Settling Accounts with the Pension Fund, set stricter reporting standards for payments to the fund by organizations and citizens, in an effort to preclude nonpayment. In the midst of his campaign to be reelected president, Yeltsin then approved two laws increasing minimum pension levels in three stages, by 5, 10, and 15 percent, between November 1995 and January 1996.

Women are entitled to retire when they reach age fifty-five, and men when they reach age sixty. Nevertheless, financial hardship leads many women to remain in the labor force past retirement age, even while continuing to receive pensions, in order to prevent a drop in their families' standard of living. In 1991 women constituted an estimated 72 percent of pensioners. The disproportion between the genders stems from women's earlier permissible retirement age and their greater longevity. Aside from pensions, women receive other retirement privileges. Mothers of five or more children are entitled to a pension at age fifty. "Mother Heroines"--women with ten or more children--receive an allowance equal in sum to the pension, and the time they spent on child care leave counts toward the minimum twenty years of work required for labor pensions. For these reasons, many women retire before age fifty-five, while most men wait until they reach sixty-two

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