Introduction
The United States is one of the most developed countries, but it is also one of the countries with the highest level of income inequality. According to research, more than half of the nation’s income goes to only 5% of the population, while the remaining half is shared by the 95%. One way of measuring a nation’s income inequality is through the Gini coefficient. The Gini coefficient measures income inequality on a scale of 0 to 1 wherein 0 corresponds to total equality; a scenario wherein everyone is earning the same amount while 1 corresponds to total inequality; a scenario wherein only one person earns all the income . Under this parameter, the United States scored 0.411 and is several points above other European countries such as Germany, Sweden, Norway, Denmark and Finland. Wealth in America is shared by only a small fraction of the population, while many suffer in extreme poverty. In order to alleviate poverty and improve the distribution of income among the country’s population, the government, under the Social Security Administration, has adopted the Supplemental Security Income, which aims to provide sure income, particularly to those who cannot join the country’s labor force because they are unemployable because of age or because of physical and mental disabilities. The purpose of this paper is to discuss the problem of income inequality in America and to determine how important and effective the SSI program is in addressing the social problem of income inequality.
Income Inequality as a Social Problem (Definition and Analysis)
Income inequality, in its simplest meaning, is understood as the gap between the income of the rich and the poor (Dabla-Norris, Kochhar, Suphaphiphat, Ricka, & Tsounta, 2015, p.4). Equality has always been associated with fairness and is considered as an important characteristic of a just and equitable society (Dabla-Norris, Kochhar, Suphaphiphat, Ricka, & Tsounta, 2015, p.4). For the same reason, the widening gap in income inequality is considered by many as a social problem with dire implications. Income inequality accounts for many social ills. A steep inequality in the income of individuals in a society, for instance, is indicative of unequal opportunities and social mobility. One of its major impacts is the unequal opportunity for education, health and other human needs, which can be unequally provided if there is a huge gap in earning between spectrums of the country’s population. The increasing gap between the income of the rich and poor, for instance, means that there is also an increasing number of Americans that are denied access to quality education, healthcare and other important social services. As observed by scholars, the numbers of Americans that proceed to higher education are gradually decreasing because college education is getting more expensive. Over the years, the amount of tuition has increased significantly, making higher education restrictive and only affordable for a fraction of the American population. The same is true with health care. In the United States, the health insurance system is not fully funded by the government. According to national data, only 45% of the national expenditure on health is being provided by the government through Medicare . The remaining 40% is being provided by private insurance companies while 15% of the health care cost is shouldered by the individual through out-of-pocket spending . There are many individuals in the United States that are not being covered by private health insurance and are also not illegible for Medicare. According to recent estimates, around 48 million individuals in America do not have healthcare insurance primarily because they are not employed and could not afford a personal health insurance . If the government does not provide welfare assistance, low income individuals will be severely disadvantaged because their access to important social institutions and services, such as in higher education and health, will be very limited. For the same reason, a high income disparity would result to extreme poverty and low social mobility. Another ripple effect of high income inequality is the proliferation of other social problems associated with poverty such as criminality and delinquency. According to social disorganization theories, individuals who come from poor families are also at higher risk of becoming delinquent as compared to those who come from well-off families primarily because the poor are often deprived of social opportunities (Wood & Alleyne, 2010, p.102). According to experts, when a family fails to satisfy the needs of its members, the children are pushed towards the streets where they are exposed to a life of delinquency and criminality (Wood & Alleyne, 2010, p.102).
Income Disparity in the United States and Jacksonville, Florida
According to researchers, the disparity of income in the United States is so high that the income of one family, particularly the Walton family, is equivalent to the income of more than 42% of American families combined. Although there are many factors why income is very unequal in the United States as compared to other developed countries, one of the most pressing concerns is the huge disparity in wages. To place income inequality in the United States in perspective, the average income of a company CEO is around $22 million annually . Comparing this amount with the average annual income of $50,000, it can be observed that company executives get 200 times more income than the average American . The wage gap becomes even worse when the income of CEOs is compared to the bottom earners, which comprises 20% of the American population. With an average income of just over $10,000 a year, the income of the bottom 20% of the American population is almost 400 times lower than that of the average CEO. Like the rest of American communities, Jacksonville in Florida is not exempt from the impacts of income inequality. According to one observer, Jacksonville also has a high level of income inequality like most urban centers in the United States. In 2013, the city’s median income is between $47,000 and $48,000, but only 19% of the population are earning such amount. Based on statistical data, almost 50% of the population are earning an income below the median with 26% of the population earning less than $20,000 annually. Consistent with the national percentage of high-income earners, only 2% of Jacksonville’s population earns more than $200,000 annually. Although Jacksonville fared well in income equality as compared to the state of Florida, the gap between the income of the rich and the poor is observed to be growing.
Supplemental Security Income Historical Background
The Supplemental Security Income, as mentioned earlier, was a predecessor of the Family Assistance Plan proposed by Nixon. For the same reason, the key to understanding the SSI is to understand the underlying agenda behind the conception of the FAP. Most scholars believe that welfare programs in the United States are an aftermath of the Great Depression. In fact, the Social Security Act of 1935, which was the landmark legislation that house many federal welfare programs, was designed to address the predicament experienced by American families during this time wherein Americans experienced the worst economic decline resulting in mass unemployment and widespread poverty. But among those who were stricken with the Great Depression, it was the elderly populations that were deeply affected. Without the capacity to work, many of the elderly population were unable to support themselves, making them very much dependent on family members who were also struggling with unemployment and poverty. Without a federal insurance program, there is no safety net for those who are already unemployable because of old age. For the same reason, the government adopted the Social Security Act of 1935 to address the needs of the elderly; providing them with health and financial assistance after their productivity days were over. A more ambitious program that aims to extend the welfare assistance provided by the government was proposed by the Nixon administration. Named as the Family Assistance Plan, the program aims to provide a sure income to poor families, regardless of the physical condition of the head of the family. Following on the proposal of the American economist, Milton Friedman, Nixon’s FAP advocated the concept of the negative tax for the poor. Under this concept, the government provides a guaranteed income to the poor under a scheme wherein the head of the family will receive an amount equivalent to the disparity of his/her income relative to the poverty-line income. Say, for example, that the government provides a fixed negative income tax rate of 50% for those earning below the poverty-line income set at $3,000. The head of the family who earns $2,000 will have a discrepancy of $1,000 relative to the poverty-line income. He or she is then entitled to a $500 subsidy, which is calculated by multiplying discrepancy of $1000 by 50% negative income tax rate. Using this type of poverty reduction scheme, the head of the family who does not earn anything will automatically be given $1500, which is 50% of the poverty-line income. The FAP’s controversial poverty reduction scheme draws much criticism, particularly from the conservative lawmakers. Many believe that the FAP is too generous and tolerates indolence. Even Friedman agreed that the FAP scheme “reduces the incentives of those helped to help themselves” . There are also others who believe that the program’s benefits were too small or inadequate. As observed by Senator Harris, one of the Senate Finance Committee that presided in the debate over FAP, only 10 percent of the families that were already receiving welfare will be better off with FAP while the 70% of those who were already receiving welfare will not experience a change in benefits. Even worse is that 20% of those already receiving federal welfare will be left worse than their present situation.
SSI Policy Description and Eligibility
Despite Nixon’s public support for FAP, the proposal did not push through. Congress, however, passed the Supplemental Security Income (SSI), which initially targeted the elderly, the blind and the disabled. The SSI is administered under the Social Security Administration and has grown to become “the largest federal means-tested cash assistance program in the United States” (Daly & Burkhauser, 2003, p.79). Since the SSI was enacted, the program has expanded its beneficiaries to include aliens, which includes refugees and those that were granted asylum who pass the criteria of eligibility. In order for an individual to be able to benefit from the SSI program, he or she needs to send an application online. In order to be eligible for SSI benefits, one must first pass the eligibility requirements. SSI is only open for individuals that are either aged, blind or disabled. For aged individuals, 65 years old is the lower limit in order for one to be considered eligible for SSI. Blind individuals, including those who have “central visual acuity of 20/200 or less” in his better eye or has a visual field that “subtends an angle no greater than 20 degrees” are also considered as eligible under the blind criteria. Individuals with visual disabilities that does not fall under blindness may also apply for SSI under the disability criteria. The disability criteria include physical and mental disabilities. Under the disability criteria, diabled means that one must exhibit physical and mental impairment to the point that it causes severe functional limitations, life threatening, and is expected to last continuously for more than a year. Applicants for SSI should fit the criteria mentioned in order to become eligible. But most importantly, the applicant must prove that he has limited income and resources. The amount of assistance provided to beneficiaries is impacted by the value of his income and resources. Resources that can be easily converted to cash such as stocks, real estate, vehicles, etc., are considered as resources and may reduce the amount of benefit provided to the applicant. Incarcerated individuals and those who have an arrest warrant for felony are not eligible for SSI. Individuals who are admitted to public institutions are also not eligible for the month that he or she is under the care of the institution. Being a federal welfare program, SSI also applies for Jacksonville residents who are eligible. Jacksonville has a local Social Security Office that handles SSI and other social security benefits for city residents.
Critique and Evaluation of SSI
The principle behind the SSI is consistent with the theory of social justice advocated by the political philosopher John Rawls. According to Rawls, it is inevitable for members of society to carry the burden and benefits in a manner that is reasonable and fair (Rawls 10). It is also understood that the state takes on the role of a parent towards the underpriviledged under the doctrine of ‘parens patriae’ (Himes, 2004, p.1). As observed by scholars, “The individual’s inability to protect his or her own interests was, historically, the central justification for recognizing the sovereign’s prerogative to act on the individual’s behalf” (Himes, 2004, p.2). Under this context, the state is justified in taxing its citizens and distributing the proceeds for the good of everyone according to their needs. For the same reason, the importance of welfare programs such as the SSI could not be undermined. In fact, there is a consensus among experts that creating an efficient welfare system is one of the most effective ways of reducing poverty, which is why such programs are being advocated by most legitimate governments. In the United States, for instance, the creation of welfare programs under the Social Security Administration has significantly reduced the number of poor individuals. According to observers, the number of the elderly population living in poverty was cut in half with the inception of the Social Security programs. The improvement of the financial status of the elderly also has ripple effects on the disposable income of many families. Because of federal and state welfare assistance, the burden of supporting the elderly and other members of the family that are physically disadvantaged for work is significantly diminished. The United States, however, does not provide an extensive welfare program. Unlike in most European countries wherein welfare is given extensively, the United States’ welfare services are availed by only a fraction of its target population. Most people in the U.S., for instance, are not receiving adequate welfare services as compared to Europe and other developed countries. The SSI provides the needed financial assistance that would help poor individuals who does not have the capacity to work due to their physical and mental disabilities.
Summary and Conclusion
Income inequality is one of the most pressing contemporary social problems that many nations are having issues with. In the United States, particularly in Jacksonville, Florida, the inequality in income has reached an alarming level as the gap between the income of the rich and poor widens. In order to address the issue of income inequality, lawmakers have tried to design welfare programs that aim to supplement the income of the income of the bottom earners. One of the most extensive of these welfare programs is the Supplemental Security Income (SSI). The Supplemental Security Income (SSI) is a federal program that aims to provide monetary assistance to eligible individuals, primarily the disabled and the elderly with low incomes. This program was enacted in 1972 and became operational in 1974 when it started to provide assistance to its beneficiaries. The SSI replaced most of the previous Social Security entitlement programs and is considered as the culmination of the Family Assistance Plan (FAP), a bold welfare program introduced by the U.S. President Richard Nixon in 1969. Just like the Family Assistance Plan (FAP), the SSI was meant to extend the role of the federal government in providing welfare assistance to low income Americans. The FAP, however, was designed as a comprehensive assistance program while the SSI is limited in scope. The FAP, for instance, plans to provide assistance to all poor families, regardless of the fact that some are being headed by an able-bodied head of the family. Unlike the FAP, the SSI is a selective program that only provides support to specific individuals, particularly those with physical disabilities that limit their ability to work normally. The SSI is a necessary welfare program primarily because there are certain individuals who do not have the capacity to work because of their age or physical and mental disabilities. Evidently, the SSI program is one way of redistributing income and helps in decreasing the income inequality at the federal level. By taking a portion of the income of able-bodied citizens, the state redistributes income through social welfare programs such as the SSI. Sound ethical and social justice theories suggest that the state has an obligation to provide relief to this disadvantaged portion of the population. The adoption of SSI, therefore, is a necessary burden that the government of the United States could not avoid.
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