The History of Social Welfare Programs (& Current Debates)

When people suffer a disability or job loss, governments often provide some degree of social welfare to help them maintain some level of income and/or health care.

Jan 1, 2024By Owen Rust, MA Economics in progress w/ MPA
history social welfare programs


One of the most controversial and historic questions that occupies a major chunk of political, religious, and social discourse involves what should be done when people are suffering from illness, disability, or poverty and have insufficient income to maintain a decent quality of life. Until the modern era, governments did relatively little to assist those in poverty or who had become unable to work due to illness, injury, or old age. Since the late 1800s, many Western societies have evolved social welfare programs to assist these individuals in various ways. However, debates over how generous or accessible social welfare programs should be remain active across the globe, with political liberals typically arguing for more generous support and conservatives calling for limits.


Setting the Stage: Welfare Under Traditional Economic Systems

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Saint Lucy giving alms to the poor and disabled by Giovanni di Bartolommeo Cristiani, 14th century, via The Metropolitan Museum of Art, New York


For most of human history, social welfare was minimal and often relegated to families, religious groups, local lords, and local charities. Those who were unable to work had to rely on the kindness of others, as governing systems did little to support them. Most places utilized a traditional economic system where decisions about what to produce, who produced it, and who received it fell to local lords, religious leaders, or community elders. This made concepts like the labor market and unemployment more difficult to measure than today, as people were often placed into jobs by tradition or decree of local leaders.


Until the modern era in the West, all organized social welfare was through the church, meaning the Roman Catholic Church prior to the late 1500s. Devout Christians (and devoutness was expected) were supposed to give alms (financial donations for the poor), a practice known as almsgiving. Although religions were typically adamant about the necessity of caring for the poor and infirm, the practice of almsgiving was often insufficient to meet the needs of the poor, and religious leaders often kept many funds to build lavish cathedrals. The success of charity, even backed by organized religion, to assist the poor and infirm could be thwarted by corrupt individuals who wanted to use the alms for other purposes.


Setting the Stage: Workhouses/Poorhouses

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A photograph of boys placed in a workhouse for the destitute in Victorian-era England, via Historic UK


Relief from poverty moved from a purely religious practice to a government practice during the Renaissance era, shortly after the split between Catholics and Protestants. Locally, this was done in England beginning in 1601, with each parish expected to provide its own poverty relief. In 1723, the concept of the workhouse was formalized with the Workhouse Test Act, also known as the Knatchbull Act, after its creator, Sir Edward Knatchbull. By 1776, there were approximately two thousand workhouses in England where the poor could receive some aid in exchange for work. The term “Test Act” came from the fact that the poor had to show they were essentially destitute and willing to perform hard and unpleasant labor, thus being an early form of means testing.

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Similar to immigration, entering a workhouse required an applicant to undergo various tests, including medical tests. Those allowed to live in the workhouse typically received a uniform, and many residents (up to twenty percent) were long-term and had lived there for five years or more by the mid-1800s. In that same vein, much of the work of a workhouse involved making the institution self-sustaining, including through farming, sewing, and general handiwork. In agricultural areas, workhouses often helped farmers with grinding and milling. Violation of listed rules could result in punishment, such as denial of food or being placed in an isolated cell.


1880s-1920s: State-Run Welfare Programs in Germany

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The current logo of the German state pension system, via the University of Potsdam


While England had a system for assisting the poor and infirm, Germany became the first country to provide organized social welfare for the elderly. Otto von Bismarck, the first leader of a united Germany, proposed the first old-age pension system in the early 1880s, along with sickness insurance and workers’ compensation for on-the-job injuries. In 1889, the old-age pension became law and was quickly adopted by other European nations. Initially, one had to be 70 years old to receive benefits, though this was lowered to age 65 in 1916. In 1927, Germany added unemployment insurance.


A debate remains over what influenced Bismarck to pursue social welfare programs, with a popular assumption being that it was a hedge against communism. Germany itself had only united as a nation the previous decade, so the state welfare systems may have been a strategy to help unite and instill loyalty among the population. Others disagree, arguing that the piecemeal creation of different social welfare programs in Germany points to a lack of a singular strategy. The programs were not universal in their infancy, with only about 10 percent of the population covered by the health insurance program in the 1890s. Although covered workers could choose their own doctor and receive free care, they contributed a majority (two-thirds) of the finances toward the health insurance program (versus one-third for employers).


Progressive Era Social Welfare 

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A poster praising the reduction in child labor in the early 1900s through the use of Mothers’ Pensions to provide cash assistance to poor mothers, via Cambridge University


Up through the Gilded Age, there was little government intervention in the American economy to assist the poor and infirm. At the time, the husband and father was typically the only family member to work outside the home in non-agricultural areas. This meant that if the father suffered illness or injury, the family was left without any income. Beginning in 1911 with Illinois, states passed mothers’ pensions to assist women whose husbands could no longer provide an income. Politically, this was successful because it appealed to the role of motherhood and was also seen as a way to reduce child labor. Previous efforts at social welfare had been regularly criticized as making people idle and disincentivizing work.


Additionally, part of the drive for mothers’ pensions was to keep children in the home, as children had often been moved to state institutions – which were often considered unsafe – if the family had no income. The push for reform was influenced at the national level by President Theodore Roosevelt, who convened a White House Conference on the Care of Dependent Children in 1909. By 1934, when the New Deal made social welfare an accepted principle nationwide, all but two states had mothers’ pension laws. However, funding was often insufficient, and pensions were handled at the local level, meaning effectiveness varied widely from place to place.


Great Depression Reveals Limits of Local Charity

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Unemployed men lined up at a soup kitchen in Chicago, circa 1931, via CK-12


Despite the growth of social welfare systems in Europe and the spread of mothers’ pensions across the states, America remained rooted in laissez-faire capitalism up through the 1920s. When the Great Depression hit in 1930, coming on the heels of the infamous stock market crash of 1929, the federal government and state governments were unprepared for the surge of unemployment and the collapse of many banks. Socially and politically, many felt that it was the job of local governments, charities, and nonprofits like the Red Cross to assist the poor.


US President Herbert Hoover, along with many other political conservatives, feared that giving direct federal government support to the unemployed would lead to dependence – people continually relying on the government for support. Although local organizations did often step in to assist, an unemployment rate that surged as high as 25 percent overwhelmed these efforts. In 1932, shortly before Hoover lost re-election by the greatest landslide in presidential election history, aid to the poor and unemployed only averaged $26 per jobless person nationwide, many of whom had dependents.


New Deal: Federal Government and Social Welfare

ccc employment poster 1941
A poster encouraging young men to apply for employment with the Civilian Conservation Corps (CCC), a New Deal agency that hired many unemployed men, via Humanities Texas


In 1932, Hoover lost re-election to Democratic presidential nominee Franklin D. Roosevelt, governor of New York. When accepting the Democratic Party’s nomination, Roosevelt famously pledged a “New Deal” for the American people. Immediately upon taking office in March 1933, Franklin D. Roosevelt (FDR) began using the power of the executive order to enact his New Deal initiatives. FDR used an executive order in November 1933 to create the Civil Works Administration to create 4.25 million government jobs to assist the unemployed. Other executive orders were economically beneficial, such as FDR’s bank holiday to help stabilize the nation’s banking industry, but were not directly part of social welfare.


Executive Order 6101 created the Civilian Conservation Corps in April 1933, hiring thousands of unemployed young men between the ages of 18 and 25 to build roads, bridges, dams, and government buildings, usually in rural areas. Enlistees in the CCC earned $30 per month, of which $25 was sent to their families, thus providing social welfare for dependents. The efforts of the CCC and other New Deal agencies were important in developing infrastructure in parts of the United States that lacked it, especially the South, Appalachia, and parts of the Midwest. Importantly, the CCC was one of the first government institutions that pledged not to discriminate on the basis of race, providing social welfare opportunities for Black men as well as white men.


1935: Social Security Act

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A poster advertising survivors’ benefits of Social Security, established by the Social Security Act of 1935, via Humanities Texas


While the CCC and other New Deal infrastructure development agencies helped men of working age, one demographic that had been hit very hard by the Depression was the elderly. Retirees, especially, had been decimated by the collapse of many banks. Prior to the New Deal, banks were not insured by the government, meaning that a bank collapse could cause people to lose their life savings! The creation of the Federal Deposit Insurance Corporation (FDIC) helped protect the banking industry from future collapses, but more needed to be done to help the elderly who could no longer bring in sufficient income.


Toward that end, Congress and FDR passed the Social Security Act of 1935, which redistributed taxed income from workers to the elderly (age 65 and over) and people with disabilities. The law was signed in August 1935, fourteen months after FDR encouraged Congress to begin working on such a bill. States would receive money to help impoverished elderly and disabled, and the federal government would manage the retiree pension program that most people associate with the term “Social Security” today. The minimum monthly benefit received by a retiree was $10 per month. To this day, Social Security remains very popular and, as a result of citizens paying into it through payroll taxes and thus being entitled to it, cannot be cut as part of the normal federal budget process.


1946: National School Lunch Program Founded in the US

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A graphic showing the history of government-subsidized public school lunches in the United States, via the University of Georgia


Although most Americans are familiar with Social Security and state-run welfare programs like nutrition assistance (formerly called food stamps), many may be unaware that public schools may be the largest provider of social welfare to youth in the United States. In 1946, President Harry S. Truman signed the National School Lunch Act (NSLA) into law. By 2006, it provided either free or reduced-cost school lunches to almost 60 percent of American youth between ages 5 and 18, with the vast majority being free lunches. The program has been credited with almost completely eliminating malnourishment among school-aged children in the United States.


The school lunch program was improved in 1962 by allocating funds per capita, ensuring that students nationwide received equitable access to nutrition. In 1966, the NSLA was followed by the School Breakfast Program and Special Milk Program, providing low-income students with access to breakfast as well as lunch. The program has been adjusted over time to ensure better nutritional outcomes, such as removing sugary and fried food from public school cafeterias. Since 2012, the Healthy, Hungry-Free Kids Act has required schools to offer students fresh fruits and vegetables, whole grains, and low-fat milk options. As with many social welfare programs, it is today operated by the states with federal funding assistance.


1948: National Health Service Founded in the UK

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A hospital in the United Kingdom (UK) with the NHS logo, via the World Socialist Web Site (WSWS)


Shortly after World War II, England created the National Health Service (NHS) to provide basic health care for all residents, free at the point of service. This single-provider system, where the government provides healthcare in government-owned clinics and hospitals, uses tax revenue to pay for all services. The creation of the NHS is often seen as a continuation of Progressive Era reforms and is linked to the evolution of Poor Laws and workhouse infirmaries. The Local Government Act of 1929 essentially created free health care for those in poverty at workhouses, and this model expanded to cover free health care for more and more citizens up through the beginning of the war.


With local governments having taken over the health care once provided by workhouses, a framework was in place to provide basic health care to all citizens, not just those in poverty. The devastating bombings inflicted on Britain by the German Luftwaffe during World War II are often credited with creating the social and political unity to push through the massive social welfare reform of creating single-provider healthcare. During the conflict, an Emergency Medical Service essentially ran all health care, thus making it less difficult to simply continue that precedent of government-run medicine. Despite frequent complaints and controversies over underfunded hospitals and long wait times for specialists, the NHS remains highly popular in England, similar to the popularity of Social Security in the United States.


1965: Medicare & Medicaid Founded in the US

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US President Lyndon Johnson (left) signs the Medicare and Medicaid Act in 1965 while former President Harry S. Truman (right) watches, via the University of Virginia


Despite England’s adoption of universal health care with the NHS in 1948, the US retained privatized health care despite a proposal by President Harry S. Truman in the autumn of 1945, immediately after the end of World War II, to expand Social Security to include basic health care. In the aftermath of the war, many people were not eager to see yet more government expansion, and some critics accused the proposal of being “communist” in nature. Therefore, while European nations moved toward various single-payer healthcare models, where the government funded basic healthcare so that it was free at the point of service, the United States did not. However, twenty years later, two major groups in American society did receive government-funded health care: the elderly and those in poverty.


The Medicare and Medicaid Act of 1965 provided basic health insurance for retirees and those in poverty, respectively. All citizens received Medicare coverage upon turning 65, regardless of income. This was because private (profit-seeking) health insurance companies did not like to insure older Americans on account of their greater need for medical care. Medicaid, however, was limited to those in poverty. Medicare is a direct federal program, while Medicaid is operated by states with federal funding assistance. Due to Medicaid being run by the states, eligibility requirements can differ from place to place and takes into account one’s income, number of dependents, marriage status, and pregnancy status. Today, approximately 18 percent of Americans are on Medicare, and 19 percent are on Medicaid.


1965: Elementary & Secondary Education Act

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A graphic asking about equitable public school funding, which was a provision of the Elementary and Secondary Education Act and its later revisions, via the Education Law Center


Quality of education and access to higher education is often considered part of social welfare. The Elementary and Secondary Education Act (ESEA), passed the same year as Medicare and Medicaid, provided federal grants to provide resources to low-income students and school districts. This was targeted toward ensuring equitable levels of academic rigor and preparation for the future for all public school students. Prior to the ESEA, many students in low-income school districts did not receive a quality education and were automatically assumed not to be “college material.”


The ESEA has been reformed over time by subsequent laws during reauthorization. Many major federal laws covering broad topics require periodic reauthorization to continue allocating funding (often federal grants to state and local governments). In 2001, the No Child Left Behind (NCLB) law updated the ESEA to require state accountability for academic rigor. Though controversial due to its alleged tendency to “punish” struggling school districts, NCLB and its later update ESSA (Every Student Succeeds Act in 2015) did establish the important precedent of holding schools accountable for providing high-quality education to all students. Beginning with the ESEA in 1965, all public school students in the United States are supposed to experience equal opportunity in education access and the ability to pursue higher education.


2010: Affordable Care Act Implemented in the US

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An image inviting readers to learn more about the Affordable Care Act (ACA) that governs health insurance coverage, via the US Department of Health and Human Services (HHS)


While the Medicare and Medicaid Act of 1965 provided government health insurance for large groups of Americans, and US military health insurance (TRICARE) covers a few million more, a majority of Americans had to acquire health insurance on their own. Most could opt into employer-provided health insurance, though this often required automatic deductions of the premium from their paychecks. Others could buy health insurance coverage on an individual market. There were frequent complaints that these insurance plans were not comprehensive and denied people based on pre-existing conditions (long-term illness or disability).


In 2009, US President Barack Obama proposed the Affordable Care Act (ACA), which would provide government subsidies for health insurance plans to low-income Americans. Unlike the NHS and other single-payer health care plans, health insurance in the US under the ACA would remain provided by private companies but would be subject to greater government regulations. In exchange for having to provide comprehensive coverage and accept applicants with pre-existing medical conditions, health insurers would benefit from government subsidies, and controversially, all adults over age 25 were required to have health insurance coverage (or face a tax penalty). The rationale was that the subsidies and increase in the number of paying customers would balance out the additional cost of medical coverage.


Current Debates: Single-Payer Healthcare & Debt Relief

student debt forgiveness plan 2022
A graphic explaining the 2022 student loan debt forgiveness plan released by the Biden administration, which was struck down by the US Supreme Court in 2023, via Carleton College


During the 2020 US presidential election, one proposal debated by Democratic candidates was student loan forgiveness. Since the 1990s, when student loans became easy for all college students to access, student loan debt had ballooned to over $1.7 trillion. Many liberals and progressives argued that at least a portion of this debt should be forgiven by the federal government (which issued federal student loans) in order to allow millions of young people to help the US economy by buying cars, houses, and other goods and services. In 2022, US President Joe Biden attempted to forgive up to $20,000 of federal student loan debt per borrower using an executive order, but this was ruled unconstitutional by the US Supreme Court in 2023.


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A graphic showing eight modern forms of social welfare programs in the United States, via Ohio University


Since 2015, single-payer healthcare has re-emerged as a social welfare proposal in the United States under the Medicare for All framework. Liberals and progressives, led by US Senator Bernie Sanders (I-VT), have advocated for expanding Medicare to all Americans, regardless of age or income. Although the Medicare for All proposal is far from becoming law, since 2015, it has picked up considerable support among Democrats in Congress in various bills. Today, a majority of polled Americans support the concept of Medicare for All, though support is considerably less for a single-provider system like England’s National Health Service, where many citizens could not pick their own doctor.

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By Owen RustMA Economics in progress w/ MPAOwen is a high school teacher and college adjunct in West Texas. He has an MPA degree from the University of Wyoming and is close to completing a Master’s in Finance and Economics from West Texas A&M. He has taught World History, U.S. History, and freshman and sophomore English at the high school level, and Economics, Government, and Sociology at the college level as a dual-credit instructor and adjunct. His interests include Government and Politics, Economics, and Sociology.