The social safety nets in developed market economies consist of various different elements and they differ from nation to nation, and at times from state/region to state/region. These are non-contributory transfer programs that are aimed at the welfare of the poor and the vulnerable. In the United States, social safety nets seek to protect the poor or those in danger of shocks and poverty from sinking below a particular poverty level. These programs referred to as welfare seek to raise the financial status of people in need and may also aim at improving their employment opportunities.
Public welfare programs provide wide safety net to assist people in combating poverty and rise into the middle class. This safety net is aimed at people with children, the elderly and other less privileged people such as the disabled. The welfare can comprise of cash assistance, Medicaid and food stamps (Grosh, Del Ninno and Tesliuc 2008). The federal government in the United States has developed a food program for individuals with low income. This is what is referred to as the Food Stamp Program.
There are two ways by which food stamps are distributed to the eligible individuals. The first way is through vouchers in a booklet, while the second is as Electronic Benefit Transfer (EBT) cards. These are used by the recipients to purchase food stuff from appointed supermarkets and food shops. This way, the welfare program provides food security for the people who are vulnerable and cannot afford to provide food for themselves (Bartfeld, 2003). Despite the fact that most people in the United States have health care insurance, a number still remains uninsured or underinsured.
This is the point where the social safety net comes in to ensure that these people have access to medical care. Medicaid is a collaborative federal-state program that provides health care to the poor, to children and to pregnant mothers who live below a specific poverty level. This is the largest welfare program in the United States that ensures that the poor are able to access health care. This program is funded by both the federal and the state government (Alderman and Hoddinott, 2007). Unemployment insurance is a federal-state program that offers fundamental income support for the unemployed.
This is particularly for workers who are laid off or those that are involuntarily dismissed and get a fractional replacement of their payment for a particular period of time. The amount paid is dependant on the workers prior pay and the period of employment. The employers give taxes for the purpose of this unemployment program. The aim of the unemployment insurance is to assist in countering economic fluctuations. With any increase in the economic growth, the unemployment insurance program increases via increased taxes while the unemployment insurance decreases as less people are unemployed.
Food stamps, unemployment benefits and Medicaid offer actual support to families that are faced with financial crisis (Alderman and Hoddinott, 2007). Despite the fact that the idea of the government providing social safety nets through to the people of the United States is a noble action, it is done at the expense of the others. The people of the United States are forced to cater for the needs of others, some of them who have refused to work. The taxes paid in catering for all the needs of the poor, the elderly and the unemployed in the country are a burden to the tax payers.
In addition to the fact that the social safety nets are costly to the tax payers, they tend to create disincentive effect. This is because they have failed to motivate people to work for their needs. Where people are assured of food and medical care even without having to work, they do not find the need to work. The government has failed in finding ways of motivating people to work. The government has also failed to address the root causes of poverty and unemployment, addressing them and thus lessening the burden of the working class and the employers (Sachs, 2006).