I think that the US should move in a more social democratic direction, emulating the successful Nordic welfare states. This is the first part of a series of posts that I will be writing to explain how I’d build the welfare state in an ideal social democratic America.
Family benefits are an integral part of any social-democratic welfare state. They should reduce child poverty, promote gender equality, and encourage work-life balance. Market incomes are often insufficient to provide for a family’s needs and welfare, so social incomes are very important to reduce the financial burden families with children face. I estimate that the cost of this would be somewhere in the range of 2.4–2.7% of GDP, not including the reductions in the cost of current tax expenditures and benefits.
Child Benefits
Child benefits are universal (cash) payments to families with children. All families would receive these cash benefits, regardless of income or employment status.
- The base rate of child benefit would be $250 per month, per child. ($3,000 per year)
- Families would receive an additional $80 per month for each child aged 0–3. ($960 per year)
- Large families would receive an extra $50 per month for the 3rd child, and each subsequent child. ($600 per year)
- Single parent families would receive an additional $100 per month, per child. ($1,200 per year)
- Families with disabled children would receive an additional $100 per month for each disabled child. ($1,200 per year)
For example, a single parent with one child aged 2 and one child aged 7 would receive monthly benefits equal to $530 per month. ($6,360 per year)
Child Care
Having a universal public childcare system is essential to promote gender equality and raise employment rates.
- 4 and 5 year-olds would be entitled to a free, full-day place in pre-K.
- Every child would be entitled to a childcare place from the age of 6 months until reaching the age of 5 years old.
- A small, flat-rate fee would be charged for childcare, about 10–20 percent of the cost — this would likely be around $7 per day. (Or it could be done on a sliding scale, but the minimum subsidy would be ~65% of the cost.)
Social Insurance and Leave
Workplace flexibility and social insurance rights are necessary to ensure economic security during times of no work due to family-related responsibilities.
- Social insurance benefits would replace wages on a graduated scale: the first $500 per week would see 100% replacement, the next $500 per week would see 65% replacement, and the next $500 per week would see 50% replacement. (For example, someone earning $1,100 per week would receive a benefit equal to $875 per week.)
Parental Leave
- New mothers would be entitled to 12 weeks of paid maternity leave.
- New fathers would be entitled to 12 weeks of paid paternity leave.
- In addition to paid maternity and paternity leave, parents would be able to share 44 weeks of paid parental leave between them.
- Parents would each be entitled to 104 weeks of job protected parental leave.
Family Leave
- Parents would be entitled to 40 hours of paid family leave each year when they have a child under 6, and 20 hours when their child is aged between 6 and 13. This would allow a parent to miss work, with protection, to attend to family-related responsibilities. The benefit would pay 100% of the hourly wage, up to $16 per hour.
- For example, if a parent has to leave work three hours early to take his or her child to a medical appointment, and earns $20 per hour, they would be entitled to a payment of $48 from the state.
Lump Sum Payments
- In August of each year, families with a child attending school would receive school bonus to help with the costs of school supplies, etc. This would be a flat-rate payment of $150 for children up to the age of 12, and $250 for children over the age of 12.
- Upon the birth or adoption of a new baby, every family would receive baby bonus. This would be a payment of $500. In the case of a multiple birth, the payment would be $600 per child.
