Canada and the United States represent two alternative responses to the economic restructuring and new macro-economic environment of the 1980s. In the United States, modest programmes of social protection for the non- elderly followed the downward drift in wages and earnings at the low end of the labour market. The exception has been some growth in wage subsidies for the working poor provided by the Harned income Tax Credit. Overall, however, transfers to the non-elderly have declined as a share of GDP and family income inequality has risen. The result is a general decline in aggregate social welfare despite strong employment growth.