Celebrating 80 years of the the Social Security Act - The cornerstone of our economic security
by Annette Case
When people hear the term social security, the first thing that often jumps to mind is the public system that provides income for retired workers. The Social Security Act of 1935 instituted a cornerstone to guard against the “hazards and vicissitudes of life….and provide some measure of protection to the average citizen and his family”- the loss of a job, inability to work due to disability or age, the care of children, and prevention of ill health. The Social Security Act intended to provide for the economic security of our American Society. And the social insurance components of the law … “will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness.”
Social Security and social insurance generally works very effectively as intended. Nine of out ten individuals age 65 receive benefits helping seniors afford the basics and avoid destitution. For nearly 3 out of 4 unmarried people it represents 50% or more of their income. This public benefit is critical as half of workers have no private pension coverage. Social security provides for widows and surviving children under age 18 when a parent dies. Unemployment insurance also works very well for those who receive benefits and allowed workers during the recent recession to keep their homes, put food on the table and care for their children while they looked for work.
The 1935 act was a response to massive social and economic changes. Workers, usually men, moved from farms to industry and into cities, from self employment to wage employment.
“The civilization of the past hundred years, with its startling industrial changes, has tended more and more to make life insecure.”
That quote from President Roosevelt rings true today with our own technological revolution and global economy which has wrought an increase in low paid jobs, self employment and employer behaviors that skirt the very protections provided by the Social Security Act. Today the majority of women work, new arrangements are needed for the care of children in order for parents to work, and adults live and work longer. We are on the verge. of the next great evolution in economic security for our American society.
Advancing economic security, the ability to afford the basics and weather the uncertainties of life, is a deeply rooted American value . Proposals to provide for our economic security date back at least to 1795 through income supplements so every young adult would get a start in life and support when they aged out of work. In 1935 support for the Social Security Act was built on the collective action of many who believed our country should provide for workers as they aged. Then, as now, deep economic recessions heightened the urgency. As a result of collective action, pensions for Civil War veterans and their widows, company pensions and state laws to provide pensions began to emerge. By 1929 six states enacted pension legislation, that totaled 17 by 1932. Modern economic security efforts include paid family and sick leave to account for critical caregiving needs. Momentum is growing. Four states and 24 counties or cities have adopted paid sick leave and three states provide paid family leave among other acts of economic security.
Relative to the varying local patchwork of narrow programs, the social insurance of the federal Social Security Act meant much greater inclusion and equal access to benefits. Yet, then, as now, not all households benefitted equally. Certain workers were excluded from coverage including agricultural and domestic workers. This decisions left out workers that, at the time, represented 60 percent of the nation’s black population. Though these exclusions have changed over time, the number of jobless workers receiving unemployment insurance is at its lowest level in over five decades. Race and gender discrimination still exist in access to higher paying jobs, equal pay, and who experiences job loss first. Today, people of color are less likely to receive unemployment benefits. The public is hotly debating inequities in our economic security structures.
Roosevelt intended the Social Security Act of 1935 to serve as the cornerstone of an ever evolving economic security structure. We’ve built on the foundation by including Medicaid and Medicare in 1965. We expanded health care further in 2009 through the Affordable Care Act. We’ve improved the value of retirement income. Yet over the years we’ve also created new barriers to support for those who lost a job or experience disability. We must still address the insecurity of workers created by employer practices such as unpredictable hours and schedules that change without notice. We have yet to fully recognize the need for working adults to also provide adequate caregiving. We have no bullet proof strategies to end discrimination.
On this 80th anniversary we find ourselves again reckoning with vast social and economic changes and income and wealth inequality. Its time to retrofit our foundation of economic security. Policy choices to account for these changes and continue the march of progress include paid family and sick leave, a 21st century unemployment insurance accessible to all workers, and. additional accessible benefits to provide for the care of children. Let’s celebrate all we have accomplished and double down on our commitment and. momentum to build modern day economic security for all of our American society.
Annette Case is a Senior Consultant for the Insight Center for Community Economic Development’s Metrics Matter Initiative.