Wessels Living History Farm - York Nebraska Farming in the 1930s
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SSA, the Social Security Administration
There is one fact of life that no one can escape. Life is uncertain. Illness, disability, old age and unemployment are threats to the economic health of individuals. That was never more true than during the Depression. During the 1930s, a major political movement developed to provide some form of social insurance against threats to the economic security of Americans. The Social Security Administration was the result.

  Letter to FDR  

During the first 150 years of the nation's existence, most of its citizens were farmers. Most economists believe that these rural communities had a built in form of economic security. People who were able and willing to work could provide enough food for themselves and their families. Those who were disabled or had grown too old to work would be taken care of by their extended family. Most people died young, compared to today's average lifespan.

All of those factors changed in the first 30 years of the 20th Century. The Industrial Revolution overtook rural America. The country became more urbanized – 1920 was the first year in which more than half of the U.S. population lived in cities rather than on farms. By 1930, 56 percent lived in cities. Urban industrial workers now depended on factors outside their control for their economic security. A recession or depression could put them out of work. Few companies had pension plans for workers who retired.

In addition, when people moved to the cities, they usually left their elders behind. Extended families were no longer around to take care of the retired. And people were living longer. In three short decades between 1900 and 1930, the average life span increased by 10 years. By 1935, there were 7.8 million aged persons in America.

Before the New Deal there had been various private and public plans to provide some sort of economic security. Fraternal organizations provided a social group and life insurance to their members. The Freemasons, the Odd Fellows, the Elks, Moose and Eagle Lodges all provided aid.

Poorhouses were set up by states and localities to keep the homeless people off the streets. A very few companies set up pension plans for their workers. Some states set up old pension funds, based on the first public pension fund – the Civil War veterans pension fund.

As the Depression deepened, a number of radical proposals surfaced to provide some sort of pension or relief assistance.

  • Louisiana Gov. Huey Long agitated for his "Share Our Wealth" program.
  • Doctor and social reformer Francis E. Townsend suggested a revolving pension plan.
  • Father Charles E. Coughlin went on the radio advocating popular social reforms mixed with virulent anti-Semitism.
  • Writer Upton Sinclair had a broad program of reform that included a pension plan.
  • The Technocracy Movement advocated "production for use" rather than production for profit.

  The first SSA check  
All of these plans were important because they attracted millions of supporters who flooded government offices with handwritten pleas for help, like the one reproduced here.

In response, FDR formed an executive committee in 1934 to develop a social security insurance program loosely modeled on those in 34 European countries. In a little over a year, the Social Security Act was outlined, introduced and passed by Congress and signed by the President.

The law included two major programs – a federal system of old-age benefits for retired workers who had worked in industry and commerce, and a federal-state system of unemployment insurance. Over the years, the program has been amended and expanded until now it is the foundation of modern retirement planning.

Written by Bill Ganzel of the Ganzel Group. First written and published in 2003.

 

The Politics of the REA

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