Social Security: Early History
History of Social Security: The Quest for Economic Security
By Abe Bortz, Social Security Administration Historian (1963-1985)
Note: This entry is a portion of Special Study #1, a lecture Dr. Bortz, the first SSA Historian,developed as part of SSA’s internal training program. Up until the early 1970s new employees were trained at SSA headquarters in Baltimore before being sent to assume their new duties in offices around the country. As part of this training, Dr. Bortz presented a curriculum on the history of Social Security. This lecture, developed in the early 1970s, was the core of that curriculum. It features an extensive overview of social policy developments dating from pre-history up to the passage of the Social Security Act in 1935.The Quest for Economic Security [View Image]
The Quest for Economic Security-You might say that the search for security began when Adam and Eve were driven from the shelter of the Garden of Eden.
The Quest for Economic Security
Man’s quest for economic security is as old and as continuous as our records of human life itself. Evidence of it is to be found in the most primitive people’s attempts to shift from a hunting economy to settled agriculture. it can be seen among early urban societies in projects to store grain for lean years. It appears in classical antiquity in policies to provide bread for the needy. It is exemplified in the middle ages by the lords assuming some responsibility for the welfare of their vassals. It is visible in early modern times in poor laws, charity workshops, poor farms and the philanthropic activities of religious organizations. In fact, the vital test of the progress of a society is the degree of security it offers its members. How well a society provides for at least the elemental needs of the unfortunate is now and has always been a test of civilization. On the other hand, you know it has not been too many centuries ago when the belief prevailed that the end of life was to serve the Lord and that the Lord could best be served by embracing poverty. Yet possibly even then, even though unconsciously, there was some feeling that the status of those who were dependents was not to be envied, so that a certain sense of superiority developed.
The English Poor Laws & Developments in Europe — Let us go back to the beginnings of the English Poor laws which significantly influenced our own thinking and action toward the poor, the sick, the lame, the blind, dependent children, and the aged.
Prior to the 16th century, the feudal system provided security–although at a low level–for a great portion of the English population, and the church assumed primary responsibility for helping others in need. Under feudalism, the obligation of the serf to work on the manor influenced his right to maintenance. With the breaking up of feudalism, the responsibility both for preventing and for relieving destitution devolved on the community.
In continental Europe the Church was powerful and poor relief remained, until comparatively recent times, almost wholly in the hands of ecclesiastical authorities. In England and Scotland, the Reformation and the dissolution of the monasteries led to the assumption of the responsibility by the State.
There the first steps–in 1531–in the development of a national system of poor relief were for the most part negative and prohibitory–the repression of begging and vagrancy, the regulation of individual alms giving and the restriction of the movement of laborers from one parish to another; only the aged and impotent could beg and even they were restricted to their own neighborhoods. Relief of the poor was thus left to the consciences of local authorities. However, a 1536 regulation, which some claim to be the first English poor law, made local authorities responsible for the collection of voluntary contributions to be used to employ able-bodied “paupers” and to provide direct relief for others. Poor children were to be apprenticed and all begging was prohibited; relatives were to assume responsibility for the poor of all types. In 1572 a previously local compulsory poor rate or tax was made national in scope.
Of course the very recognition that widespread dependency created a grave social problem tended to reflect adversely on the dependents. An even more important factor was the presence among the group of large numbers of petty offenders, “valiant rogues” and “sturdy beggars,” they were often called. The law did single out the “impotent poor” to whom in theory no blame attached and to whom it was proper to give relief; yet it is not too difficult to see how this distinction was sometimes forgotten.
The Elizabethan–Poor Relief Act–or Old Poor Law of 1601–definitely recognized the responsibility of the State for its dependent classes by insisting that each parish–(now the unit of administration)–levy a rate or tax. Such relief was to be collected by overseers of the poor appointed by justices of the peace. It also attempted to classify dependents and to provide specific treatment suitable to the needs of each group–work for the able-bodied poor, almshouse care for the infirm and apprenticeship for children. These arrangements did not work too well, for many of the poor moved or traveled from their own parish to parishes that provided better. So additional restrictions had to be imposed, including residency in the law of 1662.
Under the Elizabethan poor laws, the aged and the sick apparently received better treatment than other poor persons. On the other hand, children were often apprenticed under unsatisfactory arrangements merely to reduce the cost of supporting them on relief. Actually only feeble attempts were made to employ the able-bodied poor.
In 1732 a general act permitted parishes to refuse relief to those who would not enter a workhouse. These workhouses soon degenerated into mixed receptacles of misery, where all classes of paupers, vicious and unfortunate, young and old, sick and well, and lunatics were dumped. Fifty years later–in 1782–it was declared that to receive relief, the able-bodied had to work outside the workhouse.
In 1795 at Speem–and because of, it became known as the Speemhamland System though it was not really a system as such was adopted under which wages of laborers were to be supplemented by relief payments–or an allowance–from the public treasury–if the wages of the laborer did not provide a minimum standard of living. The result: thousands were pauperized and the Nation’s expenditures for poor relief increased tremendously. On many parishes this proved to be an almost impossible burden.
At the same time the effects of the industrial revolution were beginning to be felt. So the Speemhamland System was open to even more criticism. It was argued that this was State interference with the individual’s function and responsibility; that it was an undesirable influence on the moral character of the population; that it was a subsidy for the landowning class; and that it was a deterrent to labor mobility.
Consequently, a royal commission was appointed in 1832 and from its study came a new law–of 1834–the “NEW” POOR LAW. This enunciated the principle of national uniformity–that is, identical treatment of each class of destitute persons throughout the Kingdom, (2) the principle of less eligibility, which required that the conditions of the pauper be less desirable economically than that of the humblest independent laborer, and (3) a workhouse system which substituted indoor for outdoor relief. Able-bodied workers and dependents were to be granted relief only in workhouses in which they could be closely supervised and the conditions such that they would clearly prefer regular employment. The same was true for poor aged, poor sick and the poor young. The philosophy behind this was a harsh one, namely, that all the poor were poor because of their own failing or folly. The recipients even lost the right to vote and were required to wear special identification to indicate their 2nd class status.
This philosophy and legislation stemmed from the new ideas of the 17th and 18th centuries, along with the economic changes that destroyed almost entirely any concept of dependency not resulting solely from the fault of the dependent. For as economic prosperity became the mark of the Lord’s approval and poverty a sign that the victim had incurred the Lord’s anger, it followed that those too poor to live without alms, must be sinners in need of punishment. The economic changes which made possible the rise of many of the relatively poor to positions of affluence served to emphasize the idea of personal responsibility; the extraordinary worship of the virtues of industry, of frugality and self-help likewise cast a stigma upon the state of dependency. So this attitude, registered most clearly in the 1834 act, attempted to make conditions under which relief was given as onerous as possible for the recipient.
This view of dependency persisted long after its underlying sanctions had lost their vitality. New sanctions, however, were found in the theory of evolution and its interpretation as proof of the survival of the fittest. Although this idea modified to some extent the emphasis on punishment as remedial action, it did not destroy or modify the belief that dependents were a group inferior to the rest of society.
In identifying dependency with sin or unfitness, some exceptions were made for the “worthy poor”–even by the most ardent advocates of the survival of the fittest–who recognized the possible existence of victims of circumstances. But “worthy” seemed hard to find or were forgotten in the general belief that dependents were less well endowed morally or physically than the independent wage earner.
Beginning in the middle of the 19th century public sentiment began to change and the English Poor Law system began to be liberalized on a piecemeal basis. Some of this came about through a better acquaintance with those who sought aid–in greater part by a professional or semiprofessional group ministering to these people.
This led to a greater recognition of the role played by extraneous circumstances; a realization of the continual shift in composition of the dependent–which was no longer that of a fixed and distinct part of the population. In addition, studies of the independent wage earning group showed that many lived on the edge; a little change could send them into dependency.
Then as a more critical analysis of the workings of the economic system resulted in a knowledge of its wastes and maladjustments and, as the growing realization of the inter-dependence of the individual and society, led to a less complete acceptance of a rigid doctrine of individualism, the old attitudes toward economic dependency became less consistent with accepted common sense.
There was, however, no general renunciation and no conscious adoption of a new attitude. Rather the exceptions which had never been quite overlooked before now began to receive more emphasis. Outdoor relief became more common, separate institutions were created for women, the sick and handicapped, the victims of industrial accidents, children, the aged, and, more visitors were permitted to inspect the almshouses.
Great Britain in 1908 provided an old age pension system for the needy aged on a more humane level, while in 1911 a National Insurance Act provided sickness and unemployment insurance benefits for some workers on a contributory basis.
Poverty in America —That was Great Britain, in America, the first English-speaking colonists brought with them the English poor laws. As in England, the care of the poor at first was connected with the church; in fact some of the earliest assistance provided for the support of both the poor and the parson. Copying the English principle — every colony and later, every State, early in its history enacted a law providing that when people had no other means of support, the Government must provide for their care and support. During the colonial period, relief was given to the needy largely in their own homes. It was based on local responsibility, liability of relatives for support of indigent family members, and residence laws restricting eligibility for relief to those who lived in the locality. Auctioning off the care of the poor as individuals or in groups and the indenture of both children and adults were common practices. Basically the community relied upon the household, rather than on public institutions. The poor and the insane customarily were relieved within the family, the orphan was apprenticed to a household, the criminal, after being fined and perhaps whipped, was then returned to his residence. The 18th century community had recourse to institutionalization only when some extenuating circumstance–such as debilitating illness or violent insanity–made no alternative arrangement feasible. These ad-hoc institutions that came into being during the colonial era resembled the household both in routine and construction.
It is true as already noted, that in the early years of the republic, the community always recognized final responsibility for the destitute, but as long as land was free and industry small, the number of persons who were without some means of support remained relatively limited.
It was not until after the adoption of the Constitution (and note the preamble to the Constitution which sets forth 6 purposes for its adoption and the formation of the Government of U.S., one of these being to “promote the general welfare.” And among the powers conferred by the Constitution upon the Congress is the power “to lay and collect taxes for the general welfare of the U.S.”) it was not until after the adoption of the Constitution that we began to differentiate among the great mass of the poor. The old poor law had made no differentiation except between the “sturdy beggars,” who were to be put to work, and “the deserving poor,” who were to be relieved without work.
As early as the 1820’s the Yates (N.Y.) and the Quincy (Mass.) reports criticized public outdoor relief as a source of dependency and pauperization. Like the British and their 1834 Poor Law, Americans demanded a punitive, limited public welfare system. By now its major resource was the institution and it concentrated upon two categories of dependency — the non-able bodied poor, who required long term custodial supervision and the able-bodied who found work distasteful. The workhouse test would assure that the condition for able-bodied patients would be inferior to that of the lowest paid, but independent laborer. Outdoor relief would be the responsibility of voluntary agencies, whose character building influences would prevent it from degenerating into a dole.
The almshouse, infirmary, asylum, poorhouse, poor farm, county farm, county home–whatever you want to call it, and what it was called differed in various parts of the country–was the first and for many years the only public charitable institution. In the workhouses were thrown together the petty criminals, the insane, the ne’er-do-well, the aged, the infirm, and those only temporarily in need. So that beginning about the time of the Constitution, we came to recognize the need for differentiation among the poor and for treatment of each major group among them in accordance with their peculiar conditions and needs.
In the decades after 1820, America turned with unprecedented enthusiasm and energy to the construction of custodial institutions for the poor, the insane, the orphan and the criminal. Institutionalization now became the first rather than the last resort. The institution and not the household became the preferred setting.
The use of custodial institutions in the United States seems intimately connected to the community’s changing concepts of the causes of dependency. It appears that the post-Revolutionary War generations were far more prepared than their predecessors to assign a larger share of responsibility for dependent behavior to the structure of society itself rather than to individual idiosyncrasy, choosing to locate in existing social arrangements the essential causes of the problem. As they viewed it, American society was so open and unstructured–filled with limitless opportunities for achievement and vice–and its members so inadequately prepared to cope with it–since neither church nor school, nor, above all else, family provided the necessary discipline–that poverty, crime and insanity threatened the welfare of the new republic. Concomitantly, Americans during these years also seem to have shared a confidence in the ability to design an environment and construct a setting in which these faults could be eliminated and the causes of dependency thus eradicated. Their diagnosis gave them the confidence to attempt cures and reform and also enabled them to appeal successfully to private philanthropists and State legislators for the funds to construct and maintain custodial institutions. And, understandably, with the beginnings of a factory system, the institutions built after 1820 were more influenced by and more nearly resembled the factory; whereas those built before 1820 more nearly resembled the household.
Veterans & Merchant Seamen –– America early made special provisions for two groups in the population–veterans and merchant seamen. In 1789, the Federal Government accepted the responsibility of providing pensions to disabled veterans of the Revolutionary War. The Act of 1790 to regulate the military establishment included pension provisions for the regular armed forces. Since that time the responsibility of the Federal Government to provide a continuing income for veterans disabled in service and for the survivors of such veterans has never been questioned. As a result of pressure generated in large measure by economic need, and in the absence of more general protection for all members of the community, veterans benefits have also been more available–at successively shorter intervals after each war–to veterans suffering from non-service connected disabilities and to their survivors–and where large numbers of the veterans of a particular war had reached retirement age, solely on the basis of age. Provisions for age were first made in connection with legislation affecting Spanish-American War veterans.
As for merchant seamen, it was 1798 when Congress established a system of health insurance for them. Compulsory deductions from seamen’s wages were used to establish and maintain hospitals for the care of sick or disabled seamen in the various ports. In 1884, the payroll deduction was replaced by a tonnage tax and later by general revenue financing. The Marine Hospital Service thus established developed into the United States Public Health Service.
The Industrial Revolution –– Even before but certainly during and after the Civil War, the U.S. began creating a powerful productive economy. By 1890 it was the richest and industrially the most powerful nation in the world. And it was providing, in spite of its limitations, an increasingly rich material life for a majority of people. Yet industrialization took place in such a way as to create extraordinary economic and social problems for 20th century Americans.
Looking only at the economic area–there was a marked decline in competition and the establishment of monopolies. Secondly, the economic revolution created social problems of enormous magnitude–cities that grew too fast, where millions of people lived amid squalor and misery; there existed mass exploitation of women and children and a whole complex of problems caused by unemployment, illness and perilous old age. These were the human costs of rapid and uncontrolled industrialization.
Thus, a major factor in bringing on and influencing social security was industrialization.
For in an industrial economy most workers are employees, primarily dependent on wage income. Such income may be below subsistence needs, particularly if family responsibilities are substantial. In addition, income security is conditioned by the worker’s ability to get and to hold a job. In a complex, interdependent, industrial economy the threats to job security are manifold. A general drop in business activity will trigger layoffs, as will changes in consumer preference, product obsolescence, or major technical change. Such unemployment is rarely the worker’s fault; it is the result of forces completely beyond his control. Yet by the early years of the 20th century Americans–despite their many problems–were confident they had the ability to set aright the social and economic injustices inherited from the 19th century. Certainly this was reflected in the thinking and action of the leaders of the Progressive movement, a movement that flourished in the first two decades of the 20th century.
A concomitant of industrialization was urbanization, the movement to and the development of large cities and even larger metropolitan areas.
While on a farm, mothers and children could help with the chores and help increase family income, in the city, the mother–unless she worked–and the children until they found employment–were only additional burdens for the wage earner. At the same time, high land costs meant smaller dwelling units and less physical capacity to give care in the home to persons outside the immediate family group.
The degree and speed of urbanization was reflected in the shift of our population from rural to urban:
|Urban||14,129,735||22,000,000||30,000,000||42,000,000 approx.||54,000,000 approx.|
(for lst time more)
|Rural||36,026,048||41,000,000 approx.||46,000,000 approx.||50,000,000 approx.||51,000,000 approx.|
(20 million non-farm 31 million farm)
(23.6 million non-farm, over
30 million farm.)
As for the number of aged persons — those over 65:
|Age 65 & Over|
Of significance, the rate of increase for the aged was greater for each decade between 1900 and 1930 than the national increase.
And note what had happened to life expectancy in the U.S.: Whereas in 1900 it was 47.88 (males) and 50.70 females; By 1929 it was 57.71 (males) and about 61 for females.
Another important facet in the development of industrialization and urbanization were the vast numbers of immigrants who came to these shores. And they were most important, for it was the immigrant along with the Negro who provided the labor force the unskilled labor in the basic industries that helped make for the vast development of our industrial growth.
Between 1860 when U.S. population was 31 and one-fifth million and 1900 when U.S. population was 76 million, some 14 million immigrants arrived here. In that year, 1900, 10 1/2 million Americans had been born in Europe and 26 million were of foreign or mixed parentage. Between 1900 and 1915 – in but 15 years, as compared to the previous 40 years, 14 1/2 million immigrants arrived. All told between 1901 and 1930 – 18 1/2 million immigrants arrived.
Alongside industrialization and urbanization, there was also an agricultural revolution which was reaching new heights. An important factor was mechanization. With mechanization, based in large part on the use of interchangeable parts, the United States between 1870 and 1900 rose to the leadership of the world in the manufacture of agricultural machinery.
As a result of mechanization and other improvements, crop production per male worker increased more than 100% between 1850 and 1930. Along with this went a rapid movement of people off the land into the cities – because of depression on the farm beginning with the 70’s, 80’s, and 90’s and into the 20th century–and for the real and supposed advantages of city living.
In the vanguard of the movement to palliate the grosser aspects of American life, the miserable living conditions of the city masses, the exploitation of women and children in industry and the degradation of submerged, unprotected workers, were priests and ministers who worked in the slums. However, a separate class of social workers, usually employed by charity organizations and settlement houses emerged in the 1890’s. They constituted a growing and vociferous element in the American society after 1900. They made intensive surveys of labor conditions, causes of poverty, and means of alleviating social distress. As time passed, moreover, they became departmentalized. Some concerned themselves with care of immigrants, some with problems of labor, some with juvenile delinquency.
The leaders of the social justice movement by 1900 had gone far beyond the concept of private amelioration and were beginning to evolve ambitious new schemes of social salvation. What they now envisaged was nothing less than the systematic use of State police powers to accomplish the rearrangement of economic relationships. In other words, State Government, and later the Federal Government, should enter the battle to protect the weak – first by legislation based on investigation by social workers, next by employing social workers as agents of enforcement. This, of course, was another aspect of the Progressive movement of the 20th century.
The charity organization movement achieved a large amount of success in discrediting public welfare and inducing counties and municipalities to abolish outdoor relief. Its leaders condemned public relief or assistance as incompatible with biological and economic law as well as social stability. Only voluntary philanthropy, which combined relief with careful investigation and diagnosis of each case – could prevent widespread pauperization of the working population. Public relief was considered as superfluous; private agencies could satisfy all relief needs of the State without the necessity to levy taxes – which anyway competed with fund raising efforts. Public relief was not only unnecessary, the advocates of the charity approach argued, but inordinately expensive and a source of graft and corruption, for Government officials could afford to be generous with other people’s money. Besides, the use of tax money hurt capital development.
In addition, it was argued those accustomed to relief degenerated into permanent paupers, whereas the private charity investigator who visited the poor in their homes, created a personal tie with each of these people.
From the viewpoint of private charities, there was a clear and easy division of the field – the public authorities – to maintain the public institutions, and the private societies to give the family relief.
The concept of a Bureau of Public Welfare originated in Kansas City in 1910. Really this was a revolt against a limited, negative concept of public welfare. Through centralized efficiency, attained through scientific research and the use of trained personnel, and efforts to prevent dependency, the Bureau of Public Welfare, it was contended, would redress the lack of power and prestige between the public and private sectors. Here was recognition that poverty was often attributable to social inequities rather than personal defects. It was more consistent, advocate of the B.P.W’s argued, it was more consistent with democratic principles, that the poor should seek assistance from the city government than from philanthropies supported by the rich. The public social need should be met by the democracy, that is, by the people in their corporate capacity (this can and would be shifted to the national stage)–besides, the city had more resources, financial, intellectual, organizational — than the voluntary agencies. Also, the idea of a Bureau of Public Welfare was associated with efforts to professionalize the public welfare sector.