Understanding The Beginning Of Modern Social Security in the United States

During the first administration of Franklin Delano Roosevelt, the United States was in deep economic turmoil. When FDR took office in March of 1933, the stock market crash of 1929 was still a recent catastrophe, and the Great Depression was in full effect.

In 1933, the poverty rates among senior citizens was well above fifty percent. For more than half of the nation’s elders, meals were uncertain. Housing was uncertain. Health care was a constant question.

FDR’s administration pushed to implement specific programs that could establish a form of “social insurance.” These programs, known collectively as the New Deal, were designed to reduce the more dangerous aspects of life. Infrastructure would get the attention it needed, jobs would be more plentiful, and more of the nation’s most vulnerable citizens would receive the assistance they required.

Frances Perkins led FDR’s Committee on Economic Security, and under her stewardship, the Social Security Act came into being on August 14, 1935. The new act would provide benefits for those who were unemployed, as well as retirement benefits for those who had aged out of the workforce.

For the first time in US history, workers’ wages would incur a payroll tax — half paid by the employer and half paid by the employee — which would supply a public fund for these benefits. At the time of a former worker’s death, the new Social Security Administration would issue a one-time, lump-sum benefit payment.

The Social Security Act provided money on a state-by-state basis to provide benefits and assistance, and it was at this time that the concept of “Titles” arrived into the public consciousness.

Title I : Benefits for individuals above a certain age

Title III : Benefits for those who were unemployed

Title IV : Benefits for families with dependent children

Title V : Benefits for mothers and their children

Title VI : Public health services

Title X : Benefits for people who were blind

Disability benefits, as we now know them, did not arrive until 1956. At that point, the payroll tax increased to 4% (2% paid by the employer, 2% paid by the employee).

Some of the initial architects for the Social Security Act of 1935 were political science professors from the University of Wisconsin in Madison, WI. Among these were Wilbur Cohen, Arthur J. Altmayer, and Edwin Witte. Witte has been referred to as “The Father of Social Security,” in part for the concept of a federally funded pension plan.

At the time of its original adoption, Social Security did not cover most women and most minority workers. One of the main reasons for this — and a primary cause of controversy during its initial implementation — was that the benefits specifically did not cover “domestic service” workers, government employees, or agricultural laborers. As many teachers, hospital workers, social workers, and librarians fell under the “government employee” purview, they were excluded from coverage. Also ineligible were workers whose jobs were intermittent — and intermittent work was more often filled by minorities and women.

The Social Security Disability Insurance benefits did not begin until July 1956, more than two decades after the Social Security Act went into effect. Disability coverage had been the subject of intense debate in Congress for more than 20 years. When it finally was adopted, the coverage looked different from how many people thought it might appear.