Social Security is such a vital part of Americans’ retirement planning that it’s hard to believe this amazing benefit wasn’t always available.
The Social Security Act was signed into law by President Franklin D. Roosevelt on August 14, 1935. In addition to several other provisions for the general welfare of Americans, the new Act created a social insurance program designed to pay retired workers age 65 or older a continuing income after retirement.
The program was desperately needed because of two changes that our country had experienced – a shift from families making their living to buying their living, and the Great Depression.
Before Social Security came about, there was a period when families made their living. This had been the case for almost 250 years – since colonial times, on the frontier, and until the late 1890s. Families were self-reliant and were able to live off the land, growing food, tending to livestock, and largely making the things they needed. And, when one family member grew old and could no longer work, other family members stepped in to care for this individual.
But, in the late 19th century and the early 20th century, our country experienced an unprecedented shift in the way people work.
As a result of the Industrial Revolution, there was a massive migration from the countryside to the city. Former farmhands took work in manufacturing and building jobs, while women took up work as clerks, cashiers, and stenographers. With this new way of living came an availability of goods that wasn’t present before – everything from groceries to household goods to clothing was now for sale on a large scale.
The availability of goods for purchase grew exponentially, and factories needed more and more employees to continue to make those goods. The result was two-fold – it became easier to buy goods than to make them yourself, and it caused rural folks to continue to flock to the city for work.
Family life also changed; no longer were generations of family members living under the same roof. People were now buying their livings, and security no longer meant tending to the family farm; it meant making an income and living in the cities. And, instead of stockpiling money in a safe or under a mattress, people began to invest in the stock market.
Then, in the early 1930s, the Great Depression struck. Countless jobs (and thus incomes) were lost, resulting in great suffering for millions of people.
The Depression was particularly hard on the older generation. Those close to retirement or in retirement saw their savings disappear. They again became dependent on their children for help, but the dynamic had changed. Their children had their own burdens and often couldn’t help their aging parents.
By the time Roosevelt was elected in 1932, the need for a social assistance program for retirees was clear.
People wrote directly to the President of their bleak circumstances. According to the Social Security Administration’s online Historical Background and Development of Social Security, the letters came in droves.
A woman in South Carolina scrawls heartbreaking a note reading “I’m 72 years old and have no one to take care of me.” Another letter comes to the White House from Virginia. “I’m a 60-year-old widow greatly in need of medical aid, food and fuel, I pray that you would have pity on me.” Letters such as these came by the thousands from the elderly across the country to the President, to Mrs. Roosevelt, and to almost everyone in Washington whose name was publically known.
President Roosevelt rose to the daunting challenge before him. Instead of creating a public welfare system for the elderly, he instead engineered a program that was far more workable (and far less radical).
Social insurance, as conceived by President Roosevelt, addressed the permanent problem of economic security for older Americans by creating a work-related, contributory system in which workers would provide for their own future economic security through taxes paid while employed.
And so, the Social Security program as we know it today was born, adopted into law in 1935.
Upon signing the Social Security Act into law, President Roosevelt said, “We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”
So, there you have it. We shouldn’t take that monthly check for granted, even if it is just an additional income stream we can count on every month. Without the Social Security Act, the welfare of our country’s retirees would not be as supported as it is today. And for that, we are grateful.