Old Age Insurance In The 1930's

Pre-industrial America was a time when the elderly held all the power. The old had complete authority in their family, ruled over councils of government, and prescribed social values through their religious and cultural control. High status in the past rested on the ownership of land. In this agricultural society, age-based retirement was rare because the knowledge and skills they possessed played essential parts in their respective communities. As the heads of households and/or master craftsmen, it was the old who trained young apprentices until they were experienced enough to take over the land or business. However, with the emergence of the Industrial Revolution, the status of the elderly severely diminished, as they became outcasts in

The small amount of companies that offered these pensions only covered a miniscule percentage of the labor force, the financing of the pensions was irresponsible due to the lack of actuarial calculations, and business firms promised a reward for long faithful service but without legal guarantees failed to meet the agreements. Up until 1935 there was never a mention of compulsory, contributory old-age insurance in the U.S., which would eliminate many of these problems.

The widespread suffering caused by the Great Depression brought support for numerous proposals for a national old age insurance system. “The best estimates are that in the early 1930’s over half of the elderly lacked sufficient income to be self-supportive” (Haber). Sponsors of compulsory social insurance pointed out that neither public welfare nor voluntary insurance sufficed to provide the necessary relief from the loss of ordinary contingencies in the worker’s life. Voluntary social insurance programs reached only a small fraction of the population and usually did not help the ones most in need of assistance.

In steps President Franklin Delano Roosevelt. In a message to the President of Congress he

He thought the flourishes, which accompanied the signing, was recognition of the importance of this measure in legislative history. However, as many Americans saw, the inefficiency, waste, and extravagance which have gone along with the attempts to build up this emergency relief system have contributed to a widespread feeling that there should have been instituted a wiser and better way of guarding against the problems. As one writer for the St. Paul Pioneer Press put it, “it would be a mistake to imagine that the country now has a system of unemployment insurance and old age pensions ready to spring into immediate protection. That the new social security system will stand the test of experience as struck off by Congress in the first writing is one of the least likely things in the world. ” In FDR’s haste to provide immediate relief, mistakes have been made and it is an open question whether the legislation will stand the test of constitutionality. Only time can answer the questions that arise over the effectiveness of social security for this is to be a social experiment that can only be judged by the test of results.

As previously stated many Minnesotans didn’t like the idea of increased taxes to fund a system, which didn’t immediately affect them. The Social Security Act was the greatest single tax burden ever approved. Citizens of Minnesota agreed with Roosevelt’s biggest challenger, former Kansas Governor