Social Security History in the United States
Social Security Early Forms of Social Support
Introduction to Social Security History
Societies throughout history have devised ways to support people who cannot support themselves, particularly older people, people with disabilities, and people without family. The Code of Hammurabi, a body of laws created by King Hammurabi of Babylonia in the 18th century bc, is one of the oldest documents to discuss social support. The code defined the rights that widows and orphans should have to the estates of their relatives.
Religious and moral teachings in most societies have also encouraged people to help one another through acts of individual goodwill. Until the past few centuries, however, no society had a universal, publicly financed social support system. One of the first publicly financed systems developed in the late 16th century in England, out of a series of legislative acts known as poor laws. Under these laws, local governments built almshouses, large facilities that housed those too old or unfit for work. Poor laws also established workhouses, public housing and work facilities for the unemployed. In addition, poor laws provided for some so-called outdoor relief, which offered assistance to the poor and unemployed outside of almshouses or workhouses. The funding of poor law measures, unlike that of later social insurance programs, came from general taxes rather than from those of the people being supported. The modern-day counterpart of the type of support once provided by the poor laws is usually called welfare. However, poor laws foreshadowed the development of social insurance in Europe and Social Security in the United States in that they established a framework of public support for the elderly, the disabled, and the unemployed.
In the 1700s, British settlers of North America established poor laws in their new colonies. These laws became the foundation for the first social support systems in Canada and the United States. Some people also received support from membership organizations, including fraternal orders and friendly societies (work-based organizations similar to craft guilds). These organizations provided financial support to their members and to the families of their members when a member could not work due to a disability or death.
The need for a more extensive social support system grew in the United States during the mid- to late 1800s because of changes in labor patterns that came with the Industrial Revolution. Before industrialization, most people worked on farms. Large families provided the labor necessary to run a farm, and most people lived in extended families, which encompassed several generations of relatives. In extended families, healthy working-age members could support their young, elderly, and infirm relatives. However, with the rise of factory, office, and service jobs located outside of the home, people no longer needed to live in large families to make a living. Many jobs actually required that people move far away from their extended families. With this change in work, people began to have small, nuclear families, which included only a couple and their children. In the shift from extended families to nuclear families, many people lost their most reliable source of support-a large network of relatives. As a result, increasing numbers of people ended up in poverty if they could not work or if they had no family members to support them in their old age.
One response to this shift in work patterns was the development of pension programs and insurance plans. During the 1800s trade unions developed their own insurance plans and mutual associations-groups that pooled funds contributed by employees and employers to finance insurance benefits. Railroad workers established particularly strong insurance and pension programs. A Railroad Retirement Act was later written into federal law along with Social Security. Corporations began offering pension plans in the late 1800s. By the early 1900s, many state and local governments offered pensions to government employees such as teachers, police officers, and firefighters. Private insurance companies had also begun offering health and disability insurance policies by this time. (See also Retirement Plans.)
One of the widest-ranging systems of social support in the United States prior to passage of the Social Security Act developed during the American Civil War (1861-1865). In 1862, the federal government created a generous pension program for Union war veterans disabled in battle and for their families. Later amendments to this legislation gave benefits to Union veterans in their old age and to those disabled outside of battle. As extensive as this pension program was, it covered only a minor portion of the U.S. population, and it lasted only into the early 1900s.
During the early 1900s most states enacted workers’ compensation laws that required businesses to pay benefits to employees injured on the job or to the families of workers who died because of work-related accidents or illnesses. Workers’ compensation and employer-sponsored pension programs formed the foundation of a growing system of privately funded social insurance, though with public oversight. However, these types of support still covered only a minority of U.S. citizens. Some states also enacted mandatory old-age pension laws, designed to cover all citizens, but many of these laws were quickly declared unconstitutional and repealed. Several attempts by states to develop health insurance systems also failed against tests of constitutionality.
Economic security declined for all U.S. citizens in 1929 when the stock market crashed, triggering the Great Depression-a period of severe unemployment throughout the country. Millions of people fell into poverty. Economic hardships were particularly severe for the oldest members of the population. In response, in the early 1930s several states managed to enact and maintain old-age pension and unemployment insurance programs. Political pressure for a national social insurance program increased as the depression persisted and deepened.” (1)
Resources
Notes and References
- Information about Social Security History in the Encarta Online Encyclopedia
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