Arthur J. Altmeyer
THE EXTENSION OF SOCIAL SECURITY AS A MAJOR FACTOR IN CHILD WELFARE
by Arthur J. Altmeyer,
Chairman, Social Security Board,
Before the Child Care Center Conference of the Welfare Council
of New York City
Hotel Roosevelt, New York
March 3, 1943.
It is not flattering to our civilization to realize that now, when our country is at war, many of our children are better off than children in similar families have been through the past years of peace. The decline in unemployment and the rise in earnings mean that hundreds of thousands of homes have regained what the home of every child should have-economic independence. The total expenditure for public aid in recent months has been at a lower level than in any winter of the past ten years--over the whole period for which we have a comprehensive record. Our new ration books and the shortages of meat and milk and butter reflect not only the shipments to our fighting men and our Allies but also the fact that many more of the families in the United States now have money to buy the foods that every child should have.
But I am sure we all agree that war has brought evils of its own, far off-setting any such gains. Families are separated as men enter the armed forces or leave home to work in war plants. Living conditions in congested war centers may be as demoralizing to family life as was depression in the slums. The premium on labor doubtless is drawing some children out of school into dead-end jobs which will cramp their future; paid jobs are also attracting some mothers whose young children need them at home. Worst of all, when the war ends, there will be many children with only a faint memory of a father who went to the front and did not return. Children cannot help but share the fear and anxiety which clouds many homes.
Even under these pressures of war--in fact, because of these pressures of war--we have become acutely aware of the social importance of family well-being. Men with family responsibilities have been deferred from military service. When they are serving, the Government provides family allowances, in addition to their allotments from their pay, to help replace the family's loss of their earnings. Emergency risks have been recognized in provisions for soldiers and their dependents and for civilians affected by enemy action. Price control and rationing are used to distribute short supplies of the necessities of life fairly, at prices that are fair. Community services for health and welfare are seen to be prime importance in maintaining the home front and keeping the lines of supply moving to the battle fronts stretched across the world.
In either war or peace, this home front job is a teamwork job. Public provisions are basic, for only public action has the authority and the resources to cope with the general provisions which must reinforce family welfare and child welfare in communities, in States, and in the Nation. Governmental programs are directed toward the security of most families, but they cannot necessarily give due consideration to all problems of families or to families which are exceptions to the general rule. It is at this point that the voluntary agencies pick up and make their contribution not only to the families they serve but also to the Nation as a whole. To say that public provision for security is basic is not to say that the services performed by the voluntary agencies are not equally essential to the families they serve. Each strengthens the other. One type of service often implements the use which families make of the other, so that public and private programs dovetail into and reinforce one another.
At the present time I am especially mindful of the contributions which social workers can make, through their skills in recognizing and treating individual problems, in helping families to meet certain of the war pressures. They can help them, for example, to adjust to the separations necessitated by military service; they can help mothers to decide whether their best contribution lies in taking in a war job or in remaining at home with their children; when a mother decides that the job is the wise choice, they can help her to see that proper provision is made for the children.
But because I work for a public agency, I am especially concerned with the part that public action can play now and in the future to ensure the security of children. For children, security includes many factors--a happy home, good housing and good schools, a healthy and well-organized community, recreation, and other community resources. Important for many of these-- in fact, the tool which makes it possible to establish and use these other resources-- is the maintenance of a steady family income. When family income is cut down by the unemployment or sickness of the breadwinner or cut short by his death, the children in the household are likely to suffer more lasting damage than the adults.
As you know, the Social Security Act contains two different approaches toward maintaining family income. One is by means of social insurance, under which a worker has a right to draw benefits because of his record of employment and earnings when he encounters the risk for which he is insured. The Federal old-age and survivors insurance program provides old age retirement benefits for workers which include allowances for the wives of beneficiaries and for young children dependent on the beneficiary. There are of course few such children, but these old age retirement benefits to the aged doubtless are benefitting many children indirectly, since they relieve the sons and daughters of these beneficiaries from obligations which they could carry only through sacrifices on the part of their own wives and children. Of greater importance to children are the survivors benefits paid under this program to the young children of an insured worker who dies and to his widow while she has young children in her care. Possibly some of you know at firsthand stories such as appear in the Board's records every day-- stories of homes in which it has been possible for a family to avoid asking for public aid and to let the children continue in school because the survivors benefits gave a modest but steady income to supplement what other resources the breadwinner may have left.
The other social insurance program established under the Social Security Act is that for payment of unemployment benefits, under State unemployment compensation laws, to insured workers who are out of a job through no wish or fault of their own. These benefits replace only a part of a workers usual earnings--at best, no more than half--and they are paid only for a limited period, but they provide a means to help families to tide over relatively brief periods of involuntary unemployment. Unfortunately, only one State law includes dependents allowances in the benefits paid workers.
The second approach of the Social Security Act to maintaining family income is that of public assistance, paid on the basis of need, to special groups in the population. As of course you are aware, this assistance is paid by the States, with the aid of Federal matching grants, to the needy aged, the needy blind, and dependent children who have been deprived of support or care by reason of the parent's death, incapacity, or absence from income.
If I were to quote the figures on the amounts of benefits and assistance payments or the numbers of beneficiaries and recipients under these insurance and assistance programs, you would judge that the present social security program is doing a great deal to maintain family security and promote the welfare of children in homes where even now there is poverty and deprivation. You would be right in making such a judgment. But though we already have made great progress toward social security, the record of what we are doing tells only part of the story. It is necessary to look also at what we are not doing to get the whole picture of the relation of the social security program to the present and future needs of children. If we are to give reality to our faith in the principles of the Atlantic Charter and to affirm our faith in democracy, we must see to it that in peace as well as in war we have built the foundation for every child's healthful growth and development.
Let us look at the gaps and shortcomings in our present provisions for maintaining what is every child's due--security of a home in which there is protection against the common risks to income for which few families, if any, can themselves make adequate provision.
Take first the Federal program. A large share of the families of the Nation now have little chance, if any, to benefit from either survivors insurance or old-age insurance. This is because the coverage of the program under the national system established by the Social Security Act excludes employment in some major fields of work, notably agricultural labor, domestic service, public employment, and self employment. When the program was started, it was felt that there were serious administrative difficulties in collecting insurance contributions and maintaining records of earnings for most of these groups of workers. No one has denied that they and their families have at least as much need for insurance against death and old age as the industrial and commercial workers who are already covered. The Social Security Board believes that it is now entirely feasible to extend the coverage of this Federal insurance system to all gainful workers. Such a step would be particularly important in protecting children and their mothers against the total loss of income if the breadwinner should die, since a little more than half our children live in rural areas, where the present coverage is least extensive.
Inclusion of public employment, with appropriate coordination of the system with any present provisions for public employees, would also provide survivors insurance for large groups of families who now have little systematic protection of this type and would help to solve a problem of particular importance in wartime. Thousands of workers have gone from private employment, in which they were covered, into arsenals, navy yards, and other public work where they have no corresponding protection. Unless the program is extended, their survivors insurance may lapse and any retirement benefits they may ultimately be able to claim will be less than would have been the case if all their work had been covered. Measures also are necessary to see that the men in the armed forces and their families do not lose, as a result of their military service, protection they had already built up in covered employment or would have attained if it had not been for the war.
Our present Federal insurance system gives no protection against a risk to family income and independence which is only less devastating than death--that is, long-continued disability of the breadwinner. In some ways permanent disability may be more catastrophic than death, since the support of the disabled wage earner and special needs for his care become a charge on the other members of the family. Disability often cuts short a worker's earning power when his responsibilities for family support are the greatest and before he has had a chance to make savings for retirement. The Social Security Board believes that a program of cash benefit payments for permanent and total disability is a necessary adjunct to our social security program.
In contrast to these programs which deal with prolonged or permanent loss of earnings, unemployment insurance is intended to help families tide over relatively brief intervals when the breadwinner is without a job. It would have been difficult, if not impossible for hundreds of thousands of families to have weathered periods in the past two years and a half, when factories were changing over to war production, if it had not been for unemployment benefits.
Impressive as the facts and figures are, however, we have not yet evolved an unemployment compensation program on which we can rely with full satisfaction and confidence. The present program is a mosaic of 51 separate laws, covering the 48 States, Alaska, Hawaii, and the District of Columbia. These laws differ in coverage, benefit rates, contribution rates, and many other important particulars. As a result there are serious differences from State to State in the benefits for which workers qualify and the burdens on employers in substantially similar circumstances. Because of these differences and also differences in the risk of unemployment in different parts of the country, some States have built up reserve funds which are adequate to meet any strain that can be anticipated, while in others reserves are too low to weather periods of severe unemployment which may reasonably be expected.
The past year has made it doubly clear that in social security, as in war, strength lies in union. Pooling of funds is needed so that in the post-war period adequate benefits can be paid to all eligible unemployed workers, regardless of the State in which they happen to have worked, and so that none will be deprived of his due because a State fund is insolvent. A national system of unemployment insurance would wipe out differences in the protection now afforded under the separate State laws and the unfair competitive disadvantages placed on employers in States which try to deal adequately with risks of unemployment. Pooling of the funds now channeled into 51 water-tight compartments could ensure payment of more adequate weekly benefits for longer periods of time. Some evidence of the inadequacy of present unemployment compensation laws is the fact that, even in a boom year like 1942, 40 percent of the workers earning benefits exhausted all their rights to benefits before finding another job.
We are still so near to the dark 1930's that I need not remind you that for a decade or more unemployment was the greatest single threat to the economic independence of families and to family morale. I think none of us is so optimistic as to believe that it cannot be such a threat again. Now is the time to get our house in order, so that safe and adequate provision will be available for the families which, through no wish or fault of their own, find themselves without earnings during the necessarily sweeping and drastic post-war readjustments. It would be folly to imagine that these readjustments will have regard for State lines. As part of a sounder and better system, the Board believes that unemployment benefits should recognize a workers family responsibilities, that is, that benefits should be payable in behalf of the dependents of an insured unemployed worker as they now are payable to the dependents of workers insured under old-age and survivors insurance. At present such provision is made only under one of the 51 laws, that of the District of Columbia.
Sickness is like unemployment in that it brings more or less temporary interruption of earnings. These interruptions, however, come both in good times and in bad, and, in addition to loss of earnings, are likely to occasion extra expenses to meet costs of sickness. In most countries sickness has been one of the first risks to be recognized in terms of social insurance. The Board believes that our social security program in the United States should be extended to include at least cash benefits for temporary disability, with provision for dependents, and also hospitalization benefits for insured workers and their dependents.
I have gone into the extension of social insurance at same length and for two reasons: First, because from every standpoint, this is the time at which such measures can best be undertaken. Now, when earnings are high and all the wheels of industry are turning, workers and employers can set aside the contributions needed to ensure future rights to benefits. There is no way in which increased earnings could be better invested, from the standpoint of either the family or the Nation. For the family which actually meets with disaster-- sickness, unemployment, chronic disability, or death--insurance benefits give a far greater protection than could have been obtained if the worker's insurance contributions had been kept as his individual savings. In any period of recession, the money now saved would be paid at a time when it is most needed and to those who most need it. In the interim, such contributions could help to lessen the dangerous inflationary pressures which arise because of wartime shortage in the goods and services available for families to buy.
The second reason I have discussed social insurance so fully is because of its bearing on the coordinate branch of a social security program--public assistance. Granted a social insurance program which would be a sound and adequate first line of defense to families against the economic risks I have outlined--loss of earnings by reason of sickness, invalidity, unemployment, and death--much of the suffering now reflected by the assistance rolls could be stemmed at its sources. No social insurance system, however, could do the whole job. Assistance must be there as a life net. The needs of some families will slip between the provisions of an insurance system, which is necessarily designed in accordance with the average circumstances of large groups of persons.
I would like at this point to mention my conviction, and that of the Board, that it is misleading to distinguish between social insurance as something based on right and public assistance as something based on need. The existence of a social insurance measure implies that there is a general need for the provision it makes; otherwise, it should not exist, nor should employers or workers be asked to contribute to it. Ordinarily, benefit formulas are so devised that low-paid workers, who are presumed to have greater need, get relatively higher benefits than high-paid workers. When an individual has qualified according to the requirements of the insurance system, he has a "right" to the benefit stipulated by its provisions. But in any modern society, does he not also have a "right" as a citizen to such assistance as the community provides for needs which are not met by other social measures? For assistance, too, there is a qualifying requirement, that he himself is without adequate resources. But the fact that the qualifying requirement is his lack of means, rather than his prior employment and wages, makes assistance no less a right.
If we look to public assistance as a right, what is our present progress under the social security program? The most striking limitation is that under the Social Security Act Federal grants-in-aid are available only for particular groups in the population--for the needy aged, needy blind, and needy dependent children. Children, moreover, must have been needy for one of several specific reasons--the loss of support or care by reason of the parent's death, incapacity, or absence from home.
The second striking factor about our present assistance program is the disparity among the States in the levels of assistance. Since the Federal grant matches what the State can and is willing to provide for assistance, up to certain specified maximums for individual payments, relatively larger amounts of Federal funds can and do go to the States which have the largest resources of their own. When the total amount at the State's disposal is too small, various devices are used to spread the assistance funds. In aid to dependent children, for example, some States deny assistance to families which have any member who is employable, even if he or she is unemployed; some rule out families with only one child. A common device is to pay only some fraction, perhaps a half or three-quarters, of the amount the welfare agency finds necessary to meet the family's needs.
There is a special limitation on the program for aid to dependent children in that the matching Federal funds may not be used toward any part of an individual payment which exceeds $18 a month for the first child and $12 for each additional child aided in the same home. No separate provision is made in the Federal act for the mother or other relative who cares for the children. For the needy aged and the needy blind, matching Federal funds may be used in payments up to $40 a person a month.
One obvious change that we need to make in justice to children under the social security act is to lift or remove these ceilings, leaving a State agency free to use Federal funds under an approved plan to meet the Federal share of as much assistance as the State agency finds necessary for families with dependent children. This step alone, however, would tend to be of greatest help in the States which now are making better than average payments. At the same time, special Federal aid should be provided low-income States, in which a disproportionately large number of all the children in the Nation are living. As things stand now, the States which themselves have the largest resources are able to qualify, on the equal-matching basis, for the largest amounts of Federal money. Special Federal aid, to the poorer States, granted according to objective standard such as State per capita income, could remedy this injustice to children who have the double misfortune of being in a needy family and also in a low-income area of the country.
Attaining some more nearly adequate standard for aid under the present provisions for dependent children would still leave untouched the plight of children whose need arises from a cause other then one of those now specified in the Social Security Act-- for example, the unemployment or underemployment of the parent. Perhaps in New York City and before this group I need not document the statement that even now there are people who are eager to work but cannot find a job. The Board believes that it would be appropriate to extend the present program so that matching Federal funds would be available for aid to needy children irrespective of the reason for their need.
At present needy families which are not eligible for aid to dependent children or the other special types of public assistance have little recourse except to general relief. It is hardly necessary to say that where funds are lacking or inadequate for the special types of public assistance, general relief, which is supported wholly from State and local funds, is even more limited. Yet under our existing arrangements, it is the only hope of those who are barred, by reason of age, residence, citizenship, or other requirements from aid under one of the programs for which Federal funds are provided.
If we are really to stretch a life net under social insurance and other provisions for the economic security of families, Federal aid for general assistance, under arrangements similar to those now used for the special types, would seem to be the measure which would best help to remedy present lacks and deficiencies. The Social Security Board has recommended the establishment of a Federal State program of general assistance. Even now, unmet needs for relief are still acute in some areas and are likely to become even more acute with the liquidation of the WPA and discontinuance of the food stamp plan and the distribution of surplus commodities. Since the localities have been providing a large part of the funds for general relief, questions of the legal settlement of relief applicants have always been especially troublesome.
We have in mind--doubtless you do also--the months or years following the war when migration and sweeping readjustments in industry cannot help but bring problems which will transcend county and State lines. Is it too much to hope that the victory of the democracies should find us equipped here at home to make reasonably adequate provision for distress among our own families, in whatever part of the country the peace any find them.
To sun up, I have tried to outline some gaps and shortcomings in our present social security program--gaps in the groups and the risks now covered, shortcomings in the extent or adequacy of measures we have already undertaken. Nothing which affects family security is alien to children, who are necessarily exposed to all that hurts or helps their elders. I trust that in stressing the need for strengthening and extending our social security program, I have not given too negative an impression of the really remarkable progress in less than a decade, since the Social Security Act became law. But, to quote the often and justly quoted Sir William Beveridge, the good should not be the enemy of the better.
I would also like to point out that we already recognize, in terms of the war emergency, many of the economic risks of children about which I have been speaking in the long-run terms of peace. We would not tolerate, for example, the denial of a Government allotment to the children of a soldier because his family happens to live in a low-income State.
Our hopes for social security after the war must be based upon the production of wealth, a fair distribution of wealth, and a continuity of purchasing power to cover basic human needs. Real social security is dependent upon reasonably full employment and the maximum production of the goods and services which people need. We have reason to believe--and the war has added to that reason--that Americans want to work and will work when they have a chance. It is more than a little humiliating to realize that it has taken a war to give so many of them a chance to do so and to give so many children a chance to live in a home where the adults feel they too are contributing to the safety and well-being of their country.
The program which I have outlined is based on the assumption that the post-war United States will continue to strive for security in this fundamental sense and at the same time will develop further specific measures for the security of all our people. These are methods of action which Americans have used since pioneer days in banding together to face tasks and risks which individual families or communities or even States cannot meet alone.
A group of young British medical men--many of them serving abroad in the armed forced recently sent out a draft report on comprehensive post-war proposals for comment by their colleagues at home and at the front. Their temper of mind seems akin to what Americans also are thinking about social security for ourselves and our children. "We recognize," these British doctors wrote, "that such comprehensive proposals carry with them a theoretical risk of excessive pampering and paternalism. These dangers have been put forward as an argument against most social reforms in the past hundred years; yet the same people who put them forward, have often argued that a leisured class, existing on unearned income, is a cultural and social necessity. We consider that the conduct of the British people in all social classes in the present war suggests that the virtues of courage, enterprise, and vigor (and indeed a certain number of vices) occur independently of the income level and the measure of financial security. We regard the theoretical risks involved in social security as well worth running."
1/ Medical Planning Research, Interim General Report. Supplement to The Lancet, Nov. 21, 1942.