Arthur J. Altmeyer
The Farm Family and the Social Security Act
by Arthur J. Altmeyer
Chairman of the Social Security Board
circa July 1937
The Social Security Act is our first effort to attack the problems of want and insecurity on a Nation-wide front. Passed in 1935 and effective in 1936, it has already brought an increased measure of security to the American people--to those who live in small towns and in the country--as well as to those in the larger cities and industrial centers.
The act is made up of ten distinct but closely related provisions designed to protect the public health, to safeguard childhood, to help the blind and the handicapped, and to offer protection against the suffering caused by unemployment and by poverty in old age.
What does this protection mean to the farmer and his family? Every one of these ten provisions contributes either directly or indirectly to the health and well-being of farm dwellers in every part of the country. Indeed, throughout much of the act there is apparent a clear intention to make available in less thickly settled districts benefits and services which have long been established in more populous communities.
The three maternal and child-welfare provisions are explicitly intended to extend protection to children in farming communities, and this purpose is so stated in the act itself. The fact that the rural child-health record has in the past made a poorer showing than that of the cities is proof of how greatly these services are needed. The present expansion of both State and local maternal and child-health services through Federal-State cooperation in every State in the Union, means that fewer mothers and babies will die needlessly. The extension of services to crippled children, already in effect with Federal aid in 45 States, provides not only treatment but the means of locating children in remote districts and transporting them to hospitals. Child-welfare services in rural communities have also been provided with Federal assistance in 45 States, with the purpose of caring for neglected children so that they will not be driven into delinquency. With the Federal grants now available under these three programs, communities are now able to provide more adequate child-health and welfare protection and to see the that more children have a chance to grow up with strong bodies and a good start in life.
Nowhere else in the Social Security Act is any distinction made between town and country. In the five remaining welfare provisions, the act offers the States Federal assistance in providing certain kinds of protection for all their people, no matter in what part of the State they live. As a matter of fact, however, the increased protection now available is likely to make more difference in the country than in the city, since in the past greater population and wealth of cities has often given them the benefit of certain services which country districts could not provide.
Now, under the terms of the Social Security Act, State county, and district public-health provisions are being developed in all the 48 States and 3 territories. County health officers and public-health nurses are promoting health programs in agricultural communities. They are helping to meet the problems of school health inspection, of sanitation, and of chronic health hazards like tuberculosis, for which many counties have never in the past been able to make adequate provision.
So also vocational rehabilitation provides opportunities for reeducation for all kinds of workers who have become crippled or handicapped, no matter where they live or what kind of work they have previously done. Practically all the States are now participating in this program, and thousands of people are receiving training which will help to make it again possible for them to support themselves and their families.
The programs so far described provide for Federal aid in developing services which have long been recognized as essential to community welfare. In addition to these, the Social Security Act also offers Federal cooperation in providing direct assistance to the needy aged, the needy blind, and dependent children. Provision for those three groups who are in need through no fault of their own has been accepted for years as a government responsibility. But the majority of our counties, and even of our States, have never had money enough to meet this obligation. Even before the depression, many communities were unable to provide any assistance, and in others the amounts actually granted were pitifully inadequate. With the depression this situation became so desperate that the Federal Government was compelled to come to the rescue with a Nation-wide emergency program.
The Social Security Act places Federal and State cooperation in public assistance to these 3 groups on a permanent basis. Under the terms of the act, the Federal Government pays to each State with approved public-assistance plans approximately half of what the State spends in aiding the aged and the blind and one-third of the State's expenditures for aid to dependent children. In addition, the act also provides that all approved State plans must be effective in every part of the State, so that no county or district can be left out; and that the State government itself must pay part of the cost of assistance, so that none of its subdivisions is left to bear the entire non-Federal share of the expense. Some States pay the entire non-Federal cost out of State funds. Others call upon their counties for partial support of local programs. But many of the States where the latter plan is in operation have made various arrangements for giving supplementary help to counties where resources are low and needs are high.
The Social Security Act has also made it possible for the States to make their eligibility requirements more liberal, so that more of the needy can be aided. Citizenship and residence requirements are less stringent, and no one, for example, may be denied assistance on the grounds of insufficient local residence, if he is otherwise eligible and meets the requirements for State residence. Beside helping the State to give more assistance, the act also helps it to give better assistance. The provision that the State take part in administration means that local communities can share services which most of them could not afford separately. Moreover, since this program gives assistance in the form of cash allowances to people living in their own homes, it means that fewer of the needy will be compelled to depend on the precarious support of "outdoor relief" and grocery orders, or to take refuge in county poorhouses. Experience has proved that this form of assistance has two advantages over older ways of caring for the needy: it is not only better for those of the needy who are able-bodied and can take care of themselves, but it is also actually more economical for the tax-payers.
At present it is estimated, on the basis of reports for the past months, that approximately 1,823,700 people are receiving assistance in the 43 States participating in one or more of these programs; about 1,349,600 of the aged are being aided in the 43 States with approved planes; 38,500 of the blind in 29 of the 30 States with approved planes; and 435,600 dependent children in 31 States. The majority of the States not yet taking part in all these programs are now considering State action which would, if adopted, enable them to set up plans conforming to the act.
In agricultural States this cooperative Federal, State and local public-assistance program is especially urgent, because of the character of the population. Many rural communities have more than the average share of old people and of children, and in such communities the situation is sometimes little short of desperate. Through the Social Security Board the Federal Government stands ready to give the fullest possible cooperation to every State in developing this service for its own people.
In providing that each State shall set up and administer its own plans, the Social Security Act recognizes that local conditions differ from State to State and that practical welfare and assistance programs must be geared to the actual conditions existing within each State. The act gives the States a large measure of freedom in making their own plans; this very freedom, however, places upon the States an obligation to make the most of the opportunities now open to them.
In offering these Nation-wide opportunities, the act also recognizes that need knows no local boundaries. If we are to meet these urgent and immediate problems, the Federal Government must take its place as an equal partner with the States and their communities.
In addition to providing for these present needs, the Social Security Act is designed to set up protection against future need. Two of its provisions--those for unemployment compensation and for old-age benefits--are directed toward this end.
The provisions of the act relating to unemployment compensation make it possible for the States, if they so desire, to set up systems whereby the majority of industrial and commercial workers within the State may be entitled to regular payments for a limited time in case of future loss of work. The latest available estimates indicate that 18,700,000 people are now employed in jobs covered by the unemployment compensation provisions of the 48 laws already approved by the Social Security Board, including those of 45 States, the District of Columbia, Alaska, and Hawaii. In addition, similar laws have recently been enacted by Florida and Missouri. The only State still without such legislation is Illinois, where a bill has passed the Senate and is now before the House. The regular benefits to be paid to covered workers in case of future unemployment will go far toward bridging gaps between jobs and will help to provide for the worker's family during a temporary lose of work.
The old-age benefits program offers a method whereby young and middle-aged workers can build up protection for their own old age. This protection is provided through a system whereby covered workers will be entitled to a monthly income after they reach 65 and retire from regular employment. As now set up, the plan covers everyone who, after 1936 and before he is 65, is employed in industrial or commercial occupations. Whether he spends all or only part of his life in such work, he will be entitled to benefits in proportion to the total wage record. This is the one part of the act to be directly administered by the Federal Government, and it was placed on a Nation-wide basis simply because no other plan was found to be sufficiently comprehensive. This program, according to the terms of the act, was planned as the last to take effect. It went into operation on January 1, 1937. and up to June 18 more than 28,700,000 working people had applied for accounts under it.
These 2 provisions represent a substantial beginning in making both old-age security and protection during unemployment a reality in this country. But it is only a beginning. No one recognizes this better than those who are administering the Social Security Act. For this reason the Social Security Board believes that one of its most important responsibilities is to study the operation of the act and recommend changes as these seem possible and advisable. The act itself provides for such study and requires the Board to make such recommendations to Congress.
In the public-assistance and welfare provisions we have more than forty years of State experience, in administering similar measures, on which to build. In dealing with unemployment and old-age dependency we have no such background. Only one State has passed on unemployment compensation prior to 1935, and no general public provision had ever been made in this country for old-age protection. But in principle both unemployment compensation and old-age benefits are founded on sound democratic precedents. Both assume that the soundest foundation for future protection is the individual's own work and earnings. In both programs the amount of benefits to which an individual will be entitled is therefore based upon his past earnings and employment.
This is the reason why, in initiating these new programs, their coverage was kept within the field of organized industry and commerce. In this new and enormous undertaking the only practicable way to begin was to start where individual work and wage records could be most easily maintained. The fact that self-employment, agricultural labor, domestic service, and certain other kinds of work are not covered is not due to any lack of concern for the often serious needs of those so employed but simply to the practical difficulties of administration which their inclusion would entail. While these problems were being studied prior to the passage of the act, it was believed--and the Social Security Board continues to believe--that practical experience in administering these provisions in the fields where they could more readily be introduced would be the best, if not the only, way of gaining the knowledge necessary to administer them in fields, like agriculture, where the difficulties would be still greater.
The Social Security Board favors the amendment of the act to extend the Federal old-age benefits plan to cover farm laborers. It has stated to Congress that the only problem involved is that of setting up practical methods of administration. This proposed extension would apply only to those who are employed on farms, just as the present plan applies to those who are employed in commerce and industry. The self-employed--whether farmers or shopkeepers or doctors or lawyers--present still more difficult problems with which we have not yet enough experience to deal.
It is important to remember that, although agricultural employment, as such, is not covered by State unemployment compensation laws and the Federal old-age benefits program, those who normally live and work on farms may under various circumstances come under both these provisions. One of the outstanding characteristics of working conditions in this country today is that people move so readily from one kind of job to another. Men who work most of the year on farms take jobs in canneries and factories and mills during the slack season. Others may leave the farm for a period of years to work in industry or commerce. During these shorter or longer periods of work away from the farm, they will, in most cases, be covered by both the Federal old-age benefits program and State unemployment compensation laws. Since the requirements for establishing benefit rights under both are relatively easy to fulfill, it is practically certain that a large number of people will find that their work outside of agriculture is sufficient to bring them within one or both of these systems.
To take a single example--from old-age benefits, since its provisions are the same all over the country, while unemployment compensation differs somewhat from State to State: A man may leave the farm and work on a job covered by this program long enough each year to earn an average of $300 yearly over a period of ten years; with a total wage-record of $3,000, he will be entitled to a monthly retirement income of $15 after he reaches 65. If his total wages received in covered occupations are lower or higher, he will receive a correspondingly smaller or larger retirement income. The smallest monthly payment will be $10 and the largest, $85.
After a man has retired and is receiving his regular monthly benefit payments, he is perfectly free to go on farming or to do any other kind of work in which he is "his own boss." Going back to the country after years of working elsewhere is nothing new. But too often in the past it has meant that those who returned became sooner or later a burden upon their struggling families or a charge upon the community. Those who go back to the country after retiring under the old-age benefits program will have at least something to contribute to their own support, and most of them will have enough to live on without help. For those who still need aid, Federal-State public assistance will continue to provide self-respecting help.
Farm people will benefit from these provisions not only because from time to time, they leave the farm for the factory. They will also share in the general economic advantages which are among the most important results anticipated from these provisions. We have learned that when unemployment strikes cities, the country cannot escape disaster. When wage earners have no pay envelopes, the bottom drops out of the farmer's market. Unemployment compensation will give the wage earner something to go on between jobs; it will make it possible for him to provide the essentials for his family. And some of the main essentials are farm-produced, like food stuffs and cotton. Unemployment compensation will thus go far toward stabilizing the buying power upon which agriculture is dependent; it will go far toward protecting all of us from sliding into the pit of another depression. In the same way old-age benefits will maintain as consumers millions of older people who might otherwise be dependent; it will protect communities everywhere from increasing demands for relief. Although farmers, self-employed business people, and certain others pay none of the taxes required under the Social Security Act and under State unemployment compensation laws, they will share in the benefits of this general stabilization.
The Social Security Act is not intended to meet all our needs or solve all our problems. What it is intended to do--and is doing--is to assure all our people of certain minimum essentials and to forestall some of the worst effects of unemployment and of poverty in old age. But for economic security we must still work for a sounder balance between business and agriculture. The act will contribute to this balance by maintaining the buying power of industrial workers and older people, and by stabilizing the market for the farmer's produce. Time and experience will teach us how to improve and extend its operation most effectively. Under the act we have already made the greatest advance in our history toward social security. But it is not the last advance. Farm families, along with their neighbors in town and city, may look forward to increasing protection against the hazards of their common life.