Committee on Economic Security (CES)

Volume VI. Social Insurance

I. Security for Agricultural Workers


Josiah C. Folsom

November 3, 1934
Mr. L. H. Bean

Dear Mr. Bean:

I herewith submit a report upon "Economic Security of Farmers and Agricultural Laborers."

It has been announced that President Roosevelt intends to present to the next Congress a program of economic security of these objectives: Security of the home, economic security, and social insurance.

The accompanying report is intended to show the need of the application of social insurance to agriculture and to indicate some problems in that connection.

In response to requests from Mr. Olsen and Mr. England last summer, a committee consisting of V.N. Valgren, chairman, and Messrs, C.L. Holmes, F. V. Waugh, B.R. Stauber, T.B. Manay and the undersigned prepared a report of developments and problems in social insurance and other means of improving the economic security of individuals with special reference to the farmer. That report was transmitted by Dr. Valgren to H.R. Tolley and to you on September 26.

Last month you assigned to William T. Ham and myself the making of more definite recommendations as to the possibility of social insurance for farm workers. Dr. Ham did some preliminary studying on the matter and wrote an outline for a report. He then had to leave the city on other duties and has not yet returned. The undersigned took over from Dr. Ham the task and is responsible for the preparation of the present report. In its preparation were used some data and parts of the committee report noted above. Dr. Ham's outline was followed in general.

This report has been prepared without proper time for study of existing experience in social insurance and with little consultation with other persons and without time for mature consideration. It is submitted in the hope that it will be of some service in showing the need for social insurance among agricultural workers and give some suggestions to its application.

Very truly yours,

Josiah C. Folsom
Assistant Agricultural Economist

JCF Enclosure



Josiah C. Folsom,
U. S. Department of Agriculture,

November 1934.

The United States Census of 1930 enumerated 6,012,012 farm owners and tenants and, in addition, 2,800,194 farm wage workers, mostly farm laborers. Unpaid family workers numbered 1,659,792. The total engaged in agriculture was 10,471,998 or 21.4 percent of the Nation's gainful workers of ten or more years of age. Upon these may be said to depend for support the Country's farm population of 30,445,350 persons, or 24.6 percent of the total. The importance of providing for the economic and social security of this part of the Nation's population is second to none.

For the last 13 years, beginning with 1921, farmers and farm laborers in the United States have been in a serious economic position.

Farm operators have suffered from the fact that the price of their products have been lower than those of commodities they had to buy, compared to pre-war times. In 1921 the ratios stood at 82. By 1925 it had risen to 99. In the next four years it held slightly under that, until the depression began in 1929. The ratio fell to 87 in 1930, and to 61 in 1932. Partial recovery since brought the farmers' purchasing power back to 81 by September 1934.

Farmers' costs of production have ever since the World War held above pre-war rates. In 1929 the index was 147; in 1933 it had dropped to 108. But that year the ratio of prices received by farmers to prices they paid was 64, making production without loss very difficult or impossible.

In 1930, 997 farm bankruptcies were reported. The post-war situations forced this number to 7872 in 1925. Temporary easing of the economic situation brought farm bankruptcies to 4023 in 1931, and the depression had caused nearly a 50 percent increase in the next two years. Data are not yet available to indicate the trend in 1933 or 1934. Gross farm income from crops and livestock was between 11 and 12 billion dollars from 1924 to 1929 inclusive. In 1932 it had dropped to $5,143,000,000. After 1929 the drop of income forced cuts in expenditures, but these could not be brought down as fast as income declined. Return to capital and management as percentage of farm operators' net capital was 3.6 percent in 1929. In 1932 the depression had made this a loss of 6 percent.

Farm laborers, managers and foremen working for wages numbered on April 1, 1930, 2,800,194, or 26.7 percent of those gainfully employed in agriculture. In 1920, farm laborers were receiving an average wage of $47.24 per month with board, for the country as a whole. The post-war depression temporarily forced wages back faster than farm costs of living. From 1923 to 1930, wages had risen enough in comparison to farm costs of living so that their index was above that of those of costs of living. Since then, they have lost even more than before, so that in 1933 cost of living index was 109, and that of farm wages 80 (Table 1). The average wage rate per month with board was $14.67 on April 1, 1933. This was less than three-fourths of the average for the years 1910-14. Since then, both the cost of living and wages gave risen so that the indexes for wages the first nine months of 1934 was 91, while that of cost of living had gone to 123. Living costs had risen faster than had wages.

The supply of and demand for hired farm labor are closely related to farm wage rates. Decreased demand and increased supply usually mean lowered wages. This has been very evident in the last few years.

Since 1929 farmers' demand for labor fell steadily in a spite of tendencies to crop season increases, until by April 1933, the demand for labor was 60 percent of normal. Farmers were offering only three jobs where they usually offered five.

On the other hand, farm labor supply increased while demand decreased. In January 1933, it was a quarter above normal. The excess supply was made up not only of those habitually doing farm work, but also many thrown out of other employment seeking farm work. As a result, there were five workers available for every two farm jobs. Since January 1933, increased demand for labor, both in and out of agriculture, has reduced supply to the point that there were in the summer of 1934 three workers for every two jobs.

During the period since the depression began, farmers have financially been forced to reduce wage payments. They did this both by cutting wages and by reducing hiring. But many farmers have held onto labor in hopes economic conditions would improve. Farm laborers saw their earnings drop faster than did costs of living, but those who could held on to their jobs lest they be unable to get others at any wage. They knew of the many without work or incomes. Laborers with families were particularly hard hit by low wages and lack of work.

It had been stated that the need for social insurance among farmers has been rendered much less necessary by the provisions made to secure economic recovery through various Governmental measures such as the establishment of the Agricultural Adjustment Administration to increase agricultural power and by the enactment of laws to ease the credit situation for farmers. This is only partly true as is shown by the fact that from 1930 to 1932, the value of farmers' income from production of the "eight" basic agricultural commodities was between 51 and 54 percent of the total. And, again, when the Agricultural Adjustment Administration ceases to operate, the need for other social protection such as insurance may become greater.

The present difficult situation of many farmers is shown by scattered relief date. Two surveys by the FERA within the last year showed that close to half the heads of relief families on their lists in eleven states were farm operators. Of these, two-fifths were owner operators. The data also showed that farm laborers make up at least 5 percent of relief cases. Croppers made up nearly half the relief cases in five southern states. Inasmuch as farm operators form only one-eighth (12.3 percent) of the total gainfully employed of the United States, farm laborers, managers and foremen 5.7 percent and croppers 5.4 percent of those of the South, it will be seen that there were larger proportions of relief people from among farming people than from other classes in the total populations.

42.3 percent of all farms in the United States in 1930 were operated by tenants (Table 2). The percentage was 20.9 in the West, 30.0 in the North and rose to 55.5 in the South; 24.2 of the farms in the South were reported operated by croppers.

Croppers are particularly hired laborers paid by a share of the crops they produce rather than in money. These people are as a class almost constantly without resources with which to meet unemployment or any other emergency.

As noted above, croppers form a disproportion number of relief cases. This may be due in part to actual need among many who have contracts, and in part to inability to secure either acreage to work or other employment. Statements have been made and complaints received by the Department that reduction of acreage has been accompanied by actual reduction of numbers of croppers and laborers on the land. While it is believed that there has not been any great net change of this kind, no actual measure of this movement has been made.

Data on unemployment among hired farm laborers are far too few. The Census of 1930 reported that 142,802, or 1.4 percent, agricultural workers were out of work and looking for jobs, or were on lay off without pay; at the same time, 6.6 percent of all gainful workers were similarly situated. These data concerning agricultural workers are apt to be questioned on the ground that many who habitually do farm work during the crop season, but who engage in other activities during the winter, may have reported themselves to the Census enumerator as engaged in other occupations, and may have also been idle at the time of the Census early in April. Among those idle reporting agricultural occupations, half had been without work for less than five weeks, and the rest for longer time. Hence, the true amount of unemployment in agriculture may have been under-reported. This would appear confirmed by the strike noted below.

A limited number of studies shed some light on the amount of unemployment among hired farm laborers. Of 293 casual and noncasual farm workers interviewed in Massachusetts on 1932, 25 percent had had 5.22 months unemployment in two years. 1920 had been an active year; 1921 was one of minor depression.

Similarly, in New Jersey in 1922, 13.6 percent had been out of work 7.6 months in four years. As both groups included some people who did not habitually hire out winters, the percentages of adults out of work at some time was higher.

Out of 964 wheat belt harvest hands interviewed in 1920, when the post war boom was still at its height, 39.2 percent had suffered unemployment during the year previous. No information was obtained concerning the character of employment previous to unemployment, or of time out of work.

Another study reported casual farm laborers' jobs lasted only 27.3 days in length.

A study among nearly 11,000 migratory berry pickers in Arkansas by the Federal Emergency Relief Administration in 1934 reported unemployment among these workers to have been increasingly serious in the past five years. In 1920, only 29 percent of their available working time was spent in idleness. Each year following it grew greater, until 47 percent of the year 1933 was without work. Income per day employed dropped from $2.13 to $1.25.

On general farms of Central New York, farmers reported giving month hands 142.1 days of work a year. This means less than half a year of employment (38.9 percent) at best, and then the necessity of some idleness during the hunt for some other job. Inasmuch as the larger part of farm hiring is during the crop season, it means non-agricultural work must be usually obtained during the winter.

Seasonal work in agriculture in many regions of the country requires large increases of labor forces. To meet this demand, migratory laborers go to the crops, especially harvests. The number of such workers has been roughly estimated at from one to five millions. The workers are men, women, and children. They work truck and fruit crops on the Atlantic and Pacific Coasts, the sugar beets crop, and grain harvest, small fruits of Louisiana and the Ozarks, of Michigan and New York. The Federal Emergency Relief Administration obtained data concerning nearly 11,000 such persons picking strawberries in the Ozarks this year. It is likely that the survey did not contact half of these migrants.

At very few places is it possible to make any check on the volume of the movement of migratory labor. Two examples show movements through local bottlenecks:

Between five and ten thousand cross from Norfolk, Virginia and the DelMarVa Peninsular for strawberry and potato crop work each year.

The other recorded as movement of from under 200 to over 10 thousand monthly north or south through certain mountain passes between Southern California and the San Joaquin Valley, running up to a volume of 24 thousand per year.

Forty two percent of the farmers of this country in 1929 hired farm laborers, giving them an average of 156.2 days of work at a cost of $363.06 per farm hiring, an average cash outlay of $2.32 per day of labor hired. This figure in itself emphasizes the fact that, on the average, hired farm laborers get hardly over half a years's work in agriculture at a wage with which it is manifestly impossible to support a family without added employment and income. It gives no clue to amount of unemployment suffered, but does show that an equal amount of supplemental activity, and usually earning, is necessary for the rest of the year for the average laborers. Even in the Pacific States where the largest number of days of employment (204.1) was reported for the laborer, the inadequacy of agricultural work and the need for supplemental support is evident. In the East South Central States the situation reaches its worst with only 36.4 days of work reported for the hired farm laborer on the average. The laborers average earnings from farm work in 1929 amounted to $707 on the Pacific Coast, and $124 in the East South Central.

It may be suggested that farms employing less than certain numbers of hired laborers be exempted from the application of laws providing workmen's compensation and unemployment laws. To do so would deprive the majority of agricultural laborers of the benefits given others.

A high percentage of large farms and their employees would doubtlessly be included in any plan for social insurance applying to agriculture while employees on these are in number much out of proportion to the number of farms employing them; they form a distinct minority. Several facts demonstrate this.

The Census has published a study of large scale farming in the United States in 1929. Data for this were obtained from Census schedules. The farms included were those having a valued of products of about $30,000 or more in 1929.

The data below were compiled from that and Census reports:


All Farms

Large scale farms

All farms except large scale farms

Per farm (all farms) hiring

1. Number





2. % of all farms





3. Average expenditure for hired labor, Total





4. Per day of labor hired





5. Average days labor hired





6. % total labor expense





7. Man years of employment (300 per year)





(1) Line 3 + Line 4

Seven out of ten of the larger scale farms considered were located in the Southwest and Far West. Four of the ten were on the Pacific Coast. Over a third were in California. No other geographical division has as many as 9 percent of the large-scale farms.

These data indicate that large scale farms hire 11.0 percent of the man days of labor. As to actual numbers of workers affected, probably a smaller percentage of the total laborers are concerned, because small farms hire day labor at the peak of the season out of proportion to their average requirements. The seasonal variations between high and low points of hiring is large. Probably the low point is not half the year's average, and the high may be double that average. Such is the fact on some types of farms. Assuming that the percentage of farm laborers hired by the large scale farms considered is proportional to total wage payments, and that these farms alone would be covered by insurance, 69 percent, and maybe more, of farm laborers would be excluded from its benefits.

The Division of Labor Statistics, Department of Industrial Relations of the State of Ohio, collects data required by law from all employers of three or more persons in agriculture and in other industries. In 1922, it obtained reports from 1,444 such farm employers They formed 0.66 percent of all farms, and 1.6 percent of farms hiring that year. The Division believed it was getting reports from a high proportion of farms employing three or more. These farms employed an average of 4.28 persons in January at the minimum for the year, and 7.56 at the maximum in July. This is a rise of 75 percent.

These farms had on April 15, 1929, 9.8 percent as may hired workers has the Census reported on April 1, 1930.

To include only much farms in the social insurance would apparently exclude 90 percent of hired farm laborers in Ohio. The same would probably be true of most other states, if not all.

In any scheme of social insurance planned to cover hired agricultural laborers, croppers should be included. Croppers are enumerated by the Census as share tenants "to whom landlords furnish all the work animals." There were 776,278 of them in the South in 1930. They are practically hired laborers who are paid in shares of the crops they raise rather than in money. Their economic situation is commonly considered as poor as that of any large group in the country. Their low standards of living have been forced upon them partly by their economic and partly by their social status. Their need for protection by social insurance is increased by their situation. Their situation is such that by the opening of the next crop season, they have usually exhausted their resources, and have to be provided with the barest necessities of life by their landlords until the season's crops are sold. As a class, they have not the resources with which to take ordinary preventive measures against sickness, to pay for proper medical care, to meet loss of crop or land. Ill health and illness among them and other rural southern people of extremely limited resources are stated to be more than ordinarily prevalent.

The possibilities of applying a system of social insurance to farm workers are affected by peculiarities of the industry of agriculture.

The farms of the country are in small scattered units compared to those of many industries. Farms averaged 167 acres in area in 1930, ranging from 82 in the South Atlantic States to 652 in the Mountain States. They included 52 percent of the land area of the country, 50 percent in the South Atlantic, 29 percent in the Mountain States, and 81 percent in the West North Central. Most of the farms are scattered in rural territory. This means that there are an average of practically 4 farms per square mile of land area in the country, 8 in the South Atlantic States and one in the Mountain States. Consequently, distances from farms to administration centers of social insurance or their branch offices are necessarily large compared to those from urban points to offices. Rural travel is often handicapped by roads poor at best, and almost impossible at times because of snow or mud.

The average numbers of persons per farm is small. Many industrial concerns have thousands working in the same plant. Few farms have a hundred and that hundred may be scattered over a large rural area. Every farm has its operator or manager who usually lives and has his principal occupation on the farm. The median size of the rural farm family, including the operator, was 4.02 persons in 1930. In addition, on April 1 of that year there was an average of 0.43 hired farm laborers. This totals 4.45 persons. Insurance for such small units is expensive to administer.

Agriculture is an industry which has considerable seasonal variations in its demands for labor, as has been shown above. This necessitates considerable employment of casual laborers in the usual conduct of the business. These workers at certain periods of the year are engaged in other activities. Those which are wage-paid would to a large extent be included under a comprehensive social insurance plan. Farm family members, including operators, engage in considerable wage-paid work away from their farms in addition to home farm work at some times of the year. This may or may not be agricultural work. This brings up the complex problem of insurance coverage and administration for workers shifting from one job, industry, and locality to another.

In the past and present application of social insurance, agricultural workers have been largely excluded, exempted, or given permission to voluntarily insure. Data as to the extent to which those in America have availed themselves of opportunity for self-insurance of any form, public or private, are lacking. One large insurance company recently addressed concerning the matter reported no such data existed. Other indications are that only about half of the farmers have life insurance in any form, and that only a very small percentage have health and accident insurance. One study among farm laborers reported 53 percent of farm laborers having life insurance. The percentage insured among the American born of the group was 56; among the foreign born, 27. Most of these workers lived in a thickly settled part of the country where contacts with agents selling such insurance are relatively easier than in much of the country.

Agriculture is commonly considered to have a comparatively small number of accident and health hazzards. But limited data indicates otherwise.

The fact that so large a proportion of relief cases on the rolls of the emergency Relief Administrations are farm laborers, farm tenants, and even owner-operators of farms, and the fact that less of them than of other classes seem to be voluntarily carrying insurance, show that social insurance is desirable among agricultural workers, in spite of the extensive credit and other relief measures taken by the Government for farmers in late years.

Among contingencies against which farmers operators need protection through social insurance are sickness, accidents, old age, and, in cases of tenants, unemployment through inability to rent land or secure other work. Hired farm laborers need similar insurance. Provisions for them should include accident insurance as workmen's compensation; their unemployment and also in other occupations in which they have to engage to supplement agricultural work during part of the year.

Health Insurance for Agricultural Workers

Agriculture is commonly considered a comparatively non-hazardous occupation. But it has disease and physical hazards to be faced from weather, contagion from animals, strains of poor posture, ailments and skin troubles from handling certain substances, diseases spread by insects, which appear to affect it worse than they do other industries. Some of them are peculiar to it. In some parts of the country, improper diet and contaminated water supply are health hazards commonly little recognized. Each of these appears at times to affect agricultural workers more than others.

Health insurance should provide for medial benefits for care during temporary disability, longer-continued partial disability, and possible permanent disability, arising from disease. If cash rather than service benefits were to be given, it is quite probable that many beneficiaries would not or could not use the money to secure benefits nearly as adequate as would be assured by the giving of services only. The dependents of those insured should be also included. Coupled with the scheme should be one of preventive measures including popular education, to help reduce the incidence of disease and accident. For persons disabled for their usual occupations, rehabilitation treatment would seem advisable.

The limited existing experience in American communities in organizing medical services for large groups indicates that for moderate regular dues, medical services can be secured for not too sparsely settled rural communities as well as for urban population groups for moderate regular payments or dues. The services rendered usually include the attendance of a physician, and some medicines; varying degrees of surgical, nursing, and hospitalization may be included in addition, or are obtainable at moderate additional costs. Foreign experience in organizing and administering sickness insurance should furnish helpful suggestions for an American set-up.

Similar results should be obtainable under a compulsory insurance scheme. None should be drawn up without consultation between representatives of the public, of the medical profession, and the Government. It should assure moderate premiums from those insured, and a reasonable regular income to those of the medical profession serving those insured. The American Medical Association and the American College of Surgeons have drawn up health insurance principles.

Most foreign systems of health insurance require contributions by the persons insured, their employer and the Government. For this country, it is suggested that Government contributions be paid only on behalf of agricultural workers specified low income groups; that contributions from the employed in groups having incomes of specified higher amounts, or wages, and employment ordinarily assuring such income, be made jointly by such persons and their employers; that contributions from the employed having specified larger incomes, and from the self-employed earning similar amounts be fully responsible for their own contributions; and that persons having earnings of larger amounts be allowed to choose whether or not they should take advantage of the insurance system.

It is believed that organizations for health insurance assuring regular adequate support of physicians, nurses, and medical centers would secure to many rural communities services now unobtainable locally. The benefits to individual and public health would be well worthwhile.

Accident Insurance

Agriculture in commonly considered a comparatively non-hazardous occupation, but it has risks of disease and accident. The statement has been made that accidents are more numerous in farming and occupations closely connected with it than in any other industry.

Data concerning accidents in this industry are far from complete. However, it is stated that there are about 5,000 fatal accidents and 85,000 workers receive injuries necessitating absence from work each year. Only few occupations appear to exceed agriculture in the number of deaths.

Exposure of agricultural workers to occupational accidents is affected by long hours; by frequently great physical exhaustion; by variety of work for which they may be insufficiently trained; by unfamiliarity of many foreign-born workers with our language, tools and methods; by dangers from handling livestock; by increased use of machinery, some of it insufficiently safe-guarded; by faulty construction of farm buildings. Some of these risks are not encountered in other industries, and some have been minimized there by safety precautions.

Accidents insurance for farmers and members of their families should apparently be self-insurance. For hired farm workers, it should take the form of workmen's compensation insurance.

It has been estimated that 40 per cent of the employees of the country excluded from benefits of workmen's compensation are engaged in agriculture.

Agricultural laborers are specifically excluded from the benefits of workmen's compensation insurance systems in a quarter of our States; in a third of them farmer-employers are exempted, but may voluntarily insure under States laws; in a few States workmen's compensation laws apply to hazardous occupations in agriculture. Four States have no workmen's compensation laws.

Only one State, California, requires a comprehensive system of workmen's compensation covering agriculture. The law provides that all farmers must formally accept or reject its provisions. Penalties are provide for failure to do so. Farmer employers rejecting the law are deprived of certain farmer possibilities in legal defense in contesting an award to an injured employee.

Agricultural laborers as a whole should be provided workmen's compensation in extending a system of social insurance throughout the nation. Such compensation insurance should apply to all engaged in the customary work of the employer in carrying on his farming operations.

Certain farm operations of more than usual hazard should be subject to workmen's compensation under all conditions, for example, care of dangerous livestock and operation of machinery such as threshers, and ensilage cutters. Hazardous work may require insurance rates higher than ordinary work.

Exceptions might be made in case of workers hired for work not in the usual course of the employer's business. Exceptions might also be made for workers hired for very short periods by farmers who ordinarily hire no labor.

Supplemental to the operation of an insurance system should be the encouragement of safety measures among farmers and farm laborers toward accident prevention. Machinery manufacturers should be required to provide approved safety appliances on their machines and to furnish machine buyers information as to their proper use.

All accidents requiring medical assistance or absence from work should be reported to the proper authorities who should investigate the circumstances and consequences of the accidents. The inspectors should fully inform the persons injured of their rights and benefits under the law with the purpose of seeing that they obtain those they desired with minimum loss of benefits and with minimum of expense. Similarly, they should inform the employers of their duties under the law.

Benefits in accident insurance should provide the victim for part of loss of earnings during incapacitation, and for necessary medical treatment and rehabilitation. In case of total loss of earning power over an extended period of life, or death, there should be provision for support of dependents of victims, either under accident insurance or other public relief measures such as widows' pension.

Unemployment Insurance.

Unemployment insurance is intended to help hired workers to tide over periods without work. In its application, agricultural laborers have practically always been excluded. Agitation for their inclusion has gained strength in England recently, where laborers' union is strongly behind it. It is to be hoped that in setting up an American system, they may be included; in not at the beginning in a comprehensive way, then later as the setting up and administration of such a system develops the necessary enabling experiences.

There are fundamental difficulties in applying unemployment insurance to American agriculture, and also fundamental needs for it as outlined previously.

Administration of unemployment insurance applied to agricultural laborers is admittedly difficult and expensive because of the small, scattered employing units, the seasonability of much farm work, the extent to which a large number of agricultural workers must move between jobs and localities, and the character of much of the seasonal labor body. But the benefits of such insurance should not be denied those doing considerable farm work for their support.

Any system of unemployment insurance set-up should be nation-wide. So far only one system is in operation in the United States, that of Wisconsin, which does not apply to agriculture. If State systems were to be established they by themselves would have wide variety of provisions and great lack of uniformity. This would establish another element of competition favorable to States setting up higher standards of rates of contributions and lower standards of benefits, and less favorable to those of reverse standards. Federal coordination is considered essential, if not a Federally administered set-up.

In foreign countries experience has shown that an unemployment system is logically administered in close connection with or by a national employment system adequately covering the country. Such arrangement appears highly desirable here. The United States Employment Service has expanded its system so that it now operates in about half of the counties of the country. It should probably operate in all from the sole standpoint of bringing together would-be employer and employee. It would have to do so if it were to add to its functions any in connection with administration of unemployment insurance.

Hired farm laborers may ordinarily be classified from the standpoint of employing farmers as non-casuals and casuals; non-casuals, those usually employed for the year or crop season; casuals, those employed for not over a few weeks on the same job. These classifications refer to jobs rather than usual occupations. But classification with reference to occupations rather than jobs would appear desirable in administering a system of unemployment insurance. There would then be the following definitions:

Non-casual farm laborers: Those making farm work for wages their sole or principal occupation, either as non-migrants of migrants. Croppers would form a subclass of this group.

Casual farm laborers: Those engaging in wage-paid farm work for short periods incidental to other activities (wage-paid or not) which take up the principal part of their time.

The terms will be so used in the discussion of unemployment insurance.

Non-casual farm laborers should be protected by unemployment insurance toward which contributions should be made by the laborers and their employers. The system should be national in scope and such as to provide sufficient flexibility of operation to include migrants.

The remuneration of hired farm laborers may consist wholly of money, or of money plus perquisites. The value of at least standard perquisites given should be included in establishing total remuneration, and from that value would be calculated the contributions to be made toward unemployment insurance. It might be necessary to officially name the perquisites allowable and their maximum values allowable individually and collectively from time to time.

For collection of contributions a stamp book system might be used. Contributions should be on basis of percentage of total remuneration. Stamps to attest to contributions should be purchasable at employment offices and of postal officials, and affixed to the book at times of wage payments. The book might have space for record of employment and wage, payments, and of other essential data or entries. The stamp book should be submitted to a local insurance representative at intervals to allow making of official records from it.

Unemployment benefits could probably be set at some amount not over half of prevailing wage rates for each State, or possibly part of a State, and payable at the benefit rate prevailing in the locality of last employment. Benefit rates should be changed not oftener than once a year in accordance with indices of wage rates. They should be payable only after contributions over large part of a year without award benefits, and after a waiting period of at least two weeks. These provisions would eliminate most of the casual laborers who do not have other wage-paid employment.

It is recognized that farm laborers receive varying wage rates within the same locality. But these differences are not considered large enough to argue (as in the case of many industries) that unemployment benefits be paid in accordance with wages received when contributions are based on percentages of wage payment.

Application of unemployment insurance to croppers presents peculiar difficulties. They receive payments for their work as a share of the proceeds of the crops on which they work, at the end of the crop season. Croppers and their landlords would probably have to pay their insurance premiums at the time of settlements are made for crops. Benefits should apply upon failure of the cropper to secure a contract for the succeeding year by the end of the time when such contracts are customarily made in the locality of his previous contract.

For other contract workers, for example, sugar beet laborers, insurance premiums should be payable at each time contract payments are made and final payment by the time the worker leaves his job, either before or after the end of harvest. In regions where final payment to the laborers depends upon settlement made by purchaser of the crop or product long after it is delivered, final payment of unemployment insurance premiums should be made upon the basis of anticipated price to be paid for the product in a given area. These factors can be estimated by representatives of farmer-producers, by product purchasers, and agricultural officials.

Insurance Against Old Age

Old age pensions are now in operation in over half of the United States which have about half of the country's population. These pensions are paid only to those who can prove extremely limited resources and consequent need, and can show fulfillment of residence and citizenship requirements. All occupational classes are equally eligible. None of there systems requires contributions from individuals. All are publicly financed by various means. The majority of foreign old age pension systems require contributions.

At present the payment of old age pensions in American States having such systems is much limited by residence and citizenship requirements which are a large proportion of the otherwise eligible have not fulfilled. For whatever system may be adopted later for the country as a whole, there should be uniformity of eligibility requirements from State to State, and provision for eligibility for and payment of pensions to persons who have had no permanent legal residence in any state, although always resident in the United States.

A matter to be considered in planning an old age insurance system is the now increasing proportion of the aged in the population. Since 1850 the percentage of persons under 20 years of age in the country has declined from 52.5% to 38.8%; those 60 years of age or older have increased from 4.1% to 8.5%. Students of the matter estimate that by 1980 young people will form only 24.8% of the total and that the aged will comprise 19.7%. The youthful group will continue to decline, the aged group to increase, and that of what may be called the middle age will increase slightly in percentage of total population. The problem of care of the aged promises to be one of increasing importance.

Available data concerning the rural and urban population show relatively the same changes of proportions in age groups over the last 10 or 20 years. In 1930, 44.3% of the rural population was under 20 years of age, as compared to 34.5% of the urban. Only 46.9% of the rural population was 20-59 years old, as compared to 57.4% of the urban. 8.9% of the rural population was 60 years or older compared to 8.3% of the urban.

Even though the proportion of aged is increasing among the farm population, there may be some less need of old age pensions for those aged farm operators who have become incapacitated for active work than among the aged of other occupational groups. This is because family ties in rural communities are stronger than elsewhere. Younger people there, especially, children, are more apt to care for their aged relatives within their means than are many city people.

It may be advisable to have two plans for old age pension, one non-contributory, the other contributory. The first should be administered by the government to provide pensions adequate for minimum necessities and decent care of the aged who had been members of low wage groups, unable to contribute towards a pension system, and who had no close relatives able to care for them. The second would utilize contributions of the assured to furnished them larger pensions, allowing some more comfort in their last years than would be available under the first plan. Under it any electing to make contributions would be eligible to do so and receive a higher pension within reasonable limits.

A standard age of eligibility for pension should be set. For manual workers this may be 65. Exceptions might be made for those above 60 who are unable to keep at work because of physical disability.

Premiums might at first have to be set high enough to at least partly pay the pensions of those who would be immediately and soon afterwards eligible for pensions upon the setting up of a system, but who had not been required to make payments adequate to establish reserves from which to pay their pensions. Later, when adequate reserves had been established, premiums might be reduced or benefits increased. Deficiencies in funds for operating in the early periods of the plan should be met by government appropriations.

Some people eligible for and receiving pensions might be in a position to supplement them by their own efforts at such activities as gardening or employment within their abilities. Persons receiving pensions under the non-contributory system should not be discouraged from this by partial or full withdrawal of corresponding amounts of their pensions unless their remuneration were considerable greater than the amount of pension affected. Persons receiving pensions under the contributory system should be paid their pension without such deductions.

A predominant essential of a nation-wide social insurance system would be federal setting of standards; federal coordination of State administration, if that is to be the method of operation; and probably federal contributions sufficient to secure similar scales of contributions and benefits in the various states so far as possible in view of local situations.

Left to themselves, the individual States would set up systems enough different in purposes, in methods of operation, in plans for contribution, in benefits, and in effectiveness of administration to cause popular comparison and dissatisfaction between States. Some States would doubtless fail to take any action. Requirement of comparatively high rates of contributions from individuals, either in percentages of wages, payments or actual amounts, and payment of benefits relatively low in value would be to the disadvantage of those States, particularly where the insurance plan was based upon premiums depending on wage payments.

Some central authority should set, or have sufficient influence to secure their setting, the standards for social insurance systems to make their administration and operation as nearly uniform from State to State as circumstances will allow. The central authority should exercise sufficient supervision and control to maintain desirable standards of operation and administration throughout the country.

There is abundant precedent for the Federal Government's making contributions to State governments toward the expenses of carrying on work of common interest, provided State authorities comply with the terms on which such payments are offered and will cooperate with the Federal Government. It might be possible for this to be done in connection with setting up systems of social insurance.

At present and in the near future there are sure to be brought up arguments that financial difficulties caused by the depression make it unwise to attempt to set up a social insurance program. It is to be admitted that the payments necessary to operate such a system would come more directly from some classes that have funds for relief work; that other classes under the new set up might pay less than they do now. But the net cost to the public should be about the same; and the moral effect gained, considerable.

Setting up a social insurance system should be made easier now by the fact that the relief problems of the depression have impressed the public with the fact that such insurance is working well in some foreign countries, that it is desirable here, that it would relieve workers of much uncertainty concerning economic and family financial emergencies, that the costs of such insurance would be more equitably distributed than those of public relief, and that despite possible temporary disadvantage, the plan is worth starting.

Even so, it is quite likely that some States would fail to take action reasonably promptly. Some other plan may be necessary to secure nation-wide action as promptly as the present emergency makes desirable, either to expedite action by States, or to set up a Federal system of social insurance.

The Wagner-Lewis excise tax plan, as embodied in H. R. 7659 of the 73rd Congress, or something similar, may be necessary to hasten State action, and also to get social insurance systems into actual operation before State preparations can be effectuated. The Wagner-Lewis bill provided for raising revenue to operate an unemployment system by an excise tax upon employers' payrolls. It proposed to allow an employer to credit against the Federal tax thus due (1) any amounts paid during the year to State unemployment funds under certain conditions, and (2) the amount by which such paid contributions were less than his largest contribution under the State laws in any previous year. The second deduction was allowed to encourage regularity of employment, and to reduce the need for unemployment benefits.

There is a third possibility for establishing systems of nation-wide insurance, - direct federal Action. This may be open to question as to its constitutionality, and because in ways State action is preferable within limits which would coordinate it with that of other States.

There is one problem which will doubtless need Federal action for its solution, - that of the worker who shifts from one locality to another, and from one industry to another. Such a worker may be a casual from the standpoint of the employer and job, but may be a non-casual in that he works most of the time. His migrations may be interstate, and his changes from one job or industry to another necessitated by seasonal variations in employment opportunity beyond his control. He should be as eligible for social insurance and its benefits as the non-migrant.

If the establishment of social insurance system is on the basis of State action, some federal adjustment may be needed at times between State funds to take care of inequalities between contributions and benefit payments among the States, because migrants contributing in one State may need benefits while in others.

Similarly, if insurance systems set up industrial pools for contributions, there should be allowed necessary shifting of funds between pools.

Social insurance is intended to protect its beneficiaries against ordinary periods of unemployment and financial need. But there are emergencies of longer duration and greater financial need which may exhaust social insurance funds. These may have to be supplemented by State or federal aid. So far as possible, these should be distributed to the beneficiaries as payments for employment on public works rather than as direct money payments. This country has become used to the practice of starting and carrying on important public works to supplement private employment during times of depression.

Some cases of incapacitation caused by accident or prolonged illness may make necessary help for the individual beyond the ordinary benefits of insurance. These may have to be met by public funds, both for prolonged treatment of disease or injury, and for rehabilitation.

Different contribution and benefit rates may have to be set for the more hazardous jobs in administering health and accident insurance.

It is suggested that a social insurance plan against unemployment or ill health be administered from the standpoint of important occupational groups, or industries rather than individual employers or employees. This would require far less operating detail. Pools could be set up for each industry and possibly for certain hazardous occupations.

Table I. Indices of specified farm costs and farmers' purchasing power

(1910-1914 = 100)



cost of

cost of

Farm Wages

























































































































Table II. Percentages of Farm Operators By Tenure and By Color, In the United States, 1920 & 1930

  Year Total White Colored
Total Number of Operators





Total Number of Operators





Percentage of each group who were:  


















































(1) Includes Croppers

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