On August 14, 1935, the Social Security Act was enacted ... "To provide for the general welfare by establishing a system of federal old-age benefits and by enabling the several states to make more adequate provision..."
The real significance of this Act is that it was the country's first major federal government program to deal directly with the economic security of its citizens. Before then, such matters were handled by states and private sources. Federal action became necessary because neither the states nor private charities had the financial resources to cope with the growing need among the people.
The subsequent paragraphs will examine some of those major social, economic, and philosophical developments which led, directly or indirectly, to the present American social insurance system.
The Social Security Act is an attempt by government to meet some of the serious problems of economic insecurity arising in an industrial society. Up to 1870, more than half the nation's adult workers were farmers.
In the years that followed, however, industry developed rapidly and the economy tended increasingly to be characterized by industrialization, specialization, and urbanization. The result was a nation of more employees working for wages and proportionately fewer independent farmers, artisans, and tradesmen engaged in family enterprises.
In an industrialized society, workers found themselves dependent on outside forces to provide their families with the necessities of life, forces over which they had little influence. Any misfortune that interrupted their current income could mean destitution and poverty. The severe depression of the 1930's dramatized the fact that many American workers were almost universally dependent on factors beyond their individual control for their economic security.
Previous methods used to meet the economic risks of unemployment, old-age, death, and disability no longer proved adequate or guaranteed security in the face of nationwide economic disaster. A...