War and Postwar Social Security Protection for the Wage Earner

Date01 November 1942
Published date01 November 1942
Subject MatterArticles
War and Postwar Social Security Protection for the
Wage Earner
S INCE 1935 we have had on the stat- lishes governmental machinery for three
ute books of the United States a
essential services to wage earners.
basic program looking to social security
First: To help the wage earner in re-
for the Nation. With due regard to
spect to his first necessity-a job-we
the economic realities, as well as the
have a national job-finding service, the
comfort and happiness of our people,
United States Employment Service,
two main features of that program are
available free of charge to every man
designed to protect the wage earners
and woman looking for work. The first
of the country against certain common
World War showed us the need for
hazards of their working lives: ( 1 ) in-
such a service; the depression of the
ability to find work, and (2) depend-
early thirties proved the necessity for
ency of the wage earner and his family
strengthening and developing the lim-
in his old age or in case of his death,
ited service we then had.’ This was
whatever his age.
done through the Wagner-Peyser Act of
This program was drawn up in times
1933. As the war emergency came on,
of peace for a nation at peace. Most
the President provided for national di-
of it was embodied in the Social Se-
rection of the network of local employ-
curity Act of 1935, which was sub-
ment offices throughout the country,
stantially broadened by amendments
heading up in the Social Security Board.
adopted in 1939. It has been in full
These offices are now functioning as
operation long enough now to have
recruiting stations for manpower to pyro-
become an integral part of the pattern
duce materials of war. When the war
of our Government in wartime as well
is over, they will be the agencies for
as in peace.
Experience has demon-
demobilization of war workers and their
strated its value and more clearly shown
return to the occupations of peace. The
the areas for further expansion and de-
war has shown clearly a trend that has
long been developing-a national labor
Considerable progress has been made
market with a mobile labor supply. It
in a few short years in getting these pro-
has clearly demonstrated the need for a
grams established. However, there are
nationwide employment service with a
certain necessary steps that we should
nationwide outlook and a nationwide
take now to strengthen and expand these
supply of men and women available for

programs. We have managed to cope
effectively with the most difficult ad-
Second: Every state has an unem-
ministrative problems involved in the

For a study of the
years of operation and there now
prewar employment
service see R. C. Atkinson, L. C. Odencrantz,
exists an administrative foundation in
and B. Deming, Public Employment Service
this country capable of supporting the
in the United States (1938). For more re-
task of a broader and more compre-
cent surveys see the hearings and reports of
hensive social insurance system.
the Tolan Committee (Select Committee In-
vestigating National Defense Migration, House
of Representatives, 77th Cong., 1st Sess., 1941,
First Interim Report; 2nd Sess., 1942, Hear-
The social security program estab-
ings, Pts. 27 and 28).

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ployment insurance law. The purpose
Third: We have a Federal system of
of these laws is to provide a partial sub-
Old-Age and Survivors Insurance for
stitute for the wages a worker loses
wage earners and their families. This
when he is out of work. Weekly bene-
system is intended to provide wage earn-
fits are equal to about half pay, up to
ers themselves with a monthly retire-
a maximum usually of fifteen to twenty
ment income beginning at age 65 or
dollars a week, and continue for about
after; a monthly income for the wage
fourteen to sixteen weeks. Benefits are
earner’s wife also after he retires and
paid from state funds, created by col-
she, too, is 65; a monthly income for
lecting a pay-roll tax from employers.
his widow in her old age, also in her
Unemployment insurance is a Federal-
earlier years in case he dies leaving her
state system. The Social Security Act
with children to provide for, and for the
provides that the Federal Government
children themselves. Benefits are pro-
pay the costs of administration if the
vided also for the wage earner’s depend-
state unemployment insurance law con-
ent parents after they are 65 years old,
forms to certain requirements of the
if he leaves no wife or child.
act. The Federal Government also lev-
Because this system is still in its
ies a tax upon employers offsetting (up
early years, the number of beneficiaries
to 90 per cent of the Federal tax) the
so far runs only to hundreds of thou-
contributions paid by an employer to
sands, but there are more than 51,000,-
a state unemployment compensation
000 wage earners on our books with
fund. The state laws, however, are ad-
wage credits toward benefits for them-
ministered by the respective states. Up
selves or their families as time goes on.
to the present time the state unemploy-
We are paying benefits amounting to
ment insurance funds have paid out-of-
about $9,500,000 a month.
work benefits amounting to nearly two
The retirement age, as already stated,
billion dollars, with as many as five and
is 65. As war work increased, however,
one-quarter million people receiving
many 65-year-old men and women
benefits in one year. Unquestionably,
ceased to retire. Something like 600,-
it has relieved hardships in many a
000 of them, now eligible for old-age
home, and in many communities has
retirement benefits, are still at work, and
definitely kept local business alive by
some 28,000 who retired have gone back
sustaining the purchasing power of the
to work.
workers in periods of large-scale unem-
The Social Security Act contains
other provisions of importance to wage
As a Government undertaking, how-
earners, as to all our people. But it is
ever, unemployment insurance is new in
the United States Employment Service
the United States. Now, after at least
and the two insurance systems, applying
three years’ experience in every state,
as they do specifically to wage earners
and more than that in many of them,
and their families, which come within
we know the system should be consider-
the scope of this discussion. I have
ably revised. Some changes would have
described briefly the role of these three
been necessary in any event, but now
services in the Nation’s life thus far.
it is imperative that there be basic
What will they mean to us when the
changes in order that we may be pre-
war is over?
pared for postwar conditions. With the
necessary basic changes, unemployment
insurance can be a potent factor in our
On one point there can be no ques-
postwar readjustment.
The first economic need of the

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returned soldier will be a job. To help
The primary purpose of unemploy-
him get a job we have the United States
ment insurance is to pay benefits to
Employment Service. That means we
unemployed workers. Yet the benefits
have local employment offices all over
under unemployment insurance laws
the country-1,500 of them, operating
are, in general, less adequate even than
full time, several thousand others giving
those under workmen’s compensation,
part-time service-and these will be de-
which are far from adequate. There is
voted then to the one purpose of read-
no doubt that the existing benefits must
justing men and women to jobs in civil
be made more...

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