Social Security History
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Some form of social security has been around since the time of the ancient Greeks. It took the form of amphorae of olive oil. This was stockpiled for economic security. The feudal system was a medieval form of economic security for both serf and lord. It wasn’t until the Middle Ages that charity was used as economic security. Family and relatives have been the most constant form of economic security. The farm has been a traditional source of security for families since it provided food and labor. The most prominent sources of economic security are labor, assets, family and lastly charity.
Guilds and Friendly societies
With the rise of cities and villages came the formalization of groups of merchants and craftsman. These guilds banded together to help protect and provide for their members. From these beginnings came the friendly societies, which are the forerunner of trade unions. These structures started around the 16th century during which time governments began to assume some responsibility for the economic status of its citizens.
18th & 19th Century America
During the 18th and 19th centuries, relief for the poor was made extremely demeaning with loss of rights and other stigmatization implemented to discourage dependency. In 1795 Thomas Paine wrote a controversial pamphlet to establish a public system of economic security. The Civil War Pension of 1862 was the first real social security program offered in America. It was a very limited program but gave aid to those it deemed worthy.
20th Century American Social Security
Four things that contributed to the collapse of the traditional systems of economic security were the loss of “extended” family, increased life expectancy, the Industrial Revolution and the urbanization of America. By 1900 there were 5 companies that had decided they should provide some form of company pensions. With the stock market crash of 1929 came forth many calls for reformation and change. The alternative to the old system of economic security, proposed by President Roosevelt, was based on social insurance. This was a plan that was not welfare but a work related plan to support the elderly. Therefore, it was in 1935 that the form of American social security as we know it, came into existence.
Social Insurance
The idea of social insurance was used as the background of our social security system. It was based on two principles: that of “social” meaning i.e., it has an agenda that is greater than the self-interest of individuals; and that of insurance against a defined risk. In this case, the risk was loss of income. It is easy to see how unemployment, death, or disability fits this but the retirement aspect was included under the definition of cessation of work. From this came the Social Security Act signed by President Roosevelt, August 14, 1935.
Enactment of Social Security
In late November 1936, applications for numbers were given out at the post office. In January of 1937, the first FICA tax was withheld. The first Social Security Act provided for old-age assistance, unemployment insurance, aid to dependent children and state grants. The state grant was a support to the state so they could provide different forms of medical care assistance. This grant was the beginning of Medicaid.
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