June 6, 2023

Social Security Trivia

The late 1920’s and early 1930’s was a period of unrest that tore through the very fabric of the nation. In the cities, people would stand in lines for hours just to get a bowl of soup and a piece of bread. The basic commodities needed for survival were scare. People would knock on random doors hoping for a bite to eat. Corn husks or benches were often used as replacements for mattresses and beds. By 1933, the unemployment rate had climbed from 3 percent to 25 percent. Suicides increased by 33 percent; people were giving up. The Great Depression destroyed families and lives, and altered the very nature of our society.   

Social Security Trivia - The Great Depression Unemployed men queued outside a soup kitchen opened in Chicago by Al Capone The storefront sign reads 'Free Soup

Social Security was enacted in response to this pervasive poverty. It was a means of providing workers with a basic level of income after they retire. It was also one of the standing achievements of the New Deal programs and a precursor to the Great Society reforms of the 1960’s. Social Security helped foster a new idea of the social contract between government and the people.

In the summer of 1935, President Franklin D. Roosevelt, seeking to curb the growing poverty and suicide rate within the country, signed the Social Security Act into law. Originally the benefits were modest, but in the post-WWII era the Social Security system experienced rapid benefit growth. Over the 85 years since its inception, poverty amongst the elderly in the U.S. has decreased dramatically. According to the National Bureau of Economic Research, “between 1960 and 1995, the official poverty rate of those aged 65 and above fell from 35 percent to 10 percent, and research has documented similar declines dating back to at least 1939.” Social Security is often seen as the driver that initiated this change. In fact, over the past decades the poverty rate among the elderly has fluctuated more in line with that of working-age adults.