A safety net woven with very big holes

Looking forward to cashing that Social Security check? For many of the people I’ve interviewed it’s a primary source of income. In 1935, just as they were beginning to enter the labor force, President Franklin Roosevelt signed the Social Security Act into law as part of the New Deal. Although this universal retirement program had precedents in Europe and in a system of Civil war pensions, it generated plenty of controversy — and continues to. (A key topic, of course, is what will be left in the till by the time the baby boomers have retired en masse.)

A reflection of changing political agendas, the law has been amended many times. The original 1935 statute paid retirement benefits only to the primary worker. Benefits were keyed to lifetime earnings, presumably those of a head of household in a stable job. The benefit structure of the old-age component was progressive: lower-income workers received relatively more per dollar earned than higher-wage workers. Two years later the law was amended to provide a spousal benefit: the nonworking spouse of someone entitled to an old-age benefit also became entitled to an old-age benefit, as did survivors (widow(er)s and orphans).

As economist Karen Kornbluh points out, the system worked well for the families for whom it was originally designed: families had left agricultural lifestyles for wage labor in cities, making them dependent on a single breadwinner’s earnings:

As a result of the old”“age insurance program, the official poverty rate for people age 65 and over dropped to 10 percent by 2003, from 35 percent in 1959 (the first year the federal government kept records using a standardized measure of “poverty”). And Social Security is still enormously important to America’s elderly; it accounts for about 90 percent of total income for both men and women ages 65 and older.

But the new legislation left many Americans behind. Minorities rely especially heavily on Social Security because they’re less likely to have access to other sources of income, like pensions. Yet both agricultural and domestic workers were specifically excluded from Social Security coverage in 1939. “At the time that eliminated virtually 80 percent of black workers from this essential source of support,” writes Katherine S. Newman in Another Shade of Gray: Midlife and Beyond in the Inner City. It wasn’t until 1954 that “regularly employed farm and domestic workers” were added to the roster. Even then workers had to have 40 quarters on record in a covered job in order to qualify for some benefits — not a good fit for those hostage to seasonal work, frequent layoffs, or injuries. (Disability insurance was added in 1956). “The eventual expansion of Social Security meant that more minorities were included, but they tended to receive only partial benefits as they reached retirement,” writes Newman. “This is what inequality means at the tail end of the life span.”

Predictably, this is a triple whammy for minority women: women over 65 are twice as likely to be poor as their male counterparts. And Social Security is inadequate: nearly 25% of Americans over 65 live on incomes of less than $39 per day. Who do you know over eighy who’s working because they need the income to make ends meet?

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