Social Security at 80: Expanded But Still Missing the Keystone

08/13/2015 05:13 pm ET Updated Aug 13, 2016

Eighty years ago, on August 14, 1935, President Franklin Roosevelt signed the Social Security Act, famously declaring: "If the Senate and House of Representatives had done nothing more... than pass this Bill, the session would be regarded as historic for all time." Nonetheless, Roosevelt acknowledged that this groundbreaking Act was "a cornerstone in a structure... by no means complete."

Initially, the Social Security structure was indeed incomplete. Only a portion of the workforce was covered by the retirement and unemployment insurance programs. Left out were employees in very small establishments and the public sector as well as self-employed workers. Also excluded were domestic workers -- largely women, and agricultural laborers, an occupation employing the vast majority of African Americans.

Since FDR laid the cornerstone, Old Age Insurance has expanded almost beyond recognition. Within four years it began covering widows and orphans, transforming Social Security into a family program. In 1950, Congress added coverage for domestic and agricultural laborers. An additional, grave risk -- disability -- was added later in the fifties, and Medicare, in the mid-1960s. In 1972, automatic cost-of-living increases began protecting retirement benefits against the risk of inflation. Retirement benefits have increased in adequacy but are often too low, particularly for one-third of seniors whose principal income is social security -- a proportion increasing with the decline in private pensions.

Unemployment Insurance has been less expandable, but excluded groups were covered in 1970 when Congress also enacted automatic extension of weeks of coverage during recessions. While Old Age and Survivors' Insurance is almost universal, most jobless workers are still not eligible for Unemployment Insurance in ordinary times, although the proportion increases during recessions when so many more people are laid off.

But what is social security without a job?

That was the keystone, according to the report of the Cabinet-level Committee on Economic Security that planned the Social Security Act: "Since most people must live by work, the first objective in a program of economic security must be maximum employment." Headed by the first female Cabinet member, Labor Secretary Frances Perkins, the Committee proposed "employment assurance" -- "that the federal government should stimulate private employment and provide employment for those able-bodied workers whom industry cannot employ." They observed that public-work programs are most necessary in periods of severe depression, but may also be needed in normal times.

Except for short-term unemployment, both Roosevelt and Federal Relief Administrator Harry Hopkins, preferred work to cash benefits. They considered a permanent government employment program for those still jobless after receiving short-term unemployment compensation, but the two elements were split into permanent but short Unemployment Insurance (only 16 weeks originally), and a temporary employment program, the famous Works Progress Administration (WPA). The WPA literally changed the face of this nation, vastly enriching our physical, social, and cultural resources, but it was terminated during World War II when full employment made such job creation temporarily unnecessary.

Thus, as Perkins wrote in the mid-1940s, "Unemployment Insurance stands alone as the only protection for people out of work."

What would Roosevelt, Hopkins, and Perkins have said when, during the Great Recession, many jobless workers collected extended unemployment benefits instead of being paid for work that would have benefitted not only them but all of us -- by repairing our decaying infrastructure, making our economy and the planet more sustainable, and providing sorely needed services.

Unemployment continues to undermine economic security and is neither short-term nor confined to deep economic downturns. Today, six years after the official end of the Great Recession, 20 million people are either jobless or forced to work part-time. The labor-force participation rate or proportion of working-age people either working or actively looking for work is the lowest since 1976. If it were the same as before the recession, the unemployment rate would be 7.3 percent, instead of 5.3 percent. Periods of unemployment, moreover, reduce workers' retirement benefits and rob the Social Security Trust Funds of revenues.

Enactment of pending legislation would come close to completing the Social Security edifice.

The Humphrey-Hawkins 21st Century Full Employment & Training Act, introduced by Rep. John Conyers, Jr. (D-MI) commits the U.S. to full employment, the assurance of useful work at a living wage for all. Paid for by a small tax on financial transactions, HR 1000 would create millions of new jobs in construction, infrastructure repair, energy and conservation, education, health care, human services, and neighborhood renovation. Such jobs could be targeted to neighborhoods like West Baltimore, where most adults are jobless.

Other pending legislation like Rep. Marcy Kaptur's (D-OH) 21st Century Civilian Conservation Corps would create jobs and give the public a taste of how government job creation could preserve the nation's resources.

Let's observe Social Security's 80th birthday by taking steps toward employment assurance -- what its planners considered the keystone of economic security. Let's make their support of employment assurance a test of whether candidates for federal office in 2016 deserve our votes.