Information About the Social Security System
- Social Security, paid for with taxes, is an insurance policy to pay workers after they retire to protect them from, as President Roosevelt said, a "poverty-ridden old age." Medical payments for disabled Americans came later, as did aid to dependent children, survivor benefits and various state grants. Roosevelt's system was much more conservative than some of the more radical proposals.
- According to the SSA, an early social security system were the professional guilds in Europe during the Middle Ages, which regulated business and provided benefits for members in times of poverty or illness. The English Poor Law in 1601 was the first state-sponsored instance of using taxes to pay for help for the poor. American colonists brought similar laws to this country.
- Even before America's Great Depression of 1929, when the unemployment rate exceeded 25 percent and 10,000 banks failed, forces had undermined the traditional sources of economic security. According to the SSA, these forces included: the industrial revolution, which moved the society from an agrarian base with people providing for themselves to a wage-based society; the urbanization of America, moving people away from their parents and grandparents; and an increase in life expectancy, creating many more older people who, while still living, were not able to earn a wage.
- Following the Great Depression, there were many social security plans of all types proposed to care for people who were not able to take for themselves. Many states enacted their own plans and called on the federal government for help. Eventually, America followed the lead of 34 European countries, and, in 1935, President Franklin Roosevelt signed the Social Security Act, with taxes collected for the first time in January 1937. The first payment was made as a one-time payment in 1937 for 17 cents. Monthly benefits were paid in 1939.
- In 1936, the Post Office assigned numbers and distributed the first Social Security cards. According to the SSA, the first number was, as expected, 001-01-0001 and was meant to be issued to the Social Security Board chairman from New Hampshire. The Chairman chose to forgo this honor, and the first card was issued to the first person who applied from New Hampshire. While the numbering system for Social Security cards does not have any functional use today, it is fun, though not 100 percent reliable, to determine where a person is from based on their number.
