1938: Social Security

The outstanding event in social security in 1938 was the inauguration of unemployment insurance payment in 30 states in addition to Wisconsin, which began such payments in 1936. The social security record in 1938 may be summarized as follows:

Federal Grants-in-Aid to the States.

In August 1938, there were 1,722,317 recipients of old age assistance in 47 states, the District of Columbia, Alaska and Hawaii. Virginia did not begin payments until September. The total spent during the first eight months of the year amounted to $258,084,550. While the average national grant was $19.17 in August, the payments in the different states varied from $5.65 in Mississippi to $32.36 in California. There was also a great disparity in the ratio of assistance recipients to the estimated total population 65 years of age and over, which ranged from 77 per 1,000 in the District of Columbia, 107 in New Jersey and 137 in New York to 486 in Utah and 545 in Oklahoma.

Federally approved aid to dependent children was extended, in August 1938, to 250,909 families embracing 617,902 children in 38 states, the District of Columbia and Hawaii. The total spent on these recipients during the eight months of 1938 amounted to $60,065,674. Although the national average in August amounted to $31.73 per family, the individual state averages varied from $10.76 in Arkansas to $62.91 in Massachusetts. The proportion of recipients per 1,000 estimated population under 16 years of age ranged from 7 in New Hampshire to 44 in Maryland.

During the same month 40,097 blind persons were in receipt of aid under the Social Security Act in 37 states, the District of Columbia and Hawaii. A total of $7,071,722 was spent on these recipients during the first eight months of 1938. As in the case of the aged, and the dependent children, the average pension varied in the different states between $9.06 in Arkansas to $47.95 in California, while the national average for the month was $23.42. The number of blind recipients per 100,000 estimated population ranged from 13 in Michigan and New Jersey to 145 in Maine.

Old Age Insurance System.

Regular monthly annuities are not to be paid under the old age insurance program of the Social Security Act until 1942. Only lump-sum benefits to those reaching 65 years of age and to estates of deceased contributors were paid in 1938. Of the total of 213,327 claims filed from Jan. 1, 1937 to the end of August 1938, 199,435 were certified for an average of $37.75 per claim. By the end of August 1938, $7,037,040 were paid out in lump-sum benefits. The taxes collected for old age insurance by the same date amounted to a total of $835,298,500, and $17,674,000 was earned in interest, leaving a balance of $845,935,000.

Unemployment Insurance.

From January through October 1938, a total of $340,359,393 was expended on unemployment insurance benefits. The average check for total unemployment in 24 states amounted in October to $11.31 and ranged from $5.78 in Mississippi to $13.39 in Michigan. For partial unemployment, the average check paid in 16 states during that month was $5.06, ranging from $5.89 in Tennessee to $7.20 in Utah. The peak of the unemployment insurance benefit expenditures in 1938 was reached in August, when $47,400,000 was distributed. In September the total expenditures decreased to $41,535,000 and in October the total amount spent was only $35,231,000. No figures were available as to the number of workers who have actually been benefited. The Bureau of Unemployment Compensation of the Social Security Board estimated, however, that by the end of October about 3,500,000 unemployed workers had received benefits in the 29 jurisdictions then in the benefit-paying column, which would make the average benefit about $97.25 during the ten-month period.

Other Significant Events.

Criticism of the Social Security Act, especially the reserve system set up for old age insurance, and demand for improvement of the Act, continued during the year. The delays in the payment of unemployment insurance benefits and the meagre benefits provided caused great dissatisfaction in many states. Federal old age assistance grants to Oklahoma and Ohio were temporarily halted during the year because of violations of the state and Federal laws. The Advisory Council, composed of representatives of employers, employees and the public, and appointed in 1937 to study the changes necessary in the old age insurance system, was expected to present a report before the end of the year. A wave of pension panaceas enlivened the Fall elections. A conference at Washington on the subject of health security endorsed in principle a wide program of Federal aid for the promotion of health and health insurance.