1939: Social Service, Public

Definition and Scope.

Public social service comprises all public tax-supported social work carried on by Federal, state and local governments. Defined functionally, it includes general assistance to the needy whether in the form of direct relief given in the home or work relief; assistance to the aged, to dependent children in their own homes, and to the blind; care of dependent, neglected, and delinquent children in institutions and foster homes; institutional care of dependent adults; special welfare services for the medically indigent, for underprivileged children, and for the mentally and physically handicapped.

Current Volume of Relief.

The major activities in the field of public social service during 1939 in point of cost and number of persons affected fall under two principal headings; direct assistance and work relief. The first includes public assistance (a collective term covering general relief, furnished by state and local public welfare agencies, and the three Social Security programs of categorical relief — old age assistance, aid to dependent children and aid to the blind — administered by state and local governments with Federal financial participation); direct relief to needy farm families through the Farm Security Administration; and the distribution through state and local relief agencies of surplus commodities bought by the Federal Surplus Commodities Corporation. Under the second heading — work relief — are included the work programs of the Work Projects Administration (until July 1939, the Work Progress Administration), the National Youth Administration, and the Civilian Conservation Corps. Wages of work-relief programs are financed entirely by Federal funds. State and local agencies sponsoring WPA projects must bear a portion of costs other than wages, such share being termed the sponsor's contribution.

In June 1939 there were in the Continental United States approximately 1,568,000 cases receiving general relief; 1,843,000 persons receiving old age assistance; 311,000 cases (including 748,000 children) receiving aid to dependent children; and 68,000 recipients of aid to the blind. The Farm Security Administration assisted some 69,000 families during that month. About 2,569,000 persons were employed by WPA; 494,000 by NYA; and 266,000 by the CCC. These figures represent decreases from the corresponding month of 1938 for general relief cases, cases aided by the Farm Security Administration and persons employed by WPA. The figures for old age assistance, aid to dependent children, aid to the blind, and for CCC and NYA employment are on the other hand, considerably above the June 1938 level, with the net result that the total number of cases receiving public aid in June 1939 exceeds last year's figure by about 56,000.

While the later months of the year usually show a rise in relief with the approach of winter, this seasonal tendency was considerably lessened in 1939 because of improved economic conditions. (See also WORK RELIEF IN THE UNITED STATES.)

During the fiscal year ended June 30, 1939, a total of approximately $3,283,006,000 was expended by Federal, state and local governments for direct assistance and work relief in the Continental United States, administrative costs excluded.

Surplus commodities, paid for out of Federal funds, had an estimated retail value of $145,000,000.

Financing.

The Federal Government and most of the states finance public social service through general appropriations rather than earmarking specific taxes. Some exceptions in financing old age assistance are found, for example, in Colorado, where constitutional provisions reserving certain revenues for this program have threatened the maintenance of other functions of government; in Oklahoma and Wyoming, where consumers' taxes are earmarked, and in Utah, which utilizes sales-tax revenues. Iowa will, in future, draw upon income, corporate, and sales-tax revenues to finance increased old age assistance and Nebraska has reserved a percentage of the gasoline tax for this purpose.

Categorical Assistance.

The first amendments to the Social Security Act since its enactment four years ago include provisions for more liberal Federal participation in aid to the aged, dependent children, and the blind. For old age assistance and aid to the blind, the maximum per individual on which the Federal Government will pay its 50 per cent share is raised from $30 to $40. Since the Federal share must be matched by the states, the practical effect of this provision will be limited to those states which have relatively high individual grants. It would seem that the increase in the Federal maximum resulted partly from heightened pressure for old age pension legislation, as adoption of the Townsend Plan itself had been defeated in Congress prior to enactment of the amendments to the Social Security Act.

Another change affecting old age assistance, and the other categories as well — designed to prevent use of these programs for general pension purposes — specifies that beginning July 1, 1941, the state agencies in determining need must consider 'any other income and resources' of applicants. The merit system of choosing personnel must be applied in state and county agencies after Jan. 1, 1940. Action during 1939 by Missouri and New Hampshire complete compliance by the states with the provision (contained in the original Act) that by Jan. 1, 1940 the age of eligibility for old age assistance be reduced to 65.

The promotion of pension schemes of the kind termed Utopian gained tremendous momentum in several states during the year, but the two chief measures submitted to popular vote were defeated. These were the Bigelow Plan in Ohio and the so-called 'Ham and Eggs' or '$30 every Thursday' proposal for an amendment to the constitution of California, both containing drastic provisions for financing. Although old age assistance payments are certainly not excessive from the standpoint of decent and healthful living, it is a fact that in the majority of states more than half of all funds for the aid of the needy are expended upon the aged. This means still less adequate grants for other dependent classes inasmuch as there are far more needy persons under 65 than over that age.

The 1939 amendments were, in general, the same for the three special categories of assistance. An exception was the provision removing inequality in the Federal reimbursement rate between old age and blind assistance on the one hand, and aid to dependent children on the other. Effective Jan. 1, 1940, Federal funds will meet 50 per cent of the cost of the latter program instead of the present 33 per cent, making the percentage of reimbursement the same for all three categories. The maximum grant on which the Federal government will pay its share is still limited, however, to $18 for the first child in a family and $12 for each additional child. Another amendment permits states to raise the age limit from 16 to 18 for children regularly attending school. Ten states, Hawaii, and the District of Columbia, are not able through current legislation to grant assistance to such children. Two other states, already able to include children of 17, are planning legislation to extend the age to 18.

Work Relief and General Relief.

The Work Projects Administration Bill (note change in WPA title) set the appropriation for this major work relief program at $1,477,000,000 for the fiscal year ending June 30, 1940. Representing a reduction of funds by more than one-third, this action necessitated a reduction in employment. The statute provides that geographic allocation of funds be based on relative population and unemployment, and that persons who have been employed on WPA for 18 months be dismissed and not be rehired for at least 30 days. The paying of prevailing hourly rates for skilled work was abandoned and wage differentials among different localities were changed.

Since the Federal works program and the state-local general relief programs are complementary, drastic reduction in WPA would be expected to cause a much higher general relief load. As a seasonal rise is also expected with the approach of cold weather, it is not possible to determine how much of the actual increase between June and the close of 1939 was due to changes in WPA. It is safe to conclude, however, that these changes would have caused a much greater rise in general relief had it not been for considerable economic improvement during the same period. See also WORK-RELIEF IN THE UNITED STATES.

Medical Care.

There was a trend among the states during the year toward increased grants of public assistance to individuals in need of medical, surgical, or nursing care. Such little child welfare legislation as there was dealt largely with increased aid for crippled children. The Wagner National Health Bill, laid over until the next session after several hearings in Congress, proposed a national health program involving grants-in-aid to states under approved plans to provide medical care (especially to persons unable to pay), aid to states to extend clinic and hospital facilities and services, aid to states for disability benefits where the states have established satisfactory programs of medical care, and increased grants for state work in the fields of public health, maternal and child care, and control of certain major diseases. State legislatures in general put off action to await Congressional action on the Wagner bill. The feature of the bill which would aid the development of state health insurance has stimulated interest in this question among the states. New York and New Hampshire have legislative commissions studying the problem of medical care, and a health insurance bill was introduced in California but failed of passage.

Membership in nonprofit hospital service plans increased greatly during the year. Total enrollment on July 1, 1938, was not quite 1,950,000; by July 1, 1939, 4,034,000 were covered by this insurance. There is a strong movement underway to extend low-cost group service to the field of medical and surgical care, and successful plans are in operation in a few states. Several other states passed enabling legislation this year. While these voluntary insurances are not within the means of the very poor, they are of interest to the general field of public social service, and supervision of the type and cost of care is, in some jurisdictions, shared by state departments of public welfare.

Social Insurances.

The social insurances are so closely related to public social service that significant changes in their provisions should be noted here. The 1939 amendments to the Social Security Act relating to the old age insurance system marked great advances from the standpoint of social usefulness. Instead of relating benefits to the exact amount of prior wages, benefits are now to be related to needs of the insured and their dependents. Aged wives and widows of annuitants and younger widows with children will receive benefits under the new provisions. Aged parents will receive survivors benefits under certain circumstances. Payments of benefits will begin in 1940 instead of 1942. Coverage has been extended to include employees of banks, maritime labor on American vessels, and persons continuing in employment after age 65. (See also SOCIAL SECURITY.)

Unemployment insurance administration has been simplified in sixteen states during 1939 by the adoption of benefit tables within wage classes in lieu of the former complex method of computing each individual benefit separately. Nine states have also adopted the simple and constructive device of uniform periods of duration of benefits for all qualified workers. Merit-rating of contributions, a source of great administrative complexity, was abandoned in four states but adopted for the first time in two others and the Territory of Hawaii.

Railroad workers are not covered by old age insurance under the Social Security Act but under a separate system administered by the Railroad Retirement Board. An amendment to the Railroad Unemployment Insurance Act provided that effective July 1, 1939, railroad employees be excluded from state unemployment insurance programs and that the Railroad Retirement Board administer unemployment compensation on a national scale for this industry.

Organizational Changes.

Important in the trend toward better integration of social service functions was the regrouping of Federal agencies and bureaus to form, as of July 1, 1939 the Federal Security Agency and the Federal Works Agency. The former includes the Social Security Board, the National Youth Administration, the Civilian Conservation Corps, the United States Employment Service, Office of Education, and Public Health Service while the latter brings together the Work Projects Administration, the United States Housing Authority and several public works agencies not related to public social service. The Department of Labor retains the Children's Bureau and the Immigration and Naturalization Services. The Railroad Retirement Board remains an independent agency.

State governments to establish new welfare departments during the year were Idaho, Maryland, Michigan, Minnesota, Oregon, Rhode Island and Texas, and five other states made very substantial changes in the organization of existing agencies. Still others put through minor organizational changes.

Conclusion.

In general the year 1939 has seen advances in organizational structure, in liberalization of public assistance, in reorientation of old age insurance on the basis of needs of annuitants and their survivors, and in simplifying unemployment insurance. Attention is now centered on the whole problem of medical care to such extent that further social action may be expected in the near future.