1942: Social Security

Although recommendations for extension and improvement of the national social security program had been made in the budget message of President Roosevelt on Jan. 7, 1942, no fundamental changes in the Social Security Act were effected during 1942. The law was amended in October 1942, however, to continue during 1943 the contribution of one per cent of wages required of employers and of workers for old age and survivors insurance. Prior to this change, the tax was to be increased to 2 per cent of wages for each.

At the end of 1942, the major social security programs were as follows:

Federal Plan of Old Age and Survivors' Insurance.

Under this system, insured workers, upon reaching the age of 65, receive 'primary' benefits of 40 per cent of the first $50 of the average monthly wage earned after 1936, plus 10 per cent of the balance up to $250 monthly. One per cent of the primary benefit is added for each year of minimum earnings after 1936. A wife past 65 years of age is entitled to 50 per cent of her husband's primary benefit. A dependent child of a retired or deceased worker under the age of 16, or 18 if regularly attending school, is entitled to a similar benefit. Widows who are either aged 65 and over or have dependent children under the ages specified above are entitled to 75 per cent of the deceased husbands' monthly primary benefit. Wholly dependent parents of a worker who leaves no other survivors are each entitled to 50 per cent of the primary benefit. When no eligible dependent survives, six times the primary annuity is paid as a funeral benefit. Wages up to $14.99 a month in insured employment may be earned while receiving benefits.

On July 1, 1942, a total of 529,876 monthly benefits were paid to all classes of beneficiaries, 237,459 going to primary beneficiaries, 68,760 to aged wives of such beneficiaries, 147,674 to children, 21,694 to aged widows of insured workers, 51,789 to younger widows with dependent children, and 2,500 to aged parents. These current payments amounted to $9,554,886 during the month of June 1942. In that month, the average primary benefit then current was $22.87. Aged wives received an average of $12.19; children, $12.21; aged widows, $20.17; younger widows, $19.53, and parents, $12.99.

Contributions by workers and employers during the fiscal year ended June 30, 1942, amounted to $895,619,000, an increase of $205,064,000 over the previous fiscal year. Total collections since the system started reached $3,429,977,000 by the end of June 1942, of which $210,000,000 were disbursed in benefits. With interest added, the assets totalled $3,227,200,000.

Railroad Retirement Act.

Under the national retirement system for railroad workers, 157,450 grants to pensioners and annuitants were in force at the end of July 1942. The payments for that month amounted to $10,900,000. Up to the end of July, a total of $865,737,000 was received and $556,960,000 expended under this program, leaving assets of $308,777,000.

Public Assistance.

Recipients of public assistance numbered 3,270,204 in July 1942. During that month, 2,251,954 needy aged persons received $49,642,704; 78,689 blind persons received $2,056,096, and 939,561 dependent children in 390,592 families received $13,257,044. Ranging from $8.29 in Arkansas to $36.46 in California, the average national old age pension grant amounted to $22.04. Aid to dependent children averaged $33.94 per family and aid to the blind averaged $26.13 in July. In the same month, 566,000 cases received $13,647,000 in general relief, a national average of $24.11 per case.

Unemployment Insurance.

Benefits under the Federal-state unemployment insurance program totalled $345,707,730 in 1941, a reduction of $174,238,184 from the 1940 payments. The average annual payment of $101.74 per worker in 1941 was $1.59 above the 1940 average. In 24 jurisdictions, benefits for a week of total unemployment averaged less than $10.00 in 1941, while in 10 jurisdictions they averaged less than $8.00. Fully 46.7 per cent of the beneficiaries exhausted their benefits while still unemployed, these proportions ranging from 19.7 to 95 per cent. The benefit expenditures of 1941 represented 34.2 cents of every dollar collected during the year.

In July 1942, an estimated total of 863,000 different individuals received $32,625,149 in unemployment insurance benefits. Since the inauguration of their laws, and until July 30, 1942, the states had deposited $4,769,233,000 in the trust fund maintained by the Federal Government and $190,252,000 in interest were credited to their accounts. By the end of July 1942, a total of $1,942,330,000 had been expended for benefits while $2,943,011,000 were available for the payment of benefits.

Placements made by the United States Employment Service during July 1942, numbered 1,006,269, an increase of 60 per cent over the placements of July 1941. In April 1942, the employment service, federalized in December 1941 was transferred from the Federal Security Agency to the War Manpower Commission.

Railroad Unemployment Insurance.

The Federal railroad unemployment insurance system provided benefits of $154,000 in 7,500 payments during July 1942, 13,000 fewer than in July 1941. Since its inception, this system distributed $41,596,000 in benefits and had $266,338,000 in reserves by the end of July 1942.