Old Assumptions, New Realities: Economic Security for Working Families in the 21st Century

The foundation for much of the U.S. social, health and employment benefit system was created in 1935 with the passage of the Social Security Act (SSA). The SSA authorized a national social insurance program for retired workers, established joint federal-state unemployment insurance programs, and created a modest program of cash assistance for lone mothers to be financed jointly by the federal and state governments. Soon after passage the SSA was amended to cover some initially excluded occupations and to extend benefits to the survivors of covered workers. Coverage for permanently disabled workers was added in 1956. In the 1960s lawmakers created the federal Medicare program for Social Security recipients and the federal-state Medicaid program for families receiving public assistance.

For over seventy years, the SSA has provided the foundation for incremental expansion of national social insurance programs. These programs were aimed primarily at previously employed adults unable to work due to age or disability, and they have greatly improved the economic security of these adults and their dependents.

The original provisions of SSA did much less to protect working-age adults and their children. Over the years, federal, state and local governments have addressed this and other gaps in the initial SSA provisions by developing a large and largely uncoordinated array of programs targeted on specific populations and needs – from health and nutritional assistance for low-income pregnant women to public and publicly subsidized housing, means-tested child care subsidies, public preschool services, specialized social and mental health services, employment preparation and vocational training programs, and many more. Less visibly, federal and state lawmakers have used specialized tax deductions and credits to create incentives for employer-provided benefits, to subsidize individual expenditures for home mortgages, retirement and college savings, and other expenses, and to provide refundable tax credits for low income workers. The original programs of the SSA have also been pressed to respond to other service needs. The means-tested Medicaid health insurance program, for example, is now the primary public funder for long-term care for the elderly and disabled. Medicaid dollars are also used in many states to provide therapeutic, rehabilitative and personal assistance services for mentally ill and disabled individuals. The SSA authorized public assistance program (TANF) is used to provide child care subsidies and job preparation services and the same title of the Act funds state child welfare, foster care and adoption services.

Over the past 70 years, U.S. social benefits and employment supports have been built, piecemeal, over, on and around the foundation of the SSA – a foundation that did little to address the needs of working age individuals and that reflected depression-era social, economic and population characteristics. Even a brief comparison of these conditions to 21st century realities suggests how much has changed over time and how much these change matter for contemporary social benefit and employment policies.

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