Social Solutions to Poverty:
America's Struggle to Build a Just Society
A book by Scott Myers-Lipton


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New Deal: Social Insurance




In response to the continuing depression, labor unrest (e.g., 1.5 million striking workers in 1934), and the need to respond forcefully to these alternative plans, Roosevelt put forward the Economic Security Act after his landslide victory in the 1936 election. This act included old-age pensions, unemployment insurance, workers¹ compensation, and aid to dependent children. Roosevelt's proposals were deeply influenced by the American experience. For example, several key components of the plan were to be operated by the states, which gave them the power to determine the amount and accessibility of the benefits. The old-age pension and unemployment insurance plans were to be funded in part by the workers themselves.
Additionally, the unemployment plan was limited in the amount and length of the benefit, and farmworkers and domestic workers (mostly people of color) were entirely excluded from all the benefits plans.

Many industrialized nations had previously adopted old-age pensions, unemployment insurance, and workers¹ compensation, and implemented them in a way that blurred the distinction between public relief and social insurance. However, Roosevelt¹s Economic Security Act maintained a clear demarcation between social security, which Roosevelt believed Americans would feel they had ³earned² because they paid into it, and public assistance, which he felt discouraged people from working and undercut their initiative. Secretary of Labor Frances Perkins, who was the first female cabinet minister and a key player in development of the act, observed that Roosevelt was adamant that the Economic Security Act not be a dole.

A competing social insurance bill sponsored by Congressmember Ernest Lundeen, a Democrat from Minnesota, had also garnered considerable support.
This bill grew out of a series of Hunger Marches in 1931 and 1932 in Washington, D.C., and from the work of the Unemployed Councils, a communist sponsored organization that had been very active in resisting house evictions of the destitute. The Lundeen bill (H.R. 2827) was a more comprehensive and progressive plan than Roosevelt¹s Economic Security Act since it (a) provided coverage for all workers; (b) offered a federal, rather than federal-state, system for unemployment insurance and aid to dependent children; (c) covered the workers who were then unemployed; (d) offered immediate compensation to workers at their average weekly wages, and guaranteed it until a job was found; (e) provided a sixteen-week paid maternity leave for women; (f) offered national criteria for unemployment and welfare; and (g) was funded by an inheritance tax on upper-middle-class and rich individuals and corporations. The Lundeen bill had the support of unemployed worker groups, feminist organizations, African American groups, ethnic and mutual aid societies, some labor unions, and the Communist Party USA.

Myers-Lipton, p. 165-166

(Excerpted from “Social Solutions to Poverty” © Paradigm Publishers 2006)


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A New New Deal

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