1929-1940

​

The Birth of Social Security

​

   The real keystone of the second New Deal was an ambitious set of social insurances and permanent relief programs. These programs were welded into the 1935 Social Security Act.
 

   Certainly, the most important single piece of domestic legislation in the 20th century, the Social Security Act was far more encompassing than the program which now bears its name. Created by the Committee On Economic Security, this legislation was largely the product of social workers Harry Hopkins and Frances Perkins who worked closely with FDR throughout the process. Eventually a number of policy experts and legislators were involved in creating a broad set of programs that put the national government permanently in the business of welfare. The major components of the Social Security Act were the Social Insurance’s and the Public Assistance Programs.

​

Social Insurance

​

   The Social Security Act provided federal support for two social insurance programs that had been already initiated in many states. Unemployment Insurance and Workers' Compensation were crucial components in this set of provisions.

   However, the most ambitious part of the social insurance provisions was the creation of a federally administered program that provided limited insurance to workers in their old age. Officially this program was the Old Age Survivors and Disability Insurance (OASDHI) but is now known generally as Social Security. Together this set of social insurances was conceived as a matrix of programs offering working people some guarantees against economic and social problems beyond their individual control.

​

Public Relief

​

   Although FDR generally favored work-relief projects over welfare programs, he recognized that work was not always feasible. The Social Security Act created a set of programs for dependent people. These entitlements were funded through a mechanism that matched federal, state and local contributions. The programs had two major elements. One provided aid to people with disabilities and the other granted aid for widows and their children.

​

Shortcomings in the New Deal

​

   There is much to admire about FDR's response to the Great Depression. The programs of the First and Second New Deal did much to ameliorate the exigencies of the crisis. However, there were serious flaws both conceptually and operationally in the programs that became the cornerstones of the welfare state.

   African-Americans were not equal participants in the New Deal programs. While Mrs. Roosevelt and others were strong advocates for equality within FDR's administration, the president, ostensibly for political reasons, failed to demand it. As a consequence while African Americans were hired in work project programs, their participation was unfairly limited.

Women were also discriminated against under the New Deal. In spite of the support of Harry Hopkins and Aubrey Williams, women's wages in the work programs were always less than men's wages. There were also fewer programs for women. Mrs. Roosevelt, Mary Dewson of the Democratic National Committee, and others fought consistently for more programs for women.

   In 1933, Mrs. Roosevelt convened a White House Conference on the Emergency Needs of Women. This meeting brought leading social workers and welfare administrators together to champion more participation by women in the New Deal programs. However, FDR and Harry Hopkins remained committed to putting men first.

​

   The New Deal also marginalized both Hispanics and Asian-Americans. Hispanic unions, a force in the early 1930s,were ignored in the Wagner Labor Act of 1936. There were massive deportations of Hispanic workers in the early 1930s.

   Asian-Americans had always been the object of bigotry in the west. Few received either welfare or work through the New Deal. The myopic race policies of the New Deal bore singularly tragic fruit. In the first months of World War II., Japanese-Americans (Nisei) were placed in concentration camps, euphemistically called relocation centers, for the duration of the war.

 

   While the two New Deals were able to temporize some of the Great Depression's worst effects and created a welfare infrastructure that would serve the nation for the rest of the century, they failed to solve the economic problems that created the crisis. In retrospect, we now recognize that the various emergency measures, deemed so dramatic and radical in their time, were too meager to pull the country out of the depression. It took the enormous deficits created by World War II finally put an end to the depression. While some of FDR's economic insiders were followers of English economist John Maynard Keynes, FDR was too conservative to back the budgets and huge deficits that would have made a real impact on the Great Depression.