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toritto1942

I was born during year four of the reign of the divine Tiberias and grew up in the outskirts of...

Life Before Social Security

..........

March 16, 2013 by toritto1942

This year I will be 71 years old, assuming I make it and I have close family now into their eighties. I was born in the first year of WW II and my older relatives born in the 1930s during the Great Depression.

When I was a kid grandparents lived with their children and their grandchildren. One of the kids took in their mom and pop while the rest of the kids were expected to kick into the pot to provide for their support.

That’s the way it was before Social Security.

Folks were expected to work until they died which usually wasn’t long. The average life expectancy for a male in the 1920s was 49 years. If you lived longer there was no expected retirement age. You worked until you could no longer work or until you could no longer find work.

Then you were expected to live on your savings. Home ownership at the time was below 20% in the lower working class and the average wage adjusted for inflation in today’s purchasing power was around $13,000. So usually old folks didn’t have sufficient resources to live on.

So you went to your children if you had any. It was expected. Grandma usually got one of the children’s bedrooms.

Those lacking family to fall back on relied on charity, churches or became "wards" of the county poor house.

The Great Depression effectively put an end to living with your kids - your kids were now unemployed too and the elderly especially were in shocking economic free fall.

My grandmother was put up in a small apartment paid for by her children, including my father. after grandpa died. My in-laws took the grandparents into their own home after my wife’s grandfather lost his sight.

None of this was unusual. It was common among all ethnic groups. Outside the cities vast swathes of America lived like the Joads with subsistence farming or share cropping. The dust bowl and the mechanization of farming drove them off the land and on to the roads.

It was in this great calamity that social security came to be. Some fifteen years earlier the movement began to shorten the work day from eight to six hours in order to make room for the unemployed. Counter to this was a movement to provide a retirement stipend at age 65 which would allow older Americans to stop working and again make room for the unemployed.

F.D.R. considered social security a way to decrease unemployment while at the same time pumping funds into the economy. It is not surprising that we only got it because of the great calamity of the 1930s. F.D.R. insisted however that workers pay into the system and not simply be awarded a floor income when turning 65.

The trauma for the elderly of that era can hardly be overstated. As W. Andrew Achenbaum, a historian at the University of Houston, put it, "The Depression destroyed every mechanism that had existed for covering the vicissitudes of old-age dependency." Some 50% of the elderly in 1935 were living with their children.

Before the creation of Social Security, few Americans had private or state pensions, and most supported themselves into old age by working. The 1930 census, for example, found 58 percent of men over 65 still in the workforce; in contrast, by 2002, the figure was 18 percent.

I retired at age 62 because I had to. The financial institution of which I was a senior officer was acquired when I turned 60. I managed to hold on until 62 when it was acquired again by a still larger institution. My working days were over as there were few jobs out there for highly paid 62 year olds in a shrinking industry. So it was time to say goodby.

I was lucky.

During my working life my employers provided excellent medical insurance and defined pension plans, all the while still making substantial profits. Eventually 401K were added to the mix. In return they got a loyal, hardworking staff.

When I retired I received Social Security benefits as well as my defined pension benefits. At 65 I qualified for medicare. I paid for my own medical coverage for a number of years. It cost me $1,120 a month for me alone. If not for Medicare I could not afford medical coverage. Retirement is ok for an old widower who lives alone, pays his bills, visits the doctor and drives a Hyundai.

Today the nation's largest and most profitable institutions no longer provide defined pension plans for their employees. If you don't save it yourself and stash away that "matching contribution" in your 401K you ain't gonna have anything. And even if you do you may not have enough. Assuming of course you have a 401K. Or health insurance benefits. And the stock market doesn’t tank. Hundreds of thousands in my own state earn ten bucks an hour with no benefits and no pensions.

Your kid's college educations will drain the life out of your savings or they will come out of school with tens of thousands in debt and lousy job prospects. Assuming you have any significant savings in the first place to pay for their educations.

Your kid and their spouse will both work forever - not because they necessarily want to (they might) but because they have to.

At the office the CEOs of corporate America will make tens of millions while the worker bees will struggle with lousy "benefits", no pensions and a salary they can't live on.

Meanwhile politicos talk of dismantling social security and medicare notwithstanding that tens of millions depend on social security for 90% to 100% of their income and an unemployment rate that is expected to remain high for years if not decades to come.

Again I am lucky. My social security benefits are relatively high because I paid the maximum into the system for a number of years; still, my benefits account for about 40% of my annual income and life would be a real struggle without it.

Good thing I'm old. My checks are good for life, Hopefully.

it won't get too hot and we won't run out of gas before I go.

The future's so bright I gotta wear shades - not


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