Social Security 1935

During the Great Depression, over half of America's elderly population lacked sufficient income to support themselves, prompting the creation of the Social Security Act in 1935. The Act, designed by Labor Secretary Frances Perkins and signed into law by President Franklin Roosevelt two years after his inauguration, introduced old-age pensions funded by contributions from employees and employers, aimed at providing a minimal income for individuals over the age of 65. The program was designed as a social insurance scheme, ensuring that support was based on earnings during working years rather than a means-tested system. It required an extensive record-keeping infrastructure to track individual incomes and expanded gradually to cover more job categories and increase benefit levels.

In the 2010s, the Social Security fund faces significant challenges. The aging population, with life expectancies continuing to rise, has increased the number of beneficiaries, putting pressure on the system’s financial sustainability. Additionally, the ratio of workers to beneficiaries is declining, exacerbating the strain on the fund. Political debates persist on how to ensure its solvency, with suggestions ranging from privatization to increasing taxes or adjusting benefits.