The concept of social security system is complex, although understandable under rigorous exertion. Various socioeconomic factors inspired the concept of social security system. This essay discusses the historical, present, and future perspectives of the social security program in the US.
The starting point of Social Security lies in anticipation of how an individual or a family sustains income when age encroaches, or disability jeopardizes the capacity to work, when a wage earner dies, or when an employer encounters involuntary unemployment (DeWitt, 2010, p. 1). Every society, through history, encountered this challenge often and developed various strategies to address this issue. The diverse strategies intended to solve this problem were based on the interplay of individual and collective efforts.
Private insurance provided a historical basis for Social Security. In the seventeenth century, private insurance was the chief way that the affluent protected their assets, particularly real property. Nevertheless, the notion of insuring against consistent economic hazards and threats was established in the late nineteenth century in a model of social insurance.
Social insurance in contemporary industrial societies offers an avenue for mitigating setbacks of economic security. The ideology of social insurance is that, people contribute into a fund scheme controlled by the government, which it uses to reimburse individuals when they become unable to sustain themselves.
The U.S. social security system benefits are weighted to allow individuals with lower earnings get higher benefit relative to those with higher incomes. Thus, the system provides progressivity regarding benefits.
At the onset of the industrial revolution, the demand for a working social security was inevitable. In preindustrial era, most Americans depended on land for self-employment as farmers, artisans, and laborers (DeWitt, 2010, p. 2). They lived in extended families, which provided the principal form of economic security for unproductive members.
Economic security was not a threatening issue in preindustrial America because for people did not live for long due to poor healthcare systems and living habits. Nevertheless, with industrialization came prolonged life expectancy; therefore, the need for new and dynamic strategies for reliable economic security became a necessity.
The aforementioned transformation led to the development of many programs to maintain social security of individuals who due to old age or disability reached an endpoint of productivity. The last decade of the nineteenth century saw the conception of Civil War Pension program.
DeWitt (2010) observes that, the federal government started to pay benefits to Union War veterans and their living families about the commencement of war (3). The Civil War pension scheme became a genuine social insurance program by the end of the 19th century. This program was valid until 2003 when the last surviving widow of Civil War veteran passed on.
In January 17, 1935, the Economic Security Act was proposed and presented to Congress for discussion, which culminated into its enactment into law on August 14, 1935 (DeWitt, 2010, p. 4). Currently, this law is termed as the Social Security, which consists of seven distinct programs.
The aforementioned Social Security Act inspired the initial payroll taxes in 1937 and the 1942 introduction of monthly benefits. This represented a form of a vesting period during which the least amount of work will be prerequisite to monthly benefits qualification. In addition, this period provided time to accumulate some level of reserves in the program’s account prior to flow of payments to recipients (DeWitt, 2010, p. 7).
The Social Security program, following its conception, was more sensible compared to the current system. The original program reimbursed two types of one-time, huge benefit. An individual approaching age 65 then, would be entitled to payment worth 3.5 percent of his/her covered income, while deceased employee’s estate would get a death benefit computed in a similar manner. Therefore, I would ensure the future of the social security program by adopting the initial strategies, which worked satisfactorily for the benefit of all people.
Reference
DeWitt, L. (2010). The Development of Social Security in America. Social Security Bulletin , 70(3), 1-27. Retrived from web.