State Pensions or Charity?

“It is time for us to devise ways of meeting the inevitable disaster of old age and the almost equally inevitable disasters of sickness and unemployment, and these must be ways that will not fail when the stock market breaks or a new machine is invented, that will function in the lean years as in the fat years, and that can be accepted without loss of self-respect.”



In the February number of the Atlantic, Mr. Walter Gifford discusses the present-day movement for state pensions for the aged poor and sees in it an attack on our characteristically American method of dealing with the problems of poverty, a method which consists in the employment of trained social workers to administer charitable funds provided by the free-will gifts of the well-to-do. He believes that, whatever may be true of other countries, this method of voluntary action for meeting the welfare needs of our people is in keeping with our social and political philosophy, a philosophy that has made us not only politically stable and economically prosperous, but contented. 'It is as sound a principle in welfare work as it is in other activities that in America governmental agencies should do nothing that other agencies can and will do.' He pays a very fitting tribute to the social agencies which 'have done so much to keep American society healthy at the bottom,' and he is convinced that if they were to be abolished suddenly, immediate and serious discontent would arise. To prevent this, and to provide for such new demands as old-age pensions, he urges business men to be generous in their gifts to organized charity.

Mr. Gifford's tribute to the high character of the social work done in this country is not only deserved, it is needed, for there is far too little public appreciation of the knowledge, the resourcefulness, and the human understanding and tact that trained social workers bring to bear on the difficulties with which they must deal. There is truly a quality about it which, as Mr. Gifford says, is lacking in the relief given by state agencies, but then there is also a quality about state aid which makes it more acceptable to certain kinds of people. For this reason and for others I must take issue with Mr. Gifford and join with those who stand for state pensions for the aged poor rather than support given through private charity.

Let me first speak of the attitude of the social workers themselves toward these two alternatives. The list of members of the American Society for Old Age Security contains a number of names prominent in social work, such as Jane Addams, Jacob Billikopf, Alexander Johnson, Florence Kelley, John A. Lapp, John A. Ryan, Mary K. Simkhovitch, and I feel sure that most social workers will not think that in urging the State to provide a pension system for the old we are implying a lack of confidence in voluntary charity. They would probably be the first to say that this new demand would impose upon them a burden too great to bear, even if they thought that private charity was the best way of dealing with the problem. Mr. Gifford says that the only truly American way of meeting the need is by voluntary gifts, but he must have forgotten the many fields of welfare work which have already passed from private hands into those of the State. It is only necessary to mention the care of the insane poor and the feeble-minded, the greater number of the sick poor and the blind, even the pensioning of widows to ensure a home and proper care for fatherless children. No one would suggest turning these back to the private  charities. Moreover, what agency but the State now deals with the aged poor? The great majority, if destitute, must go to public almshouses, for the privately supported homes for the aged are pitifully inadequate. What we are asking is not that the State assume a new role, but that it perform an old role better and more completely. To ask the charities to care for all the needy old people is to give them an impossible task, even if we assume that the increasing generosity of business men toward organized charity, upon which Mr. Gifford counts, will really materialize.


Why is it that so suddenly this question of old-age pensions has come to the fore and movements for state insurance have sprung up in so many parts of the country? To my mind it cannot be explained as simply a cumulative result of years of work with the aged poor. There is a new element in the situation, and I believe this new element is a realization on the part of employers of labor as well as friends of the poor that we are faced with a new problem, of rapidly increasing importance, for which we can see no solution except perhaps in the dim future. It is the problem of premature old age, of the forced idleness of men and women still in the prime of life, of the establishment of a dead line at forty years, after which one is classed as unfit for work. This is, as we all know, the dark side of the amazingly rapid increase in labor-saving machinery since the war, as the new, complicated machines call, not for skill and experience and judgment, which are the gifts of middle age, but for quickness and adaptability, which are the gifts of youth.

'Technological unemployment' this condition is called, to make it sound a little less disastrous, and our public men assure us that it will surely disappear, for these machines will increase our riches, and we shall buy more luxuries, and the luxury trades will 'take up the slack.' But of course the luxury trades have no demand for the skilled mechanics who have been discharged; that solution of the problem belongs admittedly to the remote future, and we of this generation must deal with the immediate present, a present filled with workers thrown on the scrap heap at forty years of age.

Not long ago I was in an iron foundry, watching the pouring of molten iron into moulds. I noticed one man, older than the rest, staggering along with his heavy ladle, which he could only just carry, although, arrived at his moulds, he did a neat job. He was plainly in constant fear that he could not make it; he was straining every muscle to keep up with the .others, to hold on to his job. As I watched him, sensing keenly his fear and his desperate effort, I heard my guide say: 'Come back here in three months and you won't see any of these men. I'll show you what we are doing now.' He took me to another building and there I saw an automatic machine pouring iron into moulds, doing the work of a dozen men and under the charge of three slim lads of less than twenty years. The man I had been watching had no need to strain his heart over his work—he was doomed to be scrapped in any case.

Another factor in this new situation which also tends to eliminate the middle-aged is the increasing use of group insurance for employees against sickness and accident, furnished by industrial insurance companies. It is our American way to leave social insurance to commercial companies which operate for profit and find the middle-aged worker a poor risk. Therefore employers have had to adopt a strict rule against taking on new men who are over forty years of age, for only in this way can they get favorable rates from the insurance companies.

All this means that in thinking of old-age pensions we must take into consideration a great new class of needy people. These are not men who have lived all their lives on the edge of poverty; they are self-respecting artisans, skilled workers, men who have made good wages and held their heads high. At a moment when such a man still possesses all his old skill of eye and hand, and the gains of long experience, he finds himself no longer wanted, of less use in our American social system than his little feather-brained daughter with a year's training in a business school.

What is his future? His standard of living will have to slip down; he will sink to the level of the unskilled worker and then of the casual worker, for it will be harder and harder for him to find any sort of job, even if he dyes his hair and makes pitiful efforts to hide the senility of fifty years. Long intervals of unemployment will exhaust the savings of a lifetime, for remember that there are twenty or twenty-five years between the day he is thrown out as too old and the day he will become eligible for a pension, at sixty-five years of age. How many workmen have saved enough to tide them over that period and to provide for their actual old age? Most working class families have not much chance to hold on to their savings up to old age. Such a family has typically two periods of fairly easy living when it is possible to put by something. The first one comes in the early years of married life when the babies are not yet numerous, the expenses are not great, and the man is at the height of his earning powers. Then comes the strain of increasing expenses with no increase of income, followed by the second period of prosperity when the children have reached working age and have not yet left home. This, however, is succeeded by a period of increasing poverty, as one by one the children go to homes of their own, the man's earnings grow less, and the savings disappear, if indeed the many demands of sickness, unemployment, and accidents have not used them up long ago.

I have spoken of men all this time because my work takes me into men's trades rather than women's, but I am quite well aware that this is even more the women's problem than the men's, for so many more women live to old age than men. The Metropolitan Life Insurance Company tells us (1927) that the death rate for men between twenty-five and forty-four years is 661.7 per 100,000 of the population, while the rate for women is only 514.7. In the next group, between forty-five and sixty-four years, the rate for men is 2869.9, for women 1646.8. This means that a much larger number of women reach the years of dependency than of men, and I am told that middle age is an even greater handicap to the woman seeking work than to the man.

The New York Times published not long ago a statement made by Dr. S. S. Huebner, Professor of Insurance and Commerce at the University of Pennsylvania. He said to his Toronto audience: 'Only one of ten men at sixty-five has enough money to assure him an income of even fifty dollars a month. Only one out of three men who are healthy at thirty years dies before he reaches sixty. The burden of support of the others falls on the children. This is terrible philosophy. Each generation should take care of itself.'

We are told that the National Civic Federation made an investigation of dependent old people and found that there was no need for state pensions, that the great majority were already satisfactorily cared for. But apparently they assumed that every old person supported by a son or daughter was properly cared for and did not inquire further, did not ask what it meant to the child who had taken on himself the support of the aged. Those who know the lives of the poor could have told the Federation at what an unfair price that support is often given. It is, of course, more likely to be the daughter who makes the sacrifice. That old jingle, 'My son's my son till he gets him a wife, My daughter's my daughter all the days of her life,' is founded on something in human nature too deep to change with a changing world. Think of the army of faithful daughters who have had to give up all hope of a home and husband and children of their own because they were too proud to ask a man to take on him the burden of the old people. So they go through life spending their young strength for the aged, losing their chance because they have not the heart to break free and take it. Nor is it easy for the old to find a place in the home of a son or daughter—it may be the last straw to break down self-respect.


Is it sensible to assume that what is American is necessarily wisest and best, or even that it is unchangeable? Surely we should have enough humility to reexamine our national ways and decide quite objectively if they are the best possible for us. Personally, I am very loath to accept the verdict that a dependence on the benevolence of the uppermost class toward the lowest class is the only possible American way of solving the problem of the poor, or even that it makes for a healthy state and contentment at the bottom of society. If we should subject our American system to a critical scrutiny, we might find that in spite of periods of high wages (not nearly as universal as is believed) the American workingman is in some respects worse off than his brothers in Great Britain, Germany, Switzerland, Denmark.

In 1927 there was transmitted to Parliament by the British Minister of Labor a report of a delegation appointed to study industrial conditions in the United States and Canada. The report contains many flattering statements about American business enterprise, inventiveness, rationalization methods, welfare work, and so on, but it contains also some significant remarks with regard to the other side of the shield.

In estimating the relative positions of workers in the United States and Great Britain there are several important considerations to be borne in mind. In the first place there is nothing in the United States to compare with the state provision in this country for unemployment, sickness, and old age. In general, an unemployed worker has to depend on his savings when out of work. This absence of outside assistance for the worker who is unable to obtain employment makes poverty in the United States a matter of extreme hardship.

Unemployment and irregularity of employment are not of less importance than hourly wages in considering the position of industrial workers. In the United States it has been a cardinal principle that the incentive to work must be maintained at the highest point and that to provide means of maintenance in the present or expectation of assistance in the future, other than by his own earnings and savings, lessens the driving power and self-reliance of the worker. Consequently, except in the case of certain trades-unions which give unemployment benefit . . . outside support can be obtained only by charity and then only in circumstances of extreme destitution. The result is that, to the great majority who do not wish to incur the stigma of pauperism, unemployment, sickness, and old age are very serious matters. High hourly earnings often do not result in a high yearly income and, in the case of those outside the more skilled classes, irregular work may rapidly bring on serious poverty.

What the English commentators say is true. The American workman may earn high wages, although of course the yearly income of the vast majority is below fifteen hundred dollars a year, but even if he does, he must live all his working life under the shadow of three Damoclean swords, sickness, loss of his job, and old age, and against these our country, the richest in the world, gives him no protection.

Would generous gifts to organized charity remedy this lack? Well, let him who asks that question imagine for a moment that he is himself faced at sixty-five with the alternatives of private charity, administered with the greatest tact and understanding, and a state pension administered as a matter of official routine. I think there can be no doubt of his choice. It is said that state pensions will be given impersonally and mechanically. That is exactly what the proud man wants. He feels that he has done his share of the hard work of the world, maybe a bit more than his share, and that he has a right to a minimum of comfort in his old age without being forced to accept charity. The changes that robbed him of his job—his property, in his own eyes—have resulted in gains to society, and he feels that he should not be the one to bear all the losses that came with them. Has he a right to demand this? I do not know; I am no economist. It is not for me to venture into a discussion of the mysterious ways in which wealth is distributed in this country. But sometimes I wonder whether an uneasy sense of injustice and inequality in the apportionment of rewards for services performed may not explain the surprisingly favorable attitude of some quite conservative wealthy people toward state pensions for the old.

This year, if ever, it behooves us to think soberly of the need of giving some form of security to those upon whom the fluctuations of business throw the heaviest burdens. These are men and women who have no control over discount rates, or credit, or the manipulation of bull markets and bear markets, yet they are the first victims of the battles fought in those high and mysterious regions. We have all read of the bread lines, the marching of unemployed on city halls to demand work, the overcrowded municipal lodging houses and police stations. Even private charity has broken down before the unprecedented demand for shelter and food. The Salvation Army and the Y. M. C. A. have not been able to care for the hordes of wage-workers and office men, homeless, cold, and hungry, who walk the streets in desperation, finding no place in our society for their strength and skill and will to work. Such inequalities cannot be covered up by charity. It is time for us to devise ways of meeting the inevitable disaster of old age and the almost equally inevitable disasters of sickness and unemployment, and these must be ways that will not fail when the stock market breaks or a new machine is invented, that will function in the lean years as in the fat years, and that can be accepted without loss of self-respect.