"100 Years of Progress In Equalizing Retirement Is Under Dire Threat”
UNITED STATES HOUSE OF REPRESENTATIVES
COMMITTEE ON EDUCATION AND LABOR
SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS
Hearing title: “Examining Pathways to Build a Stronger, More Inclusive Retirement System”
Wednesday, June 23, 2021
LIFE BEFORE SOCIAL SECURITY AND PENSIONS
Before Social Security and defined benefit plans, workers were more likely to die than retire. In 1920 a 60-year-old man was more than likely to die on the job than retire. Women’s work was mainly in unpaid household production, the most important paid work was taking in boarders– the modern day Airbnb and she likely didn’t retire either. Most workers who didn’t die on their job were disabled and bedridden were cared for mainly by wives, husbands, daughters or daughter-in-laws.
In the 15 years or so years before Social Security was passed in 1935, only a few soldiers, union members, and government and railroad workers had pensions. Up until 1950s only the privileged were able to truly retire. In the 1940s only 3% of retirees aged 65 and over said they retired because they wanted to — they had the wealth and health to do so. Retirement for leisure was rare.
At the end of the 19th century, the unlucky elderly without work or relatives lived in poor houses and when the county poor houses dismantled, the elderly poor were transferred to what were at that time called “insane asylums” in the early 20th century.
Age was the biggest poverty risk factor. We do not have data on elder poverty before 1959, but we know that in 1920 elders spent 44% of their meager incomes on food. For comparison, now the average food share is about 7% and 10% for the poor. The U.S. still has high elderly poverty rates – the official poverty rate is 13% — and the OECD measure is 20% — the highest in the core OECD (see Graph below). Your grand or great-grandparents were at high risk of living in a walk-up, in someone’s basement, or in the barn.
LIFE AFTER SOCIAL SECURITY AND PENSIONS
Progress was marked by retirement equity due to DB pensions and Social Security.
Download the written testimony here.