The Social Security Act of 1935 was actually titled the Economic Security Act but rather quickly came to take on the name of its most popular program of old age insurance for retirees, which was commonly referred to as “Social Security.” The legislation is still seen today as forging the cornerstone of the contemporary welfare state in the U.S. federal system of governance. And its being called the Social Security Act underscores the important, if troubling, role that federalism has played in that welfare state. It has become increasingly common to see the Social Security Act as giving rise to a two-tiered welfare state that privileges national social insurance over state public assistance programs. In addition, this tiered system tends to reinforce differences in society along class, race, and gender lines with the upper-tier social insurance programs disproportionately benefiting families who were associated with more economically privileged white male workers and the lower-tier public assistance programs relied upon by poorer female-headed families who were disproportionately more likely to be nonwhite.
None of this is really an accident because of the role of federalism in our policymaking system. Southern congressmen in particular lobbied hard to ensure that public assistance titles be federal programs that accorded states substantial discretion in determining eligibility and setting benefits. They most especially wanted to ensure that public assistance to the poor families could be calibrated to the needs of the still-ascendant sharecropping system that relied on impoverished black families to work the fields. With substantial discretion, southern states could ensure that these families could be moved on and off the welfare rolls with the beginning and ends of the planting and harvesting seasons. Public assistance, as a second-tier program administered by the states, could therefore take its place in the political economy of the ancien regime that arose in the apartheid of the southern agrarian system. As a result, the main public assistance program that would come to be called Aid to Families with Dependent Children (AFDC) was little more than a federal program that standardized the limited preexisting Mothers’ Pensions programs already in existence in many states.
Social Security for retirees was, however, a different matter and was given the privileged position of a top-tier program administered by the federal government and offering uniform benefits across the states. A big reason for the difference was undoubtedly that Social Security had been championed as a social insurance program that gave benefits based on what workers had earned and paid into the system during their working years. Social Security represented a contractual obligation between the worker and the federal government, a sacred bond that gave rise to an entitlement right. Social Security benefits were earned entitlements, but public assistance was a handout. Yet, issues of class, race, and gender still featured significantly in the framing of Social Security in ways that echoed how federalism had influenced the construction of public assistance. Agricultural workers, domestics, and workers in other low-wage occupations disproportionately held by nonwhites in general and African Americans in particular were excluded from participating in the Social Security system. Southern economic interests, well represented in Congress, again prevailed this time to make Social Security a program that by its very design was more likely to benefit families of white male nonpoor workers.
The Social Security Act is still the cornerstone of the tiered U.S. welfare state, and the legacy of federalism in that tiered welfare state persists in perpetuating class, race, and gender bias.
Jacob S. Hacker, The Divided Welfare State: The Battle over Public and Private Social Benefits in the United States (New York: Cambridge University Press, 2002); and Robert C. Lieberman, Shifting the Color Line: Race and the American Welfare State (Cambridge, MA: Harvard University Press, 1998).