Elderly, Impact of the Great Depression on the
ELDERLY, IMPACT OF THE GREAT DEPRESSION ON THE
The perception that the elderly constitute a unique group with special needs is a relatively recent historical phenomenon. Widespread concern for the well-being of the elderly became prevalent by the late nineteenth century, as social reformers began to warn that industrialization and urbanization had negatively affected the status and welfare of many older Americans. Although the elderly were, in fact, overrepresented among the population of the era's almshouses and poorhouses, these fears were generally exaggerated. Rather, most older Americans at this time managed to accumulate sufficient resources, often supplemented by the assistance of supportive kin networks, to live their final years relatively comfortably. This was, however, far more the case for white, higher income people than for minorities and the poor. Nor is this to suggest that the elderly as a group were affluent, but that there is little evidence to suggest that their standard of living was deteriorating. The historical record also discloses that despite continued lobbying efforts by reformers and social workers, few programs designed to help the elderly poor were enacted during the early decades of the twentieth century.
This situation changed dramatically during the 1930s. Although the Great Depression had a profound impact on all segments of society, the economic downturn and subsequent social upheaval presented unique problems for elderly Americans. As the economic crisis worsened, many employers were reluctant to rehire or keep on older workers. Widespread bank failures often wiped out savings accumulated over a lifetime of labor. At a time when home ownership was a long and arduous process for working-class families, poor employment prospects and the loss of savings brought the threat of foreclosure. Given the inability of private and public aid organizations to provide adequate relief, those in need were forced to rely on the assistance of friends and relatives. Even those older Americans who managed to avoid the immediate impact of the Depression often had less fortunate kin, resulting in the day-to-day stress of providing economic assistance or sharing living space.
The magnitude of the crisis eventually induced a governmental response. In addition, a huge movement calling for generous old-age pensions arose around an idea put forth by Dr. Francis Townsend. By 1934 a majority of state governments had enacted old-age assistance programs based on economic need. Eventually all states provided for elderly relief, which was subsidized by the federal government under the Social Security Act of 1935. This groundbreaking legislation also established Social Security Old Age Insurance, which provided retirement benefits (based on employee and employer contributions) to eligible workers when they reached the age of sixty-five. Unfortunately, there were no provisions for workers retiring before 1935, and the original program covered less than half of the American labor force, such predominantly minority occupations as farm and domestic work having been excluded in order to secure the backing of southern Democrats. In addition, significant benefits would only accrue over a lifetime of work; thus older workers still in the labor force during the 1930s would ultimately receive reduced benefits. Despite these limitations, the Social Security Act of 1935 would have important consequences for subsequent generations of America's elderly.
Retirement was not uncommon prior to Social Security, but it was most prevalent among white-collar workers covered by private pension plans. For the American working class, industrialization generally brought higher standards of living, but retirement funds were largely dependent on personal savings (a significant exception would be Union Army veterans covered by Civil War pensions). Because of concerns about the stability of private savings institutions, many older workers attempted to supplement these funds with income derived from part-time work as they passed what would today be considered retirement age. This practice became less common after World War II, and retirement became a well-defined life stage characterized by leisure activities. Some researchers argue that the impact of Social Security has been relatively minor, since employee contributions that finance Old Age Insurance would have had a comparable effect if invested in personal savings or private pension plans. Nonetheless, the mandatory aspects of Social Security—compulsory participation with inducements to retire at a specified age—have contributed to the normalization of retirement.
Old Age Insurance benefits also helped bring about significant changes in the living arrangements of older Americans. Prior to the twentieth century, relatively few formerly married elderly maintained independent households—the more common pattern was to live with adult children. Although the trend away from co-residency with adult children was underway before the Great Depression, it was most common among middle- and upper-class elderly, since establishing and maintaining a separate residence is typically more expensive than sharing living space with kin. The establishment in 1939 of survivor's benefits under Social Security had a significant effect on the ability of widows to maintain independent households after the death of their spouses. A luxury at the beginning of the twentieth century, residential autonomy increasingly became the cultural norm in the decades following World War II.
Although the Social Security Act of 1935 did not provide health care insurance for the elderly, it did set a precedent for the establishment of services designed to care for the elderly, which was consistent with the eventual establishment of Medicare in 1965. Universal health insurance for the elderly, in combination with Old Age Insurance and the extension of survivor's benefits, reinforced the long-term trends in retirement and residential autonomy. These social programs also had the secondary effect of fostering an increased political awareness and influence among older Americans. This is partially the result of growing numbers—approximately 13 percent of the American population was over the age of sixty-five in 1990, compared to 4 percent a century earlier—resulting from increased longevity and the post-baby boom fertility decline. But as the magnitude of society's financial commitment to the elderly has grown, older Americans have come to understand that maintaining these benefits requires an active participation in the political process.
The federal government's commitment to provide significant social services represents an important transformation. During the latter half of the twentieth century, issues related to the elderly have moved from the private to the public sphere as government has replaced the family as the institution most responsible for the well-being of older Americans. Today, most of the elderly maintain emotional intimacy with their kin, but these relationships generally lack a significant financial or day-to-day care component. Although some commentators feel that this has contributed to an increasingly segmented society based on age, the attempt to provide for the welfare of the elderly has been successful as old age in the United States has become characterized by residential autonomy and financial independence.
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