Evening star., 1936-10-01
BY BLAIR MOODY.

As was inevitable in sweeping
economic experiment. humanely con-
ceived, but hurriedly executed, the
double system of pensions set up Tor
the aged by the social security act
dovetails about as perfectly as the
proverbial square peg and round hole.
The two programs-one providing
direct relief through the States on
straight pension basis, the other a
contributory annuity plan admin
istered by the Federal Government
were projected in the hope OF re-
solving once and for all the problem
Of want among the Nations old folks.
One was to supplement and compile
ment the other. Together, they would
be a rounded whole.
If 1t is to work out that way there
will have to be some drastic changes.
For, while neither system can ade-
ouately carry the entire load itself.
and either would be too expensive II
It tried to, together they present
disjointed, conflicting picture, filled
with irritating injustice and unlnten-
tional discrimination. If they swng
into full speed as they now stand,
they will turn us-along about 1850
into a Nation of neighborhood revo-
lutions.
1t came about in this way: The ad-
ministration land therefore Congress)
recognized that the job of working out
q decent, orderly program for care OF
the old would have to be tackled. 1t
realized also that if it merely promised
pension to every one who could pass
a means test" at 65, the objective
of promoting a feeling Of economic
at all be attained.
Viewpoint of Workman.
For what workman expects to be
subject of charitable pension when
he is IS? He may dread it, but he is
not going to build his hopes and plans
; on it, Any one who can pass means
test" can get relief now. A pension
check might be a trife more dignifled
than a grocery order, but promise Of
such a future would certainly not
change the collective economic out
look of the Nation.
If the program was going to mean
anything to John w. Citizen. there
fore, it had to be lifted from the realm
Of relief" 1t had to be something
toward which the workman could look
forward with anticipation, which
would be his as a mater of right and
not because he took the pauper's oath.
So the contributory plan for old
age benefits" was brought forward.
Here was something on which self
respecting worker could build. He
would be buying security for his own
old age, just as if he had purchased
an annuity in private insurance
company. When he retired, his
monthly income would be his as
matter of contract with the Gov
ernment, not charity. He would be
in position to step aside and take
things easy, paving the way for
younger man to take his place and,
perhaps, for promotions Of younger
men all along the line.
But to achieve anything close to
universal security it was still impossible
to abandon the straight pension sys-
tenn. The only way that appeared to
make the contributory scheme self
supporting was to tax the wages Of
workmen whose incomes could be
reached" and make them the bene-
f1ciaries. There would still be a sub
.stantial minority, estimated at Al
per cent, who would not be touched.
If they we're to have security, 1t
would have to be on straight grant
basis.
1t all seemed to work in together.
For If the means test" were re-
moved and straight pension grant,
ed every one, the cost to the general
taxpayer after 10 or 20 years would
be stupendous and increasing. Yet it
would not be so great at first. There
fore while the contributory reserves
were piling up, the pensions would
carry the load After that, the annui-
ties would take over the main brunt |
OF it.
Joe Workman's Problem.
All very well in general terms, but |
how about the effect on the individ- |
ual workman? What will happen to
Joe Workman, who starts paying / |
per cent of his wages to the Gov |
ernment on January and later antes |
8 per cent and finally reaches the age |
of IS, all aglow, perhaps, at the |
thought of his lifetime annuity?
Well, first, he finds that what he
thought was his as matter of right |
Isn't his. He has bought and paid for |
his annuity, but can't have it unless |
he retires. If he works until he dies, |
1t is true, 81 per cent Of his wages
go to his family as death benefit. |
But the fact remains: If he does not |
consider his annuity adequate to live
on, and prefers to keep his job, he can
whistle for his money.
Now, what prospect is there that |
the workman would think his annuity |
worth quitting his job?
The maximum is $85 a month. But |
this amount can be reached only by |
worker whose salary averages So, 1000 |
a year for 43 years. He must start at |
"a at $3.50 month and keep 1t up
until he is 65. (The only exception |
would be person on the pay roll of |
more than one employer. Thus, a
millionaire with diverse investments, |
on the pay rolls of several corpora
tions as director or officer at So, 900 |
or more, would pile up the right to the |
S85 benefit in comparatively few |
years because $4,000 of his pay from
each company would count. b.. he