2.7: 1933-1938--The New Deal

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FDR and The New Deal (1933-1938)

The New Deal

Roosevelt had promised that he would immediately get to work restoring America to prosperity, famously talking about making a noticeable turnaround within the first 100 days of his term. He put a lot of temporary relief programs into place immediately, having promised “a New Deal” for America upon being elected. His efforts helped to revive American confidence that there was a chance to pull out of the Depression. Under the New Deal, Roosevelt established a number of programs that sought to alleviate the conditions of the economic disaster through the provision of jobs in programs like the Civilian Conservation Corps (CCC) and Works Progress Administration (WPA). The CCC sent young men to do government work in rural areas, national parks and forests, while the WPA worked mostly with young men who were still in school and wanted part-time jobs (Katz, 1996). Several other programs were active in providing either jobs or temporary financial assistance as well.

While economists may debate the extent of the New Deal’s role in the economic recovery (and there are valid criticisms to be made about institutional racism in some New Deal policies), it did give Americans confidence in their leaders again, and it appeared to show that government intervention had the potential to make a big difference in dire situations like the Great Depression. This in turn set the tables for the biggest unit of social welfare legislation in American history.

Components of the New Deal

The Social Security Act

In 1935, as part of FDR’s “Second New Deal,” the Social Security Act both established a series of programs meant to provide for the well-being of Americans in a variety of circumstances and established a set of rules and guidelines for states to follow in order to receive the federal funding necessary to pay for these initiatives. Three categories of programs were established:

Public assistance: This category required the passage of a means test, as noted earlier in this chapter, to determine if one qualified. If someone was in great enough financial need, then they could obtain the assistance, provided they were part of the group it was meant to serve. Programs under this umbrella are aimed at alleviating poverty.
Social insurance: These programs were more reflective of the institutional view of social welfare, which recognized that some programs needed to be in place permanently and not simply providing a band-aid effect. This category was established due to the recognition (as recently vividly illustrated by the Great Depression) that sometimes people experienced hardship due to events that they could not prevent or change. Programs in this category intend to prevent poverty.
Public health and welfare services: The government established itself as the provider of particular social services that had previously been handled by private organizations.

Public Assistance

The public assistance programs established under the Social Security Act were:

Old Age Assistance: Aid to people age 65 and up who are in poverty.
Aid to the Blind: Aid to people with permanent and significant blindness.
Aid to the Disabled: Assistance for people with disabilities that render them unable to work full-time; this program was actually added in a 1950 amendment.

(note: the above three were later combined into Supplemental Security Income [SSI])

Aid to Dependent Children: Assistance for poor families with children at home, often headed by single mothers. This later became Aid to Families with Dependent Children, and then was replaced by Temporary Assistance to Needy Families (Social Security Administration, 1935).

Social Insurance

The Social Security Act established the following social insurance programs:

Old Age, Survivors, and Disability Insurance (OASDI): The program that people refer to today as Social Security.
Unemployment Insurance: Meant to provide some replacement income for people who have lost their jobs through no fault of their own (Social Security Administration, 1935).

Soup kitchen line

Unemployed men wait in line outside a free soup kitchen opened by Al Capone during the Great Depression. (Source: National Archives.)

Public Health and Welfare Services

Finally, the Social Security Act established the following programs, among others, and determined the government had a responsibility to provide the services in question.

Adoption
Foster care
Child protective services

Minimum Wage

After the laissez-faire nature of the Industrial Revolution and its concomitant support of Social Darwinism, as well as the horror of the Great Depression, the United States government finally became invested in establishing a fair minimum wage to cut across all fields of work. Though President Roosevelt had attempted to establish a minimum wage as part of his plan to pull America out of the Great Depression, the minimum wage law was ruled unconstitutional by the Supreme Court in 1935. A second attempt in 1938 was successful and again established the minimum wage at 25 cents (equivalent to just over $4.80 in 2021 dollars) (U.S. Department of Labor, n.d.).

The minimum wage has been periodically raised by Congress ever since it was first established. It first reached the $1.00 level in 1955, and as of June 2021, the federal minimum wage is now $7.25 for all non-tipped workers (U.S. Department of Labor, n.d.). States, however, are free to set their own minimum wages, and many have. As of 2021, Washington’s state minimum wage of $13.69 was the highest in the United States; some cities have also enacted their own minimum wage laws that surpass federal and/or state laws (U.S. Department of Labor, 2021).

Image: Minimum Wage through the Years

Infographic: A Brief History of the U.S. Minimum Wage | Statista

Source: Statista (2021).

Attribution: Social Work & Social Welfare: Modern Practice in a Diverse World. (opens in new window) Mick Cullen & Matthew Cullen.

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