Creating a twenty-first-century social insurance system for today’s “juggler families.”
In his 1985 book Family and Nation, the late Senator Daniel Patrick Moynihan wrote, “No government, however firm might be its wish, can avoid having policies that profoundly influence family relationships. This is not to be avoided. The only option is whether these will be purposeful, intended polices or whether they will be residual, derivative, in a sense, concealed.” As Moynihan knew, government policies have real effects on the lives of families, producing often unintended consequences. Sometimes this is the result, as Moynihan implied, of policymakers not fully understanding the scope of their actions. But, just as often, it can be the result of changing patterns within the American family itself. Indeed, over the past generation the American family has changed dramatically, but the policies designed to mitigate the risks it faces have remained frozen in time, many of them operating on rules developed in the midst of the Great Depression. As a result, the most vulnerable families in the new economy all too often wind up with limited protection in times of need.
Recent efforts to fashion policies to respond to the strains on modern families have focused, for the most part, on providing job-protected leave to help balance work and family responsibilities. After years of partisan wrangling, President Bill Clinton signed the Family and Medical Leave Act (FMLA) in 1993; since then, progressives have focused on expanding the FMLA to more workers, allowing workers to take time off to attend school activities and doctors’ appointments, and providing workers with sick leave for their own or a relative’s illness.
The FMLA, though overlooked by many opinion-makers, was a breakthrough in updating the American social contract for today’s families. It amended the Fair Labor Standards Act of 1938 to allow workers to take time off to care for a new child or a sick relative without losing their jobs. Clinton realized its impact; it was the first law he signed, and he mentioned it in every State of the Union. But the ability to take time away from one’s job, while a critical component of modern family policy, is not comprehensive. To give families the security they need to raise healthy, productive members of society, we need also to address the financial risks parents incur just for being good parents–when they take time out of the workplace, require a flexible schedule to raise children, or get hit with high health care or child care expenses.
For this, progressives should turn to one of the most important innovations of the last century: social insurance. In the 1930s, progressives established a suite of social insurance schemes to help families share the risks of the industrial economy: the risks associated with the inability of the breadwinner to earn the family income because of old age, death, a temporary layoff, or disability. These social insurance programs continue to provide families essential support. But today we need to create new elements in the social insurance system–as well as reform the protections now in place–to confront the new risks families face. Our current social insurance system–a patchwork of programs put in place over the course of decades–was designed to help nuclear families in which a breadwinner worked one job his entire career while the homemaker cared for the children and any ill relatives. Today’s American family and today’s workforce are markedly different. Both two-earner and single-parent families operate in a volatile, winner-takes-all economy; families often are expected to raise a younger generation and care for an older one, while saving to prepare for the current one’s future; and workers at all skill levels face a career of increased mobility and volatility.
Contrary to what conservatives have argued, Americans do not need to replace social insurance with some version of the private accounts of President George W. Bush’s Social Security plan. Rather, they need a way to continue sharing the all-too-real risks families bear as parents across the country attempt to raise kids in a new economy that provides them no margin for error. This should be the central goal of our social insurance system in the twenty-first century.
The Changing American Family
Families in the early twentieth century lived in a transformative period and confronted new challenges analogous to those we face today. In a quickly urbanizing and industrializing society, old patterns of life were breaking down. Many families had left agricultural lifestyles for wage labor in cities, making them dependent on a single breadwinner’s earnings. Extended family networks, capable of providing additional economic support for individuals in times of need, were replaced by the rise of the nuclear family. Better public health and health care had increased the lifespan of Americans by ten years from 1900 to 1930.
President Franklin D. Roosevelt responded to these changes, as well as the exigencies of the Great Depression, by creating a series of policies to soften the rough edges of the industrial economy for workers and their families. In addition to employment innovations like the creation of the minimum wage, the 40-hour workweek, and the ban on child labor, he also created a system of social insurance to guard against “the hazards and vicissitudes” of life in the new economy.
Social insurance programs had precedents both at home, where there had been a national system of Civil War pensions, and in Europe, dating back to Bismarck’s Germany. While governor of New York, FDR had implemented the first comprehensive system of unemployment relief and an extensive program for industrial welfare. Roosevelt sought a similar program for the entire nation. The result was the Social Security Act of 1935, centered around old age and unemployment insurance (UI) programs to prevent catastrophic drops in families’ income resulting from old age, widowhood, or cyclical downturns (Disability insurance was added in 1956).
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