In June 1934, President Franklin Delano Roosevelt created the Committee on Economic Security with the mandate to craft policy proposals that would provide individuals in the U.S. with “security against several of the great disturbing factors in life.”¹One of the best resources about the history of the Social Security Act and related legislation is the Social Security Administration itself, which has a historian’s office.   Whether they knew it at the time, the fifty members and staff of the Committee stood at the outset of a new era of political economy.²The executive group included Frances Perkins, Henry Morgenthau Jr., Homer Cummings, Henry Wallace, and Harry Hopkins, and it was “the ultimate decision-making authority on the CES.” The Executive Director of the staff was Edwin Witte. An advisory council of twenty-three “civic leaders from outside the Roosevelt Administration,” and a technical board of twenty-one officials from federal agencies below the cabinet level augmented and supported the executive team. The Social Security Administration details all members of the Committee and its staff.

Prior to Roosevelt’s presidency, a shift in the labor market—from agriculture toward manufacturing—had been taking place for decades.³There are many sources of U.S. economic history. One of the most sweeping is Robert Gordon’s Rise and Fall of American Economic Growth.  The Great Depression revealed that the government’s role in the economy had not similarly transitioned to handle the new avenues of economic risk that the majority of households faced. Economic insecurity—the risk that an individual would not be able to maintain an adequate income in the face of a shock—has always been present, but the nature of that risk often changes as the main sources of income evolve. The Roosevelt administration addressed the newfound systemic risks by asking Congress to enact bold legislation, including the 1935 Social Security Act, the Fair Labor Standards Act, and the National Labor Relations Act.⁴The Social Security Act of 1935 established old-age benefits and unemployment compensation, and it made a number of state grants to promote income security. The Fair Labor Standards Act of 1938 established the U.S.’ first minimum wage, standardized a forty-four-hour work week, required extra pay for overtime work, and prohibited certain child labor. The purpose of the National Labor Relations Act of 1935 was to “protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices.”

These programs and others created during the New Deal era reflected the Committee’s work, which was aimed at a singular goal:

The 1934 Committee’s goal was to craft a policy of economic security to provide a level of protection commensurate with the economic hazards of the times. That goal served as the inspiration for the National Academy of Social Insurance’s 2019–2021 Economic Security Study Panel.

As the economy has transitioned in recent decades from an exporting production economy with a broad manufacturing base to a service economy reliant on global integration, government action has not adapted to sufficiently reduce the economic risks that these changes present for the nation’s people. As we discuss in this report, many have inadequate or unreliable income and are vulnerable to economic shocks, even if they are working full time. The current mix of government taxes and transfers that bolster economic security are largely successful in helping meet the needs they were designed to address, but they do not adequately meet needs that have arisen or grown in severity since.

The Study Panel was formed in the fall of 2019 to assess economic insecurity and present policy options to better provide stable and adequate income. Economic insecurity incorporates two components: current income and the risk to current income.⁵Wealth is implicitly included in “the risk to current income” in that one may draw on wealth as source of income in the event of a shock to current income. In other words, wealth reduces risks to current income. Thus, economic insecurity may come from not having enough income or from not having reliable sources of income. Precarity and uncertainty, not just a dollar amount, are major concerns. The answer to precarity, and therefore the answer to insecurity, is assurance. We call our policy portfolio, and the philosophy of this approach, “assured income”—that is, income without the uncertainty. The policy options we present seek to guarantee that everyone in the U.S. always has income. We discuss the options in terms of how income is guaranteed, how much is guaranteed, and at what frequency. These aspects vary across the options.

Not long into the Study Panel’s period of research, the COVID-19 pandemic shook the economy into a deep recession, making more striking the economic parallels of the current study context with the context in which the work of the 1934 Committee took place. Like then, the Panel set out to address decades of evolving risk faced by U.S. households and insufficient incomes for large segments of the population, but it did so at an acute moment of economic pain and distress and political turmoil.

In April 2020, the economy shed over 20 million jobs. In the leisure and hospitality industry, the hardest hit, 53 percent of the jobs that existed in March were gone in April.⁶Bureau of Labor Statistics. 2021. Employment Levels by Industry, Seasonally Adjusted, 2000–2020. The fallout reverberated throughout the economy and provided an acute and stark manifestation of the level of economic insecurity faced by many households. As of late April 2020, 47 percent of the adult population in the U.S. reported a loss of employment income since March 13. This share was 58 percent for Hispanic/Latino adults and 52 percent for Black adults. Significantly, 55 percent of households earning less than $25,000 experienced a loss in employment income. These income losses have had devastating consequences. The number of adults who reported sometimes or often not having enough to eat in the past week rose by 20 percent, or by over four million people. By December 2020, that number had increased by 48 percent, encompassing well over 10 percent of the entire U.S. adult population.⁷U.S. Census Bureau. 2021. Week 1 Household Pulse Survey: April 23–May 5 and Week 21 Household Pulse Survey: December 9–December 21. Employment Tables, Table 1. Food Sufficiency and Food Security Tables, Tables 2a and 2b.

The lasting policy ecosystem of New Deal programs and those created since provide a strong baseline of support during economic downturns. Still, that baseline would have been inadequate without emergency federal legislation pumping trillions of dollars of relief to individuals, businesses, and the economy as a whole. The CARES Act augmented current programs, created new programs, and sent cash to 85 percent of households.⁸U.S. Census Bureau. 2020. Week 12 Household Pulse Survey: July 16–July 21. Stimulus Table, Table 1. The American Rescue Plan, enacted in January 2021, also provided significant relief to households and businesses. ⁹U.S. Department of Treasury. 2021. American Rescue Plan: Treasury’s Progress and Impact After Six Months.

The economic experience during the pandemic-induced recession provides an orientation to the Panel’s work. The U.S. has an effective policy support system that establishes a baseline of economic security for many people, but there are still unmet needs and sources of risk that require additional government action. While the extent of economic insecurity is vast, it is not universal.

The goal of the Study Panel is to help design an assured income policy portfolio that solidifies a floor of basic support and reduces economic insecurity. This report examines how economic insecurity has evolved over time, how it might be addressed, what assured income might mean in practice, and how to achieve it. This policy goal is not solely backward looking or corrective. An inclusive economy with basic security for all creates both the backstop from depression and widespread prosperity during periods of economic growth.

In two ways, the Panel’s efforts today differ significantly from the 1934 Committee’s work. First, the Committee developed its policies largely on a blank slate. It was the New Deal legislation that created the federal policy-making apparatus that, in the eight decades since, has generated a web of overlapping federal and joint state–federal programs. Cash benefits have been augmented with in-kind transfers, subsidies to service providers, direct service provisions, vouchers, and more.¹⁰An example of an in-kind transfer is the Supplemental Nutrition Assistance Program (SNAP), through which beneficiaries receive benefits that may be spent only on certain food items.
An example of a subsidy to service providers is the Legal Services Corporation Basic Field Grant. This grant funds the Legal Services Corporation, which then distributes funds to providers of civil legal aid to low-income people.
An example of direct service provision is Head Start. Head Start offers early educational opportunities to children in low-income families, in addition to other supports to promote a healthy home environment.
An example of a voucher program is the Housing Choice Voucher Program. The program provides vouchers to (some, not all) very low-income families, elderly individuals and couples, and people with disabilities. The vouchers allow beneficiaries to choose suitable housing in the private market. In most cases, the benefiting family pays 30 percent of monthly adjusted gross income toward rent and utilities, and the local public housing agency covers the remaining rent and utility expenses. This Study Panel today, in contrast, designed its policy menus within a well-established structure.

Second, the Committee had no mandate (and little immediate success) in providing economic security to all people in the U.S. For example, the Social Security Act did not protect the majority of Black workers who worked in jobs not included in Title II of the original legislation.¹¹The old age insurance portion of the legislation did not initially include farmworkers and domestic workers, which amounted to excluding at least 60 percent of Black workers from coverage at the time. By 1950, most workers in these professions were covered, and the remainder were covered in 1954 (see Dewitt 2010). Regardless of the reasoning, the effect on Black workers’ financial security was significant. The federal government created a large and generous program that did not benefit many of the lowest-income workers for over a decade of its existence. But whereas, in 1935, calls from Black leaders to amend the legislation to ensure a benefit program of equal access and coverage were met with little support, 2020 was markedly different.¹²Charles H. Houston—the president of the National Association for the Advancement of Colored People at the time—testified before the Senate regarding the first draft of the bill, which would ultimately produce the Social Security Act. He stated that the legislation “looked like a sieve with the holes just big enough for the majority of Negroes to fall through.” It should be noted, Dewitt writes, that “Houston pointed out the adverse impact of the provision on African Americans, as part of an overall critique designed to persuade Congress to drop the whole Social Security program entirely. He wanted a single, universal, federal welfare benefit in lieu of a contributory social insurance system” and conceded that the administration of “‘a pay roll tax on casual, domestic and agricultural workers would practically consume the tax itself.’ So Houston was not advocating coverage for domestic and farm workers, but rather rendering the whole issue moot by rejecting the Social Security system entirely.”George E. Haynes—Executive Secretary at the Department of Race Relations for the Federal Council of Churches—also testified regarding discrimination and exclusion in the legislation. Mr. Haynes advocated for a clause prohibiting “discrimination on account of race or color in the administration of the services and benefits to any person otherwise eligible.” No such clause was included in the original legislation. At the start of the summer, the killing of George Floyd spurred widespread protests and a national conversation about, and reckoning with, the legacies of enslavement, brutality, racial injustice, and the deep, persistent economic inequality separating White and Black peoples in the U.S. There is substantial evidence of the extent of the exclusion of Black communities in economic security programs, and the lasting effects of those exclusions, from federally backed mortgages¹³The Color of Law (Rothstein 2017) documents closely how Black individuals in the U.S. have been excluded, both explicitly and (especially) implicitly, from many of the benefits offered by public policy over the past century.  to the GI Bill.¹⁴Returning from War, Returning to Racism (Clark, 2020) looks specifically at how the promised benefits of the G.I. Bill were in a large part denied to Black veterans. Some argue that the discriminatory implementation of the G.I. Bill initiated an era of affirmative action for White families. 

Workers in the U.S. encompass an array of groups who have at one point been left out from economic security legislation, including Black workers, women workers, farmworkers, Asian workers, LGBTQ workers, formerly incarcerated workers, Native American workers, documented immigrant workers, undocumented immigrant workers, and others. Often this is a product of the occupation, industry, earnings, or type of work arrangement disproportionately experienced by certain groups.¹⁵Today, for example, many part-time workers (especially low-wage part-time workers) do not earn enough or do not have steady enough employment to qualify for Unemployment Insurance benefits. Independent contractors are ineligible for benefits altogether (Kovalski and Sheiner 2020).

The Panel also operated with an advantage that the 1934 Committee did not have: eighty-five years of experience with, and evaluation of, income security policies. Questions of how to design, finance, administer, and evaluate public programs have answers built on decades of research and practice. The Panel includes individuals who have built that evidence base and engaged their expertise in income policy.