CHAPTER I THE EXTENT AND NATURE OF THE DEMAND FOR A I. The economic condition of wage-workers calls for insurance as a necessary part of their protection against dependence and suffering. While the statistical material for determining the number of persons requiring social insurance is not entirely satisfactory, it does enable us to make a fairly accurate estimate for our purpose. There is a common assumption in this country that the wages of workingmen are so high that social insurance is not desirable; that, with the ordinary private associations and insurance companies at hand, there is no demand for collective effort, with some measure of governmental intervention, stimulus, and regulation. It is not necessary to exaggerate poverty to prove the need of a social policy of insurance. This is demonstrated by the fact that it is precisely the men of the successful classes who realize the wisdom of distributing risks, and of providing a fund in case of incapacity for labor or of death by the method of insurance rather than by depending entirely on savings and investments. If the ordinary professional man should wait until his investments would provide for his needs in long illness or for his family in case of his death, during the first part of his career, the family would be practically within a few months of dependence on charity. On the other hand, no system of saving or of insurance can do much for the non-industrial classes, as idiots, insane, paupers of all categories, vagabonds, and criminals. Workingmen's insurance can help only workingmen-those who spend most of their lives earning a living and who are paid wages or small salaries. For defectives and paupers industrial insurance is inapplicable, and these must be supported by public or private relief; while delinquents are placed under public control at compulsory labor in coercive institutions. People of wealth can easily protect themselves by investments or by insurance in private companies. If they pay too much for this benefit, their business training enables them to discover legal means of redress and correction. But the majority of wage-earners are not in like situation and require some form of collective action. In this connection we must determine as accurately as possible who should receive the advantages of a social policy of insurance. Various attempts have been made to estimate the average income necessary to prevent dependence on public relief and private charity. The average income will vary in purchasing power in different localities, and large sections of the population do not enjoy the average rate of earnings. In certain occupations the workers live in cities where rent and food are unduly expensive, and yet their earnings are made low by competition among themselves, as in the needle industries in New York and Chicago. To speak of the average earnings in this connection is often misleading mockery. We may, however, give estimates of careful observers in relation to the margin of dependence on relief. 1 Mr. P. Roberts says: "It was shown by the Bureau of Statistics of Massachusetts that it takes for a family of five persons $754 a year to live." This does not give the minimum standard of bare existence, but a reasonable standard of comfort and that only for certain areas in the state of Massachusetts. It would not apply to the negroes of South Carolina, where one of their families might regard an income of $400 a year as luxury. 1 Anthracite Coal Communities, p. 346. The minimum standard means the income below which an average family cannot fall without reducing industrial efficiency and becoming to some extent dependent. Dr. E. T. Devine, whose experience as secretary of the Charity Organization Society of New York gives his judgment special weight, thought that the minimum income on which it is practicable to remain self-supporting, and to maintain a decent standard of living, was $600 a year in his city. In 1904 he thought that the amount should be placed at $700 on account of the rise in cost of articles necessary to maintain existence. In 1907, in view of more recent studies, he inclines to raise this figure very much.2 Here again the minimum standard is explicitly reckoned for the largest and most crowded city in the United States, where rents are highest, food most costly, and the cold climate demands good house shelter, much fuel, and warm woolen clothing. Generally speaking, the class of persons who need and can receive benefit from any system of collective insurance are, on the one side, not the wealthy, nor, on the other side, the dependents, defectives, and delinquents, but, actually, the vast majority of those who live on small wages or salaries, and who, in a struggle to live decently and educate their children, have difficulty in "making ends meet." In fact, this description covers much more than half the population; that is, in the United States, perhaps now over 40,000,000 persons, bread-winners and members of their families dependent on them for a living. This is an under estimate, but it is a number large enough to present a problem worthy of arousing the attention of scholars and statesmen. It is not worthy of a nation like ours to regard social care as merely a means of keeping the weakest members from abject 2 Principles of Relief, pp. 34-36; cf. Charities and Commons, November 17, 1906. misery and death by starvation. The aim of social insurance is not only to "keep the wolf from the door," but to keep him so far away that he cannot destroy sleep with his howls. The wage-worker has special claims upon collective consideration because he no longer has any ownership in the materials and instruments of production, nor any voice in management of the process nor control of the conditions under which his body and mind may suffer. It is this fact, and not their absolute misery, which gives the members of the wage-earning group a special right to the consideration of lawmaking bodies. The employers enjoy armed protection of their lives and property, without which they would be at the mercy of the majority who are in inferior economic position. No class of persons receive relatively so much help from government as the rich. Over against this is the interest of the wage-earners in having their fortunes protected by a power which is above all and which is directed by the representatives of all. The extent of the group under consideration cannot be measured with desirable exactness, but for practical purposes the following analysis will aid the judgment. The total population of the United States, according to the Twelfth Census, including Alaska, Hawaii, Indian Territory, Indians on reservations, was 76,303,387 (75,693,734 without counting the persons in districts named), of whom 66,890,199 were whites and 8,803,535 of African descent.3 The number of persons at least ten years of age who were engaged in gainful occupations was given in the last census. Only a part of the more significant facts are here reproduced. Of 10,381,765 engaged in agricultural pursuits, 4,410,877 are called agricultural laborers and 5,674, Statistical Abstract, 1903, p. 22. The Statistical Abstract for 1907 (p. 686) estimates the population at 85,817,239. 4 Ibid., pp. 494-97. 875 farmers, planters, and overseers. Many other laborers are lumbermen, raftsmen, wood-choppers, etc. laborers of the south must be studied apart. The In the group "professional services" we notice that teachers and professors in colleges number 446,133, the majority of whom require some form of insurance, especially for sickness, invalidism, and old age, since they are on low salaries. The "trade and transportation" group includes persons of widely differing incomes, but nearly all need industrial insurance, and it is with this group that the most reliable insurance schemes have already been organized. There were in this class 4,766,964 persons. In the group devoted to "manufacturing and mechanical pursuits" there were 7,085,992 persons (5,772,788 males and 1,313,204 females). The great majority of these are wage-workers or employees on small salaries, and need industrial insurance in all its forms. The employees are not separated from the employers in this enumeration. It is well known that the tendency is to increase the relative ratio of wage-workers to employers where the great industry prevails. The total number of persons above ten years of age in "gainful occupation" was 29,074,117 (23,754,205 males, 5,319,912 females). Of family incomes of workingmen in the United States we have a valuable recent study based on investigations of the conditions of life for 25,440 families in various callings and districts. The data were gathered in the principal industrial centers of thirty-three states, including the District of Columbia. The investigation was restricted to families of wage-workers and of persons on salaries not exceeding "National Education Association, Report of Committee on Salaries, Tenure, and Pensions of Public-School Teachers in the United States, 1905. Eighteenth Annual Report of the Commissioner of Labor, 1903: "Cost of Living and Retail Prices of Food.” |