By Kirstin Downey
Americans’ fears about the economy worsened when the Department of Labor reported that unemployment had skyrocketed to 8.5 percent in March, the highest rate in 25 years.
These are not just statistics. The numbers represent real people. At 10 a.m. on a recent morning, more than 150 men stood alongside a main highway into Washington, D.C., in the Virginia city of Annandale, clustered in small groups, huddled against the wind, peering into the windows of passing cars, hoping for work. Motorists sped by quickly, looking away to avoid attracting attention and raising false hopes. Unemployed laborers are a frightening sight to those who are still working.
It is in alarming times like these that some of the key programs of the New Deal demonstrate their continuing significance and highlight how much Americans continue to rely on solutions fashioned then in response to lessons learned, in times that seem eerily similar to our own.
In this case, the economic shock absorber system is unemployment insurance. It is the FEMA of economic hurricanes, and it is keeping more than 6 million households afloat during these bad times.
The unemployment insurance system was propelled into existence by Frances Perkins, the canny but little-known social worker who was President Franklin Roosevelt's secretary of labor. She had studied the U.S. economy for 20 years before she took up her Cabinet post, and she was Roosevelt’s industrial commissioner from 1928 to 1932 while he was governor of New York. Together, they watched the Great Depression arrive and cast its shadow across the American landscape.
Frances Perkins is most famous today for her role as primary architect of Social Security. But in 1933 and 1934, the program she championed most fiercely was unemployment insurance. Now it has become a first line of defense against capitalism’s ruthless pattern of boom-and-bust cycles.
Perkins and Roosevelt had lived through at least three similar boom-and-bust cycles, in 1893, in 1907 and in the early 1920s, and they wanted to blunt the worst of the hardship average people suffered when the downturns hit. It is a program designed to help workers who lose their jobs through no fault of their own, so they can keep their families fed while they look for new jobs. It is a short-term program, because Perkins and FDR had complete faith in capitalism’s ultimate recovery.
It was part of the package of social safety proposals, including Social Security, engineered by Perkins and Roosevelt and enacted in 1935. Perkins brought her drive and commitment to the effort, and Roosevelt won the political support that allowed the package to be piloted to passage.
At the time, unemployment insurance was attacked as a socialist scheme. In some right-wing circles, it continues to be excoriated. But people of every political stripe are usually more than happy to line up for their checks when they find themselves out of work.
That’s not to say the state-federal unemployment program devised by Perkins and Roosevelt is perfect. Perkins was disappointed in its failings at the end of her life. Some states are generous to their jobless workers, while others give them only a pittance. The biggest payment a worker in Tennessee can get is $275, but a worker doing the same kind of job in Kentucky can get $415 a week, according to a recent Labor Department study. Arizona’s maximum benefit is $240, but in neighboring New Mexico, the highest benefit is $455.
In addition, many workers are unfairly excluded from the system by rules that don’t acknowledge their existence. Many undocumented workers, like some of those day laborers hoping for a job along the road in Annandale, aren’t covered because their employers never paid payroll taxes on their behalf. Those who are mislabeled "independent contractors," even workers laboring side by side with payroll employees, are out of luck as well. Recent news reports, meanwhile, have highlighted crashing computer systems, malfunctioning voice-mail trees and bureaucratic snafus in many states, preventing people from getting benefits in a timely manner. Perkins would be outraged by reports of workers waiting weeks or months for their unemployment checks, by phones ringing unanswered, with desperate workers dangling in Internet hell as they try to file claims electronically. Reform is needed. If Perkins were alive today, heads would roll.
But even with its failings, the unemployment insurance program today continues to do the work it was intended to do.
Frances Perkins has been forgotten. Today, many people don’t know who she was. But more than 6 million households will pay their bills and eat their dinner because of her handiwork. And regardless of their political ideology, many people will have reason to offer her their thanks.
Kirstin Downey, a prize-winning journalist at The Washington Post, is author of .
