percent. These parameters are virtually identical to those of the late 1930s (Lenscis 1998: 78-79; Mont, Burton, and Reno 1999).
State programs prior to the New Deal varied on other dimensions as well (Rubinow 1934: ch. 8; Reede 1947; Fishback and Kantor 1996). The scope varied from state to state depending on which industries and occupations were covered, and on how many small businesses were exempt. As a general rule, the more industrialized states covered a larger fraction of their work force. By 1930, 11 states and the District of Columbia had extended coverage to at least some occupational diseases; the rest did not. States valued loss of various body parts quite differently, much as they do today. Overall, compensation benefits were two to three times more generous in states like New York and North Dakota than in South Dakota or Virginia. Although Progressive era reformers were critical of these variations and pushed for uniform state laws, they failed. Graebner (1977) argues that some states, notably in the South, resisted uniformity because they wanted to compete for business investment based on the lower cost of their workers’ compensation programs relative to programs in other states. Thus, while it is true that workers’ compensation was the first social insurance program to gain widespread acceptance in the United States, it is also true that workers’ compensation assumed a distinctly different form in every jurisdiction that adopted it.
WORKERS COMPENSATION AND THE SOCIAL SECURITY ACT
When Franklin Roosevelt became president in March 1933, the nation was in the midst of its worst-ever economic depression. The numbers do not tell the whole story, but they are instructive. Unemployment shot up from 3.2 to 24.9 percent between 1929 and 1932. Some five thousand banks failed. Gross national product plummeted from $103 billion in 1929 to $58 billion in 1932. Total farm income fell from $6 billion in 1929, already a bad year, to $2 billion in 1932. The index of exports dropped from 115 to 35. Over half a million families defaulted on their mortgages and lost their homes from 1930- 32. In 1931 alone, 100,000 Americans applied for work in the Soviet Union (U.S. Department of Commerce 1975; Stein 1988; Kennedy 1999).
Roosevelt’s first response was to extend immediate cash relief to millions of needy families and create public works programs for the unemployed. The Federal Emergency Relief Administration, Civilian Conservation Corps, and Public Works Administration were three of the many agencies created in 1933 to help citizens cope with hardship. The second wave of initiatives began in 1934 when Roosevelt created the Committee on Economic Security (CES). The committee’s report, issued in January 1935, offered a blueprint for expanding significantly the national government’s role in social welfare. After modifications by the President and Congress, many of these recommendations were incorporated in the Social Security Act that became law in August 1935.