Article on Old-Age Pensions

In this short paper, O'Grady examines the difficulties faced by the "dependent aged": those people who have reached the end of their working life but do not have an independent income sufficient to sustain them after retirement. Before the 1930s, the "dependent aged" were cared for either in the homes of relatives (usually grown children) or in poorhouses run by local governments and charitable institutions; very, very few senior citizens had enough savings to be economically self-supporting. With the advent of the Great Depression, the situation for the elderly in any kind of situation grew even worse. Some states attempted to alleviate the situation by creating state-run old-age pensions, and there was a growing movement favoring a national system of old-age economic support. In this article, John O'Grady reviews the history of the old-age pension movement and analyzes both current and proposed plans.

Questions:

As you read the document, reflect on the following questions:

• What is O'Grady's ultimate conclusion about old-age pensions? Does he have a positive or negative view of them?
• Does O'Grady think the poorhouses would be eliminated if old-age pension legislation became universal? Why or why not?
• According to the article, what percentage of the ordinary wage-earners were unable to save anything for retirement prior to 1930? What was the impact of industry and machinery on their ability to save?