Workmen’s Compensation

By Abe Bortz, Ph.D., First Historian of the Social Security Administration

Note: This entry is a portion of Special Study #1, a lecture Dr. Bortz, the first SSA Historian,developed as part of SSA’s internal training program. Up until the early 1970s new employees were trained at SSA headquarters in Baltimore before being sent to assume their new duties in offices around the country. As part of this training, Dr. Bortz presented a curriculum on the history of Social Security. This lecture, developed in the early 1970s, was the core of that curriculum. It features an extensive overview of social policy developments dating from pre-history up to the passage of the Social Security Act in 1935.

In the drive for social justice, a new attitude began to reveal itself in trying to mitigate the evils of industrialization. One of these was in the area of safety. After the Civil War, numerous States attempted to establish–by statute–minimum safety standards for various types of industrial workers. In 1877, Massachusetts, which pioneered in many fields of labor legislation, passed a bill requiring employers to set up protective devices to safeguard workers around elevators, machinery, and hoists. By 1893, 14 States and territories had adopted some form of safety legislation, and by 1917, most of the others had followed suit. In this same area studies of workmen’s compensation legislation in Europe were published by the United States Bureau of Labor in 1893 and 1899. Germany had enacted an industrial accident insurance law in 1884. Other European countries followed suit.

In the United States the common law rules relating to industrial accidents still governed the payment of damages. Briefly stated–under these common law rules, the injured employee was not entitled to compensation if he had willingly assumed the risks of his job, if he was himself negligent, or if his injury had been caused by a fellow worker’s negligence. Moreover, in most cases the injured employee had to sue for damages and prove that he had suffered as a direct result of his employer’s negligence.

A workmen’s compensation bill introduced in New York in 1898, while Theodore Roosevelt was Governor, and one introduced in Illinois in 1905 were defeated, in considerable measure because of the opposition of the trade unions, which were fighting at the time for more stringent employer liability laws. The passage in 1908 of a Federal Compensation Act covering civil employees of the Federal Government provided stimulus to the movement for State laws. (It is worth emphasizing here that workmen’s compensation was the earliest social insurance program in the United States and the only one in operation before the 1930’s.) About this time, the A. F. of L. reversed its earlier position and began to push for workmen’s compensation legislation. Earlier, to Gompers and the labor movement – workmen’s compensation insurance was an insult to the labor movement, for it implied that it – the labor movement – had failed to meet the economic needs of workers. Just pay them enough, they had argued earlier, – they, the workers, will take care of themselves. On the other side of the fence, the National Association of Manufacturers favored workmen’s compensation but argued for employee as well as employer contributions

The newly-organized American Association for Labor Legislation (organized in 1906) gave strong support for the workmen’s compensation movement, too. It was established as a section of the International Association for Labor Legislation. Among its leaders were John R. Commons and Richard Ely from Wisconsin, and I.M. Rubinow and a whole host of economists, social workers, progressive business leaders and others from all walks of our society. John B. Andrews – who was a student of Commons’ became the A.A.L.L’s Executive Director – in 1908 and served in that position until his death in 1943. He was to become the leading influence in this organization. Although the A.A.L.L. had but 200 members in 1908 – its influence was far greater than that indicated by its membership rolls. The organization concentrated on the issue of accident compensation and industrial safety, unemployment and social insurance. It assisted in the drafting and enactment of many early compensation laws; subsequently, it goaded States into improving their existing legislation. It also provided model bills to be introduced into State legislatures.

At first many in the United States feared our constitution would not permit the compulsory European type of workmen’s compensation legislation, so an “elective” type of compensation law was enacted. This gave both the worker and his employer the right to choose between the newly-created compensation system and the old damage suit arrangement.

Several early laws were declared unconstitutional by the State courts. The first workmen’s compensation law to be upheld was enacted in 1911 in Wisconsin.

By 1920, workmen’s compensation laws were in effect in 43 States and in Alaska and Hawaii, plus a system for Federal employees already noted.

Taking an overall view of workmen’s compensation, it should be emphasized that business implications proved more influential in shaping it than considerations of equity and social expediency. The injured worker rather than the employer or industry, continued to bear most of the costs. European experience offered little proof that compensation had reduced accident rates, absolutely or relatively. The theory of compensation frankly recognized that all accidents could not be prevented. Instead, they were an inevitable accompaniment of economic activity.

And the influence of voluntarism shaped workmen’s compensation. Private insurance companies were authorized to serve as carriers in competition with each other on State funds – and merit rating systems were introduced as a stimulus to accident prevention. Thus, a collective public institution was partly administered through voluntary organizations and competitive pressure.

Mothers & Children: After 1900 several States also passed laws to safeguard women in industry. As late as 1896, only 13 States had attempted to limit by statute the hours worked by women, and only 3 States had enacted laws that were capable of enforcement. For some years, adverse court decisions retarded the adoption of further legislation, but after 1908, when the Supreme Court ruled favorably on an Oregon statute, progress was rapid and marked. From 1909 to 1917, 19 States for the first time adopted legislation dealing with women in industry, and 20 States strengthened existing laws. Although these laws differed from State to State, the most progressive States generally limited a woman’s workday to 8 hours, forbade night work for women, and sought to protect all women in industry regardless of occupation.

Turning to children, beginning in the 1860’s and 1870’s, States launched vigorous efforts to remove children from mixed almshouses. Foster care came in by 1900, that is the practice of putting children into foster homes – thereby replacing asylums. The movement against institutions was aided by the programs carried out by Children’s Aid Societies. These supported the idea of foster care and of differential childcare. Two other developments indicated, too, the different attitude and philosophy toward childcare. The beginning of juvenile courts, starting in Chicago in 1899, combined probation, separate hearings and special judges in dealing with youthful offenders. Also, getting its start in Chicago, in 1909, was child guidance, – the establishment of the Juvenile Psychopathic Institute. Linked with a Juvenile Court, the Institute, thus tied in expert diagnosis of the mental and physical condition of delinquents. On a broader scale this became the mother’s pension movement, which combined two closely related principles of progressive childcare – individualization and the superiority of the home to the institution.

Source: http://www.ssa.gov/history/bortz.html