HD nio6 Vib W6 Cornell University Library HD7106.U6W6 Report on old age relief 3 1924 002 405 268 Wisconsin. lUDUSTEIAL COmiSSIOlT. REPORT OW OLD AGE BELIEF. CORNELL UNIVERSITY LIBRARY NEW YORK STATE SCHOOL OF INDUSTRIAL AND LABOR RELATIONS THE GIFT OF The Family of Dr. I M. RuBiNOW 1875-1936 REC'O BY *. P. K.„ REFERRED TO ANSWERED INDUSTRIAL COMMISSI^,|^ tp^f^5 WISCONSIN ij[i§i?iipinifii Jjir^i^iieif. MADISON & C. H. CROWNHART, Chairman of the Commission J. D. BECK PAUL J. WATROUS, Secretary FRED M. WILCOX E. H. DOWNEY, Statistician, IN CHARGE OF INVESTIGATION Issued March t, 1915 REPORT ON OLD AGE RELIEF TABLE OF CONTENTS Foreword 1 I. The Problem of Old Age Dependence 2 II. Methods of Old Age Relief 12 III. Proposed Plans of Old Age Relief 18 IV. The Condition of the Aged in Wisconsin 23 V. Foreign Systems of Old Age Relief 43 This report on "Old Age Relief" is made in compliance with chapter 185 of the laws of 1913. The investigation of the subject was' not exhaustive but was sufficient to give a rough estimate of the probable cost of old age pen- sions based on any plan that may prove feasible. The Industrial commission recognizes that any general plan of old age pensions presents very grave considerations and necessitates most serious study of the subject. The present report is not to be taken as an endorsement pi any plan or scheme of old age pensions but rather as a uggestive advocacy of legislation favorable to the idea. 2 Report on Old Age Relief The report was prepared by Dr. E. H. Downey, of this department, an experienced investigator of ability. It presents the arguments for old age relief seriously and conservatively. " By the Commission, C. H. CROWNHART, J. D. BECK, F. M. WILCOX, Commissioners. I. THE PROBLEM OF OLD AGE DEPENDENCE The conditions of modern life have set the problem of old age in a new light. The aged, indeed, have been always with us and the younger generation has always been charged with their support. But conditions have so altered that former methods of dealing with- poverty in old age are no longer adequate. Five principal causes have operated to produce this result: ' 1. Modern industry has created a great and growing class of wage workers, dependent upon their daily toil for their daily bread. Even in Wisconsin, still largely an agricultural state, some 40 per cent of the population live by the sale of their labor. * The wage worker ordinarily has no other source of regular income but his wages. When wages cease, whether from inability to work or from inability to find a job, he is pres- ently face to face with destitution. It is this fact which has led most industrial nations to establish comprehensive schemes of workmen's compensation, sickness insurance, unemploy- ment insurance, old age pensions, mother's pensions — all designed to meet the various contingencies which deprive wage earning families of the means of livelihood. And of these contingencies none is more common or more serious than the disabilities of old age. 2. The pace at which modern industry is carried on has shortened the effective working life of the industrial popula- tion. It is not simply that excessive speed wears out the *It is impossible to state accurately the number of wage earners or the number of their dependents; the figures are not given in the census. The estimate in the text is based upon all available -data which show that the number of wage workers in this state, can not be much less than 350,000. The whole humber of persons gainfully employed was reported as 892,000 in the census of 1910. , Report on OtD Age Relief 3 workman before his time, though that is a frequent result. The insistent demand for speed leads to the elimination of all who are unable to maintain the pace. And inability to maintain the pace comes much earher than inability to work. Superannuation has become, not so much a matter of actual decreptitude, as of simple slowing up. Hence the singular phenomenon of the man of 50, still able to do good work, but unable to find steady employment. It is a phenomenon peculiar to wage workers. The farmer, the tradesman, the self-employed mechanic, can slacken his pace or lighten his labor and prolong his productive years beyond the psalmist's span. The business or professional man is in his prime at 60. But the wage earner, when once his physical powers have begun to fail, finds it very difficult to maintain a footing in industry. Exact information on this head is not to be obtained. There are no good statistics showing the number of old men employed and the character of their employment. It is a matter of common knowledge, however, that large industries are reluctant to employ men of 50, that in many occupations the dead line for new employes is drawn at 40, and that shops, mills and mines are filled with young men. Common ob- servation in this respect is fully corroborated by accident statistics. Of all persons injured in the course of employ- ment in this state 53 per cent are under 30 and 67 per cent are under 40, while only 5 per cent are in the age group 50 to 55, and only 5 oer cent are above the latter age. Inas- much as nearly 7 per cent of the population over 15 are 50 to 55, and nearly 16 per cent are over 55, these accident figures can only mean that a relatively small number of the older men are employed in industry. Lastly, it is significant that in the German empire, over one-third of the pensions for permanent invalidity (including old age) are granted to persons of 55 and under. Thus all the lines of evidence point to the same conclusion. Industrially speaking, the wage worker is already old at 50. 3. Improved sanitation, medical progress and the rising standard of comfort have prolonged the normal span of human life. Not only has the mortality rate been steadily falling for half a century; the proportion of those who live to an advanced age has steadily increased. In 1880, but 3.5 4 Report on Old Age Relief per cent of the population of the United States were 65 and upward; in 1910 the percentage was 4.3, and this in the face of an immense immigration of young persons. Greater longevity is in itself a most desirable thing, but it has the curious effect of intensifying the problem of old age dependence.* For the wage worker it means that old age is being lengthened out at both ends — by the curtailment' of the period of production and by the increased duration of life. When it is borne in mind that of every hundred men at age 20, about thirty will attain the age of 75, and that of every hundred at age 30, nearly sixty will pass the 65th year, + the extent of the problem will be apparent. 4. The increasing mobihty of modern peoples has weakened those ties of family and neighborhood which were once the best security of the aged. When it was the rule for a man to pass his life in his native village, and to see his children and grandchildren grow up around him, he might reasonably rely in his declining years upon the willing aid of kindred and neighbors. But what was once the rule has now almost become the exception. Especially in the United States and among wage earners, migration and the breaking of home ties are of common occurrence. Children of the same family scatter to distant states and the parents grow old among strangers. The homeless worker, employed in lumber camps, in railway construction, in ice harvesting and in 'many public works, moving from place to place as the chance of employment offers, is an increasing factor in Ameri- can industry. Thousands of old persons have no children, or near relatives, or even neighbors from whom they can claim support. And the proportion of such is increasing. 5. Public opinion has undergone a great change in the di- rection of humanity and fellow feeling. A past generation could cheerfully consign the aged poor to the workhouse and the treadmill. The presumption was that poverty denoted want of industry or thrift. Wherefore charity was tem- pered with opprobrium, lest it encourage pauperisni. Such is still the attitude of some who mete out public and private ♦Compare Rubinow, Social Insurance, Chapter XIX. tThe figures from the American experience table of mortality are 28.27 and 57.96 reBi>ectively, But it is well known that actual mortality is materially less, and lon- gevity consequently higher, than the American table indicates. Report on Old Age Relief 5 charity. But few people now look upon poverty as a crime or regard the almshouse as a fitting reward for a life of hon- orable toil. Such are the new conditions which have induced most in- dustrial countries, outside the United States, to provide systematic old age relief. Great Britain, Denmark, and the British colonies of Australia and New Zealand, pension the necessitous aged. Belgium, France, Germany, Italy, Spain and Sweden, provide old age insurance, under state management. In all these countries, the ordinary methods of poor relief have been superseded as respects dependence due solely to old age. (See Appendix II.) The advisability of a similar plan for Wisconsin will depend upon the ade- quacy of existing means of old age support. The support of the aged in this state at the present time is drawn from seven principal sources: (1) Individual savings; (2) private insurance; (3) contri- butions of children and other relatives; (4) employers' re- tirement pensions; (5) United States military pensions; (6) public poor relief and (7) private charity. Individual saving is, at best, an uneconomic mode of pro- viding for old age. The number who survive to an advanced age is relatively small and the length of life of any individual is wholly uncertain. No man can say whether he will live five, ten or twenty years beyond 65. To be on the safe side, he should provide for the maximum period. But of a hun- dred men at 20, scarce six will actually attain the age of 85. Hence the aggregate fund which must be accumulated for old age support on the individual savings plan is many fold greater than would be required under any collective plan. The great cost of the individual savings plan is no hard- ship to those who can save without sacrificing the essentials of life for themselves and their families. The accumulated capital is equally available to survivors of those who die prematurely and is every way an advantage to the state. But the objection is decisive to the great mass of wage earners. The average wage in this state, as disclosed by the settlement of workmen's compensation claims, is not far from $12 per week. Only 20 per cent of the workmen in- demnified for accidental injuries earn more than $15 per week and 12.5 per cent fall below $10. Taking into account 6 Report on Old Age Relief periods of sickness and unemployment, a weekly wage of $12 means a yearly incpnie of about $500. Where a family is to be supported upon such an income the margin for possible saving is extremely small. If saving is effected at all it is too likely to be at the expense of child labor, home work, overcrowding or other conditions inimical to the public weal. A second drawback of the individual savings plan is that its success requires a continuous surplus of income over sub- sistence. Old age is the last emergency of life; provision for it is postponed to every other exigency. Hence in sickness, unemployment, or other misfortune, the fund is sure to be trenched upon. Moreover, savings are apt to be swept away by bad judgment in investments. The poor are the chosen victims of get-rich-quick schemes. Business faUures, too, are especially common among small and middling sized firms. The number of persons impoverished through fraud or misfortune in middle life is very great. It is significant that of 14,988 destitute old people interviewed by the Mas- sachusetts Old Age Pension commission, 4,677 had had some property at one time or another. * Lastly, the very remoteness of old age is a serious practical obstacle to the method of individual accumulation. Saving is a difficult business at best. The ordinary man must have some definite, near object if he is to deny himself present comforts. He will save to enlarge his farm or his business, to buy a home, to educate his children or to pay his life in- surance premiums. But, in early Ufe, the helplessness of old age seems a distant and doubtful contingency. Amid the urgent wants of a wage working family, it is more than hkely to be overlooked. When the imminence of the need begins to be felt, it is already too late to accumulate enough out of a slender income. Whatever be thought of the explanation, the facts, at any rate, are indisputable. Taking men and conditions as they are, a very great number reach old age without means of support. To those who have made no special study of the problem, the extent of old age poverty is fairly startling. In great B ritain, where modern industry has run a longer *Report of the Massachusetts Commission on Old Age Pensions, Annuities and InsUTance, 1910, p. 7.3. Report on Old Age Relief 7 course than in any other country, some 17 per cent of the total population of 65 and over are outright paupers and fully one-half of all who have passed the line of three score and ten are pensioners under a law which excludes every person whose income exceeds $3 per week. In France, the thriftiest of nations, over half a million persons of 70 and upwards were shown to have incomes under $6 per month. In frugal Denmark one-fourth of all the men and women over 60 receive some form of public relief. A fairer comparison with Wisconsin is afforded by New Zealand, where wages are even higher and prosperity more general than in the United States. Yet in New Zealand one-third of the population of 65 and upward are pensioned under a law which makes an income of $292 per annum or property to the amount of $1,300 a disqualification.* Coming closer home, 22 per cent of the persons of 65 and over in Massachusetts are wholly or partially supported by public and private charity. There are no such exact records of Wisconsin conditions, for the very reason that no systematic effort has ever been made to deal with old age dependence in this state. That aged pauperism here is less acute than in Europe, or even in Massachusetts, needs no proof. But there is less reason to suppose that conditions are better among our people than in New Zealand. Some light is thrown on this subject by the census of persons of 60 and upwards which the Industrial commission caused to be taken in about a dozen representa- tive precincts (see Chapter IV). Of 1,395 individuals (including couples) only 701 owned homes or other property to the amount of $1,500 per capita, whereas 579 had aggre- gate property or savings of less than $1,000 each. Only 401 of these old people had incomes from labor or property of more than $500 annually per capita; 292 fell below $100 and 657 below $300. On this showing, the extent of old age dependence in Wisconsin is certainly not less than in New Zealand. Private insurance for old age has had little popularity in the United States. The insurance companies, having loaded their mortality tables against the life insurance policy holder, find the tables reversed in the sale of old age annui- ties. For the greater the average longevity, the higher, *For statistics see Chapter V. 8 Report on Old Age Relief obviously, will be the cost of a life annuity beginning at a stated age. Hence the annuities based on the present mortahty tables have proven unprofitable and their sale has naturally not been pushed by insurance companies. Some trade unions,* and a number of fraternal organiza- tions do undertake to provide this form of insurance for their members. But the difficulties in the way of success, for fraternals, at least, are very great. It is well known that most fraternal insurance societies set out with . youthful membership and low assessments. In the course of time the original members grow old, assessments rise, new members are difficult to obtain, and the burden upon the survivors tends to become prohibitive. This is still more emphatically the case with old age than with life insurance. Support of the necessitous aged by their children is a duty enjoined by Scripture and enforcible by statute in Wisconsin, as in most other jurisdictions, ancient and modern. The difficulty is that the aged are very often childless and that children are very often unable to assist their parents. When parents have reached an advanced age, their sons and daugh- ters are commonly married and have children of their own who require nurture and education. That would be a singu- lar social policy which should sacrifice the rising, for the sake of the passing, generation. Illustration of the foregoing statements may be had from the commission's old age census. Of 311 aged couples, 119 were either childless or had no children able to render finan- cial assistance. Of 533 single, widowed or divorced old people, 76 were living quite alone and 13 had homes with non-relatives. To complete the picture, 213 were living with married, and 168 with unmarried, sons or daughters. Of the 213 aged men and women living with married chil- dren, 105 were wholly or partially dependent. Retirement or sernice pensions are a feature of the business policy of many large employers. The plan usually provides for a monthly pension after at least twenty years' service, and the attainment of the specified age (60, 65 and 70 are the prevaihng retirement ages). The pension generally is *The Cigar Makers' International union, the International Typographical union, the Granite Cutters International association and the Amalgamated Society of Carpenters and Joiners are conspicuous examples. Report on Old Age Relief 9 a certain per cent of the average earnings during the last ten years of service, subject to stated maximum and minimum amounts. Very often the entire fund is furnished by the employer. * The popularity of service pensions is increasing, though their payment is still quite exceptional and the number of workmen affected in this state is relatively very small. In their present form, however, service pensions can never be a satisfactory general provision for old age. In the first place, only the large corporation can create .and maintain a fund sufficient for the purpose. The amount required for each beneficiary is large and permanence is a sint qua non. This limitation at once shuts out the majority of the wage workers of this state from any participation in voluntary service pensions. In the second place the requirement of fifteen or twenty years of continuous service bars the vast majority of wage workers from participation in the benefits. The personnel of most large corporations changes rapidly. Ten thousand hirings yearly to maintain a working force of five thousand is not unusual. Except for foremen, salaried employes, and a few select occupations, as railway trainmen, twenty years service in one establishment is a rarity. But an employer can not well be expected to pension those who have grown old in the service of others. Hence relatively few of the rank and file will ever draw pensions under the existing plans. In the third place, employes as a rule have no contractual rights in the pension fund. Thus the plan of the Interna- tional Harvester company (which is typical of most such plans) provides: "Neither the establishment of this system nor the granting of a pension, nor any other action now or hereafter taken by the pension board or by the officers of the company, shall be held or construed as creating a contract or giving to any officer, agent or employe, a right to be retained in the service, or any right to any pension allowance; and the com- pany expressly reserves, unaffected hereby, its right to dis- charge, without habiUty, other than for salary or wages due *For descriptions of a large number of such funds see the Twenty-Third Annual Report of the United States Commissioner of Labor, 10 Report on Old Age Relief and unpaid, any employe, whenever the interests of the company may, in its judgment, so riequire." Dismissal, or voluntarily quitting the service, forfeits all claim to a retirement allowance. Manifestly, the plan offers no security for old age. It is open, moreover, to grave ob- jection in that it seriously hampers the employe's freedom of action and may even be made an instrument of oppression. Retirement pensions for permanent public employes are common in Europe and nave recently been inaugurated in Massachusetts.* In Wisconsin such provision is limited to certain city fire and police departments and to public school teachers. The public policy of a comprehensive civil service retirement plan is a separate question which need not be considered here. Suffice it to say that such a plan, even if adopted, would apply to a very small proportion of the popu- lation of the state. United States military pensions are being paid to about 19,000 residents of Wisconsin. Inasmuch as comparatively few of the beneficiaries are under 60, these pensions may be regarded as a form of old age relief. So far as they go, the military pensions are a dignified form of support, carrying honor, rather than the reverse, to their recipients. About 10 per cent of the population of the state, of 60 and upwards, are thus provided for at an annual cost of over 14,000,000. Both in the number aided and in aggregate amount, these . federal pensions are by far the most important branch of old age rehef in this state. In the nature of things, however, military pensioners must form a constantly declining pro- portion of the aged. The veterans of the Civil War, and their widows, are fast passing from among us. Public poor relief to the aged in this state mainly takes the form of almshouse care. About 1500 persons of 60 and up- wards were cared for in almshouses during the last fiscal year, at a cost to the state of approximately $208,000. As against this number twenty-eight counties f reported out- door relief in the sum of $28,751 to 511 persons of similar age. Making due allowance for relief by the towns and by a few sparsely populated counties which failed to report, it is probable t hat public outdoor relief was extended to fewer *See Report of the Massachusetts Commission on Pensions 1914 TReports were received from counties having the county system of poor relief and from cities where the town system prevails. See Chapter IV Report on Old Age Relief 11 than one thousand old persons throughout the state, and that the total amount of such assistance fell below $50,000. As a home for the aged the almshouse leaves much to be desired. Doubtless most of these institutions afford a fair degree of physical comfort. The food is reasonably good, the quarters usually sanitary and the treatment generally humane. But respectable old people, who have done their fair share of the world's work, are here herded indiscrimi- nately with sturdy beggars, confirmed inebriates, the semi- vicious and the feeble .minded. Moreover, the stigma of pauperism is inseparable from the alms-house. Long custom and deeply ingrained public opinion make this form of relief gall and wormwood to the self-respecting poor. The like is true, to a slightly less degree, of public outdoor relief as commonly administered. Private charity ministers to the aged to only a limited ex- tent. Organized charity, by preference, deals with cases of occasional and transient need, looking primarily to re- habilitation of self support. The need of the old is chronic ; with them there is ordinarily no question of rehabilitation. Accordingly, the associated charities of the state gave relief to only 163 old persons during the last fiscal year. How many more were aided by churches or by individuals there is no means of knowing. Besides other forms of relief, there are eight privately endowed "old people's homes" in the state, mostly of a denominational character. A majority are pay institutions, charging $500 or $1,000 for admission and guaranteeing support thereafter. In the, aggregate these homes furnish comfortable and pleasant retreats for about 500 old people. Taken, altogether, it can not be said that existing institu- titutions constitute an adequate or satisfactory solution of old age dependence. Doubtless, actual destitution is com- paratively rare. The number of persons 60 years of age and upwards in Wisconsin may be estimated at 185,000.* Of this number, probably 2 per cent are recipients of public or private relief. Even including United States pensioners, the proportion scarcely exceeds 12 per cent. But that very much unrelieved distress exists no one can doubt who is familiar with the statistics of other countries. The inaugu- ration of systematic old age relief invariably brings to light a 12 Report on Old Age Relief vast mass of unsuspected poverty among the aged, t Thous- ands of old people contrive to escape the clutches of the poor law who nevertheless endure a pitiful struggle for existence. They work beyond their strength, they deny themselves proper food' and clothing, they are aided by friends and neighbors, or they are supported by their children, too often at the expense of growing families. The arguments for systematic old age relief are precisely those for social insurance in general. Like sickness and un- employment, the problem is one which can not be adequately solved by individual effort alone. Collective provision so distributes the burden that it does not fall with crushing weight upon any person or family. It alleviates distress without the imbitterment of pauperism, it leaves the present generation of toilers free to educate and provide for their own offspring, and it goes far to mitigate that economic inse- curity which is the greatest bane of all who live by the sale of their labor. Surely he that has borne the burden and heat of the day has fairly earned a measure of peace and security "when his head is white, and his back weary, and he is pre- paring to go down into the dust of death." A sound and vigorous population being the chief asset of any common- wealth, social insurance is a most effective measure of con- servation. II. METHODS OF OLD AGE RELIEF Systematic provision for old age, as hitherto developed, takes four forms: (1) voluntary insurance under the super- vision and encouragement of the state; (2) compulsory in- surance of wage workers; (3) universal compulsory insurance: and (4) gratuitious pensions. (See Chapter V.) 1. Voluntary insurance with state encouragement has been tried for half a century in France and Belgium and for shorter periods in Canada, Great Britain, Italy, Spain and Massachusetts. Generally speaking, the state provides the insurance organization, guarantees the solvency of the -fund and pays the expenses of management. Very often, also, a substant ial subsidy is granted out of the public treasury. tp^^n'?.'".''*^''®*^"''"^?-^^ *.*"= '=,^,"^"s °f 1910 was 176,864 on page 11. tFor illustrations see Chapter V. u" i^ob^s li. Report on Old Age Relief 13 It is argued for this plan that it encourages thrift and main- tains the self-respect of the beneficiaries. The old age annui- ty is not a charity, but a right which has been bought and paid for. Hence many who strongly oppose gratuitious' pensions have only commendation for voluntary insurance. The chief drawback of the method is its very prevalent want of success. In France the number of beneficiaries, in forty-five years, never rose above 3.5 per cent of the eligible population. In Belgium, after forty years' trial, the number insured was only 10,000 out of a population of 5,000,000. In Italy, notwithstanding very liberal subsidies, only 5 per cent of the industrial population were insured after fifteen years' operation. In Massachusetts, just 4,262 endowment policies, of a cash value of $500 each at age 65, were sold in five years. The reasons for this comprehensive failure are not far to seek. The cost of old age insurance even where adminis- trative expenses are paid entirely by the government, is high — $9 a year beginning at age 20 is required to purchase a monthly income of $12 at age 65. At age 30 the correspons- ing premium would be $14.81 and at age 40 it would be $26.76. There are "whole life" premiums, payable each year until the annuity begins. Moreover, if the insured dies before reaching the pensionable age — as more than two- thirds of those who take insurance at 20 will do — he forfeits all that he has paid in. Little wonder that, amid the press- ing exigencies of the wage earner's life, this form of insurance is neglected in favor of provision for dependents in the more common case of premature death. Even where liberal subsidies are paid by the government, as in Belgium since 1900, voluntary insurance is but mod- erately successful. So many, indeed, failed to take advan- tage of the plan that it was finally abandoned in France, while in Belgium it has been supplemented by outright pensions to the indigent aged. 2. Compulsory insurance of wage earners may be called the German system, though it has lately (1910) been adopted by France, as well. The German working men's insurance is very comprehensive, providing against accident, sickness, permanent invalidity, premature death and old age. The 14 Report on Old Age Relief funds are provided partly by employers, partly by the em- ployed and partly by the state. It may be doubted whether such a plan really encourages voluntary thrift, but it certainly does not undermine the self respect of the beneficiaries nor is it regarded as in any sense a charity. Notwithstanding its indubitable advantages, the German system has several drawbacks: (a) Being confined to employed persons it does not pro- vide for aged widows or other -women who have not been wage workers nor for the very numerous class of self-em- ployed mechanics, peddlers, small farmers and petty trades- men.* The practical exclusion of women is especially serious, for women everywhere constitute a majority of the aged poor; they are 62 per cent of the old age pensioners in Great Britain, 66 per cent in Denmark and 56 per cent in Australia. (b) The plan is not well adapted to Wisconsin conditions because of the great number of migratory laborers. A large proportion of the wage earners of this state are but transient residents, who presently return to Europe or pass on to other states. It would obviously be unfair to enforce the payment of premiums from these temporary residents. (c) No form of insurance, whether voluntary or com- pulsory, can benefit those who are already old. A long period — thirty years at the very least — must elapse before substantial annuities begin to mature. Hence every com- pulsory insurance system has been supplemented, during the long "transitional period," by some form of gratuitious pension. 3. Universal compulsory insurance is the plan recently (1913) inaugurated in Sweden. It fully meets one of the objections to the German plan, but is equally open to the other two. 4. Gratuitous, or non-contributory, old age pensions are paid by Denmark, Great Britain, Australia and New Zealand. By gratuitious, in this connection, is meant that pensions are payable upon certain conditions of age, residence, property, and the like, without any prior specific contribution on the part of the beneficiaries. It is assumed that the pensioners ♦Voluntary insurance is open to all these classes, but very few are actually insured. Report on Old Age Relief 15 have contributed to the fund insofar as they have been tax- payers and further, that as laborers they have helped to cre- ate the body of wealth out of which taxes are paid. The great advantages of this plan are that it is compre- hensive and immediately operative. It meets every case of old age dependence and meets it at once. The objections most commonly urged are: (a) its great cost; (b) its tendency to discourage thrift; and (c) to undermine character and (d) its supposed deleterious effect upon family solidarity. * (a) The argument from cost is not convincing. With the same number of beneficiaries and equally liberal relief, pen- sions will cost no more than insurance. It is purely a ques- tion of the method by which the funds shall be raised and of the incidence of the burden. The British method imposes a heavier burden upon the general revenues, but the German system takes more from wages and from employers' profits. (b) It is" not easy to see why the assurance of a small annuity in old age should discourage, reasonable saving. The pension is never sufficient, of itself, to afford more than a bare subsistence. The ownership of a home or the pos- session of a small income 'from labor or property, together with the pension, will secure a fair degree of comfort. Old age, besides, is but one among several objects of saving. To say nothing of those who aspire to wealth, a pension sys- tem could scarcely weaken the motives to home ownership, or hfe insurance, or that "rainy day" saving for temporary emergencies toward which the thrift of the poor is so largely directed. On such a question experience must always be inconclusive, for it is not possible to isolate the effect of any one influence in the moulding of national character. But twenty years of old age pensions in Denmark have not visibly weakened the thrifty habits of the Danes. Indeed, the'number who apply for poor relief between the ages of 55 and 60 (when eligibility to a pension begins) has markedly declined within that period. On the other hand, the absence of any such system in the United States has not resulted in making thrift a distinctively American trait. *For a somewhat dogmatic statement of these views, see the report of the Massa- chusetts Commission on Old Age Pensions, Insurance and Annuities, 1910. 16 Report on Old Age Relief (c) The effect of any system of relief upon self respect will mainly depend upon public opinion. Poor relief is degrad- ing, because it has long been accepted as a mark of disgrace. But old age pensions are not so regarded in Australasia or Denmark, nor are military pensions so regarded among our- selves. Conceived and administered as deferred wages for services rendered to society, such pensions have no de- basing effect. (d) The argument that pensions to the aged will tend to weaken family ties seems rather far-fetched. It appears to be overlooked that the argument, if it have any validity at all, is equally apphcable to old age insurance. For if paren- tal dependence is necessary to filial affection, then an insur- ance annuity would be as fatal to the maintenance of family ties as any other form of income. But that the old are dear in proportion as they are burdensome is, to say the least, a strange doctrine. It seems more rational to suppose that many a grandparent would be more welcome to bed and board, and would enjoy more independence and self respect, if he or she could contribute a modest stipend to the family budget! In thousands of cases superannuated parents are ungrudgingly supported, at a grave sacrifice, out of natural affection and family pride. In other cases, the old people are relegated to the almshouse, not from heartlessness, but because of stern necessity. In none of these cases would the granting of a pension have any tendency to break Tip the family or to weaken the bonds of natural affection. There is little reason, therefore, to reject the pension plan from any fear of remote consequences. The best method of old age relief is to be determined, not by such speculative considerations, but by existing conditions and proximate results. That Wisconsin will have sooner or later to face the ques- tion of old age relief can scarcely be doubted by anyone who is familiar with the trend of events in modern industrial communities. That the question is easier of solution now than it will be a generation hence is still less open to doubt. But the need is not so urgent as to justify hasty legislation. A new system of old age rehef ought not to be adopted with- out mature consideration and the full support of public Report on Old Age Relief 17 opinion. The commission does not wish, therefore, to rec- ommend any specific measure at this time. ' Nevertheless, the commission has formulated two plans which it believes to be meritorious. These plans are not mutually exclusive. Either could be adopted alone, or both together. Neither is very radical or far reaching, but either or both might serve as an acceptable foundation for future development. Plan "A" provides for voluntary insurance under state management. It seeks to make use of existing institutions, such as trade unions, fraternal organizations and employer's funds^a feature which experience has shown to be of great importance. It imposes no burden upon the state except the small cost of administration. The limitations of such a plan are not overlooked. But it is believed that the measure would have large educative value. European experience justifies the hope that it would stimulate individual voluntary provision for old age and would encourage employers to adopt retire- ment schemes free from the objectionable features which so often- attach to private pension funds. As to the first of these points, about 400,000 wage earners of this state pay premiums to the amount of $1,600,000 annually for "in- dustrial insurance." In return for this vast expenditure benefits were paid, to the amount of $350,000 during 1913^ the waste being some 75 per cent of premiums. The "in- dustrial" pohcies average about $120 and are, in fact, noth- ing more than a guarantee of a rather expensive funeral. If the great sum thus virtually thrown away could be diverted to old age insurance under the plan here proposed, it would ultimately endow every wage earner in the state with a monthly income of $6 at age 65. Lastly, the voluntary fund would form a valuable nucleus for a compulsory insurance system, should the latter ever be adopted. Plan "B" provides a form of old age pensions adapted from the Danish system. The property and income limits are such as to exclude all who have sufficient means of their own, without requiring actual indigence. The so-called "character tests" are designed to exclude vagrants, idlers, chronic paup- ers, habitual drunkards and those who have led disreputable lives. The idea is to provide a. dignified form of support for 18 Report on Old Age Relief those who have rendered substantial service to the common^ wealth but who, because of low wages, misfortune or poor management are impoverished in old age. A doubt may be raised whether the state has power, under the existing constitution, to provide support for the aged poor who are not tota:lly indigent. But to argue that such old age relief is not a- public purpose is to argue that the state has no interest in the material well being of needy citizens who are not paupers. To assure a reasonable degree of cpmfort and security to aged workmen, to so distribute the burden of supporting the superannuated that it will not bear too heavily upon particular families of the working generation and thereby to secure fuller nurture and better education for the young— surely these are legitimate objects of public tax- ation. Old age support is deemed a public purpose in nearly all industrial countries outside the United States and will doubtless be so considered in this country whenever public opinion is ripe for such a step. III. PROPOSED PLANS OF OLD AGE RELIEF A. Voluntary State Insurance. I. The state life fund should be authorized to sell old age insurance to citizens of the state at net cost; the maximum insurance purchaseable by any one person on these terms to be a life annuity of $150 beginning at age 65. Note — "Net cost" means that the premium rate would not include any "loading" for expenses and contingencies. The net cost of .a life pension of $12 per month, beginning at age of sixty-fi\e, is $9 per year at age 20, tl4.81 at age 30 and $26.76 at age 40. II. Old age insurance should be offered on several plans, with and without the life insurance feature, and for weekly and monthly as well as annual premiums. If premiums are paid irregularly, the amount of insurance should be propor- tionately reduced but there should be no lapse or forfeiture of any premiums actually paid. Note — The foregoing provisions are intended to make the system flexible and suited to the needs of wage workers. III. The fund should offer insurance through trades unions, fraternal organizations and employers, using these agencies for - the sale of policies and the collection of premiums. Each individual so insured should receive an Report on Old Age Relief 19 identification card and the payment of premiums should be shown by stamps affixed thereto. Note — This provision is extremely important. It will enable trades unions, fraternal societies and mutual benefit associations to insure their members with the minimum of expense and trouble, and with perfect security. It would also enable employers to provide retirement pensions the right to which would not be forfeited by a change of employment. Contiributory membership in pension funds of this description can, without injustice, be made a condition of em- ployment. If the employe quits the service he has the right to continue bis payments and, even if he fails to do so, he does not forfeit th« premiums al- ready paid. Belgian and French experience shows that ten old age policies can be sold through these collective agencies (including employers) to every one that can be sold directly to individuals. The stamp and card .system is in general use in European countries, as well as among American labor unions, and is a great convenience for the recording of small payments. IV. The fund should act as the fiscal agent for policemen's, firemen's,, and teachers' retirement funds, without, however, assuming any obligation beyond the amount of such funds. Note — The above is intended to provide for the secure investment of such funds and for their administration on sound actuarial principles. V. The administrative expenses of the fund should be borne by the state treasury. Note — Such expense will not be large in amount and is a very small price to pay for the encouragement of voluntary old age insurance. So much has been done by every European government which has established a similar system. B. A Plan for the Support of the Aged Poor. I. Administration. Old age support should be admin- istered by the State Board of Control, which should have power to appoint a Superintendent of Old Age Support and such other employes as might be necessary. Note — The success of any plan such as is here outlined will very largely de- pend upon intelligent and constructive administration. The State Board of Control, which is charged with the supervision of other eleemosynary functions, appears to be the proper agency for this work. Subject to the supervisory powers of the State Board of Control, old age support should be administered in each county by the county judge. The county judge should have power to appoint such number of inspectors of old age support as might from time to time be authorized by the county board of supervisors. Note — The very purpose of the plan — to provide a dignified form of support for deserving old people — requires that its administration should be completely separated from ordinary poor relief. Hence old age support cannot be admin- istered by the county superintendents of the poor. The county judge is the offi- cial best fitted by experience and natural aptitude to be the local' guardian of the aged. In every county containing a city of the first, second or third class the State Board of Control should appoint an old age committee of three members. Such committee should 20 Report on Old Age Relief serve without pay and should act in an advisory capacity to the county judge. jVn/e — ^Such committees could aid in the investigation of claims and would furnish a valuable fund of local knowledge and experience. II. Funds. One half to be furnished by the state, one half by the county. The state treasurer should advance to each county at the beginning of each fiscal year, one half of the amount expended in said county during the . preceding fiscal year, the balance to be adjusted at the close of the current fiscal year. Accounts should be kept in the form pre- scribed by the State Board of Control and audited by said board. The state's quota of old age support should be raised by a special poll tax of $1.50 per annum upon all citizens of the state between the ages of 20 and 60. Note — The need for old age support being a contingency to which all are exposed, it seems fair that the burden should De shared by all. The tax being small would not be particularly burdensome to any. The proportion of pen- sioners to the population between the ages of twenty and sixty would be fairly constant so that the tax would probably not vary much from year to year. The method proposed approximates the character of insurance, without the feature of accumulation. The fund raised each year would, indeed, be devoted to current pensions. But as the present contributors would, in their turn, become pensioners, they are in effect insuring their own old age. The plan thus com- bines many of the advantages of the pension and the compulsory insurance systems. In particular, pensioners who had contributed to the fund would not feel themselves to be recipients of charity. III. Qualifications. An old age pension may be granted to anyone who possesses the following qualificatiohs : 1. Is at least 65 years of age, or is at least 60 years of age and permanently incapacitated from gainful labor. No^p. — The age qualification is sixty in Denmark, sixty-five in Australia and New Zealand, seventy- in Great Britain and seventy in Germany (but with no age qualification in case of permanent disability). 2. Is a citizen of the United States; 3. Has resided in Wisconsin at least ten years and in the county wherein application is made for at least one year; Note — These residence requirements are necessary to prevent the influx of indigent old persons for the purpose of obtaininfi; a pension. 4. Is of good moral character and of temperate and in- dustrious character, which facts are certified to by at least two freeholders in the county wherein application is made; JVoie^— These "character tests" (4, 5, 6 and 7) are to exclude persons who have no just claim to the dignified form of support herein proposed. 5. Has not at any time been convicted of a felony, unless subsequently restored to civil rights; Report on Old Age Relief 21 6. Has not, within ten years next preceding the appUca- tion, been convicted of mendicancy, vagrancy or drunken- ness ; 7. "Has not, within twenty years next preceding the application, without justifiable cause, abandoned or failed to support a wife, husband or dependent child ; 8. Has not, after the act becomes effective, and within ten years next preceding the application, been committed to an almshouse nor received any form of public poor relief to the value of more than $25 in any county, city or town of this state, except medical and hospital treatment or medi- cines and surgical appliances, and except any relief granted in pursuance of Chapters 30 and 63 of the statutes, or of Chapter 669 of the laws of 1913; Note-- — The foregoing is intended to exclude chronic paupers. Medical aid is properly excepted, as are also soldiers* relief, mothers' pensions and pensions to the blind. A similar "thrift test" in Denmark has been found to. work well in reducing pauperism. 9. Does not have property, above debts, to the value of more than $500 exclusive of a homestead, nor of more than $2,000 inclusive of a homestead; but a life insurance policy shall not be deemed property within the meaning of this pro- vision. The property of a husband or wife shall, for the purposes of this provision, be deemed to be joint property and the foregoing limitation shall apply equally whether husband or wife or both husband and wife apply for a pension ; Note — The intent is to permit the retention of a homestead or of a small re- serve in cash or other property. Pensioners would thus be able to live in their own homes and not be wholly dependent upon the pension. Provision, however, should be made for the reversion of such property to the county upon the death of the pensioner, or of the last survivor of a married couple. 10. Has not alienated any property for the purpose of qualifying for a pension; 11. Does not have a clear income of more than $300 per annum if married nor of more than $200 if single, widowed, divorced or abandoned; provided that the income of a husband or wife shall be deemed to be a joint income; 12. Has no child financially able to support the applicant, within the meaning of Section 1502 of the statutes. IV. Amount of Pension. 1. The pension shall be such sum which, when added to the applicant's other means of support, from whatever source derived, will suffice for the 22 Report on Old Age Relief reasonable comfort and well being of the applicant, but no pension shall exceed the sum of .15150 per annum for each pen- sioner, nor shall any pension operate to bring the pensioner's total income above the maximum fixed by section- III, paragraph II hereof. Note — The maximum here proposed is fairly comparable, considering the differences in standards of living, with the old age pensions of foreign countries. (See Chapter V) It is expected that many pepsioners will supplement their pensions by earnings or other income, including home ownership and help from childi;Bn. Such as are both indigent and helpless should receive institutional care. 2. No pensioner shall, during the continuance of the pension, receive any other relief from the state, nor from any county, city or town, except such medical aid as may be provided under regulations prescribed by the State Board of Control and except any relief granted in pursuance of Chapters 30 and 63 of the Statutes, and of Chapter 669 of the Laws of 1913. Note-^Thh provision is intended to prevent duplicate relief and to maintain the distinction between old age support and ordinary poor relief. 3. Pensions shall be paid monthly in such manner as the State Board of Control may prescribe. V. Determination, Revision and Revocation of Pen- sions. 1. Every Application for an old age pension shall be passed upon, in the first instance, by the county judge, who shall make such investigation, through old age inspectors or otherwise, as he shall think proper, and shall certify his findings of facts and recommendations thereon to the State Board of Control. The said board shall thereupon allow or disallow the application and fix the amount of the pension, if allowed. 2. The State Board of Control may increase or decrease a pension upon satisfactory proof of such change in the pensioner's circumstances as will warrant such action; and may revoke a pension upon proof of facts which would disqualify an applicant. 3. The State Board of Control may institute proceedings for the decrease or revocation of a pension upon its own motion and shall institute such proceedings upon petition of the county judge or of any taxpayer resident in the county wherein the pension is payable. VI. Institutional Care of Pensioners. 1. The State Board of Control may, in proper cases, provide for the care Report on Old Age Relief 23 and maintenance of a pensioner in the Wisconsin Veterans' Home or any suitable home for old persons, but no pensioner, unless his pension shall have been revoked for cause, shall be committed to any almshouse. 2. The payments made to any home or institution for the care of a pensioner shall not exceed the pension payable to such person. Note — Old people's homes, for pensioners who are unable to maintain homes of their own or to live with relatives, are an admirable feature of the pension system in Denmark, Australia and New Zealand. The foregoing provision anticipates the time when the full facilities of the Wisconsin Veterans* Home will no longer be required for its primary pupose. It also permits the use of existing private or denominational homes for the aged. Most of these insti- tutions charge a single fee of $500 which is much less than the actuarial value of a pension of $150 per annum at age sixty-five. VII. Status of Pensioners. No civil or political disa- bility shall attach to any person on account of the receipt of an old age pension. But no pensioner shall alienate any property and no property of a pensioner shall pass to any heir, except to a surviving spouse during his or her lifetime, until the whole amount which has been paid as a pension to the deceased shall have been reimbursed to the state and county. VIII. Fraud. Suitable penalties should be provided for any fraud, misrepresentation or concealment, whether by an applicant or by any other person, for the purpose of obtain- ing a pension. Estimate of Cost. On the basis of the commission's investigation, it is not believed that more than 30,000 persons can qualify for an old age pension (See Chapter IV). Assuming an average pension of $10 a month, the aggregate cost would be $3,600,000 per annum, of which $1,800,000 would be borne by the state. The total population of ages 20 to 60 exceeds 1,200,000.* Hence a poll tax of $1.50 per annum on this population would yield the required sum. IV. THE CONDITION OF THE AGED IN WISCONSIN, To ascertain the "number, condition and welfare of the aged and infirm" the commission proceeded as follows: *1, 161, 764 in 1910. 24 Report on Old Age Relief 1. Almshouse superintendents were asked to keep an in- dividual record, on blanks provided by the commission, of all persons oi 60 and over who were cared for during the fiscal year ended June 30, 1914.* Such records were obtained from fifty-one of the fifty-four almshouses in the state, t 2. Similar individual records were obtained of persons 60 years of age and upwards who received relief during the last fiscal year from the county superintendents of the poor and from associated charities.! 3. Returns were obtained from the Wisconsin Veterans' home, the National Home for Volunteers and the several private and denominational homes for the aged. 4. A census was taken of persons 60 years of age and up- wards in a number of precincts selected so as to be fairly representative of the state. These precincts comprised wards in Fond du Lac, Green Bay, Madison and Richland Center, parts of four wards in Milwaukee (dominantly German, Jewish, Polish and Irish-American respectively) and riiral towns in Rock, Manitowoc and Dunn counties. From these four sources a total of 6,294 individual sched- ules was obtained and analyzed. In addition, the commission made use of the records of the State Board of Control and of the United States Pension office for supplementary and cor- roborative information. The results of the investigation are shown in the following tables and explanatory text. Old People in Almshouses. The total number of per- sons of 60 and over cared for in the almshouses of Wisconsin during the past fiscal year was about 1,500** (See Tables I-IV). This number was a little less than one-half of all the persons cared for during the same period, tt Butwhere as nearly one-half of the total almshouse population is transient, { % ♦September 30 in Milwaukee county. tThe records of the Eau Claire almshouse were destroyed by fire. The almshouse superintendents of Rusk and Wood counties failed to return the schedules. The number of inmates sixty years of age and upward in these three almshouses, as shown by returns to the State Board of Control, was 33. tin addition, returns were received from several city superintendents of the poor. No effort was made to obtain reports from towns in those counties which have the town system of p6or relief. **1470 were returned on individual schedules; the three almshouses which failed to make such return reported 33 inmates of 60 and over to the State Board of Con- trol. tt3174 for the fiscal year 1912-1913. The returns to the State Board of Control for the last fiscal year were not completed in time for this report. ttOf 3174 present during the year 1912-1913, only 1767 remained at the end of the year. Report on Old Age Relief 25 most of the old people are permanent residents,* so that two-thirds of all who remained at the end of the year were 60 or over (See Table I). The almshouse is thus primarily a retreat for the aged. The detailed analysis of the aged almshouse population brings out some very marked characteristics. (a) A very large proportion are of advanced age — only 17 per cent are under 65, 40 per cent are 75 and over and nearly 25 per cent are 80 or above. In the population of the state at large, one-third of all persons over 59 fall in the age group 60 to 65 and only one-fourth are above 74. This fact, taken in connection with the great proportion of the entire almshouse population who are 60 and over, indicates a close correlation between destitution and old age. (b) The proportion of women is very small — only 20 per cent as against 47 per cent of the state's population of 60 and over. This showing is the more remarkable because the com- mission's sample census indicates (what is true in other coun- tries) that the number of aged widows and single women exceeds the number of aged widowers and single men (See Table XII). The explanation is that an elderly woman is better able than an old man to maintain a home of her own or to fill a useful niche in the household of a relative (See Table XV). (c) The proportion suffering from chronic ailment is very high. Only one-third are reasonably sound in mind and body and only 14 per cent are able to work regularly while 12 per cent require attendance (See Tables III and IV). Of per- sons of the same age enumerated in the commission's sample census only 3 per cent are helpless while 35 per cent are able to follow gainful occupations. Table IV illustrates the need of segregation in our almshouses. The feeble-minded, the epileptic, the tubercular and the inebriate — all of whom re- require special treatment — ;are housed with those who are merely aged and infirm. A point of special interest is the proportion of those who would be eligible to old age pensions under plan "B" of this report. It appears that about 20 per cent would be dis- qualified by the proposed "character tests" and another 25 *0f 1470 reported, 897 were present throughout the year. The total inmate weeks for these 1470 was 58,104, an average of nearly 40 weeks in the year. 26 Report on Old Age Relief per cent for chronic pauperism. Rather more than one-half would have been saved from the almshouse by a pension system such as is suggested in this report. A fact which will perhaps be surprising to many is that every person removed from almshouses by an old age pension would represent a net financial saving to the state. The average cost of almshouse maintenance, including interest on invested capital, is $3.58 per week, or $186 per year, as against the proposed maximum pension of $150.* Outdoor Relief to the Aged. Neither the public authori- ties nor the associated charities of Wisconsin give much, relief to the aged poor not in almshouses. The cities and counties reporting gave relief to 511, and the local associated charities to 163 such persons during the fiscal year 1913-1914. No reports were received from rural towns in those counties which have the town system of poor relief but such towns represent much less than one-half of the population and a still smaller proportion of the aged poor of the state. The amount of such relief is very small, averaging barely $50 per person for the year. Yet the vast majority of the persons so relieved are destitute. Some 70 per cent were reported as having incomes of their own under $50 per annum and only 10 per cent as owning homes or other property to the value of $500 (See Tables V-X.) Old People's Homes. About 500 persons of 60 and upwards are cared for in private and denominational homes and about 2200 in the National and State Soldier's Homes. About one-ninth of the total number were without other means of support at the time of entrjance. Probably none would be eUgible to old age pensions under the plan sug- gested in this report. Old Age Census. The sample census of persons 60 and over in selected precincts was taken primarily to obtain a basis for estimating the cost of the suggested pension plan. This procedure was necessary because the federal census is not so analyzed by age groups as to give the required data. Incidentally, so far as these returns are representative, they throw considerable light on the condition of the aged and in- firm in this state. ♦Computed from data supplied by the State Board of Control. Deduction was made for the value of products of the poor farms. Report on Old Age Relief 27 It will be seen that substantially one-half of the women enumerated are widowed, divorced, separated or single, whereas nearly 80 per cent of the men are married. The explanation is, partly, that women on the average live longer than men and partly that husbands very generally are older than their wives. The result is that a vast number of aged women are left without homes of their own (See Tables XII and XV.) Of the persons enumerated, 35 per cent, and of those 65 and over, 29 per cent are able to follow gainful occupations. The proportion requiring attendance is 3 per cent and 4 and one- half per cent, respectively (See Table XIII). The most important data, for the present purpose, are those relating to financial circumstances (See Tables XVI- XIX). Of the married couples 65 per cent, and of others 56 per cent, own homes mortgage free; of all home owners G5 per cent have property (including homestead) of more than $2000; of non-home owners 12 per cent have property tc the value of more than $500; of married couples 60 per cent have incomes from labor or property over $300, and of others 40 per cent have incomes over $200 per annum. Altogether 733 out of 1395 enumerated fall within the property qualifica- tions for old age pension, as proposed in Pla:n "B" of this report. But of these 733, 71 couples have incomes over $300 and 134 individuals have incomes above $200 per annum. This leaves 457 out of 1395 qualified for pensions on grounds of property and income — a proportion of approximately one-third. But the distribution of property and income groups is very different as between city and country. Taking the property qualifications as proposed (See paragraph III, 9 and 11), the proportion of enumerated persons qualified for old age pen- sions is 33| per cent in Milwaukee, 40 per cent in the smaller cities, and 19 per cent in the rural towns.* These differ- ences are important because of the distribution of the aged population of the state. The federal census of 1910 gives the total population aged 65 and over as 118,637, of whom *In Milwaukee, 161 out of 509; in the smaller cities 249 out of 619; in the rural towns 47 out of 267. The proportion lor the smaller cities is probably too high though the cities and wards enumerated appear to be fairly representative. 28 Report on Old Age Relief 12,756 lived in Milwaukee, 31,631 in the smaller cities and 74,250 in rural territory. *' So far as the commission's census may be taken as repre- sentative, it indicates that the number aged 65 and over, quaUfied for an old age pension on the ground of property and income is about 31,000: namely, 4,500 in Milwaukee, 13,000 in other cities and 14,000 in rural territory. To this number would be added about 6000 between 60 and 65 qualified on grounds of property, income, and inability to work. Of the total of 37,000 so qualified about 3 per cent would be disqualified for want of ten years' residence and another 2 or 3 per cent by the character and poor relief tests. A much larger number would be barred by the receipt of United States pensions sufficient for their support. How many of the 19,000 military pensioners 60 and over would fall below the proposed property limits is not revealed by the pension office, but it can hardly be doubted that more than one-half of these pensioners are dependent upon their pen- sions for support. A deduction of 10,000 on account of such pensioners appears to be a reasonable estimate. This would indicate a total of 25,000 to 30,000 old age pensioners under the proposed plan. This estimate rests on a somewhat slender statistical basis but is probably not very wide of the truth. ""Estimated number in 1914, 125,000 in the state; Milwaukee 13,000; other cltiu 34,000; in rural territory 78,000. Report on Old Age Relief 29 1 o W ocoooo 1^ iS •1 o (NrtM^M s P J3 S s NCOCO^W Eg §1 n o 5 PQoD OC4 00090 MWOJ Mi-< MO^t-OJ 1-1 rH .-I N CO H(Ni-lT-l^ eq-ur5»ooa s :s ' M -«! K II 3 USOO-^OffO H CO 00 I^ CO »^ H 0. K " ■a a us eoMtNoa^; S «£> —ItHM ■4 < '• »o sssss *5 S' ca 8 5 11' 5 Ci|. 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'-maaoust-. ooco H0^-*IOCO-*«1"C)<0'^ QOCOCXIO us . -1 (D C-1 O OG r— 50 M 00 "-l Tt< «0 OS , _ ^H>-ie^caci3^T>-ooooex)ooo>dao3 p %vso laj CS C4 CO us us CO t^ •r^evS OUSeoOSC^T-tUSOCQ^HMOOOO cousustpcskmi— ^eDootD^DM^-H^aa^oo^~^-oo^-aa iHososaocgi>-s*oo-4'«iot>os«OMr*<»-ioi>-«Nos 'wo e*s ^H (o'nsoocoTfi-iooTHMeousoooNcous (ocT ^OO^HOOuscocxs-vHcooacOcoeceocqAOt^^us COO-^ODnUSU3USCiSC400USC^OacOCQ i-4'00 t*- us ^ CO eo us us us soeoeoeoeoeousus us-"* ^"^^-^MmccMCO saoiBnaj^s JO ;nap laj < S3 cooooous'*»eoMoooccocot--t^ffi)usasi— < c^o^oeus■^we»s^-u^use^3«oooooco«OM=o^- 0>C0US-*0>0>C0«i-f"*-*ua'!(IO ca«0!ua^^.-iM^-t^,uso»osusi- -.__. ,. _ OOi-IOOOUSCOMI>'eOOOUSOaOOCO-HCCC--l>-COt-CO C4cqac«io<:ot^oocviusiausM4«Deoeoi-(t}4usco-^ca i-iOOaeooo^-^l^OOs^ooecJcoeot^oOi-iONusus SeQ«ooousi-tusoc4coususcoousi-4Tfa9oo^Hooa3 M«OC5'^N«T»II>00«0 i-iM COU31-1^^-^-CQO 3-HC«M"#U5eDt*OOaiO'-"N _ _ ._ JOOOOOOOO^'-ItH'^ oooooooocoooooooooa>aicno>a>a:io>Oia»aaa3 0aiA 62 Report on Oi,d Age Relief The gravest defect of the German system is inadequacy. A pension of $40 per year is a very slender provision for an aged couple, even when judged by German working class standards. It is difficult to see how life can be supported on such an allowance unless slipplemented by some income from other /sources. The invalidity and widows' and orphans' pensions, though larger in absolute amount, are relatively still more inadequate since they have to support whole families. Yet the benefits are extremely large when com- pared with the premiums paid by the insured. The Imperial subsidy and the employers' contributions, taken together, are 60 per cent of the total cost of insurance. That, notwith- standing a subsidy of 3 to 2, the insurance remains woefully inadequate only emphasizes the inability of wage workers to insure themselves against the contingencies to which they are exposed. Sources — Annual Report of the U. S. Commissioner of Labor, 1909, Vol. I, pp. 1354-1444: German Workingmen's Insurance Code, Bulletin No. 96 of the U. S. Bureau of Labor; Amtliche Nachtrichten des Reichsversicherugsamts (Report of the Imperial Insurance Office) 1913; Statistisches Jahrbuch fur das Deutsche Reich (Statis- tical Year Book of the German Empire) 1912. France. The French compulsory old age insurance law of 1910 is modelled upon the German system. The act em- braces practically all wage earners. Employers and employes contribute an equal amount, usually 9 francs ($1,71) per year for men, 6 francs ($1.16) for women and 4.5 francs ($.87) for minors. The pension at age 65 is the amount actually earned by the contributions that have been paid to the credit of the pensioner plus the uniform government subsidy of 60 francs ($11.58) per annum. The maximum pension is 360 francs ($69.48). A pension may be drawn at any age not earlier thdn 55, but is subject to a proportionate reduction at any age below 65. In case of death before the pension age a small grant is paid to the survivors ; 50 francs ($9.65) per month for six months if there are three children under 16, for five months" if there are two such children, for four months if there is only one such child and for three months if there is a widow and no child under 16. To be entitled to the government subsidy the pensioner must have paid at least thirty annual contributions. During the "transition period" (that is until 1940), the required term of insurance is reduced proportionately to age for per- sons who were already 35 in 1910. Moreover the amount of Report on Old Age Relief 63 the government subsidy is increased for persons already old, being 100 francs ($19.30) per year for those who were 65 when the act came into force. The compulsory insurance law only became operative in July 1911 and the latest statistics available only extend to the close of 1912. Hence, it is not possible to present figures disclosing the full operation of the act. It is estimated that about 26 per cent of the population, or 10,400,000 persons, will be insured, under the law. On Dec. 31, 1912, there were only 186,092 old age pensions in force under the act of 1910. Of this number, 181,929 fell under the transitory provision granting 100 francs ($19.30) per year from the national treasury. Up to the same date death benefits had been granted to 8005 widows and to 18,453 children under 16. Statistics are not needed, however, to show: (a) That the pensions, whether invalidity or old age, will be still smaller than in Germany, and (b) That the law is wholly inadequate to meet the problem of Orphanage or of aged widowhood. In these respects the French Act is like the German system before the amendments of 1911. Sources — Act of 5 April, 1910, concei*ning Retirement Pensions of Workmen and Peasants. Bulletin of the International Labor Office, Vol. V. 1910. Rapport de la Commission Superieure de la Caisse Nationale des Retraites pour a Viellesse. (Report of the Superior Commission of the National Old Age Retire- ment Fund) 1912. Sweden. The Swedish old age insurance law of 1913 is more comprehensive than that of either Germany or France. The Frenfch and German systems are practically confined to persons gainfully employed. The Swedish law applies to the whole adult population. The most important difference is that the French and German laws do not, while the Swedish law does, apply to married women. Every Swedish man or woman from the seventeenth to the sixty-sixth year, inclusive, pays an annual tax, or premium, of 3 crowns ($.81). For incomes over 500 crowns (|135) a sur-tax is imposed, ranging up to 10 crowns ($2.70) for in- comes over 1200 crowns ($324) per annum. Additional volun- tary payments may be made, pot to exceed 30 crowns ($8.10) per year in all. Members of the military, naval and civil service otherwise provided for, are exempt. 64 Report on Old Age Relief An old age pension is payable, without respect to inca- pacity, from the sixty-seventh year. An invalidity pension is payable at any age in case of permanent disability. The annual amount of the pension is 30 per cent for men and 24 per cent for women of the whole amount that has been paid in in by the beneficiary. In addition, the government grants a subsidy of 150 crowns (140.50) per annum for men and 140 crowns ($37.50) for women whose whole annual income does not exceed 50 crowns ($13.50). This subsidy is reduced by one-half of the pensioner's income over 50 crowns ($13.50) and ceases altogether when the income reaches 300 crowns ($81) for a man or 280 crowns ($75.60) for a woman. It will be seen that for the lower wage classes the govern- ment subsidy will be the chief component of the pension. A man who pays 3 crowns ($.81) per annum from his seven- teenth to his sixty-sixth year, will have paid a total of 150 crowns ($40.50). His insurance annuity will then amount to 45 crowns ($12.15) and his government subsidy to 150 crowns ($40.50), or more than three fourths of his entire pension ($52.65). Moreover, for a generation to come, the govern- ment subsidy will be nearly the sole constituent of all pen- sions. At least thirty years must elapse before the insurance annuity will amount to anything substantial. Sources — Svensk Fartfattningssamling, n. r. 120, Lag om allman pension for sakring (Old Umlants Age Penision Law) June 30, 1913. Austro-Hungary. The Austro-Hungarian compulsory old age insurance law of 1906 is restricted to salaried em- ployes. It is not, therefore, a general provision for old age and need not be considered in this report. NON-CONTRIBUTORY PENSIONS The non-contributory plan of old age pensions has been adopted by Great Britain, Australia, New Zealand and Denmark. This form of old age relief is justified by the principle that whoever has honorably served in the ranks of industry has thereby earned an honorable support in the years of superannuation. Accordingly all these laws set up more or less strict "character" tests to demark the "deserving" from the "non-deserving" aged poor. At the same time the relief is confined, by means of property and income Hmits, to persons in actual need. Report on Old Age Relief 65 Great Britain. The British old age pension act was passed in 1908 and revised in 1911. The law was the out- come of twenty-five years' agitation during which five parhamentary commissions had investigated the subject and many different plans had been proposed. The non-con- tributory plan was adopted because that was the plan favored by the labor party and because there was urgent need of immediate relief. About one-fifth of the whole population of the United Kingdom above the seventieth year, were outright paupers when the act was passed. A pure insurance scheme could be of no avail to those who were already aged; their day for paying contributions was past. The required age for a pension is 70 years with proof of twenty years' citizenship and twelve years' residence in the United Kingdom. The income limit beyond which no pension is payable is £31 10s. ($153). The "character" disqualifications are: (1) Habitual refusal to work according to ability, op- portunity and need; (2) Imprisonment for crime, without the option of a fine; such imprisonment for six weeks disqualifies for two years after release, imprisonment for a longer period disqualifies for ten years; (3) Conviction under the inebriates act, which disquali- fies for six months unless otherwise directed- by the judge. More important in actual effect than any of the foregoing is the disqualification for the receipt of poor relief, except medical aid, after the granting of a pension. This may be termed a "thrift" test since it assumes that a pensioner should have some means of his own to supplement his pension. Under the original act poor relief to any dependent of a pensioner was a disqualification but the amendment of 1911 restricts the prohibition to the pensioner himself. Lastly, no pension is payable during confinement in an asylum for the insane. A pension may be revoked for any cause which would disqualify a new applicant. The size of the pension varies with the pensioner's income, being 5s. ($1.25) per week for incomes of not more than £21 ($102.27) and graduated in such a way that the total 66 Report on Old Age Relief income (including the pension) shall not exceed £34 ($165.58). In computing the income, any property is reckoned at 5 per cent per annum of its net capital value, irrespective of the actual income therefrom. In the case of a married couple, the income of each is taken to be one-half of the total income of both. The immense majority of pensions (about 94 per cent in 1912) are for the full amount of 5s. ($1.25) per week.. The normal pension (about $65 a year) is low when judged by an American standard. Still it is notably higher than the average German old age or invalidity pension ($40 to $45). Moreover an old couple in Great Britain receive two pen- sions, whereas in Germany they receive but a single pension. Thus the total annuity of a married couple is three times as large in Great Britain as in Germany. At the close of the fiscal year 1913 (the last for which sta- tistics are available) the number of pensioners was 967,921. The number was from the outset much greater than had been anticipated. The advance estimate of the government indi- cated a pension roll of 395,931 for the year 1911. The number of pensions actually in force March 31 each year was : 1909 647,494 1910 699,352 1911 907,461 1912 942,160 The actual enrollment in the first three months exceeded the estimates for the second year by 250,000. This great discrepancy between the estimate and the realization shows that the pension system brought to light a vast mass of un- suspected poverty among the aged. It was expected that only one-third of the population of 70 and upward could qualify for a pension. In point of fact 624 out of each 1,000 pensionable age in England and Wales were on the pension rolls at the close of the fiscal year 1912. This means that only two out of five old people had earnings or savings to the pitiful amount of $150 per annum. The situation in Ireland is even worse, for 727 out of every 1000 persons of 70 and" over in the Emerald Isle are pensioners. For the United Kingdom as a whole the proportion is 637 per 1000. The great increase (over 200,000) in the pension roll be- tween 1910 and 1911 was due to the removal of an important disqualification. As the act first stood, the receipt of poor Report on Old Age Relief 67 relief at any time after Jan. 1, 1908, was a bar to the granting of a pension. The removal of this disqualification at the close of 1910 added 160,000 names to the pension roll. In other words, 160,000 persons who were 68 or over in 1908, came upon the poor rates before reaching the seventieth year. This is striking evidence that the pension age is altogether too high. The cost of pensions has increased along with the numbei of pensioners. The approximate amount of pensions paid was: $10,275,000 in one quarter of 1909 $42,612,000 in 1910 $48,310,000 in 1911 $60,460,000 in 1912 The present "character" and "thrift" tests are less severe than under the original act. Still, 13,213 persons were dis- qualified under these tests during 1912. Of this number, 10,092 were disqualified for receipt of poor rehef after the granting of a pension. In some cases pensioners deliberately preferred the workhouse to such subsistence as they could obtain on $1.25 per week. In other cases, there was a fraudulent attempt to combine the pension with poor relief. About 800 were disqualified for imprisonment and about twice as many for habitual idleness. Altogether, the "character" and "thrift" tests disqualify about one in thirty applicaMs, One of the arguments relied on by the advocates of old age pension was that the cost would, to a large extent, be offset by the reduction in poor relief. This expectation has partially been realized. The number of workhouse (alms- house) inmates 70 and over in England and Wales fell from 61,378 in 1906 to 49,207 Jan. 1, 1913— a decrease of 19.8 per cent. But workhduse inmates are, for the most part, physically or mentally unfit to maintain an independent life, even with the aid of a pension. A better test is afforded by the number of persons of seventy years and upwards who re- ceived "out-rehef." This number fell from 168,096 in 1906 to 8,563 January 1, 1913 — a decline of 95 per cent. Inas- much as the per capita cost of poor rehef is stated at $137.80 per year for "indoor" and $35.56 for "outdoor" paupers, the foregoing figures would indicate a total saving of $8,899,000 in poor relief for 1912. The amount of old age pensions for 68 Report on Old Age Relief England and Wales in 1912 was $38,700,000. This would indicate that the old age pension system added some $29,000,000 to the budget of England and Wales. In fine, it may be said that old age pensions cost at least four times as much as poor relief fof the aged. But the maximum pension (about $65 per annum) is less than half as much as the cost of maintaining a workhouse inmate and less than twice as much as the cost of giving "out- relief" to the same individual. The great increase in the cost of old age pensions, over poor relief, is in the number of per- sons relieved. The pension roll of England and Wales on March 31, 1912, comprised 642,524 names. Of this number about 200,000 would probably have been workhouse inmates or outdoor paupers had there been no old age pension law. The remaining 440,000 would have "scraped along" some- how without coming on the rates. Some would have been supported by their children or by private charity, some would have worked beyond their strength, and many would nevertheless have suffered from want. The old age pension system, therefore, in part replaces poor relief, in part sup- plants private charity, and in part supplements incomes too small for decent maintenance. The old age pension act is administered by th^ Local Gov- ernment board under which are local pension committees for boroughs and urban districts and paid district pension offi- cers. The cost of administration for 1912 was about 4 per cent of the amount of pensions. So far as can be judged from the published reports, the administration is deficient in in- telligence and in central control. The published reports in particular are very defective. The data for a single year's operations are scattered through many different blue books and are nowhere brought together nor intelligently analyzed. Sources — 7 Edward VH, c. 40; 1 & 2 George 5, c. 16; Annual Reports of Local Government Boards (England and Wales, Scotland and Ireland) ; Report on Old Age Pensioners and Aged Paupers (England and Wales) (Cd. 7015); Fourth Report of Commis- sioner of Customs and Excise — 1913 (Cd. 6993) ; and British Statistical Abstracts. New Zealand. The New Zealand old age pension system was established in 1898, being the earliest of its kind in an English speaking jurisdiction. The qualifications are as follows : (1) Age, 65 years; (2) Race, not native nor oriental; Report on Old Age Relief 69 (3) Citizenship, 5 years; (4) Residence, 25 years in New Zealand ; (5) Property, not more than £260 ($1300) or income not more than £60 ($291.60) per year; (6) Character, appHcant must show that he (or she) (a) has led a sober and reputable hfe for at least one year next preceding application, (b) has not been imprisoned for as much as four months within five years or for as much as five years with- in twenty-five years, and (c) has not deserted his (or her) family within twelve years. As in Great Britain, the "character tests" are of little real importance. Of 2,499 applicants during 1913, 598 were re- jected. But most of these rejections were for want of age or residence or for excess of property or income. Barely 2 per cent of the applications were rejected for crime, family de- sertion or bad character. It is to be noted, however, that 263 pensions, out of 16,000 in force, were revoked during 1913 for crime or habitual drunkenness. The amount of the pension is £26 ($127) per annum, di- minished by £1 ($4.87) for every £1 of income over £34 ($166) and for every £10 ($48.67) of net property above £50 ($244). In the case of a married couple, each is reckoned to have one half of the total income or property of both. Life insurance is not counted as property and income from prop- erty is disregarded (being offset by the property limit). A pensioner may retain a homestead to the value of £650 ($3165), same to revert to the colony at the death of the pensioner. A pension may be granted to a necessitous man of 60; or woman of 55, who is the parent of two or more children. Such parent's pension is the same in amount as an old age pension but may be increased by not more than £13 ($63) per year if the circumstances of the case require. Pensioners who require institutional care, or who are un- able to maintain homes for themselves, may be maintained in suitable homes or hospitals. The cost of maintenance in such cases is deducted from the pension. On March 31, 1913, 821 old age pensioners were living in such homes. 70 Report on Old Age Relief The number of old age pensioners at the close of the fiscal year 1913 was 16,509. This was 36 per cent of the whole pop- ulation qualified by age and residence for receipt of a pension. The great majority (14,017) were receiving the "normal" pension of $127. Only 32 were receiving parents' pensions above the normal amount. The total amount of pensions paid during the fiscal year 1913 was $2,000,000. The New Zealand old age pension law is administered by a Commissioner of Pensions and by district Registrars, most of whom are court clerks. Pensions are paid monthly, in advance, through the post office. Sources — 62 Victoria, No. 14; 64 Victoria, No. 28; 8 Edward VII, No. 245; 1 George V, No. 45; Annual Report of the Pensions Department, 1913; New Zealand Year Book, 1913. Australia. The Australian invalid and old age pension law became operative July 1, 1909. Prior thereto the separate states of New South Wales, Victoria and Queensland had established pension systems of their own so that the Com- monwealth Fund inherited some 40,000 pensioners. The Australian law is very similar to that of New Zealand. The pension age is fixed at 65 for men and at 60 for women. The residence, race, citizenship and character qualifications are similar to those of New Zealand. The property limit is £310 ($1,510). An invalidity pension is payable to any person above the age of 16 who is permanently incapacitated for work pro- vided : (1) he (or she) has resided in Australia for five years; (2) is not receiving an old age pension; (3) has no claim upon an erriployer for accident compen- sation ; (4) has become permanently incapacitated whilst in Australia ; (5) did not purposely produce the incapacity, and (6) does not have property or income in excess of the old age pension limits. The annual pension is such as the Commissioner (or Dep- uty Commissioner) of Pensions in each case "deems reason- able and sufficient," but must not exceed £26 ($127) per an- num nor be such as to bring the pensioner's total income above £52 ($253). The "normal" pension of £26 ($127) is Report on Old Age Relief 71 subject to a deduction of £l ($4.87) for every £10 ($48.67) of net property above £50 ($244) exclusive of a homestead or above £100 ($487) inclusive of a homestead. The number of pensioners on Nov. 28, 1913, was 86,000, or 33 per cent of the total population possessing the requisite age qualification. The percentage of pensioners to persons having the requisite age and residence qualifications is not stated. The proportion to persons of the same age is slightly larger for men than for women (33.22 : 32.71), doubtless owing to the higher age requirement (65 as against 60 years). It is worth noting that the number of old age pensioners has increased out of all proportion to the increase of popula- tion, the percentage of increase from 1910 to 1913 being 26.65 for pensioners and 9.95 for population. This is due in part to the increased proportion of old people, for Australia has an excess of young and middle-aged inhabitants. Another prin- cipal cause of increase was the lowering of the age require- ment for women from 65 to 60 years at the close of 1910. There remains some small increase attributable to greater familiarity with the act and the diminution of the feeling that an old age pension implies pauperism. To the old age pensioners are to be added 14,647 invalid- ity pensioners. Of this number about one-half are 50 or over, so that in Australia, as in Germany, the invalidity pension is in large measure an old age pension. The total amount of the 90,000 old age and invalidity pen- sions in the fiscal year 1912 was $10,460,000. This would give an average pension of about $116. If the same average held good for 1913, the aggregate pensions would have been $11,- 600,000. Of this amount about 85 per cent, or $9,800,000, represented old age pensions. Unfortunately the available reports do not admit of a more accurate statement. The Australian act is administered by a Commissioner of Pensions with a Deputy in each state and local Registrars, much after the manner of New Zealand. The cost of admin- istration in the fiscal year 1912 was $200,000 or about 2 per cent of the pensions paid. Sources — Invalidity and Old Age Pensions Act 1908, No. 17, and 1909, No. 3 and 21; Old Age and Invalid Pension Report to the Commonwealth of Australia, 1913. 72 Report on Oi.d Age Relief Denmark. The oldest of the non-contributory pension systems is that of Denmark, which dates from 1891. The pension age is the lowest fixed by any country — 60 years. The income and property qualifications are rather vague: namely : inability to provide self and dependents with neces- sary subsistence. The required residence is only ten years. The "character" and "thrift" tests, on the other hand, are unusually rigorous. No one can receive a pension who has ever been convicted of crime, unless subsequently restored to civil rights, nor who has received any poor, relief, except medi- cal aid, for self or dependents, during the five years next pre- ceding the application for a pension, nor who has caused his own poverty by extravagance or disorderly habits. The amount of the pension is not governed by fixed rules as in Australia, New Zealand and Great Britain, but varies with individual circumstances. It iriuSt be such as, added to the pensioner's other means, will suffice for support. In com- puting the pensioner's means no account is taken of any in- come, dwelling and the like up to a yearly value of 100 kroner (126.80). In contrast with Great Britain, New Zealand and Australia, where man and wife receive separate pensions, the family in Denmark is treated as a unit. The pension to the head of the family is in respect of self and dependents. The average pension in 1911 was $39.82 — about the same as in Germany. The average has risen steadily. It was $17.29 in 1892, $24.82 in 1901 and $33.63 in 1908. The explanation is doubtless to be found in the increasing cost of the necessi- ties of life. As already explained, there is much variation in the indi- vidual amounts of pensions. Apart from other differences, the pensions are higher for heads of families than for individ- uals and are higher in Copenhagen than elsewhere. These dif- ferences are obviously dependent on the cost of subsistence. For Copenhagen alone 75 per cent, and for the entire country only 43 per cent of the pensions to heads of families were 200 kroner ($54) or more, whereas only 9 per cent and 18 per cent, respectively, were 100 kroner ($27) or less. Of single men only 35 per cent, and. of single women only 30 per cent, in the country as a whole, received as much as 200 kroner ($54). The whole number of beneficiaries in 1911 was 79,289. Of this number 17,008, or 22 per cent, were heads of families; Report on Old Age Relief 73 20,018, or 25 per cent, were dependents of these heads (mostly wives); 9,219, or 13 per cent, were single men; and 33,044, or 40 per cent, were single women. As in other coun- tries the number of pensioners has increased faster than the population: it was 34,732 in 1892, 60,484 in 1901 and 71,185 in 1908. The proportion of pensioners to population of pen- sionable age was 16 per cent in 1892, 25 per cent in 1901 and 29 per cent in 1 9 1 1 . (See Table XXV) . A part of this increase is due to the removal of disqualifications by successive amend- ments to the original act and part to the educative effects of the act itself. In particular, it is said, great efforts are made to avoid applying for poor relief between the fifty- fifth and the sixtieth year, so as to be ehgible for a pension. What with the growing number and increasing size of pen- sions the aggregate cost has quadrupled since the inaugura- tion of the system. It was under $700,000 in 1892, over $1,- 500,000 in 1901 and over $3,150,000 in 1911. (See Table XXV). The cost is equally divided between the national government and the communes. As in New Zealand, pensioners who are unable to care for themselves are placed in special homes. Some of these homes are groups of detached cottages, others are single large build- ings. The inmates are allowed a large share of liberty and much pains is taken to make them comfortable. Old age pensions are administered primarily by the munici- pal and communal authorities, under whom serve paid and well-trained Inspectors. The Minister of the Interior has supervision and to him lie appeals from the local authorities. The chief criticism of this administration is the power vested in the -local governments to fix the amount of pensions. In the rural communes, especially, the amount of support is kept unduly low from motives of economy. Sources — Annual Report of the U. S. Commissioner of Labor, 1909, Vol. I., pp. 623-649; Statistisk Aarbog, (Statistical Yearbook) 1912. 74 Report on Old Age Relief TABLE XXV. DANISH OLD AGE PENSIONS Pensioners Pei- 1,000 Number of Population of Pension ' Amount of Average Year Pensioners Pensions Pension Age 1911 79,289 289 $3,157,906 $39.82 1910 76,933 2,816,360 35.4^ 190' 74,017 2,63^527 35.43 1908 71,185 2,377,511 33.63 1907 70,445 2,291,991 32.53 1906 68,831 2,043,573 29.68 1905 66,878 1,915,106 28.63 1904 64,737 2,203,465 33.05 1903 62,806 1,637,122 26.06 1901 60,484 251 1,501,212 24.82 1898 56,442 1,229,452 21.78 1895 48,409 971,213 20.06 , 1892 34,732 160 690,649 17.29 CONCLUSION The foregoing survey shows that there is a very large non- contributory element in every effective system of old age relief. (1) The voluntary insurance plans have succeeded pretty nearly in proportion as they have been subsidized by the government. In Belgium, where voluntary insur- ance has had its largest success, some 40 per cent of the benefits paid in 1912 were provided by taxation. Where less liberal subsidies are paid, as in France and Italy, few workmen are attracted to the fund without compulsion. (2) Even under compulsory insurance it is found im- possible to raise more than a fraction of the necessary funds from the beneficiaries themselves. (a) From twenty to thirty years are required to accumulate a fund from such premiums as wage workers are able to pay. Meanwhile those who are already old must be supported, if at all, out of the public treasury. Pensions under the French law of 1910 now consist almost wholly of the government subsidy. The like was true in Germany for some twenty years and will be true in Sweden for a generation to come. Report on Old Age Relief 75 (b) Even when the system has become fully opera- tive the beneficiaries provide only 40 per cent of the funds in Germany and will furnish a still smaller proportion in France and Sweden. In the last year (1912) for which statistics are available some 2,900,000 persons throughout the world were receiving old age benefits. Of thisnumbermpre than 1,300,000 were being paid non-contributory pensions and about 400,000 more were receiving pensions in which government subsidies constituted by far the greater part. Of the total sum (about $130,000,000) disbursed in old age benefits during the same year, the beneficiaries contributed not more than 30 per cent. It appears, therefore, that the value, of the contribu- tory principle is more sentimental than practical. The world's experience shows, secondly, that no system, whether insurance or outright pensions, can meet the prob- lem of old age without taking account of unmarried, widowed and divorced women. Women constitute 62 per cent of all pensioners in Great Britain, 56 per cent in New Zealand and Australia, and 66 per cent in Denmark. Single women in Denmark outnumber the single men in proportion of three to one. If, therefore, insurance is confined to persons gainfully employed, the benefits must be extended at least to the widows of the insured. The third lesson is that the pension age should not be higher, at most, than 65. .German experience shows that about one-half of the working population is in need of support at the age of 65. In Denmark the proportion of pensioners to the population of the same age rises from a little over 10 per cent between 60 and 65 to more than 25 per cent between 65 and 70. In Australia, the number of invalidity pensioners between 50 and 65 years of age is 10% of the number of old age pensioners, 65 and over. Judged by American standards, the old age support pro- vided by most foreign countries is inadequate. The only jurisdictions which approach an American standard in this respect are Australia and New Zealaitd, which give pensions of $127 per annum. Of all legislafion having any claim to 76 Report on Old Age Relief serious consideration, that of Australia is the most liberal and that of Belgium the most niggardly. Few of the European pensions, however, amount to so much as $1 per week. It is to be remembered, on the other hand, that the standard of living is lower, and the cost of many necessities less, in Europe than in America. For the purposes of a workingman's pension a mark in Germany or a crown in Scandinavia may! be nearly equivalent to a dollar in the United States. Making! due allowance for the difference of standards, a pension of $150 a year in Wisconsin would be scarcely more liberal than' 5 shillings per week in Great Britain or 200 kroner per annum, in Denmark. Cornell University Library HD7106.U6W6 Report on old age relief ■■3 ■■T924 002 405 268 ED Wisconsin. Industrial 7106 ComTniafllon U6 -M6 Heport on old age relief Date Due ■■■■fiHHBf L'> ; ^ Cornell University Library HD 7106.U6W6 Report on old age relief 11 1 lllliiiill llllllllllllllllllllll lllllllllllllllll 3 1924 002 405 268