194 ChaPter^4
But the centerpiece of this second New Deal consisted of 3 new laws: the
Social Security Act, the creation of the Works Progress Administration, and
the Wagner Act for labor. With these new programs, Roosevelt got the gov-
ernment more involved than ever in the economy, ran up more peacetime
debts than before, and made the state responsible for employment and con-
sumption to a greater degree. The problem of the depression, FDR finally
acknowledged, was a problem of consumption, so he had to find ways to get
money into working people’s hands so they could buy the necessities of life.
One of the first measures, and probably the most successful, became law
on August 15th, 1935. For the first time, all working Americans would be
guaranteed a government-backed pension [similar to Townsend’s plan] known
as Social Security, when they retired or if they became disabled, they or their
survivors would receive benefits if they died in industrial accidents or before
they themselves could receive their own benefits, which amounted to about
$20 a month initially. The Act also included Unemployment Compensation [or
Unemployment Insurance] to provide pay to workers a percentage of their
wages for a limited amount of time when they were laid off due to the eco-
nomic crisis. The Act was financed through a double tax—both employersFIGuRE 4-10 Social Security poster featuring an old man