It is estimated that one on eighteen of American wage-workers attains the age of sixty-five with no financial provision for old age, and that about 1,250,000 persons above the age of sixty-five are dependent on their families or on charity, public or private, receiving $250,000,000 yearly.

The losses and suffering to dependents due to the death of the bread-winner are very partially accounted for by accidents, but no estimate of much value can now be made of the other cases.  Some notion of the losses from unemployment has been given in discussing that subject in the preceding chapter.

Sec. 3. #The new era of social insurance.# Some not insignificant attempts to deal with these problems were made throughout the nineteenth century, but the new era of social insurance may be said to date from the message of the Emperor William to the German Reichstag in 1881, in which he said: 

We consider it our imperial duty to impress upon the Reichstag the necessity of furthering the welfare of the working people....  In order to realize these views, a bill for the insurance of workmen against industrial accidents will first of all be laid before you; after which a supplementary measure will be submitted, providing for a general organization of industrial sick-relief insurance.  Likewise, those who are disabled in consequence of old age, or invalidity, possess a well-founded claim to more relief on the part of the state than they have hitherto enjoyed.

The program here outlined was carried out by the enactment between 1883 and 1889 of a series of laws, which taken together constituted a pretty effective system of social insurance for the mass of wage-workers in the German Empire.  Later amendments have extended and improved the various features of the plan, which has served as a stimulative example to other countries.  America has been the tardiest among all the industrial nations to undertake this kind of social reform.

Sec. 4. #Features of social insurance.# The plans of social insurance, in force in various countries, present a great variety of features combined in many ways.  The main characteristics in which they may differ relate to (1) the element of compulsion, (2) contributions by the insured, (3) the nature of the insurance organization.

Insurance may be voluntary or compulsory.  It is voluntary when the state simply encourages the formation of insurance agencies, and perhaps contributes something to them, leaving it to the individuals to insure themselves as they choose, in mutual societies, or in privately managed companies.  In the case of accident insurance, however, there is often a semi-compulsion by which the employer is requires to pay indemnity to his workers, according to fixed scales of compensation, but is left free to insure himself against this risk or not as he pleases, in which case it is still called voluntary insurance.  Compulsory insurance is that which the state requires to be provided be means of some mutual organization of the insured, or of the employers, or by the state.