September 12, 2014

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How Social Security Was Born: Part I

We recently posted some important tips for how to keep your Social Security number safe. It got me thinking: what was the original meaning behind social security numbers? how and why were these cards created in the first place? I had a ton of questions, but thanks to the historians at the Social Security Administration (SSA) I found lots of answers, and over the next week, I’m going to share some of my favorites with you.

Today, I’m going to share some of the planning and strategy that went into creating the Social Security programs. Be sure to check back in a few days to learn more about the security measures the Administration has implemented in the last eight decades.

When & Why Were Social Security Numbers Invented?

When the first Social Security cards were issued in 1936, they were designed to do one thing: track the earnings of American workers in order to determine Social Security benefit levels.  In a speech announcing the program, President Roosevelt explained:

“This Social Security measure gives at least some protection to 50 million of our citizens who will reap direct benefits through unemployment compensation, through old age pensions, and for increased services for the protection of children and the prevention of ill health.”

The First Card Designs

Early recommendations included one design that would have required 250 tons of metal to produce just enough cards for the first round of registration.  Not surprisingly, the Social Security Board chose paper instead. Frederick E. Happel, an artist from Albany, NY, was paid $60.50 for his design and the Board placed an order for 26 million pieces.  From 1936 to 2008 over 50 Social Security card designs have been used.  Each version remains valid today, because replacing all those old cards would cost a fortune.

Why 9 Numbers?

Government agencies considered many options for the identifications that would be printed on the card, including a combination of numbers and letters. In the end, numbers alone were chosen because only two companies in the country manufactured tabulating machines capable of reading both numbers and letters.

The numbering scheme breaks down like this:

  • The 1st 3 digits = the area number. Until 1972, these numbers represented the state in which your card was issued.  Today, area numbers are assigned based on the zip code stated on your application.
  • The 2nd 2 digits = the group number:  These were determined by a procedure of issuing SSNs in groups of 10,000 to local post offices.
  • The last 4 digits = the serial number: These represent a straight numerical series of numbers from 0001–9999 within each group.

Here’s another fun fact: no social security numbers with an area number beginning with 000, 800, 900, or 666 have ever been issued.

So, there you have it! The Social Security number that allows you to open a bank account, buy a house, and work legally in the United States was originally only intended to track your earnings over a lifetime. The value of it has changed in the last 80 years – as you know, exposing this information to thieves would make you vulnerable to identity theft.

Be sure to check in next week for Part II in this series, where we will review the safety measures that have been applied to the Social Security system over the last century. In the meantime, find out if you are doing everything you can to protect yourself from identity theft by taking this short quiz.

David Rabinovitz

Identity Protection Consultant at IdentityForce
David is aligned closely with c-level principals and provides them with coaching services focused on strategy, finance, ownership, deal structuring, and shareholder relationships, which led him to join one of his high-growth clients as their CFO. As a high-energy executive with a wealth of experience, David is a versatile corporate “fireman” who skills are often sought after to assess and resolve complex business challenges, as he brings critical insight for business leaders in transition.He is also a long-standing Special Crew Volunteer for Pan-Mass Challenge, an annual cycling fundraiser that strives to provide Dana-Farber's doctors and researchers the necessary resources to discover cures for all types of cancer.

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