IBM’s collaboration with the US Social Security Administration was a big win for the company, but it was also instrumental in helping the US government accomplish what was then called “the biggest accounting operation of all time.”
By the numbers
As of August 12, 2010, the Social Security Administration has issued more than 420 million Social Security numbers.
At the end of 1937, IBM revenues had increased by 48 percent over 1935 levels; by 1939, revenues were up 81 percent over 1935 levels.
IBM’s US workforce grew from 6268 in 1935 to more than 10,000 in 1941.
In late 1936, IBM estimated Social Security requirements had created an additional 20,000 prospects for equipment that would help employers track and create records mandated by the new law.
The start of Social Security payroll reporting in January 1937 required the issuance of Social Security numbers to 26 million American workers and the assignment of 3.5 million Employer Identification Numbers.
By 1960, there were 5000 computers in the United States, most of them made by IBM, whose annual revenues had ballooned to US$1.6 billion.
In 1935, IBM’s annual revenues increased from US$19 million to US$21 million; in the next year, revenues grew to US$25 million; and by 1937 they had grown to US$31 million. For the next 45 years, this growth continued unabated.
The total cost of Social Security investigations, research, planning and proposals to get the writing of the law underway was US$125,000.
The IBM 077 Collator was created expressly for the new Social Security program, and subsequent improvements over the next 15 years, such as the IBM 604 Electronic Calculator, cut the cost of handling data at Social Security by 50 percent.
The Social Security Administration occupied Baltimore’s Candler Building for 24 years. The old soft drink bottling plant was one of few structures capable of supporting the massive weight from the number of IBM machines required for the job.