- For All These Rights: Business, Labor and the Shaping of America's Public-Private Welfare State
The United States, with its system of private employer-sponsored health and retirement benefits, is an anomaly among industrialized nations. Jennifer Klein provides a valuable historical account of the rise of what she terms a "public-private" welfare system in America—a system in which working adults receive benefits through their employer and public health and welfare is for children, the elderly, the disabled, and the poor. Now, as the Bush Administration looks to privatize Social Security and cut back Medicaid coverage, and as more and more private firms seek to end their pension obligations and job-based health coverage continues to decline, the book could not be more timely and relevant.
Klein traces the development of the health and retirement security systems in America from 1910 through the 1950s. Placing this history squarely in the context of industrial relations, Klein tells the story of a dynamic contest between labor and management over social welfare that shaped our current system of welfare capitalism. She extensively documents the competing proposals and actions of labor, social reformers, business organizations, and insurance companies around a range of social benefits.
Klein starts with the growth of group life insurance, disability insurance, and pensions in the 1910s and 1920s. Social reformers looked to England for models of public disability and pension programs. The AFL saw both employer and government programs as paternalistic, and supported greater employer liability for accidents, which would allow workers to sue in court. Insurance companies promoted their new private insurance products as an alternative way to improve industrial relations. The resulting group insurance products, with company ratings, became the blueprint for much that would follow.
The depression and the New Deal placed the issue of security front and center. Following the passage of Social Security, insurance companies discovered that rather than cutting them out of the market, Social Security legitimized the notion of security benefits, and created a new market for supplemental benefits, which remained in the private sector. The role of the government was seen as providing for basic security, the private market would cover the rest.
Klein is at her best writing about the contest over health security. The standard story about the development of employer sponsored health insurance treats it as a historical accident: during World War II with wage controls in place, unions fought for and won health benefits from employers as an [End Page 92] alternative to wage increases. According to Klein, the National War Labor Board actually ruled against unions that requested new benefit plans in the majority of cases.
In Klein's account, America's system of employer-sponsored benefits was developed by business to ward off unions and social reformers. This is a battle that business leaders viewed as a victory over demands for both a broader welfare state and union control over benefits. Throughout the 1930s and 40s organized labor opposed employer-controlled health insurance. On a political level, organized labor supported a national health care system. At the same time, unions experimented with a wide range of alternative health care delivery systems, including union-run health clinics; pre-payment plans with group practices; union-owned insurance companies; and later, union-controlled health and welfare trusts.
Employers favored health indemnity plans with experience rating that linked coverage to the job. Unions supported direct service plans, designed to pool risk across the community and to de-link health security from employment. This was not simply a fight over methods of health coverage, but over the balance of power between labor and capital and between notions of individual vs. collective security. For employers, security was something given by the employer to workers. For labor and social reformers, security was a matter of rights, shared responsibility, and social solidarity.
Klein ends with an impassioned critique of the system of public security, and a call to reclaim dissent from market ideology. Her historical account has important lessons...