The Origins of Employer-Provided Insurance

November 19, 2008 at 9:34 pm | Posted in Rants | Leave a comment

Malcolm Gladwell’s New Yorker article is an interesting look back at how employer-provided benefits like health insurance and retirement pensions started. Most people believe that unions demanded such benefits from the company; in reality, it was the companies themselves that pushed these benefits on their workers.

What employers in the 1940’s feared was not employee benefits per se, but rather the portability of those benefits at a time of low unemployment and rising wages. Unions at the time wanted portable insurance plans so that the risk can be spread out over as large a group as possible. Sixty years later, these company-provided benefits are part of the reason why the industrial economy of the Midwest declined and why the American auto industry is on the verge of collapse. Meanwhile, European countries rebuilding from the war took another path – the government provided benefits to help reduce the burden on companies trying to rebuild themselves. In retrospect, it looks like they made a better decision, at least in terms of preserving social stability.

Leave a Comment »

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Create a free website or blog at WordPress.com.
Entries and comments feeds.

%d bloggers like this: