Welfare capitalism
[4] One of the first attempts at offering philanthropic welfare to workers was made at the New Lanark mills in Scotland by the social reformer Robert Owen.
[5] Owen opened a store where the people could buy goods of sound quality at little more than wholesale cost, and he placed the sale of alcohol under strict supervision.
They were astonished to find a clean, healthy industrial environment with a content, vibrant workforce and a prosperous, viable business venture all rolled into one.
These programs did not address the problems of long work hours, unsafe conditions, and employment insecurity that plagued industrial workers during that period, however.
[8] The Cadbury family of philanthropists and business entrepreneurs set up the model village at Bournville, England in 1879 for their chocolate making factory.
The Cadburys were also concerned with the health and fitness of their workforce, incorporating park and recreation areas into the Bournville village plans and encouraging swimming, walking and indeed all forms of outdoor sports.
The garden village had allotments and public buildings including the Lady Lever Art Gallery, a cottage hospital, schools, a concert hall, open air swimming pool, church, and a temperance hotel.
Lever introduced welfare schemes, and provided for the education and entertainment of his workforce, encouraging recreation and organisations which promoted art, literature, science or music.
Lever's aims were "to socialise and Christianise business relations and get back to that close family brotherhood that existed in the good old days of hand labour."
"[10] In America in the early 20th century, businessmen like George F. Johnson and Henry B. Endicott began to seek new relations with their labor by offering the workers wage incentives and other benefits.
When Henry Ford introduced his $5-a-day pay rate in 1914 (when most workers made $11 a week), his goal was to reduce turnover and build a long-term loyal labor force that would have higher productivity.
Led by the railroads and the largest industrial corporations such as the Pullman Car Company, Standard Oil, International Harvester, Ford Motor Company and United States Steel, businesses provided numerous services to its employees, including paid vacations, medical benefits, pensions, recreational facilities, sex education and the like.
Since this time, programs like on-site child care and substance abuse treatment have waxed and waned in use/popularity, but other welfare capitalism components remain.
In the late 19th and early 20th centuries, Germany and Britain created "safety nets" for their citizens, including public welfare and unemployment insurance.
Though increasingly criticised, these classifications remain the most commonly used in distinguishing types of modern welfare states, and offer a solid starting point in such analysis.
In Northern European countries, welfare capitalism is often combined with social corporatism and national-level collective bargaining arrangements aimed at balancing the power between labor and business.
The most prominent example of this system is the Nordic model, which features free and open markets with limited regulation, high concentrations of private ownership in industry, and tax-funded universal welfare benefits for all citizens.
Owners feared government intrusion in the Progressive Era, and labor uprisings from 1917 to 1919—including strikes against "benevolent" employers—showed the limits of paternalistic efforts.
[20] Examples of companies that have practiced welfare capitalism include Kodak, Sears, IBM and Facebook with the main elements of the employment system in these companies including permanent employment, internal labor markets, extensive security and fringe benefits, and sophisticated communications and employee involvement.
Welfare capitalists went to great lengths to quash independent trade union organizing, strikes, and other expressions of labor collectivism—through a combination of violent suppression, worker sanctions, and benefits in exchange for loyalty.
By offering employees a say in company policies and practices and a means for appealing disputes internally, employers hoped to reduce the lure of unions.
Welfare capitalism programs rarely worked as intended, company unions only reinforced that authority of management over the terms of employment.
[27] The post-World War II era saw an expansion of these programs for all workers, and today, these benefits remain part of employment relations in many countries.
