Welfare Capitalism

Welfare Capitalism

Welfare capitalism is a concept whose roots can be traced back to the 19th century, in Britain when manufacturers started offering benefits to their workers. This concept of capitalism is aimed at enhancing the social welfare of workers and entails a wide range of policies including, universal healthcare, social security, collective bargaining and industrial safety codes. Currently, it is the mode of capitalism applied in Northern and Continental Europe. Besides, it also operates in other countries like the US among others, although, there are disparities on how it works.

For instance, in the United States, the provision of welfare services like, universal healthcare is mainly done by private employers. This implies this mode of capitalism is chiefly operational within companies, which have the sole rights of determining the benefits to be awarded to employees, and to what extent.

How Welfare Capitalism has developed to Date

The concept of welfare capitalism was conceived when some employers in the manufacturing industries started offering new benefit packages to their workers. These benefits ranged from awarding sponsorship to sports teams, creation of social clubs, provision of educational and cultural activities to several others.

Such companies, also referred to as welfare capitalists even provided housing, like the boarding facilities provided for female workers in textile manufacturing industries in Lowell, Massachusetts.

In the 20th century, the concept gained popularity, and even included business provisions for workers. This enabled many employees during that time to start earning additional benefits like better retirement packages and health cover.

Although the century marked the height of this type of capitalism, not all workers were entitled to the same benefits. Business provisions were mainly prevalent in America where the industries hired skilled workforce. Besides, not all companies offered welfare benefits to their employees.

For instance, laborers and operatives were for the first time included in the employee benefits program in the 1920s. However, the program was marred by huge status disparities. Only workers with salaries were awarded vacations, and other benefits like regular work schedules, leaving out employees hired on hourly basis.

Due to the disparities on how the benefits were awarded to workers, some were unable to receive them while those who managed only got peanuts. In fact, semi-skilled and un-skilled laborers were often left out in the provisions. As a result of this, many of them had to continue working for their respective employers, despite the conditions, in the hope of getting the benefits. Unable to take more of the frustrations, workers resolved to appeal to the government for assistance.

The government’s intervention led to the introduction of a mode of welfare capitalism whereby workers were awarded benefits on the basis of a capitalist economy. In order to command a greater collective bargaining power, many workers in the US formed labor unions. Through the unions, they were able to also lobby the support of the government in enacting basic labor standards.

In, the first two decades of the 20th century, the government was able to extend the level of protection offered to workers. The Great Depression shook and slowed down the growth of this concept of capitalism but did not phase it out. Many industries were able to re-emerge and have continued the practice to date. However, the journey has not been easy as a result of a series of court actions.

Status of Welfare Capitalism Today

Today, the social welfare of workers is a critical concern to not only the workers but also every employer, government. The government has outlined basic conditions under which employers must operate like the Minimum Wage.

Any additional benefits offered to an employee, apart from the outlined minimum wage is at the discretion of the employer. In an attempt to ensure the satisfaction of employees, many companies today offer even more benefits for the social welfare of their workforce.

Many companies have realized that although employees make few demands, they can be very productive if they are happy in their places of work. That is why companies like Google have made huge investments in enhancing the working conditions for their workers.

Although many economists and historians initially viewed welfare capitalism as a means of avoiding trade unionism, it has eventually realized its goal of introducing regulatory structures similar to those advocated for by trade unions.

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