The Age of Anxiety
Nov 29th, 2005 at 6:00 am by Susie
American workers at big companies used to think they had made a deal. They would be loyal to their employers, and the companies in turn would be loyal to them, guaranteeing job security, health care and a dignified retirement.Such deals were, in a real sense, the basis of America’s postwar social order. We like to think of ourselves as rugged individualists, not like those coddled Europeans with their oversized welfare states. But as Jacob Hacker of Yale points out in his book “The Divided Welfare State,” if you add in corporate spending on health care and pensions - spending that is both regulated by the government and subsidized by tax breaks - we actually have a welfare state that’s about as large relative to our economy as those of other advanced countries.
The resulting system is imperfect: those who don’t work for companies with good benefits are, in effect, second-class citizens. Still, the system more or less worked for several decades after World War II.
Now, however, deals are being broken and the system is failing. Remember, Delphi was once part of General Motors, and its workers thought they were totally secure.
What went wrong? An important part of the answer is that America’s semi-privatized welfare state worked in the first place only because we had a stable corporate order. And that stability - along with any semblance of economic security for many workers - is now gone.
Regular readers of this column know what I think we should do: instead of trying to provide economic security through the back door, via tax breaks designed to encourage corporations to provide health care and pensions, we should provide it through the front door, starting with national health insurance. You may disagree. But one thing is clear: Mr. Drucker’s age of discontinuity is also an age of anxiety, in which workers can no longer count on loyalty from their employers.
I would add that the free trade deals that Prof. Krugman promoted have contributed to this state of affairs greatly. You have to wonder about someone who writes an essay called, “In Defense of Cheap Labor.” I am glad that he has decided to talk about the American worker, but I take this with a grain of salt.
“The resulting system is imperfect: those who don’t work for companies with good benefits are, in effect, second-class citizens.”
That’s not much different than saying that those without much money are second-class citizens.