Employee Benefits and Social Insurance

The primary purpose of this chapter is to examine the role of employers in the development and evolution of employee benefits and social insurance during the twentieth century. ¹ Employee benefits voluntarily provided by employers are one component of welfare capitalism, a human resource (HR) strategy that emerged among progressive employers early in the century as a way “to win workers’ cooperation, loyalty, and hard work through positive HR practices, such as above-market pay, job security, employee benefits, promotion from within, and employee participation plans,” and to avoid unions and fend off government intervention in labor markets (Kaufman 2001). Because employer-provided benefits are often competitive with or complementary to social insurance (benefits for workers provided by insurance arrangements operated or mandated by government), we also examine the history of social insurance.