Vivek Chibber Michael McCarthy New York University
Current controversies surrounding American working-class voting preferences and political behavior underscore a historical puzzle: why is it that industrial workers in the US never supported a working-class political party to the extent that they did elsewhere? Unlike previous work on this question, this project aims to understand the role of private social provisions adopted by large firms around the turn of the 20th century. While other advanced capitalist countries developed public social welfare policies by this time, America?s unique approach to welfare was, and is, characterized by private social benefits. Does increased income and risk inequality and increased worker-employer cohesion generated by firm-based benefits help account for the relative weakness of the industrial working-class? electoral support for working-class parties in the US? Does the uneven adoption of private social provisions across US industrial municipalities help account for the development of some class-based politics in the US in the early 20th century? This project will answer these questions through comparative-historical analysis at two levels of scale. First, the researcher compares the development of private and public social provisions and industrial working-class politics in America, Britain, and Germany between 1870 and 1929. Then, the researcher analyzes the development of public and private social provisions and industrial working-class politics in two Pennsylvania steel-towns, New Castle and Bethlehem in the same time period. The former saw the emergence of a radical working-class movement that supported the American Socialist Party, while the working class in the latter remained politically divided along ethno-religious lines. Such a project will offer an alternative explanation for industrial working-class political conservatism in the US vis-Ã -vis its European and Australasian counterparts. In doing so, this study seeks to fill an important gap. Past research is unable to explain internal variation in the US at the municipal level.
Broader Impacts
While this project will explain why most industrial workers did not adopt class-based politics around the turn of the 20th century, it will also show why they did in select industrial municipalities. However, if the project?s hypotheses are proven correct, it will also demonstrate that private social provisions are causally related to stronger employer preferences for working through the firm, rather than the state, for economic needs. By doing so, the research will provide useful concepts for understanding current controversies concerning working-class and union political behavior.
My NSF project explores how the American labor movement has shaped the development of pension programs since the passage of the Social Security Act in 1935. Countering the idea that organized labor in the U.S. has been unable to seriously impact politics and social policy formation, I show that the labor movement has played a critical and ongoing role in the making of American old-age security. However, I was surprised to find that organized labor was instrumental in privatizing pensions, making them increasingly risky for workers. I argue that the long-term development of private pensions in the U.S. can only be understood by looking at how class-organizational influence interacts with political institutions. I refer to this general approach as class-centered institutionalism. I completed my fieldwork using the archival collections of the major business associations and unions involved in the making of public and private pensions. On the business side, this included the National Association of Manufacturers, the U.S. Chamber of Commerce, and the National Industrial Conference Board. On the labor side, I focused primarily on the Congress of Industrial Organizations (CIO), American Federation of Labor (AFL), and AFL-CIO records. I used the historical data to conduct a comparative-historical analysis of the most salient changes in private pensioning: the post-war expansion of private pensioning, the subsequent changes in pension financing that favored risky pension fund investments in the stock of anti-labor firms, and the recent shift from defined-benefit to defined-contribution, 401(k)-type, plans. In the first part of the project I explain the rapid expansion of private pensions after WWII. During the war, the CIO strategically shifted away from disruptive protest and toward electoral activity. In America’s two-party institutional context this new approach led to support from key Northern Democrats for the establishment of the system of collectively bargained private pensions. Only after a series of pro-labor interventions by President Harry Truman, and a pro-labor 1948 National Labor Relations Board decision, did bargaining over pensions become legally mandatory. However, I argue that the CIO’s political alliance with Northern Democrats also undermined labor’s capacity to expand Social Security. The Democratic Party incorporated labor as one interest group among many. Unlike European labor parties programmatically oriented to social democratic policies, and primarily tied to large and centralized trade union federations, the Democratic Party was only willing to intervene on behalf of organized labor as an interest group. In the American institutional context, labor politics resulted in expanded occupational pensions, not a larger public system like abroad. The second part of my dissertation explains why, by the mid-1950s, the AFL-CIO embraced business-friendly pension fund investment strategies as the main way to increase retirement income for their members. This turned out to be detrimental to organized labor. Pension fund investments, which controlled nearly a quarter of all U.S. stocks by the mid-1970s, tended to be directed into companies that were both anti-labor and moving overseas. Countering accounts of labor strategy that focus primarily on economic factors, I show that the interplay between restrictive laws (pension provisions in the Taft-Hartley Act and subsequent legislation) and Democratic Party signaling (reinterpretations of what was possible within the law at key junctures) can best account for the development of labor’s strategy regarding pension fund investment. While new laws established constraints, signaling from labor’s political allies shaped their interpretation of what was possible within those constraints. The final part of my dissertation explores the decisive shift away from defined-benefit plans to defined-contribution, 401(k)-type, plans in the late 1970s and 1980s. This development further redirected risk away from the employer and onto the employee. I argue that the passage of the Employee Retirement Income Security Act (ERISA) in 1974, along with the decline of union salience and strength, best accounts for the rise of 401(k)s. Businesses, unwilling to incur the cost of ERISA’s regulations, shifted to 401(k)-type plans. They did so with relative ease because labor was increasingly unable to defend and expand the defined-benefit system.
