Welfare Capitalism - Efficacy

Efficacy

In the end, welfare capitalism programs benefitted white-collar workers far more than those on the factory floor in the early 20th century. Average annual bonus payouts at U.S. Steel Corporation from 1929-1931 were approximately $2,500,000.00; however, in 1929, $1,623,753.00 of that went to the President of the company. Similarly, in 1934, 400 company employees inhabited Kohler, Wisconsin (a company town), but 150 of them were single men living in dormitories. Those living in homes with their families were exclusively executives and managers. Real wages for unskilled and low-skilled workers grew little in the 1920s, while long hours in unsafe conditions continued to be the norm. Further, employment instability due to layoffs remained a reality of work life. Welfare capitalism programs didn't often work as intended and company unions really just reinforced the authority of management over terms of employment. Wage incentives (merit raises and bonuses) often led to a speed-up in production for factory lines. As much as these programs meant to encourage loyalty to the company, this effort was often undermined by continued layoffs and frustrations with working conditions. Employees soured on employee representation plans and cultural activities, but they were eager for opportunities to improve their pay with good work and attendance and to gain benefits like medical care. These programs gave workers new expectations for their employers. They were often disappointed in the execution of them but supported their aims. 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 the U.S. Recently, however, there has been a trend away from the form of welfare capitalism, as corporations have reduced the portion of compensation paid with health care, and shifted from defined benefit pensions to employee-funded defined contribution plans such as 401(k)s.