The Origins of American Segmentalism
This chapter begins the historical analysis of welfare state development by tracing the origins of American segmentalism, a pattern of labor market control marked by decentralized industrial relations, relatively high and downwardly rigid wages paid by many large employers (efficiency wages), and extensive use of company benefits (welfare capitalism). Leading employers in America embarked on their segmentalist strategy early in the 20th century by breaking with existing and emerging centralized regulation of labor markets (multiemployer collective bargaining), desiring in part to assert absolute management rights against the militant claims of labor unions. For reasons analyzed in Ch. 2, success of the employers gave rise to heightened interests in regulatory social reform in response to the deflationary macroeconomic shock of the Great Depression.
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