Rise of Company Health Care

In the United States of the nineteenth century, health care provision was, like other forms of reproductive care, performed by women within the confines of the home. Unlike its counterparts in Europe, the American medical profession remained weak and divided; lacking professional qualifications or protections, doctors operated as independent practitioners who traveled for work and often found themselves entangled in a web of debts and unpaid obligations.

Skepticism of standardized expertise within the American public gave way to a popular culture of lay medicine, with medical advice from homeopaths and druggists competing against the recommendations of general physicians in popular magazines.

But the industrial transformations of the late nineteenth and early twentieth century dramatically altered the health care needs of the public, and the form in which those needs were met. Key among these transformations was the incredible rise in women’s labor-market participation, which nearly doubled between 1880 and 1890. As more and more women began to work, health care transitioned from the realm of the home to the realm of the market.

These demographic shifts in the labor market were compounded by increased industrialization and faster modes of transportation, which, by the end of the nineteenth century, transformed America’s decentralized and locally driven economy into a single national market, marked by industrial concentration and the proliferation of working-class organizations that were militant in their demands for basic welfare.

In response to the railroad strikes of 1877 and 1886, employers increasingly sought to appease workers through company provided welfare benefits. Even prior to the 1894 Pullman Strike, plans were underway to build a “company town,” complete with hotels, parks, schools, and cinemas. Company-provided health insurance was central to the welfare capitalism of this period. Through private group insurance would not truly take off until the 1930s, in this earlier period health care was already integrated with workplace demands.

For employers, company health care was primarily intended to weaken the labor movement by securing the loyalty of rank-and-file workers. For insurance companies, the objective was to weaken existing mutual aid societies and fraternal organizations. In 1900, about 15 percent of American families belonged to a fraternal organization, and participation only grew throughout the early twentieth century.

Fraternal societies were especially popular among low-income and unskilled workers — all black, immigrant, and women’s organizations provided social benefits for the overwhelming majority of the labor force that was not unionized. Those who were unable to join any of these groups relied on charity services; a 1917 Russell Sage Foundation report found that 452 out of 690 families surveyed were on charity relief due to sickness.

Liberal Demands

It’s within this changing industrial and political landscape that the AALL formed in 1906. Inspired by the policies of the Liberal Party in England, the AALL was similarly composed of highly educated elites, including economists, statisticians, and physicians, and notably excluding industrial workers.

Ideologically, it aimed to mitigate capitalism’s worst defects in order to ensure its long-term preservation. Deeply anti-socialist, members of the organization held a technocratic view of political change, in which educated experts negotiate social advancement according to scientific principles and via the legislative process.

Nevertheless, the AALL proved to be among the most persistent advocates for compulsory health insurance at both the federal and state level. The organization held its first meeting on social insurance in 1913, formed a health committee in 1914, and put forward the country’s first public health insurance bill in 1915. State level campaigns would be launched the next year in New York, Massachusetts, and New Jersey.

The bill advocated the AALL prioritized the needs of white, male, industrial workers. It excluded domestic and agricultural workers, and focused primarily on insuring against wage loss and covering medical costs accrued during sickness. It’s perhaps surprising, then, that it failed to garner the support of precisely the population it sought to represent.

Just as employers aimed to secure worker cooperation through company-provided benefit provision, so too did the bread-and-butter unionism of the AFL approach health care provision as a tool for securing member loyalty. Union-provided sickness insurance was thought to secure member participation in the union and increase the bargaining power of workers by reducing their reliance on employers or the state.

This skepticism of elite institutions led AFL leader Samuel Gompers to break from the AALL in 1915. In an article titled “Labor vs. its Barnacles,” he denounced the proposed bill as a paternalistic attempt to undermine the independent power of the working class, noting that “compulsory sickness insurance for workers is based on the theory that they are unable to look after their own interests and the state must interpose its authority.”

But when he broke with AALL, Gompers — a famously eminently leader — formed an alliance with the National Civic Federation (NCF), an organization of business and conservative labor leaders who openly campaigned against the compulsory health insurance bill.

The Women’s Movement

The national AFL’s opposition to compulsory health insurance did not go unchallenged. In New York State, the WTUL and ILGWU broke with Gompers in the struggle for universal health security. It’s thanks to the work and commitment of these organizers that compulsory health insurance was introduced four times in NY state legislature between 1916 and 1919.

Despite repeated resolutions to organize the growing number of women workers, the AFL devoted few resources to the task and, in the early twentieth century, women were overwhelmingly excluded from AFL politics and strategy. A notable exception to this was in New York City, where in 1910 almost 60 percent of immigrant women worked for a wage, and where general strikes in the needle trade unions had generated an unusual concentration of unionized women workers.

Even prior to the introduction of the 1915 AALL bill, women’s organizations had fought for the expansion of social services through local health stations, baby clinics, and visiting nurse programs, with the ILGWU establishing a union-run health center in 1913. Through the ILGWU, the WTUL, and later organizations like the Worker’s Health Bureau, women organizers challenged the notions of independence underpinning AFL strategy, and argued that health issues are class issues which should be integrated into class-wide demands.

Among the key figures of these debates was Pauline Newman, a Lithuanian Jewish sweatshop worker who became a socialist at the age of fifteen. Newman argued that the Gompers’s conception of working-class independence assumed a gendered division of labor. Unionized men may feel independent from employers and the state, but they too are dependent on women’s care. In fact, she held that real relationships in society are all ones of dependence; self-reliance for any single group of workers was an unreachable goal.

If workers could not be truly independent, then guaranteed state assistance was beneficial to them all. The recognition of social interdependence advanced by Newman enabled her to reconceptualize the relationship between working-class movements and the state.

She notes: “I do not call state action paternalism, because I am looking forward to the time when the state will come to the conclusion that it owes something to its working men and women.” Dismissing the choice between reform and revolution, Newman argued that socialists should integrate workers into the long-term struggle through immediate demands, insisting that they “didn’t want to wait that long before socialism would come and make all the changes — they wanted something now.”

Lessons From the Struggle

Though it passed the New York State Senate, a coalition of doctors, employers, and insurance companies ultimately defeated the AALL bill in 1919. But the campaign’s relative success bears important lessons for the struggle for universal health care today. Chief among the insights of the women organizers of the Progressive Era was the importance of building institutions that integrate the interests of a broad coalition of workers.

In sharp contrast with the AFL, which derived its bargaining power from the exclusivity of its membership, unions like the ILGWU saw strength in militant action and large numbers. Industrial unions like the ILGWU bravely campaigned for universal health care, challenging the political influence of AFL leaders. And they came dramatically close to passing a bill that could have altered the course of American health care.