The European Comparison

The relative success of the welfare state in Europe owes much to its trade union history. Across western Europe, the trade union movement evolved out of artisan forms of organization inherited from the guild system. While these organizations took on various forms, by the late nineteenth century, increased mechanization had unified artisans and general laborers on the factory floor. Consequently, the exclusive craft associations of the eighteenth century transformed into industrial organizations that represented the interests of both highly trained workers and general laborers.

In France, artisan workers adopted solidaristic strategies rooted in a struggle for local autonomy; in Germany, rapid industrialization combined with powerful state repression unified resistance among artisans, journeymen, and industrial workers; and in England, a wave of unionization among general laborers meaningfully altered the composition and orientation of the Trades Union Congress (TUC).

Industrial unions relied on the organization of workers across occupational lines. Their strength lay in numbers rather than funds; because they couldn’t demand high dues from their base of low-wage workers, they were more likely to campaign for extensive and universal welfare benefits. They were also more likely to prioritize strike action and mobilizations over negotiating with employers. Thus, their strategy combined industrial mobilization with campaigns for legislative reform. Though they were still subject to the ethnic and gender divisions of their age, industrial unions nevertheless made a point of unifying workers across demographic and occupational lines.

The comparison between Britain and the United States at the turn of the twentieth century is especially indicative of how strategic orientations shape legislative gains. Unlike the explicitly socialist labor movements of France and Germany, those of Britain and the United States championed a “practical” approach that denounced politics as trivial and divisive, and focused instead on “economic” demands around wage increases and work hours. The movements also shared an admiration for voluntary association, working class independence, and thrift, reflective of a workerism that distinguished between the “deserving” and “undeserving” poor.

These characteristics designated both the British and American labor movements as some of the least revolutionary among early industrializers. But while they shared important commonalities, the two labor movements also exhibited important differences with long-term consequences.

The key strategic shift can be traced back as far as the 1880s, when the British labor movement parted from its craft origins and undertook the industrial strategy that carried it into the twentieth century. Several developments in British industrial history prompted this shift: increased mechanization weakened the bargaining position of artisans, while tighter labor markets strengthened that of general laborers.

Between 1888 and 1889, agricultural workers, gas workers, matchgirls, and dockworkers were able to mobilize effectively and build durable shop-floor organizations for the first time in British history. Their success sparked a wave of unionization across industries, and prompted the established mining, railway, and engineering unions to support the need to supplement workplace bargaining with political reform.

The new unions represented a broad constituency, many of whom could not afford substantial dues. They were unable to compete with insurance companies and voluntary associations in the provision of benefits, and, crucially, this brought them into the political realm. For poor workers who could not guarantee their own benefits individually or collectively, compulsory state insurance was the only option.

Because of their rapid growth and success, new unions and their leaders could not be ignored by the TUC. Reports from the TUC Parliamentary Committee testify to the reorientation that the organization took — not only through a growing emphasis on political representation but through explicit campaigns for national health and pensions schemes. With this came a general sense of class solidarity. In 1889, according to one representative, “the most aristocratic unionist [could not] separate himself from the humblest laborer . . . if he [were] to raise himself, he must raise his humbler brother with him.”

During the same time, the American labor movement took a decidedly different turn. By the late 1880s, the movement had experienced the rapid rise and bloody fall of the Knights of Labor, a trade union federation that advocated industrial organization and the unity of producers around the abolition of the wage system. Though the AFL became increasingly involved in electoral politics, it continued to prioritize wages and working hours over public welfare provision and universal demands. As late as 1905, a convention report concluded that “industrialism, as understood both by the founders of the [Knights of Labor] and recent advocates, is fallacious, injurious, and reactionary.”

The Fallout

These differences in orientation are responsible at least in part for the countries’ different welfare trajectories. Under pressure from the TUC, the British government passed the compulsory Old-Age Pensions scheme in 1908 and the National Insurance Act in 1911, offering minimal health and retirement benefits for the country’s workers. These policies created the bureaucratic and political infrastructure upon which the National Health Service and basic state pensions could be built in 1948. They also generated public support for state policies, which were not easily reversible in subsequent years.

The American labor movement, by contrast, lacked this foundation. When proposals for compulsory health insurance were put forward by reformists like the American Association for Labor Legislation, AFL leader Samuel Gompers united with business leaders to undermine the plan. By the time national health and pension schemes reentered the political debate in the late 1930s and 1940s, the Congress of Industrial Organizations (CIO) was battling against private insurance providers, which, over nearly half a century, had embedded themselves within America’s financial and health infrastructures and made deals with large employers as well as trade union affiliates.

Despite overwhelming public support for a national system of health insurance, neither Franklin D. Roosevelt nor Harry S. Truman was able to overcome the alliance between the American Medical Association and large insurance providers, which mobilized heavily against national provision. Whereas private insurance covered 6 million Americans in 1940, it ballooned to 75 million by 1966. This was largely thanks to the work of trade unions, which, absent a national health care system, continued to maximize benefits for their own members.

As Jill Quadagno notes, “Instead of requiring leaders who could inspire the troops to stand by the barricades, the labor movement needed leaders who could master complex financial instruments. The next battle would be won by policy experts with calculators, not charismatic militants who could issue a call to arms.”

Over the following decades, the labor movement was stuck in a double bind — by coordinating benefit provision through private insurers, it sustained its own membership rates and its function as an advocate for rising living standards. At the same time, it strengthened the very forces that would prevent the victory of a universal and public benefit system.

Lessons Learned

While European labor movements advanced the reforms that would later be the foundation for welfare-state expansion at the turn of the twentieth century, the American labor movement adopted an exclusivist strategy that focused on advancing the interests of a small group of unionized workers. Despite a few notable exceptions, the movement acted as a lobbying group, negotiating advantages for its workers rather than consolidating a mass movement dependent on popular mobilization. By mid-century, American trade unions had constructed an intricate system of private benefit provision for their workers in collaboration with insurance companies, forming what some have called a privatized welfare state.  

To change labor’s current fortunes in the United States, we need to put an end to the exceptionalism of America’s trade union model. In our present low-wage, nonunionized, and service-oriented labor market, we ought to remember that the most inclusive labor movements have typically been the most successful at winning universal reforms and establishing a foundation for future welfare expansion.

To that end, the exceptions have been instructive: in 1938, the CIO broke from the AFL with the explicit purpose of organizing workers across skill groups. Rejecting the AFL’s exclusive craft divisions and endorsing large-scale strike action in mass industries, it initiated one of the most progressive and effective periods in the history of the American labor movement from the New Deal to the postwar period.

Inspiring examples can also be found in more recent mobilizations: in 2006, unions like the United Teachers Los Angeles and the Teamsters joined immigrant-rights groups to advance a broader vision of social change. Over the past decade, the Chicago Teachers Union demonstrated how work-based struggles over pay and conditions could be broadened to address questions of racial justice and redistribution. And ongoing unionization efforts at Amazon, most spectacularly the recent union victory at Staten Island, give hope for future industrial actions among the country’s most vulnerable workers.

Exclusive business unionism got us here, but rooting labor movements within communities can get us out. This means fostering ties across wage levels, immigration status, gender, and skills to build a stronger welfare state for everyone.