It wasn't a situation designed for social peace and productivity. Radical political ideas spread. So did unionism. In any given year from 1900 to 1920 there were anywhere from 1,200 to 4,500 strikes, many of them bloody. A handier form of protest was simply not to show up for work. "Many companies experienced monthly separation rates in excess of 10%," writes historian Sanford M. Jacoby. "Quitting was a form of resistance to the rigors of factory life."
But slowly, over several decades, Employee Nation lurched into existence, shoved along by a combination of enlightened self-interest on the part of employers, union demands, and pathbreaking legislation. Among the key developments:
Stable jobs. In large companies -- Goodyear Tire & Rubber was one of the early adopters -- an organizational innovation known as the Personnel Office began intruding on the foreman's turf. Now it was Personnel that screened job candidates, wrote down job descriptions, fixed pay rates, and meted out discipline. Suddenly, people knew what to expect at work, regardless of who their boss happened to be. Later, unions insisted on the same practices. Now more and more people expected to work for one company for a long time. Job stability was born.
Benefits. The realization was slow in coming, but come it did: companies saw that they could cut down on turnover (and lower the threat of unionization) if they offered what was then known as welfare and would now be called benefits or perks. John H. Patterson, founder of the National Cash Register Co., in 1884, was a pioneer of the new approach. Among many cutting-edge benefits, he constructed "Welfare Hall," which served as both an employee dining room -- short movies were shown at lunchtime -- and a convention hall. And he raised wages and shortened hours. "The more we do for employees," he declared, "the better work they can do."
Income (and other) protection. These days we take it for granted that if you lose a job or retire, you won't immediately be living on savings or charity. But the social safety net is only a few generations old. Unemployment insurance and Social Security, for example, date from the 1930s, the workers' compensation system from 1902. The Wagner Act (1935) legalized labor organizing and established the precursor of today's process for union election and certification. The Occupational Safety and Health Act (1970) created a federal agency responsible for protecting workers.
Of course, you only got those protections if you worked for an organization. The self-employed got no union contracts, no unemployment insurance, no workers' comp. Until 1951 they weren't included in Social Security -- and when they were included, they were expected to pay both the employee's and the employer's share of the payroll tax, a sort of double taxation that persists to this day. Self-employment dropped from 15% of the nonfarm workforce at the end of World War I to less than 10% in 1960, and would continue to decline over the next decade. A 1962 study of self-employment described it as a "shrinking world within a growing economy." By then we were all citizens of Employee Nation.
Today -- after years of hype about the possibility of going out on one's own, after months of a sluggish economy -- it's easy to forget just how amazingly good a deal Employee Nation turned out to be.
Think about it. You land a job with any established company and there's a decent chance you can keep it as long as you want to. (Even in the worst of times, layoffs affect only a tiny minority of the workforce.) You get paid every couple of weeks, regardless of business conditions, plus you face the prospect of a raise, and maybe a bonus, after a year or so. Along with your salary come paid vacations, holidays, health and disability coverage, maybe life insurance, probably a 401(k), and often a host of other perks ranging from club memberships to concierge services.
But it isn't just the compensation; it's also the fact that your company provides you with everything you need to do your work effectively. Tools and equipment -- far better than most people could afford on their own -- plus all the supplies you could use, free of charge. Support staff and technical personnel of all sorts -- a travel department, people to deal with the telephone company and sort the mail and collect the bills, specialists to fix your computer, even an executive assistant if you rank high enough. Many companies have a cafeteria of some sort, often with subsidized meals; a few provide on-site day care or set up plans that allow for payment of dependent-care expenses with pretax dollars. None of this is charity. Businesses want to attract and keep good employees, and above all make it possible for them to focus on their jobs to the exclusion of everything else. The companies that make Fortune's annual "100 Best Companies to Work For" list aren't great places to hang out -- they're great places to work.
"The more we do for employees, the better work they can do."
--John H. Patterson, founder of the National Cash Register Co.
And it isn't just the workplace; it's the society, which is built around organizations in as many ways as you count. Among them:
Governments have a dozen ways of collecting taxes, from simply sending out bills (the way communities do for property taxes) to taxing business transactions (a sales or value-added tax). In our society the biggest taxes are Social Security and the personal income tax; most people pay both of them through the W-2 payroll deduction. You never see the money going out, and you often see a little bit coming back, in the form of a refund. It's about the least visible and least painful way of paying a tax, and it depends on organizations.
In a similar vein, private businesses have a dozen ways of sizing up potential customers for reliability. In the old days the local banker might know you personally and judge you by your character. A prospective landlord might judge you by your appearance or family size. But in our society banks, auto dealers, credit-card issuers, and other lenders -- not to mention landlords -- typically care a lot about one thing: your pay stub. If you have a job, you're probably OK.
