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Apart at the Seams

The Collapse of Private Pension and Health Care Protections

By Charles R. Morris

Throughout most of the past century, America, uniquely among industrial countries, assumed that private businesses would take primary responsibility for providing retirement security and health insurance to working-age people and their families—an arrangement that became known as American “welfare capitalism.” That assumption has been put to the test by the fierce competitive onslaught on almost every major American industry that began in the 1970s and 1980s. In today’s world of global competition, where prices are dictated by iron laws of marginalist economics, old traditions of employer-employee loyalties are a distant memory, and companies have been shedding benefit commitments as rapidly as possible. Apart at the Seams explores how this collapse of private sector retirement and health benefits came about and how it has affected the landscape of American social insurance. In making his case for reform, Morris examines the forthcoming strain on government benefit programs, the critical trends in American incomes and saving patterns, and the special features of the American health care system that make policy changes such a pressing concern. He argues that the question is not whether the American social insurance system must be fundamentally restructured—that has been going on, willy-nilly, for the past few decades—but rather whether there are reasonable paths to closing the gaping holes in the existing system without doing violence to the long-standing American disposition toward mixed-enterprise solutions.

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