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The Age of Employer Paternalism

Employers in the 1950s sought lifelong employees and competed for talent by promising employment stability and long-term financial security, says Nelson Lichtenstein, professor of history at the University of California at Santa Barbara.

March 15, 2012

Employers in the 1950s sought lifelong employees and competed for talent by promising employment stability and long-term financial security, says Nelson Lichtenstein, professor of history at the University of California at Santa Barbara.

"One of the major thoughts was: 'What we need are stable workforces. We don't want people to leave. We want people to stay,' " Lichtenstein says. "That was taught in business schools, in personnel management, and was thought to be the most advanced and efficient way to run a workplace. Today, turnover and contingent work are built into the cake. It's a product of managerial decisions that this is the way they want to run their workplaces. That's the biggest shift between the 1950s and today."

The 1950s was the heyday of the paternalistic company. It also was an era when unions represented one-third of workers. Nonunion companies such as Eastman Kodak Co. and IBM Corp. matched or surpassed the medical and health benefits that unions negotiated elsewhere in hopes of remaining nonunion shops, Dubofsky and Lichtenstein say.

Nonmanufacturing layoffs such as those announced this past February by Procter & Gamble Co. would have been unimaginable in the 1950s, says Dubofsky, co-author of Labor in America: A History. "If anything, they were hiring more people at those levels."

Todd Henneman is a freelance writer based in Los Angeles. To comment, email editors@workforce.com.