From the 'Treaty of Detroit' to the 401(k): The Development and Evolution of Privatized Retirement in the United States.

Abstract

Among industrialized nations, the United States has a unique system for providing social welfare, as corporations supplement the basic and comparatively small Medicare and Social Security benefits (Esping-Andersen, 1990). One result of this system is that the employment relationship takes on increasing importance as one’s access to health care and retirement benefits is inextricably linked to her job. This dissertation offers a multi-method investigation of a key welfare provision, employer-sponsored retirement, from its emergence as an institutionalized practice to its present state of decline. Study 1, examines a key historical event in the diffusion of company-sponsored retirement plans – when the United Automobile Workers (UAW) union began bargaining for such benefits in 1949-50. Because negotiating over welfare provision was a strategic departure for the Union, I compare the rhetoric used to frame these demands with that used to bargain over price control of automobiles in 1945-46. The findings show that the UAW used relatively consistent framing efforts across the two negotiating rounds, suggesting that once leaders develop a discursive repertoire consistent with the organization’s ideology, leaders explain, rationalize and legitimize their organizational strategies using the same set of previously established frames. Study 2 examines firm-level factors that have led to the decline in defined benefit (DB) pensions and the growth of defined contribution (DC) retirement plans and argues that corporate choices around retirement are shaped by power differences at the firm level. Firm ownership by financial investors negatively affects DB plan participation, while passive financial ownership promotes DC participation and active financial ownership hinders it. Manager and employee power promote DC participation and the findings suggest they also have a positive impact on DB participation. In sum, different organizational constituents have particular interests as it pertains to a firm’s retirement strategy – the extent to which these constituent groups have power, the better able they are to protect those interests. Together, these studies enlighten our understanding of the US’s unique form of welfare provision and show how decisions made at the organizational level can have significant societal impact.