A Fatal Mis-Match: Employer-Centric Benefits in a Boundaryless Workplace
Katherine V.W. Stone
University of California, Los Angeles (UCLA) - School of Law
UCLA School of Law, Law-Econ Research Paper No. 07-01
Lewis & Clark Law Review, Vol. 11, 2007
In this article, Katherine V. W. Stone traces the origins of the uniquely American system of private, employer-centered welfare institutions and argues that the prevailing model must be replaced with an alternative that is both more portable and more affordable for the vast majority of workers. Stone shows how the current employer-centric system of benefits originated in the industrial era of the last century when employers sought to secure a stable workforce through internal labor markets. She argues that this employer-centered model of social insurance and welfare benefits has largely outlived its usefulness in the new "boundaryless" workplace of the twenty-first century. In response to the aging of the population and a rapidly changing economy characterized by global competition, shorter production cycles, increased use of contingent and temporary employment and rising healthcare costs, in the last two decades employers have reduced their benefits coverage, shifted away from risk-pooling plans, such as defined benefits plans, in favor of a personal responsibility approach characterized by more portable but riskier defined contribution plans. She shows that these changes have generally shifted the costs and risks of healthcare and old age assistance onto their employees. As a result, the U.S. system of employer-centered benefits is irrelevant for large numbers of employees who have no coverage and increasingly inadequate, uncertain and costly for those who are covered.
Number of Pages in PDF File: 35
Keywords: employer-centric model of social insurance and welfare benefits, boundaryless workplace,Accepted Paper Series
Date posted: February 6, 2007
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