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L. B. Schwellenbach, Secretary
Ewan Clague, Commissioner


Union Health and W elfare Plans

Bulletin 7 [o. 900

For sale by the Superintendent o f Documents, U. S. Government Printing Office
Washington 25, D. C. - Price 10 cents



Collective-bargaining developments in health and welfare p la n s ....------Types of health-benefit plans:
Administrative control__________________________________________
Union health centers----------------------------St. Louis Plan___________________________________________________
Coal miners1 welfare funds_______________________________________
Current interest in welfare negotiations_______________________________
Outlook for health-benefit plans_____________________
Sample welfare clauses in specific agreements:
Philadelphia Bedding Manufacturers1Association and Upholsterers'
International Union of North America (AFL)---------------------------U. S. Coal Mines Administrator and United Mine Workers of
America (AFL)________
Standard contract: Men's and Boys' Clothing Manufacturers and
Amalgamated Clothing Workers of America (C IO )------------------Atlantic Cotton Felt Co., Newark, N. J., and United Furniture
Workers of America (C IO )______ _____________________________
Selected list of references____________________________________________
Trade-union welfare programs:
Development of the movement_______________________________________
Stimulus under Little Steel Formula_______________________________
Present-day types of programs_____________________________________
Ladies' garment workers' health and welfare programs--------------------Union Health Center__ ___. . . . . . . . . . _________________________
Growth of program___________________________________________
New York Dress Joint Board______________________________________
Types of benefits paid by the Board----------------------------------------Cost of Board's health and welfare program-----------------------------How benefits are paid______________________________________— .
Other considerations:
Employers' cooperation__________________________________________
Wide acceptance of union welfare provisions----------------------------Effect of program on union____________________________________
New programs create new problems__________________________________




Letter of Transmittal
U nited States D epartment of L abor,
B ureau of L abor Statistics,

Washington, D. C., March 6, 1947,
T he Secretart


L abor :

I have the honor to transmit herewith a report on union health and welfare
plans, which consists of two articles.
The first article brings up to date collective-bargaining developments in the
field. It also notes several of the medical service plans entailing a health center
and the recently established United Mine Workers’ program. This article was
prepared in the Bureau’s Industrial Relations Branch, Boris Stern, Chief.
The second article was written by Nathaniel M. Minkoff, -secretary-treasurer
of the New York Dressmakers’ Joint Board, International Ladies’ Garment Work­
ers’ Union (AFL). It treats principally of the experience of that organization
with its own program and emphasizes some of the administrative problems which
that union, and all unions, must encounter and solve.
E wan C lague , Commissioner.
H on. L. B. Schwellenbach ,

Secretary of Labor.

Bulletin 7v{o. 900 o f the
U nited States Bureau o f Labor Statistics
[Reprinted from the M onthly L abor R eview , February 1947]

Union Health and Welfare Plans
C ollective-B argaining D evelopments
W elfare Plans 1

in *H ealth and

W orkers covered by some type of health-benefit 2 plans negotiated
by employer and union more than doubled in number since 1945, as
revealed by recent estimates made by the Bureau of Labor Statistics.
In 1945, some 600,000 workers were so included; at present (early 1947)
approximately 1,250,000 are covered. Except for a few outstanding
instances, including coal mining, the plans were negotiated by the
same unions studied in the 1945 report, and are merely extensions of
their programs.8
The principal industries in which a large proportion o f workers
(totaling approximately 1,100,000) are covered by some type of
health benefit plan are clothing (men’s and women’s), textiles, and
coal mining. Other industries in which a part of the workers are
covered (totaling over 100,000) are building trades; fur and leather;
furniture; hotel; laundry, cleaning, and dyeing; machinery (particu­
1Prepared in the Bureau’s Industrial Relations Branch b y L ucy M . Kramer, with the assistanca of Rose
Theodore, under the direction of Harold S. Roberts.
> See Health-Benefit Programs Established Through Collective Bargaining, Bureau o f Labor Statistics
Bulletin N o. 841 (reprinted from M onthly Labor Review, August 1945).
* M ost of the plans described in the 1945 Bureau of Labor Statistics report have been negotiated b y the
following unions: International Ladies’ Garment Workers’ Union (A F L ); Amalgamated Clothing Workers
of America (C IO ); United Hatters, Cap, and Millinery Workers’ International Union (A F L ); Textile
Workers’ Union of America (C IO ); United Textile Workers of America (A F L ); International Fur and
Leather Workers’ Union of America (C IO ); United Electrical, Radio, and Machine Workers o f America
(C IO ); Upholsterers’ International Union of North America (A F L ); United Furniture Workers of America
(C IO ); Industrial Union of Marine and Shipbuilding Workers of America (C IO ); Hotel and Restaurant
Employees’ International Alliance and Bartenders’ International League of America (A F L ); United
Paperworkers (C IO ); United Retail, Wholesale, and Department Store Employees of America (C IO );
Amalgamated Association of Street, Electric Railway, and M otor Coach Employees o f America (A F L ).
Additional unions which have recently induded health-benefit plans in their collective bargaining agree­
ments are: Building Service Employees’ International Union (A F L ); Progressive M ine W orkers (Inde­
pendent); United M ine Workers (A F L ); United Office and Professional Workers (C IO ); Brotherhood o f
Painters, Decorators, and Paperhangers (A F L ); and United Association of Plumbers and Steamfitters
(A F L ).


larly electrical); office; paper; retail and wholesale trade; shipbuilding;
and street and electric railway.
Although extensive employee coverage is found at the present time
in only three industries, there are an increasing number and variety
o f industries in which some proportion of the workers are covered.
T ypes o f Health-Benefit Plans

In the Bureau’s 1945 study of health-benefit plans established
through collective bargaining agreements, it was found that there
were three types of benefit plans— (1) those administered by the
union solely, (2) plans administered jointly, and (3) programs ad­
ministered b y a private insurance company wherein the employer
pays the premium directly or into a special premium fund. M ost of
the plans studied were financed entirely b y the employer. This
was true of all union-administered plans, of almost all jointly ad­
ministered programs, and of more than half the plans administered
b y insurance companies.
M ost of the agreements stipulate a specific percentage of the em­
ployer’s pay roll (usually 2 or 3 percent) to be paid into the fund.
If the contribution is not specified, the employer either defrays all
expenses or supplements employee contributions as required. The
health-benefit plans included weekly cash benefits during illness and
disability caused b y nonoccupational accidents, hospital and surgical
expenses, and sometimes payment of doctor bills. In most cases
dental care and preventive medicine were not usually included.

The first Union Health Center of the International Ladies’ Garment
Workers’ Union (AFL) was established in 1912 in New Y ork City,
and still functions. In addition to furnishing medical care to garment
workers at the Center, it inspects sick-benefit plans and serves as a
health education center. It is concerned primarily with ambulatory
cases— in the nature of a clinic. It does not offer service to the
families, nor complete medical service to the members, and its financing
varies with the craft.4 In addition to cash benefit payments, and
clinical medical services, the program provides some preventive
medical care. The eye conservation plan, which provides that every
shop is to be visited and each worker examined, is unique.5 For 17•
« Health Program of International Ladies' Garment Workers' Union, b y L . Price, in M onthly Labor
R eview , October 1939; The Employee's Viewpoint on Group Hospitalization and M edical Care, b y A.
H eld, American Management Association (New York, 1946, Insurance Pamphlet N o. 65).
• Social Welfare Through Collective Bargaining, b y Julius Hochman (1945), in Collective Bargaining
Negotiations and Contracts (p. 13:101), Bureau of National Affairs, Washington.

years the Center also provided dental care, but discontinued this
service for organizational reasons.
The New York Union Health Center, administered and financed
to some extent jointly by labor and management, was not the result
of collective bargaining originally. Similar health centers, however,
have been established recently, through such negotiations, in Phila­
delphia, Fall River, Boston, and other smaller communities throughout
the country.® Furthermore, when the joint labor-management health
programs were incorporated into collective agreements in the needle
trades in recent years, the health center became the central agency
for the administration of the health-benefit program. Until 1943
the New Y ork Center was financed by local union contributions.
Since the incorporation of health-benefit funds (financed by employer
contribution) into the agreements, however, a large part of the
Center’s financial support has come from these funds.

A recent health-benefit plan negotiated by the St. Louis Joint
Council, United Retail, Wholesale, and Department Store Employees
(CIO ), referred to as the St. Louis Plan, is of interest in that a health
institute was established, through employer contribution, which offers
complete medical services. Every medical bill of members and their
families, for service in the home, hospital, or clinic, is to be met by
the St. Louis Labor Health Institute. The organizational plans as
outlined in 1945 would open the institute not only to union members
and their nonvoting families, but also to outsiders as nonvoting ap­
proved participants. This may result in a union health-benefit plan
that will include many unions jointly in the St. Louis area.

In coal mining, both anthracite and bituminous, the coal miners
secured, as a result of negotiations in M a y and June 1946, provisions
in their current agreements whereby about 450,000 miners (375,000
bituminous, 75,000 anthracite) in 3,000 mines in 23 States are to
achieve a considerable measure of security through the operation of
three welfare funds.7
In the soft-coal industry (Government operated), one fund, desig­
nated as a “ welfare and retirement fund,” is to be raised by levying
a tax o f 5 cents on each ton o f soft coal produced. It is to be admin-•
• A . Held, op. d t. (p. 25); J. Hochman, op. d t . (p. 13:106); Bureau of Labor Statistics Bulletin N o. 841,
op. d t . (p. 15).
TFor a brief discussion of the 1946 soft-coal negotiations and agreement, see T he Changing Status of
Bituminous Coal Miners, b y W itt Bowden, M onthly Labor Review, August 1946 (reprinted as Bulletin
N o . 882). See also N ew York Times, June 27,1946. The. provisions o f the health and welfare program
o f the contract are given in detail on pp. 7-9.

istered by three trustees— one appointed by the U. S. Coal Mines
Administrator, one by the union, and one jointly. A second fund,
designated as a “ medical and hospital fund,” is to be accumulated
from wage deductions presently being checked off from miners' wages,
or authorized in the future by the union. This fund is to be turned
over to the union, and is to be administered by trustees appointed
by the president of the United M ine Workers of America (AFL).
The agreement calls for cooperation between the trustees of the two
For the anthracite industry, a fund is to be raised similarly by a
tax o f 5 cents on each ton. This is a welfare and retirement fund,
and is to be administered by three trustees— two to be appointed by
the president of the United M ine Workers and one by the operators.
The technique o f levying a tax on coal produced for the establish­
ment and maintenance of a welfare fund is one that has been in exist­
ence in countries other than the United States for a number of years:
Great Britain has had such a practice since•1920, New Zealand since
1925, the Netherlands since 1936, and British India and Spain more
Current Interest in W elfare Negotiations

Some voluntary prepaid medical-care plans,9 entirely employersponsored or sponsored entirely by unions (as consumers), were in
existence for many years prior to W orld W ar II— in at least one
outstanding case such a plan was included in an agreement as a result
of an arbitration award as far back as 1926.1 It was during the
recent war period, however, that the inclusion of health-benefit plans
in union agreements gained headway.
Whether it was the national wage stabilization policy primarily
which encouraged health and welfare benefits in lieu of wage increases
during this period, or the ^necessity to maintain and increase war­
time production b y reducing the loss of man-hours caused by illness,
• Welfare Provisions for Miners in Six Foreign Countries, M onthly Labor R eview, June 1946.
•Voluntary prepaid medical-care plans may be classified, according to Margaret C . Klem , Chief o f the
Medical Economics Section of the Social Security Administration, into six types: industrial, medicalsociety, or consumer-sponsored plans, private group clinics, Government plans, and Farm Security
Administration plans.
Industrial plans, those established in connection with industry, and consumer-sponsored plans estab­
lished b y labor organizations, are the two types pertinent to the current analysis.
Industrial plans include those initiated b y the employer alone, as well as plans put into effect b y col­
lective bargaining. O f the 115 industrial medical-care plans studied in 1945 b y Margaret C. Klem , in 19
the costs were borne entirely b y the employer, in 49 entirely b y employee pay-roll deduction, and in 47
b y the two jointly. (Prepayment Medical Care Organizations, Social Security Board, Washington, 1945,
Bureau M em o. N o. 55, p. 4.)
w In 1926, the Amalgamated Association of Street and Electric Railway employees secured from the
Chicago R apid Transit Co. a clause requiring the latter to bear the entire sickness and life insurance for
its employees. (Beneficial Activities of American Trade-Unions, Bureau of Labor Statistics Bulletin
N o. 465,1928, p . 31.)

or the heightened social awareness of the need for security for the wage
earner, the fact remains that at the present time an increasing number
of unions have such health and welfare clauses in their contracts, or
have indicated their desire to negotiate for such provisions.
The potential role of health and welfare plans in collective bargain­
ing was apparent in the last convention of the American Federation
of Labor, held in Chicago in October 1946, when President Green,
in his keynote speech, stated:
I say to you * * * that that objective [the creation of welfare funds] will
now be the objective of organizations affiliated with the American Federation
of Labor; we must establish in this Nation security in every condition of life—
old age, illness, and infirmity— and in addition we must provide hospitalization
and nursing facilities and medical care for every man and woman in the United

The Congress of Industrial Organizations, at its recent convention
held in Atlantic City in November 1946, adopted a broad resolution
on various aspects of security through collective bargaining, which
The CIO intends immediately to develop a broad program so that workers
may be given a rounded protection in their living standards through collective
bargaining contracts providing for adequate pension plans, health insurance
plans, group hospitalization plans, and the guaranteed minimum annual wage.1

Current demands for inclusion of employee welfare clauses in union
agreements are recognized by management. Research services used
largely by employers 1 each have devoted considerable space in their
current loose-leaf publications on labor relations to employee welfare
and health-benefit plans in collective bargaining— the techniques of
bargaining, the types of plans, the coverage, etc.1
The M arch 1946 conference of the American Management Associa­
tion devoted time to trends in employee benefits, and heard a detailed
report by Adolph Held, International Ladies’ Garment Workers’
Union official, on the Em ployee’s Viewpoint on Group Hospitalization
and Medical Care,1 based on his experience as director of the Inter­
1 Report of Proceedings of the Sixty-fifth Convention of the American Federation o f Labor, for
October 7-17,1946 (p. 12).
1 See Resolution N o. 34, in D aily Proceedings of the Eighth Constitutional Convention of the Con­
gress of Industrial Organizations, for Novem ber 20,1946 (p. 5).
1 See services of Research Institute o f America (New York); Bureau of National Affairs (Washington);
Prentice-Hall (N ew Y ork).
m The R I A Labor Coordinator (V ol. 2, p. 38,006) in its Employee Welfare section, reminds management
that “ employee welfare plans are no longer fringe issues. Y ou must be prepared when union demands
are made. W hat factors do you have to consider in evaluating a plan? D o you know the union arguments
in favor of these plans, and, what's more, do you know the answers? Can you include your nonunion
employees in a plan the union wants, and how is this done?”
See also footnote 5.
u Trends in W orkm en's Compensation and Employee Benefits, American Management Association,
N ew York, 1946 (Insurance Series N o. 66).
735053°—47----- 2

national Ladies' Garment Workers' Union Welfare and Health
Benefits Department.
At the recent meeting of the American Medical Association on
industrial health, held in Boston, a panel discussion was devoted to
New Horizons in Industrial Health and Welfare, in which healthbenefit plans played a large part, particularly those achieved through
collective bargaining.1 The American Medical Association, in its
November 30, 1946, issue of the Journal, devoted to industrial health,
editorializes as follows:
In spite of impending legislation, health and welfare are likely to be important
factors in future collective bargaining. Labor may ask for greater direct partic­
ipation not only in industrial medical service but in plans for general medical
care. Both the Council on Industrial Health and the Council on Medical Service
[of the Association] have been actively concerned with the medical implications
in the coal-mine wage agreement and the probable extension of similar contracts
to other occupational groups. Herein lie many opportunities for constructive
medical leadership.1

Outlook fo r H ealth-Benefit Plans

There is no doubt, from past practice and current statements of
unions, from recent management concern with welfare funds and their
bargaining importance, from recent interest of the medical profession
in the role of labor and management in industrial health, from the
general interest of a considerable portion of the public in the Nation's
health,1 that welfare funds and health benefits will play an increas­
ingly important role in future contract negotiations.
The increasing importance of welfare funds is generally accepted.
However, the trend in financing such funds is not so clearly defined
as to the relation of the employer-to-employee contribution. The
establishment and extension of welfare funds through employer con­
tributions were given impetus during the war years. In many
instances, these payments were made in lieu of wage increases,1 and
employers generally assumed full financial responsibility.
Postwar conditions may put a new emphasis, not so much on welfare
funds, but on their financing. With the elimination of the wage
stabilization policy, with an increased labor force, and with the
modification in tax exemption, the question which may receive greater
w See Journal of American Medical Association, Novem ber 30,1946, for complete texts of the papers read
by Rear Admiral Joel T . Boone on Industrial Health; Andrew Fletcher, of the Industrial Hygiene Founda­
tion, on Management in Medical Plans; Boris Stem, of the U . S. Bureau of Labor Statistics, on Labor and
Management at the Conference Table.
m Idem, p. 788.
w Witness the wide interest in the Murray-Wagner-Dingell national health bill in the last Congress, and
the activities of individuals and organizations interested in a Government-sponsored health-insurance
i* See The Administration, Under Collective Bargaining, of Welfare Plans Based on Employer Contri­
butions, b y D avid J. Farber, U . S. National Wage Stabilization Board, Washington, 1946.

attention in future negotiations may be the relative proportions in
employer-employee contributions to welfare funds.
Sam ple W elfare Clauses in Specific Agreements

The employer hereby agrees to pay to the Upholsters’ International Union
Social Security Department, each and every month, in advance, between the
first and fifth day of every month, beginning w ith __________ 19___; a sum equal­
ing 3 percent of the gross wages earned by his employee-members of this union.
The said sum of 3 percent shall be calculated on the basis of the total aggregate
wages earned by said employee-members during the pay periods of 4 or 5 weeks,
terminating during the preceding calendar month.
The above described sum of 3 percent shall be paid by the employer as a con­
tribution to the Social Security Fund of the Upholsterers’ International Union
of North America above described. In consideration for the payment of said
contribution, the union agrees to extend, beginning the same date the employer’s
first contribution is due as set forth in the preceding paragraph, the benefits of
said fund to said employee-members, in accordance with the rules and bylaws
under which said fund is administered, and in accordance with the general laws
of the International.
The union has contracted or will contract for the issuance of a blanket-coverage
insurance policy or policies to provide for the payment of the various benefits as
therein provided; a policy now being in force with t h e _______________Co. It is
agreed that the premiums for the maintenance of a group policy or policies on
behalf of the employee-members shall be paid out of the periodic contributions
paid by the employer as above described. The rights and duties of all parties,
including the union, the employer, and the employee-members, shall be governed
by the provisions of said blanket coverage policy.
The union agrees that the program of social security benefits hereinabove
described shall be maintained in full force and effect for the entire period of time
during which this supplemental agreement is in effect and the terms hereof fully
complied with in all respects by the employer.
The 3 percent contribution of the employer to the social security plan is not
to be increased during the life of this agreement; if the cost to the union is de­
creased, then the contribution by the employer is to be reduced by an equivalent
amount. Two-thirds of the entire contribution is to go toward the payment of
accident and health insurance covered by the provisions of said policy, and the
remaining one-third of the entire contribution goes toward the payment of death
benefits as provided by the Social Security Department of the union and for the
administrative expenses of said department.
{Bituminous-coal mines]

Health and welfare program
There is hereby provided a health and welfare program in broad outline— and
it is recognized that many important details remain to be filled in— such program
to consist of three parts, as follows:
A welfare and retirement fund.— A welfare and retirement fund is hereby
created, and there shall be paid into said fund by the operating managers 5 cents
Der ton on each ton of coal produced for use or for sale. This fund shall be

managed by three trustees, one appointed by the Coal Mines Administrator, one
appointed by the president of the United Mine Workers, and the third chosen by
the other two. The fund shall be used for making payments to miners, and their
dependents and survivors, with respect to (1) wage loss not otherwise compensated
at all or adequately under the provisions of Federal or State law and resulting
from sickness (temporary disability), permanent disability, death, or retirement,
and (2) other related welfare purposes, as determined by the trustees. Subject to
the stated purposes of the fund, the trustees shall have full authority with respect
to questions of coverage and eligibility, priorities among classes of benefits,
amounts of benefits, methods of providing or arranging for provision of benefits,
and all related matters.
The Coal Mines Administrator will instruct the operating managers that the
obligation to make payments to the welfare and retirement fund becomes effective
with reference to coal produced on and after June 1,1946; the first actual payment
is to be made on August 15, 1946, covering the period from June 1 to July 15;
the second payment to be made on September 15, covering the period from July
15 to August 31; and thereafter payments are to be made on the 15th day of each
month covering the preceding month.
(b) A medical and hospital fund.— There shall be created a medical and hospital
fund, to be administered by trustees appointed by the president of the United
Mine Workers. This fund shall be accumulated from the wage deductions
presently being made and such as may hereafter be authorized by the union and
its members for medical, hospital, and related purposes. The trustees shall
administer this fund to provide, or to arrange, for the availability of medical,
hospital, and related services for the miners and their dependents. The money
in this fund shall be used for the indicated purposes at the discretion of the trustees
of the fund; and the trustees shall provide for such regional or local variations and
adjustments in wage deductions, benefits and other practices, and transfers of
funds to local unions, as may be necessary and as are in accordance with agree­
ments made within the framework of the union’s organization.
The Coal Mines Administrator agrees (after the trustees make arrangements
satisfactory to the Coal Mines Administrator) to direct each operating manager
to turn over to this fund, or to such local unions as the trustees of the fund may
direct, all such wage deductions, beginning with a stated date to be agreed upon
by the Administrator and the president of the United Mine Workers: Provided,
however, that the United Mine Workers shall first obtain the consent of the
affected employees to such turn-over. The Coal Mines Administrator will cooper­
ate fully with the United Mine Workers to the end that there may be terminated
as rapidly as may be practicable any existing agreements that earmark the ex­
penditure of such wage deductions, except as the continuation of such agreements
may be approved by the trustees of the fund.
Present practices with respect to wage deductions and their use for provision
of medical, hospital, and related services shall continue until such date or dates
as may be agreed upon by the Coal Mines Administrator and the president of the
United Mine Workers.
(c) Coordination of the welfare and retirement fund and the medical and hospital
fund.— The Coal Mines Administrator and the United Mine Workers agree to
use their good offices to assure that trustees of the two funds described above will
cooperate in and coordinate the development of policies and working agreements
necessary for the effective operation of each fund toward achieving the result that
each fund will, to the maximum degree practicable, operate to complement the

Survey of medical and sanitary facilities
The Coal Mines Administrator undertakes to have made a comprehensive
^survey and study of the hospital and medical facilities; medical treatment, sani­
tary, and housing conditions in the coal-mining areas. The purpose of this survey
will be to determine the character and scope of improvements which should be
made to provide the mine workers of the Nation with medical, housing, and sani­
tary facilities conforming to recognized American standards.

Commencing on the pay day for the week of December 10, 1945, and weekly
thereafter, the employer shall pay to the trustees (hereinafter called the trustees)
designated under a new agreement and declaration of trust dated as of December
10, 1945 (a copy of which said new agreement and declaration of trust dated as of
December 10, 1945, has been exhibited to the employer and approved by the em­
ployer) the terms and provisions of which new agreement and declaration of trust
are herein specifically incorporated by reference, sums of money determined as
(a) Two percent of the wages payable for the preceding pay period to all the
employees of the employer, plus
(b) Three percent of the wages payable for the preceding pay period to those
employees of the employer who are members of the union.
All of the foregoing sums shall be administered and expended by the trustees pur­
suant to the provisions of the said new agreement and declaration of trust (dated
as of December 10, 1945) for the purpose of providing benefits upon their retire­
ment because of old-age, and life, accident and health insurance, and such other
forms of group insurance for medical care and hospitalization as the trustees may
reasonably determine, to members of the union employed by the employer, and
members of the union employed by other employers who are members of the group
embraced within the general plan in the men’s and boys’ clothing industry.
The employer shall furnish to the trustees, upon request, such information and
reports as they may require in the performance of their duties under any of the
agreements and declarations of trust. The trustees, or any authorized agent or
representative of the trustees, shall have the right at all reasonable times during
business hours to enter upon the premises of the employer and to examine and
copy such of the books, records, papers, and reports of the employer as may be
necessary to permit the trustees to determine whether the employer is fully com­
plying with the provisions of paragraph 3 [above].
No employee shall have the option to receive instead of the benefits provided for
by any of the agreements and declarations of trust any part of the contribution of
the employer. No employee shall have the right to assign any benefits to which
he may be or become entitled under any of the agreements and declarations of
trust or to receive a cash consideration in lieu of such benefits either upon termi­
nation of the trust therein created, or through severance of employment or other­








In the event that the union receives written notice from one or more of the
trustees, designated by the trustees for that purpose, that the employer has
failed to pay in full any sum due the trustees under paragraph 3 and that such
failure has continued for 5 days, the union may direct its members to discontinue
work in the plant of the employer and to discontinue work upon clothing being
manufactured for the employer by contractors until all sums due from the employer

under paragraph 3 above have been paid in full. The remedy provided for in
this subparagraph shall be in addition to all other remedies available to the union
and the trustees and may be exercised by the union, anything in the collective
bargaining agreement to the contrary notwithstanding.
The trustees, in their own names as trustees, may institute or intervene in any
proceeding at law, in equity, or in bankruptcy for the purpose of effectuating the
collection of any sums due to them from the employer under the provisions of
paragraph 3.
In the event that legislation is enacted by the Federal Government levying a
tax or other exaction upon the employer for the purpose of establishing a federally
administered system of life, health, accident, medical care, or hospitalization
insurance under which the employees of the employer are insured, the employer
shall be credited against the sums payable under paragraph 3 for each pay period,
with the amount of such tax or exaction, payable by him for such pay period,
provided that the amount of such credit shall in no event exceed 2 percent of the
wages payable to the employees of the employer for such pay period.

The employer hereby agrees, as long as this agreement remains in force, to
contribute monthly on or before t h e __________ day of each month, commencing
with the effective date of this agreement t o ---------------------- as trustees of United
Furniture Workers Insurance Fund, a sum equal to 3 percent of the previous
m onths production pay roll, to be used by said trustees for the sole benefits of
the employees covered by this agreement for the purchase of group life insurance,
group accidental death and dismemberment insurance, group accident and
health insurance, hospitalization insurance, and group surgical insurance, in
accordance with the schedule of such respective forms of insurance attached
hereto entitled “ Schedule of Amounts of Insurance.” It is further understood
and agreed that these contributions to the above-mentioned trustees will be held
and managed by them under the terms of a trust agreement drawn between the
union and said trustees. (It is further understood and agreed that the employer
shall be under no obligation to see to the application of moneys paid to the trustees
pursuant to this paragraph for the purposes and uses above mentioned; but the
union, nevertheless, agrees to render reports at regular intervals to the employer
respecting application of the moneys received and benefits paid.)
The employer agrees to make available to the union or the trustees abovenamed any and all records of employees hired, classifications of employees, names,
social security numbers and amount of wages paid, and social security pay roll
records, that the union or the trustees may require in connection with the sound
and efficient operation of the trust fund above mentioned, or that may be required
by the insurance companies covering the employee.

Selected L ist o j References
A m e r ic a n F

e d e r a t io n o f



Health-Benefit Plans by Collective Bargaining. Collective Bargaining Series
No. 1. (901 Massachusetts Ave. NW., Washington 1, D. C.) May 1946.
A m e r ic a n M

anagem ent


s s o c ia t io n .

Trends in Workmen’s Compensation and Employee Benefits.
Series No. 65. (330 West 42d St., New York, N. Y.) 1946.

m e r ic a n


e d ic a l



s s o c ia t io n .

Journal of the American Medical Association, November 30, 1946.
N. Dearborn St., Chicago 10, 111.)




D yers, F inishers, Printers

B leachers



A merica

(TW U A-CIO ).
Health Insurance in the Textile Dyeing, Finishing, and Printing industry.
(18 Church St., Paterson 1, N. J.) May 1945.
I nter^Union I nstitute


L abor


D emocracy.

Royalties, Taxes and Assessments. Labor and Nation, August 1945, Part
Two. (112 East 19 St., New York 3, N. Y.)
N ational W age Stabilization B oard.

The Administration, Under Collective Bargaining, of Welfare Plans Based
on Employer Contributions. By D. J. Farber. September 1946.
P rinceton U niversity , I ndustrial R elations Section.

Group Health Insurance and Sickness Benefit Plans in Collective Bargaining.
By Helen Baker and Dorothy Dahl. 1945.
Sickness Benefits and Group Purchase of Medical Care for Industrial Em­
ployees. By Dorothy Dahl. October 1944.
San F rancisco E mployers C ouncil.

Information on Voluntary Health Insurance.
cisco, Calif.) June 1946.
Social Security B oard, B ureau


R esearch

(114 Sansome St., San Fran­



Prepayment Medical Care Organizations. By Margaret C. Klem. Bureau
Memorandum No. 55. June 1945.
Stern , B ernhard J.
Medicine in Industry. (The Commonwealth Fund, New York, N. Y.) 1946.
U. S. D epartment of L abor, B ureau of L abor Statistics.
Health-Benefit Programs Established Through Collective Bargaining. Bul­
letin No. 841. 1945. (Reprinted from Monthly Labor Review, August
Health Program of ILGW U. By Leo Price, M. D. (In Monthly Labor
Review, October 1939.)
Welfare Provisions for Miners in Six Foreign Countries. (In Monthly
Labor Review, June 1946.)

T rade -U nion W elfare Programs *
By N athaniel M. M inkoff, Secretary-Treasurer, J oin t Board Dressmakers*
Union , International la d ies ’ Garment W orkers* Union
Development o f the M ovem ent

G row ing preoccupation o f unions with health and welfare programs
is not a new departure in labor policy; this preoccupation dates back
to the early days o f trade-unionism in this country.
The first organizations of workers in the United States, as in Great
Britain, were generally mutual aid associations, such as loan, sick
benefit, or burial societies. Overt organization for collective bargain­
ing was still forbidden by law, and these mutual aid groups, almost
from the start, assumed what today would be called “ industrial
* This article deals primarily with the experience of the New York Dress Joint Board of the International
Ladies* Garment Workers* Union.
The views expressed are those of the author and are not necessarily shared b y the Bureau.

functions,” in addition to the narrower tasks of providing the mutual
aid for which they were ostensibly formed. It was these mutual aid
groups which initiated the modern labor movement, and from them
the trade-unions of today have derived the habit of referring frater­
nally to members as brothers and sisters, as well as some of the
ceremonials and rituals of initiation and procedure.
With time and favoring circumstance, the essentially industrial
character of these organizations became explicit. The Philadelphia
Typographical Society, for instance, organized in 1802, was incor­
porated in 1810 as a benevolent society. In 1833 it gave way to the
Philadelphia Typographical Society whose “ primary and paramount
intention” was “ the determination and support of adequate w'agcs
for journeymen printers.” The Pennsylvania Society of Journey­
men Cabinetmakers of Philadelphia (1806) was likewise formed for
purely benevolent purposes. In 1829, the society constitutionally
established itself “ as a criterion for workmen to endeavor to settle all
disputes arising between them and their employers.” The Brother­
hood of Locom otive Firemen and Enginemen was formed as late as
1873 as a benevolent society, and it was not until 12 years later that
it assumed its role as a labor union. The Iron Molders’ Union,
established in 1859, operated an extensive benefit system before it
assumed industrial functions. Curiously enough, all benefits were
suspended by this union in 1880 on the ground that such features
interfered with the industrial tasks of the organization. After a
decade, however, the welfare program was resumed.
Other groups, organized in later years as labor unions in the modern
sense, soon expanded their activities to include welfare programs.
The Barbers’ Union, set up in 1887, initiated its benefit program in
1893. The Tobacco Workers, organized in 1895, established its sick
benefit program in 1896. The Plumbers’ Union (1889) established
its benefits in 1903. In one way or another, welfare and mutual aid
programs became a recognized feature of American trade-unionism
and helped greatly to give it a much needed stability in its early days.
B y the end of the First World War, however, trade-union welfare
activities w
rere definitely on the decline. The attitude of the top­
most labor leadership was troubled and unfriendly. In 1930, Matthew
W oll stated:
Benefit systems, where they are still in operation, are a constant source of
trouble. They are encountering all of the troubles that beset unscientific insti­
tutions. Their assessments must be raised constantly to meet rising ages, and
increases of assessments are always resented. All manner of complications
result. * * * Few union operations are today productive of as much woe
and uncertainty as the benefit systems that remain in operation.2
* W hy Trade-Union Group Insurance Rather Than a Benefit Plan?
gravcr, April 1030.)

(In T he American Plioto-En-

Daniel J. Tobin, president o f the Teamsters’ Union, said very much
the same thing in recent years:
Our advice to local unions is to keep away from the sick benefit and from the
unemployment benefit as much as possible. * * * Local unions should not
overload themselves with liabilities during these prosperous days. Build up
your treasuries. Remember there are lean years ahead of us.8

Welfare programs had come to be regarded as of little importance
when, in the early 1930’s, union leaders, in launching their campaign
to organize the mass-production industries, found to their dismay
that in many instances workers were reluctant to join bona fide unions
because their own “ company unions” were providing them with
various forms of health and welfare benefits and recreational facilities
which the bona fide unions could not match. Hence, those unions
which succeeded in organizing mass-production industries had to
promise their newly organized members, in addition to increased
earnings and shorter hours, the continuation of the welfare features to
which they had become accustomed. Thus, a number of labor
unions unexpectedly and sometimes unwillingly undertook social
welfare programs quite out o f line with their general outlook.
Stimulus Under Little Steel Formula

A t this point a basic change in the nature of “ union welfare pro­
grams” took place. Hitherto, the term implied plans financed by the
workers themselves, through regular payments or assessments;
henceforth it was to mean funds and programs financed— in part at
least— by the employers, in accordance with an understanding
reached through collective bargaining and often embodied in the col­
lective agreement. The limitation of wage increases during World
W ar II under the Little Steel Formula greatly promoted this develop­
ment. Beyond the 15 percent increase above January 1941 levels
authorized for direct wage increases, it was possible to obtain indirect
increases in the form o f “ fringe adjustments” including employerfinanced health, welfare, and vacation plans. As E. E. Witte, of the
National War Labor Board, explained:
It is clear from all these cases that the Board will not normally order an em­
ployer to institute a group insurance plan or direct the liberalization of a plan in
existence. Each case, however, will be judged on its own facts, and where it is
clearly necessary in the interests of a fair and equitable disposition of the dispute
to require the employer to institute or liberalize a group insurance plan, the
Board will so direct.4

Under the pressure o f the war, and in view of the high profits which
industry was earning, management was not averse to this directive.
* International Teamster, April 1944.
* D aily Report on Labor-Management Problems, N o. 76 (Bureau of National Affairs), April 13,1945.

As a result, union welfare programs were initiated in many segments
o f the trade-union movement.
P resen t-D ay T ypes o f Programs

The type of welfare program in operation today varies with the
circumstances in the particular industry or locality in which it func­
tions. In some instances— for example, the erstwhile Kaiser ship­
building enterprise on the West Coast— the program is financed
entirely by deductions from the workers’ earnings, but is managed
exclusively by the company. The Endicott Johnson Co. of Bing­
hamton, N. Y ., has a. different approach: It not only assumes the
entire administration of the plan, but also furnishes all the finances as
well. A third type is that maintained by the Consolidated Edison Co.
o f New York, whereby the program is financed by contributions from
both the employees and the employer, although administration is the
exclusive prerogative of the company. The fourth kind— which will
be discussed here in detail— is that of the International Ladies’
Garment Workers’ Union local unions. Here the programs are
financed entirely by management, but the day-to-day administration
is left to the union, subject to review of a council on which the em­
ployers are represented .
Ladies9 Garment W orkers* Health and W elfare Programs

H istory.— The International Ladies’ Garment Workers’ Union
entered the field of welfare programs soon after the historic cloakmakers’ strike of 1910. Several local unions, notably Pressers’
Local 35 and Cloak Tailors’ Local 9, both of New York City, estab­
lished tuberculosis benefit funds, to which each member contributed a
dollar a year. Workers found suffering from tuberculosis were eligible
to a cash benefit of $100, or a sojourn in the country for a minimum
period of 10 weeks at the full expense of the union.
N ot so long ago, it will be recalled, the needle trades constituted
a thoroughly sweated industry, giving rise to the term “ sweatshop.”
N ot much attention was paid to the plight of the workers except by
the weak and struggling unions (which, single-handedly, were unable
to do much), and by a few reformers. M ost of the garment factories
in New Y ork City were located in the tenement slums of the East
Side; building piled upon building without vacant space for admitting
sunshine, light, or air. Sanitary facilities were lacking. The long
hours of employment and low wages compelled many workers to use
the factory as a lodging. Employers did not object to this arrange­
ment, because it saved them the expense of a watchman. There were
no factory laws to observe.

Under these conditions, it was inevitable that tuberculosis should
become the chief occupational disease in the garment industry.
Such an environment also led to one of the most disastrous industrial
catastrophes known in our country, wherein 147 young women workers
lost their lives in a fire which broke out in the Triangle Waist Shop
in March 1911. It was definitely established, at the criminal trial
which followed, that the owners had the factory doors (including
those leading to the fire escapes) locked during working hours.
These startling facts came to light as a result of an industry-wide
investigation conducted by the United States Public Health Service
in 1912 in cooperation with the Joint Board of Sanitary Control.
This unique institution came into being as a result of the signing of
the “ protocol of peace,” which followed the prolonged and bitter
general strike of the coat and suit makers of New York in 1910. Its
main objectives were the elimination of dreaded sweatshop conditions
and of fire hazards.
Louis D . Brandeis, Louis Marshall, and Hamilton Holt were the
chief architects of this idea. The Board was originally administered
by representatives of the employers, the workers, and the public,
the latter consisting of Dr. William J. Schieffelin, Lillian D . Wald,
and Dr. Henry Mosko.witz. Its medical director, the late Dr. George
M . Price, succeeded several years thereafter in interesting the parties
not only in the maintenance and observance of more desirable working
conditions, but also in the improvement of the health of the workers.

Thus, from a small beginning involving only a few thousand workers,
a huge institution today, known as the Union Health Center,6 was
created. It is owned and operated on a nonprofit basis by the
ILGW U. Housed at present in its own modern, fireproof 27-story
building, it is serving the needs of the 150,000 IL G W U members
located in the New York area. In 1945, it rendered no less than
164,636 medical services to 28,056 patients. During the same year,
it handled a total of 11,881 disability cases, to whom it rendered 24,652
services. The institution is at present under the directorship of
Dr. Leo Price, son of the founder and first administrator of the Center.
It has a medical staff of about 100, with a lay staff of over 150.
From the public health standpoint, the Union Health Center is
unique. It was the first institution of its kind in the country, and
its director is frequently called into consultation by government
bureaus and other agencies interested in public health problems.*
* See M onthly Labor Review, October 1939 (p. 811), for description of the IL G W U health program.


In the years that followed, local unions of the IL G W U began to
inaugurate first a tuberculosis benefit fund and later a limited form of
sickness insurance. Both of these benefits were financed by a 35-cent
monthly stamp paid by the workers. The actual amount of benefits
varied, but the high point was reached in the payment of $150 to
tubercular members and a weekly sick benefit of $7 for a period of 8
to 10 weeks.
A t the present time, the great m ajority o f the IL G W U ’s 350,000
members, distributed in 420 separate local unions in 275 communities
in 35 States and Canada, enjoy some form of health and welfare
N ew York Dress Joint Board

The largest single unit in this integrated union welfare program of
the IL G W U is the New York Dress Joint Board, which includes three
local unions (22, 60, and 89), w*th a membership of approximately
60,000. (Cutters Local 10, though part of the Joint Board, is for the
present not participating in the program.)
When the collective agreement between the Dress Joint Board and
the employers’ associations in the New York dress industry was re­
newed on M ay 6, 1944, a new clause was included providing for a
3%-percent pay roll contribution by the employers to maintain a
health and welfare program. The funds, according to the terms o f
the agreement, “ shall be used exclusively for the members o f the
union and for the payment of the operating and administrative
expenses thereof.”
“ The health fund,” b y further provision of the agreement, “ shall
be administered b y the Joint Board, and the Joint Board shall de­
termine what proportionate amount of the health fund shall be al­
located for health benefit and what proportionate amount shall be
allocated for vacation benefit. W ith respect to health benefits, the
parties hereby create a council consisting of two representatives of
the Affiliated Association, two o f the National Association, and two
o f the Popular Association, and six representatives of the Joint Board
o f the Dress and Waistmakers’ Union, which shall be presided over
by the Impartial Chairman. The council shall have the right to
determine the types and amounts of health benefits which the mem­
bers of the union shall receive and which, however, shall not exceed
the total amount allocated by the union for health benefit. The Joint
Board shall file with the council any rules and regulations relating to
health benefits which it may adopt, and amendments which it may
make thereto, and shall report periodically to the council the accom­
plishments of the health fund with respect to health and vacation

benefits. W ith respect to vacation benefits, the parties agree that
the Joint Board shall have the right to adopt rules and regulations in
connection therewith and to establish the eligibility of members of
the union for benefits and the amounts o f benefits to be paid them.”

Benefits currently paid b y the New York Dress Joint Board are as
(1) Cash benefit— Members who are ill and unable to work are
entitled to a cash benefit o f $15 a week for a period o f 10 weeks each
calendar year. It is paid upon certification by the medical depart­
ment o f the union (Union Health Center), and continues as long as
the member is unable to work, up to 10 weeks.
(2) Hospitalization.— Members are entitled to a benefit of $5 per
day for each day o f hospitalization up to 60 days in any calendar year.
(3) Surgery benefit.— The union pays every member undergoing a
surgical operation a sum varying from $10 to $50, depending upon the
nature o f the operation.
(4) M edical credits.— In addition to all the above benefits, every
member o f the union is entitled to $25-a-year medical service at the
Union Health Center for general medical examination, special labora­
tory tests, or X -ray.
(5) M aternity assistance.— A $50 maternity benefit is paid members
upon presentation o f a board o f health birth certificate. The plan is
being enlarged to include stillbirths, etc.
(6) Eye conservation program.— Every member is entitled to free and
unlimited eye treatment and to free eyeglasses.
(7) Tuberculosis benefit.— Members who are found to have tubercu­
losis are sent, at the expense of the fund, to any one of the many
tuberculosis sanitariums with which it is affiliated, and are kept there
until their health is fully-restored. Those desiring to withdraw from
membership and take care of their health independently of the fund's
provisions are allowed a cash settlement of $250. The obvious
difference in cost between an unlimited stay in a recognized health
institution with all costs (including regular sick benefit and personal
expenses) paid by the fund, and the alternative of $250 allowed a
sick member who undertakes his own cure, is intended to deter mem­
bers from asking for cash settlements and to encourage them to enter
an institution where the chances for the arrest of the illness and its
ultimate cure are so much better.
(8) Vacation benefit.— E very member of the union, employed or
available for employment in the industry, is entitled to a cash vacation
benefit ranging from $33 to $48, depending upon the particular craft
of the worker; This sum is payable on the first of June o f each year.

Death benefit.— In addition to the $150 lump-sum death benefit
paid by the home office of the ILG W U , for which the individual
member pays $1 a year, most of the local unions pay an additional $150
without any contribution from the members. Death benefits, it should
be noted, are not financed from the Joint Board Health Fund, but b y
the members’ contributions supplemented by the local treasuries.

The size and scope of the New York Dress Joint Board health and
welfare system are indicated by the payment, during the first 8
months of 1946, of over $600,000 for seven kinds of health benefits
(as shown by the following table) and of more than 2 million dollars
in vacation benefits in 1946.
Com parative am ount o f health benefits paid during first 8 months o f 1945 and 1946
First 8 months


T yp e of benefit



Total amount paid_____________ ______________





Cash benefits............................................................
Hospitalization benefit............................................
Rurppry twififU
. .
Medical credit..........................................................
Mat.phi tty assist,anna _
Tr ,
„ n. T._
E ye conservation program. ..................................
Tuberculosis benefit................................................







P er capita costs.— On the basis of the foregoing figures, it is esti­
mated that the average cost in health benefits alone, excluding medical
and general administration, is over $16 per member per year.
The cost is not uniform for the three local unions involved in the
foregoing table Thus, Local 22, with a dues paying membership of
25,671, runs its various forms of benefits at an annual cost of $19.36.
Local 89, with a membership of 30,405, averages $12.69, and Local
60, with 2,766 members, averages $19.34. The wide difference in
costs between Local 89 and the other two locals is attributable largely
to the fact that the former is composed of a considerably younger
element; moreover, the whole benefit system is more recent in this
union than in the other locals, with the result that its membership is
not yet fully aware of what it has to offer, and so does not take the
same advantages of the program as do the other two unions.
Actual per capita costs in cash sick benefits, including the medical
fees involved in the examination of sick members, are as follows:
Local 22...............................................................$11.15
Local 60............................................................... 10. 52
Local 89—.............- ............................................

8. 44

Cost o f medical benefits (on a per capita basis) are distributed


Local 22________________ .................................. $3. 29
$1. 64
Local 60________________ __________________
3. 43
1. 69
Local 89. .............................. .................... - ............
.3 2
.9 9
Claim rate p er 1,000 (percent)
Local 22............................ ................... - ..................16*
Local 60________________ .............................. ..
Local 89........ ............. ......... --------------------------------10*

General administration, including complete supervision as well as
audit of employers1 books, runs at the rate of 5 percent of gross col­
A further examination of the foregoing table (p. 18) shows that as
the health fund becomes better known to the members, payments
increase correspondingly. This fact accounts for the 29 percent rise in
the eye conservation program, wherein no change in benefit rate was
made between the first and second year o f operation.
Increases in the other parts of the program are due primarily to
the change in schedules which went into effect on April 1, 1946,.
whereby the weekly rate of cash benefit was increased from $12 to
$15, the hospitalization benefit from $3 to $5 per day and from 20
to 60 days per year, and medical credits from $15 to $25 per year.
Tw o entirely new benefit forms were added— surgery benefit and
maternity assistance.
There was also a substantial increase in the vacation benefit paid
this yean From a preliminary report recently made available, it is
evident that, although the total amount disbursed for vacation benefit
for the full year ending M ay 30, 1945, amounted to $1,476,709.90,
the vacation benefit paid out for the year ending M ay 30, 1946,
amounted to at least $2,069,254.46, an increase of over 40 percent.
This advance is explained in part by the fact that vacation benefits
were increased by $10, and in part by the rise in the number of claim­
ants (51,077 to 53,503) for the benefit. The average cost of this type
of benefit was about $39 per member during the 1946 period indicated.
The administrators of the health fund are not disturbed by these
increases. The industry is still operating at a good pace and the
receipts in 1946 n ot only compared well with the previous year but
also showed an increase o f 13.9 percent, as o f August 1, 1946* As
a result o f the added income, the health fund has been in a position to
put away a substantial reserve, from which it expects to be able to
increase current benefits still further and gradually add new forms of
The types o f benefits herein described are determined by the ex­
perience which the union has gained from the operations of similar
funds during the past 30 years and are also geared to the revenue

derived during the past year. As already indicated, systematic up­
ward readjustment is anticipated. Knowing the character of the
industry— its sharp seasonal fluctuations and general instability— the
union administration is taking a most careful attitude with respect
to scales of payment since it does not want ever to be in a position
which necessitates reduction in benefits.

W e were fated with the problem o f how to pay benefits. Instead
o f establishing a completely new department, with an individual
record for each of the 60,000 dues-paying members, which would have
required continuous posting o f the members' records, we agreed to
utilize the already existing sick-benefit departments of the individual
locals and their records. Thus, members, who take sick, report di­
rectly to the local to which they belong. The health fund department
o f the locals, in accordance with uniform rules and regulations, then
notifies the Union Health Center of the case. The member is exam­
ined within 3 days, and if disability is established, the first week's
benefit is paid on the tenth day following the receipt of the report of
illness. Thereafter, weekly checks are mailed upon the seventh day.
A t the conclusion of each month, the local health fund departments
submit detailed statements of disbursements to the secretary-treasurer
o f the Joint Board Health Fund Committee, who reimburses such
amounts to the local health funds, subject to audit.
A ny member who feels that he has been deprived of his rights or
that he has not been paid in full for his disability, has ample oppor­
tunity to lay his grievance before his elected local officer. He can
explain, in a language which both understand, his particular claim.
He thus has the satisfaction of “ talking it out” with the chief adminis­
trator o f his local union, rather than having to be content with a mute,
stereotyped form reply.
I f he is still dissatisfied, he has an opportunity to appear before a
committee on claims, which meets regularly in the office o f the union.
This committee is composed of two rank-and-file members from each
o f the affiliated local unions, and is presided over by the secretarytreasurer o f the Joint Board. The rules and regulations of the health
fund empower this committee to make whatever adjustments the
facts would seem to justify.
In this fashion, we have established a machinery which allows for
a centrally controlled administration and at the same time offers
wide flexibility, giving the local unions a substantial degree of auton­
om y and the individual member a feeling that he is not hopelessly
removed from the administration of his union and its funds.

Other Considerations

Obviously the comprehensive health and welfare program here out­
lined could not have been undertaken without the security and strong
organization which the IL G W U has been able to develop in the past
30 years. When a trade-union must devote all of its energies and
resources in struggling for adequate wages and decent working condi­
tions, it has neither the time nor the means to think in terms of social
welfare programs. Once it has achieved a substantial degree of
unionization and control over workers in the industry, it can under­
take these “ extracurricular” activities, which then become a legiti­
mate part o f its industrial program.
In fairness to the employers in our industry, it should be said that
they, too, are entitled to credit for the inauguration and development
of our welfare program. In the course of the past 30 years of col:
lective bargaining these employers have learned to recognize a
responsibility beyond providing adequate earnings and decent working
conditions to the men and women in their employ. They have become
acquainted at first hand with the social and economic value of human

Encouraged by the success which the IL G W U has scored in the
field of social welfare, many other unions have, in recent years, suc­
ceeded in incorporating similar provisions in their collective agree­
ments. Among them are the Amalgamated Clothing Workers of
America (CIO ), including its New York and Chicago divisions; Fed­
eration of Dyers, Finishers, Printers, and Bleachers of America (C IO );
United Furniture Workers of America (C IO ); United Hatters, Cap,
and Millinery Workers’ International Union (A F L ); Upholsterers’
International U n ion of North America (A F L ); New Y ork Hotel
Trades C o u n cil;6 Chain Service Restaurant Employees’ U n io n ;6
International Jewelry Workers’ Union (A F L ); International Union
of Mine, Mill, and Smelter Workers (C IO ); and International Print­
ing Pressmen’s and Assistants’ Union of North America (AFL).
M ore recently this movement was spurred by the United Mine
Workers of America (A FL), which in a recent agreement has provided
for a minimum of social security for the hundreds of thousands of
coal miners. Because of the grave industrial hazards to which
miners are always exposed, this form of protection would have been
desirable even before the garment workers and others began to enjoy
it. Henceforth welfare benefits become an important issue in em« Members of the Hotel and Restaurant Employees International Alliance (A F L ) in Greater N ew York.

ployer-employee negotiations. This was made clear by President
William L. Green in his report to the convention of the American
Federation o f Labor held in Chicago in October 1946.7

W hat has been the effect of this welfare program upon the organi­
zation? Does it make for a stronger union? Definitely, yes. Among
the chief factors making for the strength and effectiveness of the
IL G W U have been its comprehensive benefit services, including, of
course, its highly developed educational and cultural program.
In the early stages of the ILG W U , its membership was in a con­
stant state of flux. The industry in all its branches was sharply
seasonal. Shop strikes would break out on* the eve of every season.
The workers would obtain some wage increases here and there, only
to see them disappear several weeks later. There was nothing ’ to
bind the garment worker to his union. He would join and drop out
at frequent intervals. The turn-over in membership was tremendous.
W ith the introduction of the benefit system conditions changed
radically. Today the person who joins the ILG W U has every good
reason to maintain his membership even in slack periods. He no
longer drops his membership at the end of the busy season as he did
formerly, because today his membership is a form of security against
illness, unemployment, accident, and death. This makes for stabil­
ity, organizational strength, and effectiveness on the industrial field
and gives the union real capacity for expansion.
N ew Programs Create N ew Problems

The administration o f union health and welfare plans carries with
it certain new responsibilities and creates certain new problems which
are already beginning to make themselves felt.
I should like to stress particularly the need for actuarial experi­
ence and guidance in the operation of welfare programs. Heretofore,
unions have relied on whatever data they were able to obtain from
governmental and private sources, together with their own meager
information acquired in the course of experience. Benefit scales
have been fixed simply on the basis of availability of funds. Little
account has been taken of such facts as the increasing age of the
membership and the consequent higher incidence of illness. Will the
unions be in a financial position to pay the present benefits in the
years ahead, when the needs will become greater and the means more
limited? This is but one example of the kind of questions that must
be considered. So many factors are involved that, unless the actua­
rial aspect is properly handled, the entire program may be jeopardized.
‘ See p. 5 for statement from M r. Green’s report.

2. It appears to me that the trade-unions ought to begin pooling
their experience with a view to setting up definite criteria to enable
welfare programs to stand the strains and stresses inevitable under
our present economic set-up. It is my feeling that the more efficiently
and the more scientifically our funds are administered, the more likely
we are to preserve their voluntary character.
3. Another problem which has come to the fore is that of invest­
ment. The profitable and secure investment of union health funds,
as well as of union funds in general, constitutes a tremendous responsi­
bility upon union leadership. Because persons directly in charge of
union funds are free from the governmental restrictions to which
most of the nonprofit fraternal organizations, savings banks, and in­
surance companies are subject, they have to use extreme prudence and
care. Investment is a study in itself, and few of the union officials
in charge of funds are trained in it. W hat may appear as a sound
proposition to one man may be discarded by another for the sake of
an additional fractional percent of interest. M ost funds have met
the problem by limiting investment to the purchase of Federal, State,
and municipal bonds. This seems to be a fairly safe course to follow,
and one which will not subject the administrator to criticism in the
event the bonds drop in value. But even here there are elements of
danger. Some municipalities and States represent a better risk than
others. Standards should be set up as to types of investment. The
question of maturities is similarly important. Portfolios must be so
arranged that advantage is taken of changed financial conditions.
It is a mistake to think that, once a Government bond is bought, it
must be kept to maturity.
4. The complete segregation of health and welfare funds from the
general funds of the union is not only desirable but absolutely neces­
sary. It has already been noted that some unions were at times
compelled to suspend or entirely liquidate their health and sick benefit
programs because of industrial conflicts that completely drained their
resources. N o union can consider itself forever immune from labormanagement clashes. Unless the health and welfare funds are prop­
erly segregated, there is danger that they may be used, directly or
indirectly, for general union activity. In this connection, there comes
to mind an incident in the course of one of our perennial strikes in the
late 1920,s. When I told the strike committee that the money to
which reference was made was the property of the sick-benefit fund
one of the strike leaders told me, “ If we don’t win this strike, there’ll
be no union and no sick fund.” T o this I replied, “ As long as there is
this sick fund, something will always be left of the union.” Experience
not only in the IL G W U but in many other sections of the labor move­
ment has proved these words correct.

In the International Ladies’ Garment Workers’ Union and all its
affiliates segregation of funds is an established and fixed policy. Its
supreme governing body— the general executive board— has long ago
laid down the law that in no instance and under no circumstances are
funds to be intermingled.
Needless to say, trade-unions have entered the field of social welfare
out of sheer necessity. The attitude of some employers with respect
to the health and welfare of their workers and the past inadequacy of
governmental plans left them no other course. However, it is hoped
that the social security program of the Federal Government, which
now offers only a limited form of protection, will eventually embrace
all forms of sickness insurance and medical, mental, hospital, surgical,
dental, and prenatal care. When this happens, some unions will gladly
turn over their responsibilities to the Government and continue to
pioneer in other fields of social reform and economic justice.
H ow well the Government will run this program, no one can tell.
Some trade-unionists do not relish the idea of exposing their members
to the potential red tape of bureaucratic management. When we
reach that point, it m ay be well to rely upon the experience which the
European trade-unionists had in this respect. In pre-Hitler Germany
and Austria, as well as in the Scandanavian countries, welfare funds,
under the name of “ Arbeiter-Kranken und Sterbe-Kasse,” functioned
very satisfactorily on a tripartite basis— Government, industry, and
labor. It may be that we can do the same, and with our American
ingenuity, may be able to improve upon it.
B ut I am not prepared
to formulate any definite program of administration. W e lack suf­
ficient experience to come to definite conclusions. W e should, how­
ever, endeavor to develop a workable aud, above all, a humane ap­
proach to the problem. In the administration of health and welfare
programs, we are constantly dealing with sick and disabled people.
T o restore them to health and at the same time help them retain their
human dignity is a task worthy of our best talents and attention.