Self-Insured: How Unions Beat the Market
A deep dive into how railway brotherhoods and cigar makers provided better, cheaper insurance for workers than private firms.
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Discussing trades union insurance in the Typographical Journal, Don C. D. Moore presents interesting data. The Cigarmakers' union is one of the most interesting of all the unions for study in the working of labor union insurance. The union has been in existence since 1864 and began paying sick and death benefits in 1881. In addition to three forms of insurance—sick, death and disability, and out of work—the organization provides for strike benefits. The railway brotherhoods are also an interesting field of inquiry. Following as they do very hazardous occupations, the railway workers provide insurance in the form of a compulsory minimum, with an optional addition. The average cost per $1,000 insurance for the four unions is $12, while the average in the old line companies for the same occupation is $22.00, or an average difference of $10.00 in favor of the brotherhoods. Moreover, the insurance companies' rates cover payments only in case of death, while the brotherhoods pay the same amount for total disability as for death—no small matter in such dangerous occupations as railroading.
“The average cost per $1,000 insurance for the four unions is $12, while the average in the old line companies for the same occupation is $22.00.”
This article highlights a time when unions acted as mutual aid societies, filling gaps in social safety nets before the state or private insurance markets adequately served working-class families. It provides a historical counterpoint to current debates about the rising costs of healthcare and the financial fragility of the working class.
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