Industrial Insurance
in social science, insurance for wage earners against want. The fraternal orders of America and the friendly societies of the United Kingdom may be said to provide insurance. Many of these organizations issue insurance policies and pursue the methods of insurance companies. Regular membership in any of these organizations is considered insurance against dire want. Trades unions every-where make it a point to care for needy members, but these bodies are unstable and are unlikely to include the humbler wage earners in their membership.
In recent years the term has acquired a restricted meaning. A political party declaring for industrial insurance is under-stood to favor social insurance, insurance by society, or, in other words, insurance of working people by the government. The best developed system is that of the German Empire. The German plan includes insurance against sickness, accident, physical break-down, and an extension old-age pension system. The earliest legislation was passed in 1883. Relief in case of sickness is granted for twenty-six weeks. In order to build up a fund from which aid may be paid a small percentage is withheld from week to week out of the wages of the workingman and the employer is required to contribute half as much. Two thirds of the entire cost is thus paid by the wage earners themselves. There is no option. All wage earners connected with mines, railways, factories, etc., lose a trifle from their wages and are thereby insured. A man earning a dollar a day pays seventeen cents a week into the fund. An allowance is made women for time lost during childbirth. Forty-one days' wages are allowed for funeral expenses. Funds are cared for by local authorities under imperial supervision.
German legislation covering accident insurance by the state followed in 1884. All wage earners receiving less than $750 for a year contribute to the fund. Aid is granted according to the degree of incapacity. Total incapacity for labor is met by a pension of two-thirds of the yearly earning. In case of death, burial expenses are provided for by a pension to the widow of one-fifth of the husband's former wages, and an allowance for each child until it reaches the age of fifteen. Invalid insurance and old age pensions were provided for in 1888. The fund for this insurance is taken equally from the worker and the employer, save that the Empire grants $12.50 a year to each annuity. The old age and invalid benefits vary from $12 to $82.50 a year. The German system enforces saving and makes savings secure. It reaches every wage earner and renders him certain of medical attendance, of a pittance, if not comfort, still an escape from dire poverty in his old age, and a decent burial.
Up to 1904 60,000,000 persons--workingmen and their relations--had received aid footing up to a total of $1,000,000,000. Of this vast sum, they had paid in about $625,000,000 from their small earning. In 1904 the number of working people insured in the various classes was 11,418,000 for sickness, 18,000,000 for accident, and about 14,000,000 for old age. A considerable portion of the funds is invested in workingmen's cottages and hospitals, baths, and sanitariums which yield a small income to the fund.
Other European countries have followed the example set by Germany. Austria enacted a law for accident insurance in 1887, and sickness in 1888. In Germany the classes are organized by trades; in Austria by territorial boundaries. In 1895 Holland, Italy, Finland, and Norway set industrial insurance in operation. The United Kingdom (1898), Denmark and France (1899), Sweden (1901), and Russia (1904) have enacted legislation requiring employers to grant aid in sickness and old age; but the invalid workman has small means with which to compel wealth to comply with the law. New Zealand enacted an old age pension law in 1898. The policy of industrial insurance is indorsed by labor unions. Socialists have not failed to point out that the universal adoption of the system would be hastened by public ownership and direct legislation.
The more radical plans for old age pensions contemplate a payment from the state treasury to every citizen above a certain age (seventy, perhaps), as a sort of "service pension." The advantage claimed for this plan is that it removes all appearance of charity or class distinction.