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This chapter returns to the analysis of twentieth century U.S. to explain the dual nature of its system of labor market governance in which cartelism, a centralized system of multiemployer collective bargaining, thrived alongside segmentalism in important sectors like bituminous coal mining, clothing, and building and construction. In these sectors, employers and unions joined in cross‐class alliance to prop up wages to stem destabilizing low‐standard competition. The regulatory alliance, distinct from Sweden's solidarism, which imposed ceilings instead of floors on wages, helped give rise to economic and political phenomena of an equally distinct nature, e.g., early ties between the Republican Party and the powerful miners’ union; corruption in building and construction (which was absent in Sweden); and ultimately, employer interests in the New Deal's labor and social legislation of the 1930s.

Wraps up the analysis of labor market developments in the U.S. through the 1940s showing how and why employers abdicated their segmentalist autonomy and submitted temporarily to state‐imposed solidarism, including intersectoral wage compression similar to what Sweden's normal peace time system brought about. During the prewar and interwar periods, the same employers actively sought another kind of intersectoral control, especially over wages in the building and construction trades, because high wages in this sector disrupted major manufacturers’ otherwise workable system of labor market governance just as they did in Sweden. Unlike in Sweden, however, major American manufacturers were unable to find allies for a cross‐class alliance against the building trade unions, and thus political relations between capital and labor remained far more hostile than in Sweden despite the Swedish labor movement's explicitly anticapitalist ideology.

This chapter begins the historical analysis of welfare state development by tracing the origins of American segmentalism, a pattern of labor market control marked by decentralized industrial relations, relatively high and downwardly rigid wages paid by many large employers (efficiency wages), and extensive use of company benefits (welfare capitalism). Leading employers in America embarked on their segmentalist strategy early in the 20^th century by breaking with existing and emerging centralized regulation of labor markets (multiemployer collective bargaining), desiring in part to assert absolute management rights against the militant claims of labor unions. For reasons analyzed in Ch. 2, success of the employers gave rise to heightened interests in regulatory social reform in response to the deflationary macroeconomic shock of the Great Depression.

This chapter turns to the dramatically different turn of events in early 20^th century. Sweden, where highly centralized collective bargaining took hold, largely at the behest of employers, accomplished with their effective use of sweeping multifirm and multiindustry lockouts. Securing absolute management rights despite union input in collective bargaining, employers achieved a solidaristic system of labor market regulation in which wages were held below market equilibrium for most firms and wages were standardized or compressed within many industries. The employer confederation was not successful, however, in achieving a desired compression of wages across industries, a goal that was to require labor union help and political intervention, discussed in the following chapter.

Concludes the book with a survey of trends in the areas of collective bargaining and social policy from the 1950s through the 1990s, and examines them in light of earlier analysis, in the U.S. and Sweden. It finds, for example, that dramatic changes starting in the 1970s and 1980s in labor‐management relations (the decline in unionism and collective bargaining in the U.S. and the decentralization of bargaining in Sweden) were more influenced by international market processes in the U.S. than in Sweden. It also finds that analysis of the ongoing realignment of capitalist and labor interests helps explain the late 20^th century welfare state trends.

This chapter wraps up the analysis of solidarism's development through the 1950s with historical evidence showing how employers strongly favored continued wage compression, a fact that thoroughly undermines the mythology that employers reluctantly traded centralized negotiation of an egalitarian structure of wages across firms and industries in exchange for the labor confederation's suppression of wage militancy. Wage solidarism and restraint, consensually pursued in multiindustry collective bargaining, generated endemic labor scarcity, which in turn gave rise to a profusion of welfare capitalist benefits offered by firms to attract and retain labor. The employers’ confederation proved unsuccessful in unilaterally suppressing this resurgent segmentalism, and these difficulties help explain employer support for welfare state politics during the 1940s and 1950s.

From 1900 to 1950, three waves of attempts at organizing farm workers failed to win a single multiyear contract, establish a sustainable farm workers union, or reform the rules governing the farm labor market. At each of those moments, ethnic labor associations, radical networks, and the American Federation of Labor (AFL) were involved, but in competition rather than collaboration. Recognizing their limited ability to challenge growers on their turf, labor leaders learned that no matter how well organized they were locally, they often had to win outside support to make even short-term gains.

In the late 1950s and early 1960s, changes in American political, economic, and social life—and the expectation that the bracero program was in its final days—once again opened a door for organizers bold enough to try unionizing farm workers. This time, the newly merged AFL-CIO acted first by launching the Agricultural Workers Organizing Committee (AWOC) in 1959. The Teamsters, recently expelled from the AFL-CIO, initiated their attempt in 1961. The fledgling Farm Workers Association (FWA) launched in 1962. The strategies that the leaders of these efforts devised to challenge the power of California growers could hardly have differed more. These strategic differences were not arbitrary. They grew out of real differences among the people who devised the strategy of each organization and how they worked together to do so. In the years 1959 to 1962, these differences in people and processes influenced the launching of three very different organizing attempts, thus shaping their subsequent development.

Coal mining offered the opportunity to earn money quickly during booms, but it was a dirty, dangerous job often located in isolated little towns. To protect themselves against exploitation by employers, coal miners exercised both voice and exit. The voice came in the form of collective action either through the formation of labor unions or labor strikes. The United Mine Workers of America (UMWA) enhanced the welfare of their members in several ways. Within the coal industry, miners obtained higher wages by joining the union and striking. The union did not necessarily lead to a better situation in all phases of the job, however. Accident rates were no lower in union than in non-union mines, nor was the quality of sanitation better, holding other factors constant. Blacks were welcomed into the union in the mining areas where they had long been located, but a number of union locals in the North treated blacks as pariahs. The UMWA was crushed along with the coal operators by the deterioration of the industry in the late 1920s and early 1930s.

When the National Farm Workers Association (NFWA) affiliated with the AFL-CIO to become the United Farm Workers Organizing Committee (UFWOC), ethnic leaders, radical organizers, and the AFL found themselves on the same team for the first time in California history. Employer reaction to the DiGiorgio victory put the alliance to the test immediately. One consequence of the victory was that it inspired wine grape workers at Perelli–Minetti vineyards near Delano to join the strike. The Teamsters intervened by providing strike breakers, claiming to represent them, and signing a contract behind the UFWOC picket lines. Recognizing that they would become a Teamster “hunting dog,” driving one ranch after another into the Teamsters' sights if they didn't fight back, UFWOC launched a boycott of the company's wines despite the fact that the existence of a Teamster contract could inhibit labor support. By May 1967, it became clear to Perelli–Minetti and the other growers that a Teamster contract could not protect them from a UFWOC boycott. The Teamsters realized that without employer cooperation they could offer UFWOC little competition in the fields. All sides went to mediation, UFWOC suspended the boycott, the Teamsters withdrew from the fight, and Perelli–Minetti transferred the contract to UFWOC. How did affiliation with the AFL-CIO, despite the traditional labor movement's history of failure in the fields, enhance the NFWA's strategic capacity? Why couldn't the Teamsters devise a more effective strategy after their “responsible union” approach failed? When the Teamsters tried to learn from UFWOC by mimicking its tactics, why didn't it work? And how could the new union expand the scope and scale of its operations to be able to consolidate its success, fend off new challenges, and launch new initiatives? The answers can be found again, although at a whole new level, in the capacity to generate effective strategy.

The strength of Lake Mills' plant-community identity, its historic vertical integration, and its domestic market orientation all combined to inhibit cooperation with other plants within APV to improve the effectiveness of the parent company as a multinational association. There was, in short, no American equivalent to the Danish Mafia, nor could such a network be easily imagined from the perspective of Lake Mills. Without the institutional resources and external allies to support a more expansive vision of the plant's future, local unionists and managers understandably fell back on a slew of defensive carrot-and-stick strategies for maintaining its position within APV. On the positive side, they sought to reinforce Lake Mills' indispensability to the multinational by providing a quick turnaround service to the company's large US customer base, and by developing new products tailored to US technical standards.

Institutional factors affecting the labour and the product market differ significantly in European countries. Product market competition, for instance, is recognized to be stronger in Anglo-Saxon countries, and employment protection to be higher in Southern European countries. There is extensive literature which investigates how these institutional differences affect unemployment dynamics. The bottom line of this research is that analysing the interaction between institutions and economic shocks helps explain unemployment differences across OECD countries. This chapter reviews empirical literature regarding the question of whether labour and product market institutions affect training incidence and whether they can account for some of the variation in training outcomes observed across European countries. It is argued that most of the existing evidence is not comparative but country-specific, with a strong emphasis on the US and to a lesser extent on the UK. A European perspective is taken by matching data from the European Community Household Panel — a large dataset covering 15 EU countries — with information on time varying institutions. An empirical investigation of the relationship between training incidence and labour and product market institutions is carried out, focusing on cross-country and time series variations in institutions.