Social Contract Pros And Cons

2. What was the new "social contract" between labor and management, and how did it benefit both sides as well as the nation as a whole? During the 1950s, the United States bore witness to the resolving of tensions between labor unions and management, which had been escalating during the preceding two decades. Laborers and managers came together in various industries to compromise, which resulted in the introduction of “social contracts”. Social contracts were long-term agreements signed between unions and employers, and during the 1950s they focused on a variety of issues long-disputed by workers, unions, and employers. Overall, the creation of social contracts benefited both sides for it enabled both parties to reach an agreement they were content with. For example, some social contracts “…left decisions regarding capital investment, plant …show more content…
In regard to unionized employee’s rights, “Employers stopped trying to eliminate existing unions and granted wage increases and fringe benefits” (Foner 941), such as pension plans, health insurance, and automatic pay adjustments. While these social contracts and their benefits were exclusive only to workers in unions, they did also sometimes benefit the nation as a whole. For example, in the 1950s and 1960s, unions were able to achieve an increase in the minimum wage, which was “…earned mostly by nonunion workers at the bottom of the employment pyramid” (Foner 941). Social contracts, as mentioned earlier, also helped prevent unauthorized strikes which would, in turn, reduce the inhibition of the production of goods, and therefore help prevent product shortages caused by strikes. In the