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$70 Million Effort Seeks New Safety Net for Workers

Resource type: News

The New York Times |

by STEVEN GREENHOUSE The Rockefeller Foundation’s annual report is chock-full of photographs of exotic lands and details of its grants to fight disease in Cambodia and help African farmers improve their soil. It is part of the foundation’s focus on what it calls smart globalization. But now the foundation has begun to focus on globalization’s effects closer to home, specifically on the way it has increased economic insecurity for many American workers. Concerned that thousands of corporations have cut back on health coverage and pensions – partly because of competitive pressures fueled by globalization – the Rockefeller Foundation has begun a $70 million effort to help build a new social safety net for the nation’s workers, especially the poorest and most vulnerable. As globalization was occurring, we started thinking this is going to affect us, too, that it’s not just everyone else in the world wearing Levi’s and listening to American music, said Judith Rodin, the foundation’s president. We started looking at the economic implications of outsourcing and offshoring, and we saw that although globalization may help countries, it may not help individual workers in those countries, particularly in the developed world. Dr. Rodin voiced concern this month that globalization had helped rip apart the social contract, dating from the 1940s, in which employers provided their workers with generous health coverage and pensions. Out of such concern, the foundation has created the Campaign for American Workers, which has made 15 grants aimed primarily at restoring health and retirement security. Those grants, for instance, have gone to groups to develop affordable health coverage for workers under 35 and to increase retirement savings among African-Americans. One grant went to Doorways to Dreams, based in Roxbury, Mass., to develop a demonstration program at several dozen tax preparation locations to encourage low-income and middle-income workers to invest part of their tax refunds in savings bonds. The goal is to encourage financial security and retirement savings among these workers. In June, the Rockefeller Foundation and Time magazine sponsored a poll of 2,000 Americans to gauge the extent of economic insecurity. It found that 72 percent said Americans were less financially secure than 10 years ago. Sixty-six percent said they were not saving enough for retirement, while 23 percent said that they did not have health insurance at same point during the previous year. Noting that only about half of private-sector workers get health coverage through their employers, Janice Nittoli, the director of the Campaign for American Workers, said, I think the employer-based system of benefits, as battered as it is today, will fade into the sunset. While John D. Rockefeller, the oil tycoon who founded the foundation, was not known for being friendly to workers, Dr. Rodin said the foundation has had a long history of helping workers. In the 1980s, it financed a program to improve the job prospects for the unemployed and underemployed, like welfare recipients and criminal offenders. We’re the foundation that funded the committee that developed Social Security in the 1930s for President Franklin D. Roosevelt, Dr. Rodin said. For Dr. Rodin, a former president of the University of Pennsylvania, a big concern is how globalization has affected the white-collar workers who lost jobs to Asia and blue-collar workers whose factory jobs have moved overseas. You have to start thinking about the middle class as part of the vulnerable population that is at risk, she said. We can’t trade protection or anti-immigrant our way out of this. We really have to think about economic security – and insecurity – in a much more creative and holistic way. Sara Horowitz, founder of the Freelancers Union, an 80,000-member group based in Brooklyn that provides health and disability insurance to freelance workers, praised the foundation’s work. They’re trying to analyze what the next social safety net is going to look like, and instead of doing it by some big-picture analysis, they’re funding a lot of different experiments to try to develop that safety net, and that makes their strategy pretty unique, she said. The Freelancers Union has received a $3 million Rockefeller grant to develop a 401(k) program for freelance workers and independent contractors that will have lower service fees than most 401(k)s. The project also calls for furnishing guidance on what type of 401(k) will be best. We’re using mutual aid to set up these things, Ms. Horowitz said. We don’t think they should take on all the risk of setting up their own benefits because a lot of them don’t have the expertise. The Rockefeller Foundation is financing a project to develop an economic security index, which, like the University of Michigan’s consumer confidence index, will measure how economically insecure Americans feel. It is also financing a project to make annuities more affordable and attractive so that more Americans can buy annuities after they retire. Qvisory, a nonprofit based in Seattle, has received an $800,000 Rockefeller grant to provide credit counseling to help prevent many workers under 35 from drowning in a sea of debt. Qvisory is also giving online job advice and setting up health insurance products tailored to workers under 35, many of whom are not offered health insurance in their jobs. We’re trying to teach people how to get out of debt and how to save, said Eileen Quigley, Qvisory’s executive director.

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