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Providing health insurance to employees is a massive tax dodge. Providing schools to their children (or auto insurance, etc) is not.

If employer-sponsored housing was a similar tax dodge, you'd see employers bidding for employees with salary + rent free living.




Interestingly enough, according to one post I read just today, that's exactly what Chinese factory employers are doing: http://www.slate.com/blogs/moneybox/2012/10/18/foxconn_facto...


It actually goes back much farther than that. The Krupp family provided their workers with free housing, schools, health care, etc. At the same time, it bound the employees to their employer for life, more or less.

Krupp established the Generalregulativ as the firm’s basic constitution. The company was a sole proprietorship, inherited by primogeniture, with strict control of workers. Krupp demanded a loyalty oath, required workers to obtain written permission from their foremen when they needed to use the toilet and issued proclamations telling his workers not to concern themselves with national politics. In return, Krupp provided social services that were unusually liberal for the era, including "colonies" with parks, schools and recreation grounds - while the widows' and orphans' and other benefit schemes insured the men and their families in case of illness or death. Essen became a large company town and Krupp became a de facto state within a state, with "Kruppianer" as loyal to the company and the Krupp family as to the nation and the Hohenzollern family. Krupp’s paternalist strategy was adoped by Bismarck as government policy, as a preventive against the Social Democratics.

http://en.wikipedia.org/wiki/Krupp#Overview

Similarly, in coal mines across the US for years, they would do the same thing. They would pay the workers in "script" so they could not earn real money and thus, escape the life of being a coal miner. That was what the famous song by Tennessee Ernie Ford was about (http://en.wikipedia.org/wiki/Sixteen_Tons).

Many other industries, such as trucks/shipping in the UK also paid employees in script, thus forcing them to only buy from the company stores. http://en.wikipedia.org/wiki/Truck_system




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