This is what I was trying to say in The Old Deal is Broken, but Krugman says it so much better:
Age of Anxiety and Job Insecurity, by Paul Krugman, NY Times: Many eulogies were published following the recent death of Peter Drucker, ... however, ... few ... mentioned his book "The Age of Discontinuity," a prophetic work that speaks directly to today's ... economic anxieties. Mr. Drucker wrote "The Age of Discontinuity" in the late 1960's, a time when most people assumed that the big corporations ... like General Motors and U.S. Steel would dominate the economy for the foreseeable future. He argued that this assumption was all wrong.
It was true, he acknowledged, that the dominant industries ... of 1968 were pretty much the same as the dominant industries ... of 1945, and for that matter of decades earlier. ... But all of that, said Mr. Drucker, was about to change. New technologies would usher in an era of "turbulence" ... and the dominance of the major industries ... of 1968 would soon come to an end. He was right. ... Many of the corporate giants of the 1960's ... have fallen on hard times, their places in the business hierarchy taken by new players. General Motors is only the most famous example. So what? ...: why does it matter if the list of leading corporations turns over every couple of decades, as long as the total number of jobs continues to grow?
The answer is the reason Mr. Drucker's old book is so relevant...: corporations can't provide their workers with economic security if the companies' own future is highly insecure. American workers at big companies used to think they had made a deal. They would be loyal to their employers, and the companies in turn would be loyal to them, guaranteeing job security, health care and a dignified retirement. Such deals were, in a real sense, the basis of America's postwar social order. We like to think of ourselves as rugged individualists, not like those coddled Europeans with their oversized welfare states. But as Jacob Hacker of Yale points out in his book "The Divided Welfare State," if you add in corporate spending on health care and pensions ... we actually have a welfare state that's about as large relative to our economy as those of other advanced countries. ...
[T]hose who don't work for companies with good benefits are, in effect, second-class citizens. Still, the system more or less worked for several decades after World War II. Now, however, deals are being broken ... What went wrong? An important part of the answer is that America's semi-privatized welfare state worked in the first place only because we had a stable corporate order. And that stability - along with any semblance of economic security for many workers - is now gone.
Regular readers ... know what I think we should do: instead of trying to provide economic security through the back door, via tax breaks designed to encourage corporations to provide health care and pensions, we should provide it through the front door, starting with national health insurance. You may disagree. But one thing is clear: Mr. Drucker's age of discontinuity is also an age of anxiety, in which workers can no longer count on loyalty from their employers.