With the first Industrial Revolution, workers became aware of their helplessness in the face of long working hours and low wages. Professional alliances and strikes were crimes and employers were not obliged to pay for the expenses caused by work-related illnesses or accidents. It was in this context that the initial systems of protection such as private savings, mutual funds, private insurance and public benefits emerged.
This is an individual provision that consists of a worker setting aside part of their ordinary income.
Over time, this measure has been encouraged by governments themselves. However, this system is difficult to sustain in times of crisis when workers’ salaries sometimes do not even cover the family’s basic needs.
This is another welfare system based on the members of certain groups forming associations to cover risks such as old age, disability, illness and death, through financial contributions by their members.
It is important to emphasize that in mutualism the objective of profit does not exist, since it is inspired by the principle of solidarity, which serves as the basis of what is known today as Social Welfare, both public and private.
This appeared at the end of the 15th century, linked to the development of maritime trade, as a private law contract by virtue of which, through the payment of a premium, estimated according to the risk assumed by the insurer, they were obliged to pay a capital sum or indemnity if the event that the insurance covered occurred.
It is worth mentioning the emergence of a special type of life insurance in England in the 16th century, characterized by the fact that the life of a person was insured for a short period of time, one year or even less. It was based on providing the relatives of the deceased with an indemnity in the event of death so that creditors could be compensated if the person’s debts had not been paid.
Today, private insurance enables many groups of people and companies to protect their employees against work-related accidents and occupational diseases.
This arose to solve the problem of poverty resulting from the first Industrial Revolution. However, nowadays this social assistance can be private, when it is undertaken by private institutions, public if it is undertaken by the government, and mixed when both characteristics are combined.