Sidney Hillman's union founded a bank for working people

Person: Sidney Hillman
Lived: 1887–1946
Field: Labour movement
From: Lithuanian-American

The story

Sidney Hillman believed a union should do more than bargain over wages. After leading the Amalgamated Clothing Workers of America through a four-month lockout in 1919 and winning a 44-hour week by 1920, he turned the union toward building institutions that would serve its members' whole lives. In the 1920s the Amalgamated pioneered a version of "social unionism" that offered members low-cost cooperative housing and unemployment insurance.

The union also founded its own bank. The Amalgamated Bank was chartered on March 16, 1923, and opened to the public on April 14, 1923, on East 14th Street near Union Square in Manhattan. An advertisement of the time described it as owned and operated by the Amalgamated Clothing Workers, and its original directors included Hillman and Fiorello La Guardia, the future mayor of New York. While other unions also founded banks, the Amalgamated used its bank to supervise the business operations of garment firms that came to it for loans. Labour historian David Brody notes that under Hillman the union built two banks and set up educational and social support programmes for members.

Hillman also favoured what he called constructive cooperation with employers, relying on arbitration rather than strikes during the life of a contract. "Certainly, I believe in collaborating with the employers! That is what unions are for," he said in 1938, explaining that a productive industry gave workers a claim to higher wages, shorter hours and a greater share in the benefits. The union imposed industry-wide standards to take wages and hours out of cut-throat competition and even arranged loans and efficiency studies for struggling employers.

The approach had its critics among more radical members, but it helped stabilise a chaotic industry, and manufacturers themselves later credited Hillman with bringing order to it.

The Amalgamated Bank still exists. It describes itself as the largest union-owned bank in the United States, became a publicly traded company in 2018 and in 2021 became the first publicly traded financial services company to be a public benefit corporation. The idea that a union could serve its members as savers, tenants and citizens, not only as workers, remains one of Hillman's most original legacies.

Why it matters

Hillman's social unionism gave garment workers financial security, banking and homes of their own, showing how a union could serve its members' whole lives.