The Pullman Strike of 1894

You can only push people so far before they explode:

George Pullman responded to the depression much like many of his contemporaries. At first he cut back his workforce by three-quarters. But widespread layoffs threatened both profits and the paternalism on which his town had been founded. In 1894, he began taking contracts at a loss—overproduction. This enabled Pullman to rehire many workers, so that by April 1894, 68 percent of the old workforce was employed again. But the only way to compensate was by cutting piece-rates a drastic 28 percent on average. Moreover, because Pullman remained committed to a return on investment in the homes he had built for his workers, he refused to reduce the rents he charged, which were already higher than rents charged elsewhere. The resulting economic hardship was greatly exacerbated by the unpredictability in piece-rates and the grievances against particular foremen.

Bolding mine, because these two specific factors of course clashed, and pushed workers (and their families) into a no-win scenario. There is nothing intrinsically wrong with paying workers based on how much they produce, as long as you don't change the rules when it suits management. But when a day's work is all of a sudden worth 28% less, it is far worse than cutting somebody's "hours" back to 29 instead of 40. Conservatives of today would probably say "just produce more" or some other poorly-crafted observation, as if workers were intentionally holding back. Had Pullman been a little more flexible about the rent, this strike might not have happened:

George Pullman gave bricks-and-mortar expression to his sense of the immutability of the social order that is still visible in the Pullman district. Every level of his workforce had a corresponding architectural form. Executives lived in detached homes; foremen in substantial row houses; skilled workers in smaller quarters; and unskilled workers in apartments, some having only two rooms.

As built in the 1880s, there was to be only one church in Pullman's community, which he expected all denominations to share. He reasoned that his factory used interchangeable parts, so why couldn't religion operate similarly?

And everything was owned by Pullman, who operated his town as an independent political entity, about 8 miles south of what was then Chicago's border.

Early in his career, Pullman tipped his hand to the way he intended to run his business: Instead of selling his sleeping cars — which transformed overnight travel from an ordeal to a luxurious experience — he operated them in conjunction with the railroads they ran on. A passenger bought two tickets — one from the railroad, another for the privilege of traveling in one of Pullman's cars.

Logically, the next step was to move his plant out of Chicago, where workers found housing and recreation for themselves. Pullman abhorred the idea of factory hands tippling after work, and he would allow no taverns in his town. His hotel for visiting businessmen had a bar, which was off-limits to Pullman's workers.

By building his town on 4,000 acres of open prairie, he intended to isolate it from the union organizers who made Chicago a center of the labor movement and radical politics.

As you can see, for Pullman anyway, this was as much a social experiment as it was a business venture. We hear much from Conservative/Libertarian "intellectuals" about government paternalism, but not a peep about the company towns of the Gilded Age. I have a sneaking hunch that for all their bluster about patriotism and American Independence, they really don't view Autocracy as a threat to freedom. Wannabe feudal lords like George Pullman are to be admired, while people like Eugene Debs are to be feared:

The Pullman workers who met with the company in early May had recently joined the nation’s largest labor organization. The American Railway Union (ARU) had been founded a year earlier by a thirty-eight year old, charismatic former official of the Brotherhood of Locomotive Firemen, Eugene Victor Debs. The ARU was a response to the counterattack on the wages and working conditions of railroad workers by a coalition of railroad managers, the General Managers Association (GMA). Founded in 1886, the GMA set standard job classifications and wages, recruited strikebreakers, and equalized revenue losses that railroads faced as a result of strikes. Debs recognized that the union brotherhoods of the locomotive engineers, brakemen, firemen and other skilled railroad workers must cooperate among themselves and with the masses of unskilled railroad workers if they were to successfully counter the tactics of the GMA.

After experimenting for several years with federations of brotherhoods, Debs created the ARU, an association of all workers employed by the railroads irrespective of their skill level or whether they worked in the repair shops, running trades, or freight depots. After winning a widely trumpeted victory over the Great Northern Pacific Railroad in 1893, dissatisfied Western railroad workers flocked to the new organization. When it held its first convention in Chicago in June 1894, it boasted 150,000 members, including about a third of the employees of George Pullman. The new managerial elite of the nation’s largest industry now faced a worthy adversary.

Which led to the brutal suppression of organized workers by elements of local and national government. I don't mean to gloss over that, but what led to that is more important, IMO. Because there are many parallels between 2021 and 1894, not the least of which is affordable housing. Our reliance on the private sector to provide (and profit) from housing, with little actual regard for affordability, is a paradigm that must be broken. Pushing for higher wages is definitely important, but without a sustained effort to keep rents from rising, that will fail. Miserably. Median monthly rent in the year 2000 was just over $600. It is now approaching double that, at $1,104 per month. That's actually 2020, and I have no doubt 2021 will surpass $1,200, especially after Trump's idiotic trade war with China, and his complete lack of understanding on who actually pays tariffs.

The bottom line: Without rent controls and much more public housing, this train is going to run off the tracks.

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Comments

As someone who actually owns a rental property...

I can say that I totally agree with your position on this. What my wife and I own is not some big complex, but rather our previous home in another state. We rent it out through a management company and, to be honest, make a tidy profit on that because we were lucky enough to buy it at a time when the market in the area was just beginning to rise and thus we have a very inexpensive mortgage on it. But we've always tried to be reasonable about how we do this. We set a rent six years ago that was on the low side of the market for that neighborhood and what the property is and we haven't raised it since, despite some urging from the management company. We have stable tenants and don't want to burden them or drive them away. We'd rather that they stayed and the neighbors get to have good people living there long-term. We told the management company that if there was any problem during the pandemic that we'd cover their monthly fee if the tenants had any problems, foregoing the rent (i.e., not seeking back rent) to keep them in the house. We basically put in our own more stringent eviction moratorium. We wouldn't have any problem with a regulated rent environment, since we've never sought to raise rents anyway. I know we're hardly typical of most landlords (and our management company is a fairly small local firm), but it wouldn't be a bad thing to see more have to behave in a responsible manner, especially the big corporate landlords that far too many renters have to deal with.

Thank you.

I know several folks who rent out homes (mostly smaller ones) and most of them are very reasonable. Just enough to cover costs plus a little profit. But of course there are not (nearly) enough landlords like that.