People and Profits, Are the Two Really that Difficult to Balance?

May 15, 2017  
By Bill Hohlfeld

On last night’s American Labor History segment of Blue Collar Buzz, we briefly discussed the Pullman Strike of May of 1894. There was nothing terribly complicated about it. Neither the cause nor the effect is difficult to understand, economically.

When the Chicago World’s Fair of 1893 shut down, another falsely driven economic boom collapsed, as did the need for George Pullman’s rail cars. Pullman’s natural response was lay-offs. No demand for cars means no demand for the people who build them. So, not dozens, or even hundreds of workers were let go, but thousands lost their livelihood in a day and age that provided no social safety net for the unemployed. Even if we could navigate through those emotionally troubled waters, the insult that followed the injury was unbearable. The workers who remained, depending upon their job classifications, were forced to take anywhere from a 25 to a 33 per cent cut in wages.

They were not, however, given a reduction in rent for the company housing in which they lived. Why? Because, according to Pullman that would have been charity, which he found to be unhealthy for the recipient and downright unethical of those who offered it.  So Pullman continued to rake in real estate and utility profits while the very people who had made his fortune for him with their labor barely managed to subsist. In fact, it was not unusual for families to be cold and hungry inside their “model” Pullman homes, as there was no income left to cover the cost of food and heating.

So, once again we come to the false dichotomy being laid out for the American worker (and voter). Scenarios such as this are much too often presented as a simple case of choosing a “free market economy” or some sort of socialist quagmire of relentless regulations, insane inefficiencies and hypocritical party bosses who live off the sweat of the duped and betrayed proletariat. The truth is, we don’t have to choose between the two now and Pullman didn’t have to then either.

Just as Pullman could have cut back the cost of rent and utilities at a rate commensurate with the wage cuts, so can we have sane regulation and still manage to encourage the entrepreneurial class. Pullman could have fostered loyalty and perhaps a touch of devotion in his workers, if he had shown a bit more empathy with his workforce. And, he would have remained incredibly wealthy in the process.

Today, we could join the rest of the industrialized world and insure that all our citizens have access to a good education, adequate health care and work which pays a a wage that allows a worker to sustain him or herself with some modicum of dignity. We’d have to stop our Pullmanesque labeling of people at the bottom of the economic ladder as morally deficient for wanting charity. We’d have to admit that the millions of ordinary people who go to work every day bring as much, if not more, to the table than the “great minds” who steer America’s corporate ships. And yes, we would have to be willing to take a second look at the way we balance people and profits.


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