railroads

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:

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