Early1900s America society was populated with a few haves and many, many have-nots. Those that had power and money did whatever they could to keep the status quo. Industrialists and big city politicians worked together to stay rich by forcing the working class to stay poor. Yet by 1970 the working class was no longer on the bottom but instead it had become solidly middle class. The differences between 1900 and 1970 are reviewed in terms of social mobility in order to understand whether or not social mobility was greater in 1900 or in 1970. It will become clear that in 1970 a poor person could get into the working class more easily than a poor person in 1900 could even get a job. The industry and governmental processes making that possible are explored below.
There was a new American Dream of the 1880s held by former slaves and the millions of immigrants who had fled bad conditions in Europe. The dream was that anyone who worked hard could become a success in the USA. America was the country of opportunity. But the South and the North did not allow African American integration into society, instead obstacles were made. In 1890 the reaction to the Civil War by Progressives in the South was to keep former slaves carefully segregated away from whites so drinking fountains, toilets and public schools were segregated. Progressives in the North used bureaucracy to make voting difficult for African-Americans so they could not gain electoral power. The immigrants had no guarantee of stability or security in their working lives if they could find a job. In Chicago and other big cities Big Business controlled every part of their lives by manipulating city politicians with graft (corruption and bribery). Peoples’ lives were a nightmare because a corrupt, expensive and inefficient city government was useless for keeping infrastructure in order or public services running smoothly. In The Jungle by Upton Sinclair described the types of organized industry and crime such as the ‘ Racing Trust’ which owned the legislatures and the ‘ Poolroom Trust’ which was in charge of gambling and horse races. Sinclair described Dunham & Co. as an example of a market monopoly which made everything it needed and used every part of an animal’s body to make consumer products. The workers were at the mercy of industries which formed Trusts like the greedy members of the Beef Trust which was organized nationally to make the most profit with the least output of money, a cost-based management strategy. The Beef Trust fixed prices, treated workers like slaves, and was supported by Chicago’s political machine. In other words it broke laws and created victims from the vulnerable poor in order to become richer. The Jungle’s main character, Jurgis, learned that hours of work at the meatpackers were not guaranteed; during slow times workers might get 35 cents for two hours work then sent home. Now-a-days cost is considered a fixed cost and usually calculated as overhead, but the way 1900 wages were calculated, a worker could never be sure of the amount to expect. The amount could depend on promises made to a corrupt politician. Jurgis had such an experience when he worked as a scab at the meatpackers; (he had asked for $3 a day and it turns out the office workers were getting $5 a day for the same work). Respect for employees did not enter into the calculation for profits. Workers could be laid off at any time and recalled days, weeks or months later, if at all. In The Jungle Jurgis’ experience demonstrated that in the 1900s criminals could make better livings then honest workers.
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Meatpacking offered low pay, awful conditions and dangerous work. But someone always needed a job. Sinclair explained this was the order on based on which ethnicity would accept the lowest wages; so if the Germans left then the Bohemians and the Polish immigrants would take the jobs. Industries needed a concentration of workers so the influx of new waves of immigrants worked out well for them until Unions started to organize. The greatest fear of industrialists was a concentration of workers that could organize so they helped fuel racial and ethnic divisions.
European workers were also fighting industrial oppression. Trotsky’s1905 theory of “ Permanent Revolution” featured a Permanent Working Class to run the country. Other workers around the world would come to each other’s aid so socialism would eventually be the dominant political system. The concentration of wealth would not be in a few hands of aristocrats (as in Russia) or industrialists (as in the USA and England). The society would be classless meaning everyone would be on equal terms (similar to a commune but on a national scale).
The Progressive Era (mid-1890s to 1920s) brought progressive action. Government services were needed for fairness and efficiency after years of business control. Big Business (the industrialists and their trusts) were not stopped overnight but step-by-step changes were made. Three of the main goals of Progressive Era were (a) economic reforms, (b) direct democracy, and (c) providing public schools and public services. For example, services like city gas and water hook-ups have a big volume (number of customers). The bigger the volume the less cost a customer should expect. Privately owned companies formed monopolies and charged whatever they wanted; so public companies were set up to run economies-of-scale-type businesses fairly. When a monopoly was in place the charge to the customer was ‘ whatever the market would bear’ whereas a public company charged an appropriate amount (cost) based on volume.
World War I
World War I started Archduke Franz Ferdinand, heir to their Austro-Hungarian throne, was assassinated. European countries had been in wars of expansion for decades. President Woodrow Wilson’s reason for entering the war was to end imperialism. The US stopped exports to Germany in 1917 and 1918 but the increased exports to France and Great Britain (GB) were phenomenal; the US economy grew. The increase in manufacturing meant jobs and started a period of social mobility. From 1910 to 1915 the exports to GB, France and Germany stayed consistently at the same level. Then in 1915 the exports to GB and France rose dramatically. In 1900 exports to GB were worth approximately $534 million; in 1917 it had risen to $2, 016 million. That calculates to an increase of 37%. The increase in exports to France was about 8. 9%. Exports to Germany stopped completely in1917 and 1918; when resumed in 1919 it took only one year to reach $331 million, which was close to the pre-war amount of $345, 000 and showed a 60% increase from the 1900 level of $187 million.
Henry Ford was influenced by the 911 a scientific method business model introduced by F. W. Taylor. It used an assembly line for large scale production and best use practices of rationalization and standardization. Scientific observation identified the optimum time and motion. Division of labor, work measurements and evaluation of piece-rate wages were part of the business model. Ford used those methods to their best advantage and introduced velocity based management which was structured on efficiency – getting the product made and to the consumer as quickly as possible. These were operational changes made on the factory floor. Adjustments could be made based on consumption rates (or availability of resources) by adjusting worker numbers, if necessary using fewer people more efficiently. Fordism included a production line that was efficient, had the best throughput velocity, and responded to changes in demand.
Production line manufacturing is where one person has his/her own place on the line doing the same thing over and over. In a production line putting cars together one person might hold the door, another one bolts the hinges to the chassis, the next person bolts the side mirror to the door, and on down the line as the car gets closer to being completed. Automobiles changed the way products were made and the rules for social mobility. Ford wanted the automobile to be affordable to the working family man. If a line worker made $2 to $3/day $1000 to $1200 they could afford a Ford Model T at about $290 per car. An automobile symbolized a family that was “ moving up” in the world; an outward show of social mobility.
In the early 1920s the average annual wage in manufacturing ranged from $1, 200 to $1, 500 (depending on the part of the country). Growth of manufacturing meant increased hourly annual wages. But the Great Depression of the 1930s brought a downward trend for millions in wages and social mobility. Lost savings, no jobs, no house and no automobile left many living on the street. U. S unemployment rose 4. 5 percent from 1928 to 1930; from 1930 to 1933 joblessness was approximately 16. 2 percent. In 1928 unemployment was at 4. 2 percent and finally in 1942 the level was closer to that 4. 7 percent bringing the cycle back to the 1928 level. The increase happened because FDR initiated the New Deal to get people back to work and to get the economy moving again. Families needed relief (aid distributed by government programs). The Wagner Act of 1935 (the National Labor and Relations Act, NLRA) and the 1938 Fair Labor Standards Act (FLSA) were passed. The NLRA was necessary so workers could organize safely without being threatened (freedom of association) and ensured the right to collective bargaining. The FLSA is something all workers today should celebrate and remember because it set the minimum hourly wage (set to $0. 25), the standard maximum work week (set to 44 hours) and banned child labor (especially oppressive and dangerous work). Finally workers had a guarantee of a minimum hourly pay and a chance to improve their quality of life and once again gain social mobility. Relief could be emergency relief, cash to help a person survive, or affordable loans and was designed to combat scarcity. The Public Works Administration created jobs for photographers, dam builders, and everything in between (known as the Civilian Conservation Corp). The Farm Credit Act helped farmers buy seeds and other items. The Agricultural Adjustment Act subsidized farming because drought had made growing crops impossible. This aid had the purpose of helping farmers keep their farms. Banking reforms were established like the Federal Deposit Insurance Corporation so that people would trust banks again and start savings accounts.
Unions increased in membership numbers and were strengthened (it seemed at the time) by the 1913 Clayton Bill (more legal ability to organize, freedom from injunctions for making reasonable demands, and jury trials when a member was held in criminal contempt). Unions seemed quite strong during WWI but then in the 1920s the Clayton Bill was not as effective as hoped. Workers’ terrible conditions resulted in them looking to Socialism for answers. Socialism is the economic theory in which the workers own the means of production. Wage competition pits workers against each other for any job available, but socialism means that workers cooperate and support each other. The US did not become socialist and a lasting socialist party did not develop here as it did in European countries because the idea that individuals could find success was so strong. In 1904 and 1912 Eugene Debs ran as the Socialist Party candidate for president. Debs garnered 6% of the total votes cast in the 1912 election, a good amount for a new party. Although the Socialist Party did not last, Unions flourished and made life in 1970 good for workers with plenty of social mobility. The US did become progressive though because government started setting safety and quality control regulations. Therefore government became a bigger bureaucracy not like the limited government people wanted at the start of the century.
After World War II
After World War II the economy was experiencing a boom time. In 1945 Per Capita GNP was $1515, in 1950 it had risen to $1877 and by 1955 it had risen to $2408. During the 1950s consumer-buying was up leading to more manufacturing jobs. By 1965 the Per Capita GNP was $3535. That calculates to a rise in Per Capita GNP of approximately 43 percent in twenty years. Wartime manufacturing had started the boom. After the war soldiers found work in assembly lines. They were able to make enough money to buy consumer goods. There were cars available at prices families could afford (Ford wanted his workers to be able to own a car and he succeeded). Workers were moving up in the worlds according to their purchasing power and in that way the economy was good. Wages rose after WWII to an average of $3940 in 1946 and a 43% rise ($6900) by 1960. Workers became part of the middle class by the 1960s and the new American dream became one of materialism (concept that worldly possessions bring happiness, became an accepted measure of quality of life) and consumerism (purchasing of consumer goods, became essential to social mobility because acceptance into society depended on what you owned). The 1960s Middle Class accounted for 60% of the population and represented people living comfortably above the poverty line but not rich. The poverty line constitutes the dividing line between modest well-being and poverty. In 1962 Harrington reported that the U. S Bureau of Labor Statistics estimated a family living on $4000 a year was the poverty line and it was an individual living alone $3, 000 a year. An estimated 40 to 50 million American lived below the poverty line, which made up 25 percent of the population at the time. AFL-CIO estimated a family of four could adequately live on $4, 800 in urban America, in 1960s Houston $5370 was needed and in Chicago $6567 was needed per year. The Bureau of Labor statistics considered these amounts of annual income to be above minimum maintains and quite a distance form luxury (Harrington, 1962, 181) The percentage of Americans in poverty in 1900 was 39 percent, in 1929 50%. In 1961 29 percent poverty rate fell to 20 percent in the 1970s. The figures show that social mobility was at a standstill during the Great Depression but by the 1970s the poverty rate was low so that social mobility was high. The working class had made it to the middle class.
Poor workers in the 1970s had more access to social mobility than in 1900. By the 1970s workers were solidly part of the middle class and had job security, good homes and good wages. The new American Dream in the 1880s of achieving whatever an individual wished turned out to be unrealistic. The new American Dream of the 1960s and 1970s was based on acquiring products to acquire a higher quality of life. The 1970s rise of workers was possible because of hard won battles by Unions for job security and safety plus the passing of good legislation. A new choice had developed during the days when Socialism was starting to become popular and that was the ability to cooperatively own or invest in factories so that workers could share in profits. This was the opposite of the opportunities available to workers inn 1900.
Harrington, Michael. The Other America. New York, NY: Touchstone, 1962. Print.
Lewis, Sinclair. Babbitt. 1999. New York, NY: Oxford University Press, 2010. Print.
Meyerson, Harold. The Other America May Be Coming Back. Washington Post. Lexis-Nexis, Editorial, 2005 Jan. 5: A17.
Rossi, John P. The New Diplomacy & Its Failure: The U. S., World War I, & the Origins of World War II History 21 Lecture Outline, 2012.
Sinclair, Upton. The Jungle. 1906. New York, NY: Oxford University Press, Print. 2010.