Company Towns: 1880s to 1935

Traditional settings for company towns were for the most part where extractive industries existed– coal, metal mines, lumber — and had established a monopoly franchise. Dam sites and war-industry camps founded other company towns. 

In other cases, the company’s motivations were less ideal. The remoteness and lack of transportation prevented workers from leaving for other jobs or to buy from other, independent merchants. In some cases, companies paid employees with a scrip that was only good at company stores. Without external competition, housing costs and groceries in compan... See more

The problem arose when after the panic of 1893 the workers of Pullman received several wage cuts that on the average added up to twenty-five percent. These cuts were bad in themselves, but when coupled with Pullman’s actions of not lowering the rents for his company owned homes in Pullman, the laborers began to unite.

Roosevelt Administration’s New Deal dealt the final blow to end American company towns by raising minimum wages, encouraging industrial self-governance, and pushing for the owners of company towns to “consider the question of plans for eventual employee ownership of homes”.

Pullman Palace Car Company was famed for its sleeper and luxury rail cars that it manufactured. One of these manufacturing locations was in Pullman, Illinois. George M. Pullman founded the town of Pullman as a place where his workers could live.

Pullman lesson Although economically successful, company towns sometimes failed politically due to a lack of elected officials and municipally owned services. Accordingly, workers often had no say in local affairs and therefore, felt dictated. Ultimately, this political climate caused resentment amongst workers and resulted in many residents eventu... See more

A strong post-war American economy meant installment buying was accessible to low-wage earners who could now purchase previously unattainable goods like automobiles and radios. Moreover, workers were no longer dependent on employers for healthcare and education.

Company towns often become regular public cities and towns as they grew and attracted other business enterprises, pool transportation and services infrastructure. Other times, a town may not officially be a company town, but it may be a town where the majority of citizens are employed by a single company, thus creating a similar situation to a comp... See more

Decline of American company towns By the 1920s the need for company towns had declined significantly due to increased national affluence. Despite income inequalities and a relatively low standard of living conditions amongst factory laborers, the prosperity of the 1920s saw workers’ material well-being improve significantly.