Democrats & Liberals Archives

The Rebirth of the Company Town

I grew up thinking that the company town was dead. It went out with worker protections and unions. By “company town” I don’t mean that there was one major company that employs most of the workforce, but that the company owns the housing, owns the stores, may own the utility companies etc.

In short, workers' survival are not just tied to their wage, but that the company controls access to the necessities of life. This is happening across the company, and across the world, for a variety of reasons and with a variety of intents, but happening it is.

In its worst form - the coal mining towns of the United States for example - the cost of housing, school, medical care, hardware, and food, were all issued on credits which were deducted against a worker's pay. Invariably, it cost more to live than workers were paid, so the workers were continuously in debt to the company. Workers could not leave until the books were balanced, and so they were effectively the property of the company.

Today's company towns are taking on an array of faces and functions, but whether sparkling with high tech "amenities," or covered in the dust of construction, they are company towns all the same.

  • High tech and big business has reinvented the company town inside its own walls or large "campuses."
  • Relatively remote areas where housing and other necessities simply don't exist.
  • Lack of available housing - such as along the Gulf Coast after hurricanes Katrina and Rita.
  • Housing costs exceed the wages of workers (vacation resorts for example)
  • Company town as big business itself.

There are those situations where employers must provide housing and other accommodations for their workers. In those cases, the work sites are so remote that other options are not available. Generally, one expects these accommodations to be temporary. Workers go to the work site. They work for some pre-specified period, then they rotate "home" until their next shift.

The situation of some workers in the Gulf is different from the above scenario in important ways. Workers are needed, but the funds for rebuilding the infrastructure of the Gulf have variously gone astray. Those who can afford to move back have far more economic resources than the general workforce has. Even at $18 an hour, workers cannot find affordable housing (Newshour). So it is little surprise that an Mexican immigrant workforce earning $8 an hour are either housed in sheds behind company fences, or left sleeping on the streets (New Standard, and Pacific News Service). Now workers are being brought from even further away - India - to join the the Mexicans inside the fence - accommodations which they pay for (Newshour).

The Company Town of the future?
Then you have the companies like Tata Steel who see company towns as a business opportunity. According to Tata's sources, their town of Jamshedpur is the best town in India. They look forward to building at least one more in India, and then "a few of them around the world." Tata, is now focusing on providing utility companies, health care services, and the like. Each of these services will become their own subsidiaries so that Tata Steel can sustain its focus.

Tata Steel takes care of the road maintenance, electricity supply, streetlights, healthcare, sanitation, and vector control, making any municipality redundant. Delineating the company's responsibility, Chief of town services Kanwal Midha points out, "More than 15,500 acres of land are with us. The plot on which the works are located belongs to us permanently. The rest includes area used by us directly or indirectly for production purposes, company housing, land leased to other organisations or individuals, and civic amenities like schools, hospitals, parks, roads and sub stations."

Another model is that of Nike, Microsoft, Intel (and others) with large campuses that can extend the work day (and week) of employees by allowing them to essentially live at work. This model, does not accommodate family well, and it sets an expectation on workers to spend much of their time working.

At the dusty end of the spectrum are the fenced sheds with few amenities that companies like Northrup Grummond and Halliburton are providing for their immigrant labor force in the Gulf.

What does this trend reflect about our society and our world? The situation in the Gulf is not tremendously different than that faced in Colorado, and at base is an issue of affordable housing. The housing market in both these areas is beyond the reach of the workforce. This trend reflects all too clearly the growing gap between those at the top and the rest of the society. "They" need "us." The bifurcation of society spreads, but there is a different concern that the company town raises.

The Tata model runs head on into the issue of the ultimate privatization of civic life. We are being told on both a national and global level that the corporate model is the best model. We are told it is the most "efficient" model. We are told that the "market" will meet all needs and challenges. However, there are significant issues with that world view. The "model" is not working well in Aspen, or in the Gulf. Efficiency is not the first goal of the corporate world view - profit is. That is the big rub. If civic needs are profitable, they become increasingly beyond the reach of the average (much less the poor) citizen.

Likewise, a profitable model is not necessarily the best. Biotechnology and cloning will ultimately be profitable as it will place the corporation clearly between the population and our next meal. However, it will not necessarily make for better food supply. In fact, cloning fixes traits permanently and does not allow ongoing selection of the best traits for reproduction.

In the old company town, the company frequently allowed people to purchase homes; however, those homes did not include the land they were on. The land was leased from the company and it could end that lease at any point for any reason. Across the country many in mobile and modular home communities are finding the fault of this model, as owners (frequently corporations) sell or choose to develop the land those homes are on for more profitable purposes.

A book titled "Jennifer Government" by Max Berry points towards a merger of the company town and the big business model. In the book, the world has devolved into a shrinking array of corporate and government entities with employees branded to their employer. The unaffiliated struggle to survive. One vision, but likely not one that most of us would like to see become reality.

Life was not meant for a corporate model and we rebelled against it once.The Commission on Industrial Relations appointed by Taft ultimately concluded that the company town was feudalism at its worst. We may have to repeat that history again before people see the new feudalism that seems to be increasingly encroaching on our lives.


Sources
Reference.com. "Company Town." http://www.reference.com/browse/wiki/Company_town

Wikipedia. "Commission on Industrial Relations." http://en.wikipedia.org/wiki/Commission_on_Industrial_Relations

Lawrence Boyd. EH.net. "The Company Town." http://eh.net/encyclopedia/article/boyd.company.town

Tata. "An Idea Called Jamshedpur." http://tata.com/0_our_commitment/employee_relations/articles/20050120_jamshedpur.htm

Newshour. PBS. 2/07/2007. "Worker Shortages Post-Katrina Send Businesses out of Mississippi" http://www.pbs.org/newshour/bb/business/jan-june07/gulfcoast_02-07.html

Terrie Albano. The Peoples Weekly. "Battered by Katrina, Gulf Coast workers stand up" http://www.pww.org/article/view/8119/1/295/

Roberto Lovato. 11/17/2005. Pacific News Service. "Gulf Coast Slaves: Halliburton Exploits Katrina Latino Workers" http://news.pacificnews.org/news/view_article.html?article_id=93b709e20da9749bbefecb6215fb7049

Kari Lydersen. 11/03/2005. The New Standard. "Immigrants Rebuilding Gulf Coast Suffer 'Third World' Conditions." http://newstandardnews.net/content/index.cfm/items/2559

Jim Robbins. 2/17/2007. NY Times. "Boom in the Mountains Creates a Housing Shortage" http://www.nytimes.com/2007/02/17/us/17resort.html?_r=1&oref=slogin

Janet Urquhart. 9/11/2006. The Aspen Times. "Skico looks downvalley for employee housing." http://www.aspentimes.com/article/20060911/MOUNTAIN08/109110032

Anne Hull. 1/22/2006. Washington Post. "A Company Town on The Mississippi" http://www.washingtonpost.com/wp-dyn/content/article/2006/01/21/AR2006012101371.html

Sequoia, Inc. http://www.visitsequoia.com/employment.aspx

Furnace Creek. http://www.furnacecreekresort.com/employee-housing-1214.html

Posted by Rowan Wolf at February 20, 2007 11:06 AM
Comments
Comment #209044

Anyone else see the court decisions that say those held at Guantanamo can’t challenge their cases and the judgment against Philip Morris was also overturned? This is the result of Bush’s political appointees to the bench…who says there isn’t legislation going on by judges??? Who’s really upholding the U.S. Constitution???

Posted by: Lynne at February 20, 2007 12:14 PM
Comment #209053

Rowan,

You’re describing the Republican version of free market heaven; Indendured labor and no entitlements.

Posted by: Dave1-20-2009 at February 20, 2007 12:49 PM
Comment #209055


Roberts and Alito were not put on the bench to appease the religious right. They were put there to benefit the business community and the corporations in specific. What is best for the corporations is best for America.

Posted by: jlw at February 20, 2007 12:52 PM
Comment #209068
and the judgment against Philip Morris was also overturned?

The judgement against Philip Morris was rightfully overturned. I’m a little confused how anyone can have a problem with that decision? Should a jury really have the right to issue punishments against a company that are not related to the case in question?

Posted by: Rhinehold at February 20, 2007 1:51 PM
Comment #209088

Rowan: Have you thought at all about addressing the modern issue of credit cards and personal debt, and how these may relate to the concepts of company towns and company stores, particularly when workers are issued credit cards by the companies they work for and largely spend their money with those companies in return? (ie, Target employees getting Target Visa Cards and largely using them to shop at Target.)

Posted by: Jarandhel at February 20, 2007 4:33 PM
Comment #209090

I’m curious to know if you have the same dislike for the ultimate “company town:”

The Federal Government.

Posted by: kctim at February 20, 2007 4:46 PM
Comment #209094


Washington D.C. is definately a company town. Bought and paid for by the anti-American corporations. They have even bought themselves a war in Iraq. Has our government done all it can to cure our addiction to oil? Rather than that, the administration has gone to war in Iraq to insure that the oil companies can continue to serve our NEED.

Posted by: jlw at February 20, 2007 5:52 PM
Comment #209104

At one time labor unions were against the concept of the “company town”—the arrangement where the employer provided (and therefore monopolized) services. But now things are trending in the opposite direction, and it’s hard to say that this represents companies actively seeking more power over their employees (even if this is the net result).

It seems pretty undeniable that today, labor itself wants and demands that companies subsidize everything from health care to day care and in many cases housing.

Posted by: Loyal Opposition at February 20, 2007 6:42 PM
Comment #209109


16 tons and what do you get
Another day older and deeper in debt
Saint Peter don’t you call me cause I can’t go
I owe my soul to the company store.

Tennessee Ernie Ford

Posted by: jlw at February 20, 2007 8:41 PM
Comment #209113

jlw
Did you know that Earni Rord Song was banned from several radio stations as being communist?

LO
Labor unions will negotiate anything they can for their members. That is their function.I am concerned that some companies will keep unions from talking to their workers in these company towns. Been done before. Even with armed gards. Looked alot like a forced labor camp.

Posted by: BillS at February 20, 2007 9:26 PM
Comment #209142

SHIELDING THE POWERFUL, SCREWING THE PEOPLE

This New York Times editorial hits the nail on the proverbial head…Bush’s courts increasingly favor corporations, regardless of precedent and Constitution and law, and relegate ordinary persons to their doom at the hands of the almighty corporations with no recourse.

It’s the Robber Baron era all over again…have we learned nothing?

Posted by: Lynne at February 21, 2007 10:15 AM
Comment #209143

Lynne,

Old money has learned that you have to have the judges on your side. But not by buying them, just by having believers.

Posted by: Dave1-20-2009 at February 21, 2007 10:18 AM
Comment #209147

Rowan, terrific article and an interesting topic.

jlw, I was also thinking about that Ernie Ford Song when I was reading the above article! :^)

BillS:
“Labor unions will negotiate anything they can for their members. That is their function.I am concerned that some companies will keep unions from talking to their workers in these company towns. Been done before. Even with armed gards. Looked alot like a forced labor camp.”

Indeed, but then maybe it’s a chance for Unions to rise again. The GOP has worked overtime getting people to vote against their own best interests (both politically and when it comes to Union representation), but feudalism is totally anti-American. So, while it might take awhile, perhaps they’ll finally get fed up and start understanding that the only way to get what they need in the way of representation and shrewd bargaining is to organize. If they want to live decently and be respected for their work they’re going to need a Union. Solidarity is the only way people have ever gotten either in a company town.
United We Bargain — Divided We Beg!

Posted by: Adrienne at February 21, 2007 10:35 AM
Comment #209149

Sorry, Lynne, but the New York Times (imagine this) is incorrect in it’s editorial.

By some odd example of twisted logic that only the New York Times editorial staff could muster they somehow equate taking in account past actions of an individual that has been found guilty of past actions with an organization who is being punished punitively for all of the people who may or may not have been harmed in a similar fashion by a single act. Had William Morris continued to act irresponsibly after they had been found guilty of doing so then perhaps they would have had a case but that is not the issue.

Also, the court did NOT find that they could not be hit with that large of a punitive judgement, even in this case which can be retried, only that the jury must be instructed properly. Imagine that.

Posted by: Rhinehold at February 21, 2007 10:37 AM
Comment #209151

LOL, Philip Morris, not William Morris… Not that we shouldn’t be going after William Morris as well, but for different reasons altogether.

Posted by: Rhinehold at February 21, 2007 10:45 AM
Comment #209154

Rhinehold, which William Morris would that be? The one who started the ad agency, or the amazing English artist of the Arts and Crafts Movement? :^)

Posted by: Adrienne at February 21, 2007 11:09 AM
Comment #209155

Ooops, wait. Not ad agency — but talent agency.

Posted by: Adrienne at February 21, 2007 11:10 AM
Comment #209172

Company towns that exploit are a serious problem, but not all of them are like that.

I have a very good friend who works at the Nike campus in Beaverton, OR. He talked to his supervisor about changing his schedule to better suite his commute and Nike financed him a new home for his family at 0% interest and payments that so low that no bank would ever be able to compete.

Not to mention the Nike campus has just about everything any one could ever want at a better quality than any one could ever expect, I know this because I have been there numerous times.

I for one would love to live on the Nike campus.

Then again there are those companies much like the old mining towns, not to mention the new mining towns (not too much better), who abuse their circumstance.

How does one draw the line between the companies that provide for the better of their employees and thsoe that clearly exploit their employees?

What would we have to enact to provide reasonable protection with out infringing the rights of those who have not abused the situation?

Posted by: Bryan AJ Kennedy at February 21, 2007 12:31 PM
Comment #209174

Bryan,

I’m sure there’s an ability to regulate abuses out of the equation. It wouldn’t be easy, of course, and getting the support of the obsessive freemarketeers for any effective controls would be a challenge.

Posted by: Dave1-20-2009 at February 21, 2007 12:38 PM
Comment #209181

Bryan,

In today’s environment where the worker is more in control of their future then ever before it seems a bit silly to think we need to regulate businesses that much. If a company is being predatory on their employees they will find themselves without employees in short order. It is just too easy to change jobs and work for someone far better for anyone to stick around if it is really that bad.

In days past when the ‘company towns’ were the dream of many industrialists, getting and keeping a job was hard, specialized and educated employees were not around or in demand and you could lose your job at the drop of a hat with little hope of finding employment again so quickly. But we have grown tremendously as a country both in wealth and social understanding, not to mention communication of those companies that are violating the public trust. Coupled with the limitation and regulation of monopolies and the worker is in the catbird seat these days.

Of course, there should be some minimum protections of employees for covert manipulations, etc, but one benefit of a business over the government is that you can choose to change jobs without issue.

Posted by: Rhinehold at February 21, 2007 1:57 PM
Comment #209188

Rhinehold,

See that is percisely the line of thought I have when I hear “company town”.

I have only seen two examples of a company town.

One was Beaverton, OR which grew from Nike into the most pleasent and a realitively affordable cities in the Portland area.

The other was Magnolia, WA which grew from Microsoft. It is with out a doubt the most beautiful place I have been with in the States.

When I look at the housing in Magnolia I think, “well heck, then can own me all the want as long as I get one of these houses with a couple of those cars in the fromt”.

I think today’s “company towns” probably have a higher standard of living then a good 80% of the other cities in the country, if not significantly more.

I do wonder about “company towns” over seas. I really doubt they are as nice as Magnolia or Beaverton.

Then again, they are probably still a whole lot nicer than the other cities in those countries.

Posted by: Bryan AJ Kennedy at February 21, 2007 3:04 PM
Comment #209233

Adrienne
The best chance unions have to rise again is a bill soon comming before congress that will once again make it possible to organize.Bushco has already said they will voto it. There are also provisions in it that would make managers personally liable for violations of labor law and require arbitration if first contract negotiations reach impasse. Hopefully at least some of these reforms will be enacted.The right spinners have already concocted a slant on the main thrust but it will be harder at least for them to protect obvious law breakers. The union busters used to carry brass knuckles. Now they carry brief cases.

Posted by: BillS at February 21, 2007 8:58 PM
Comment #209247

“there should be some minimum protections of employees for covert manipulations, etc, but one benefit of a business over the government is that you can choose to change jobs without issue”

Rhinehold,

I’ll store that quote in my archives for future reference.

IMO that sounds like something I’d expect from a “compassionate conservative”.

I’ll add a long, really long, sigh…………! I fear we truly are returning to the days of the “robber barons”, and possibly worse given the state of our military industrialism.

Posted by: KansasDem at February 21, 2007 10:17 PM
Comment #209248

Brother BillS:
“The best chance unions have to rise again is a bill soon comming before congress that will once again make it possible to organize.”

Yes. I know about this bill — and it’s about time.

“Bushco has already said they will voto it.”

Naturally. They only represent wealthy people and corporate interests.

“There are also provisions in it that would make managers personally liable for violations of labor law and require arbitration if first contract negotiations reach impasse. Hopefully at least some of these reforms will be enacted.”

Much needed, and yes, hopefully we will see some reform.

“The right spinners have already concocted a slant on the main thrust but it will be harder at least for them to protect obvious law breakers.”

The problem I see with the right is that from top to bottom, they no longer feel they need to acknowledge any laws.

“The union busters used to carry brass knuckles. Now they carry brief cases.”

No doubt. Yet the Union reps that I know well also sometimes carry a brief case — and they also carry brass — but it’s all in their trousers! ;^)

Posted by: Adrienne at February 21, 2007 10:28 PM
Comment #209250

“I think today’s “company towns” probably have a higher standard of living then a good 80% of the other cities in the country, if not significantly more.”

Bryan AJ Kennedy,

There’s only one way to know for sure. Go live in one for a few months. The fact is that we’re going backwards as a nation. More and more middle class Americans are slipping into poverty and because of that they’re willing to work longer hours with less benefits.

Reaganomics was just the beginning. Bush turned the “trickle” of trickle down economy into the most massive debt we’ve ever seen. Fact is the Republicans won’t be happy until the streets are full of beggars again lining up at soup kicthens.

Of course it will all be a part of “gods will”, and we’ll all still hear the Republicants telling us how damn well off we are…………….

Posted by: KansasDem at February 21, 2007 10:34 PM
Comment #209276

Interesting point KansasDem. Have you seen this article? ;
http://www.counterpunch.org/whitney02212007.html

Posted by: Paul in Euroland at February 22, 2007 4:54 AM
Comment #209292

KansasDem,

The fact is that we’re going backwards as a nation.

Sorry, but do you really have anything to base this on except political prejudice?

I have not seen this in my neighborhood, my city or my state. In fact, I see life being much better for everyone involved, even the most ‘poverty stricken’ who try at all get better than minimum wage jobs, telephones, cell phones, cars, tvs, cable, etc. Compare them to the ‘poverty stricken’ of the depression who lived in cardboard cities with no hope of any kind of social benefits that we see today…

Posted by: Rhinehold at February 22, 2007 11:00 AM
Comment #209303

Nobody is holding a gun to anyones head. People can go wherever they want and work for whoever they want. If they feel “trapped”, it’s of their own mental restrictions.

Why is the answer to any issue always to legislate another law or get a ruling from a judge who thinks he knows better then the constitution.

Posted by: cliff at February 22, 2007 12:58 PM
Comment #209316

I would say that the undoing of the protections against spying on citizens - put in place after the Church Commission - is going backwards.

I would say that housing workers in garden sheds behind 8 foot fences is going backwards.

I would say that the loss of habeas corpus - the right to know what it is you are being arrested and held for - is going backwards.

I would say that restarting the nuclear arms race (which has happened) is going backwards.

I think that many people in this country all across the political spectrum are concerned about these things - including the conservatives. SO I don’t think that saying we are going backward is “political prejudice.”

Posted by: Rowan at February 22, 2007 3:24 PM
Comment #209405

“Sorry, but do you really have anything to base this on except political prejudice?”

Rhinehold,

That’s easy. I’d normally just rely on EPI for info but McClatchy just released a report:

http://www.realcities.com/mld/krwashington/news/nation/16760690.htm?source=rss&channel=krwashington_nation

“The percentage of poor Americans who are living in severe poverty has reached a 32-year high”

“What appears to be taking place is that, over the long term, you have a significant permanent underclass that is not being impacted by anti-poverty policies,” said Michael Tanner, the director of Health and Welfare Studies at the Cato Institute, a libertarian think tank.”

If CATO says it, it must be true:-/
To me the following is especially damning:

“Over the last two decades, America has had the highest or near-highest poverty rates for children, individual adults and families among 31 developed countries, according to the Luxembourg Income Study, a 23-year project that compares poverty and income data from 31 industrial nations.”

“It’s shameful,” said Timothy Smeeding, the former director of the study and the current head of the Center for Policy Research at Syracuse University. “We’ve been the worst performer every year since we’ve been doing this study.”

“With the exception of Mexico and Russia, the U.S. devotes the smallest portion of its gross domestic product to federal anti-poverty programs, and those programs are among the least effective at reducing poverty, the study found. Again, only Russia and Mexico do worse jobs.”

Those last seven words bear repeating, “only Russia and Mexico do worse jobs.”

Posted by: KansasDem at February 23, 2007 9:38 AM
Comment #209406

Great! Just a couple of questions though…

What is ‘severe poverty’ in the US compared to other countries? Only have 1 tv instead of 4? America has the largest percentage of the population being overweight, seems a bit strange for such deplorable living conditions, etc.

I would like to see that definition and comparison before we go much further down this path.

And, I have to say, we do spend way too much as a country on ineffective FEDERAL poverty fighting programs. But we also spend a great deal voluntarily and through state based programs that actually work much better than the federal kind.

That seems to support my suggestion that the federal government really shouldn’t be involved in this wealth redistribution program, they can’t do it well and focus on the wrong remedies. What the poor in this country need are mentoring programs and therapy to help determine what their issues are that are preventing them from obtaining the opportunities that are out there and override the horrible job their broken familes did in instilling those values in them.

Posted by: Rhinehold at February 23, 2007 9:46 AM
Comment #209411

Company towns, while their intentions may be benevolent (which I doubt), have too many problems associated with them to be allowed.

1. They have too much power over employees. What happens if the person wants to leave the job or gets fired? They are not only out of a job but also evicted from their home. Or they use threats of eviction to coerce people to stay in a bad situation.

2. No right to privacy - if the company owns your home who is to say they can’t come in any time they want? can they tap you phone? read your mail? bug your house?

3. This is a short step from going back to the days of company scrip payments instead of cash and this adds a new level of coercion. Not only can they kick you out of your house for no reason but they can take your money too.

Posted by: Tom Snediker at February 23, 2007 10:36 AM
Comment #209529

Bryan AJ Kennedy wrote:

What would we have to enact to provide reasonable protection with out infringing the rights of those who have not abused the situation?
It is really quite simple. Protect and expand labor’s right to organize, negotiate and strike. That is the only thing that will provide a “check and balance” and counter balance the power of corporations. Attempting to limit the power of corporations is ineffective, difficult, and counter productive. Empowering workers to match them is the solution.

Posted by: Ray Guest at February 24, 2007 11:04 AM
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