Mitchell’s Musings 6-27-11: Working on the Railroad

Mitchell’s Musings 6-27-11: Working on the Railroad In Historical Statistics of the United States, I came across this tabulation of average annual earnings per full-time employee in 1900 (private sector):1 Finance-insurance-real estate

$1040

Nonprofit

$652*

Construction

$593

Railroad

$536

Bituminous coal mining

$516

Local transportation

$510

Wholesale-retail trade

$508

Gas and electric utilities

$506

Manufacturing

$487

Educational services

$469

Telephone and telegraph

$433

Anthracite mining

$340

Personal services

$330

[$548]**

[$435]**

Medical & other health services $256 Agriculture-forestry-fishing

$178

*It’s not clear exactly what is in this sector since medical and educational services are listed elsewhere. Presumably, whatever it contains involves white-collar and professional occupations. **Figures in brackets [ ] are for “wage earners” only.

Some elements of the ordering are surprising. The medical sector is down toward the bottom, perhaps a reflection of the notion that in 1900, going to a hospital was a risky business, perhaps

1

U.S. Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970 (Washington: GPO, 1975), vol. 1, pp. 166-168.

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as likely to harm you as help you. That finance comes in at the top is probably no surprise to 21st century observers.

What interested me was the position of railroad workers. The data, with all their limitations, suggest that rail workers were relatively highly paid, given the standards of that time, although the data above were collected only a few years after the “Pullman strike” of 1894 was broken.

In 1900, the automobile was a rich man’s toy and traveling any distance, or transporting cargo, most likely involved rail. Railroads were seen as a key industry. The folkways of that era suggested that the public saw rail workers as entrusted with considerable responsibility.

Consider the 19th century poem, The Night Operator, which hails the work of a night-time railroad telegraph operator, whose efforts keep passengers safe: http://www.employmentpolicy.org/night-operator-linked-mitchells-musings-6-27-11 Or consider the poem, Asleep at the Switch, about a 19th century railroad switchman whose failure to perform leads to disaster: http://www.employmentpolicy.org/asleep-switch-19th-century-poem-linked-mitchellsmusings-6-27-11 (In one version of the poem, the result of being asleep at the switch is an actual disaster. In another version, the switchman awakes in his bed after having a bad dream of the disaster – a happier ending. He was asleep, but not at the switch.) We still use the expression, “asleep at the switch,” to connote a failure to perform, even though public fascination with railroads is largely a thing of the past.

Perhaps, then, it is not surprising that rail workers were relatively well paid in 1900. They were entrusted with public safety and with expensive capital equipment. But unlike workers in many other industries, direct supervision while on the job was not technically possible. You had to rely on them to do the job responsibly. Time and motion studies, Taylorism, and similar workplace practices that were coming into vogue at the time did not easily apply to railroads.

There may well have been what economists would call an “efficiency wage” element in the pay of rail workers, i.e., a pay premium to encourage good performance.

Is there relevance for today? For a time, the contemporary complaints about public sector workers and their compensation tended to omit police and fire, the so-called “first responders” who were celebrated after the terrorist attacks of 9-11. Now, however, even first responders seem to be included in such complaints.

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In a sense, in the aftermath of the Great Recession with its elevated unemployment, it is possible to cut pay, benefits, and conditions without immediate consequence. You can always say to those who resist such cuts that they should be grateful to have a job. 2 But in the future, as the broader labor market slowly heals, there may be untoward consequences of that approach. Someone may be asleep at the switch just when you need assistance.

2

The above-mentioned 1894 Pullman strike was a response to wage cuts during the recession of that era.

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