This is the source of the chorus in the song "Sixteen Tons":
You load sixteen tons, and what do you get? Another day older and deeper in debt. St. Peter, don't you call me, 'cause I can't go; I owe my soul to the company store.
The military still very much has company stores, company housing, really the whole company town concept is very much intact. It works, and has worked since WWII, because getting shot at is a strong disincentive to work for the military. Pacifism doesn't help either. But the net effect is that saving money on housing or recouping paychecks through the company store isn't exactly the long pole in the tent for the organization's success. Retaining skilled workers is far and away the long pole in this tent.
In general, the military also provides housing mainly for people who can't afford the local economy, or are frankly better off not making all their own financial decisions, and a few senior officers where it's better to keep them on base. The "skilled worker" group is still living on the economy, buying houses.
So, I would hypothesize that whenever companies are people-starved for the long term, due to systemic pressures, offering company stores and company housing as a benefit aren't such a bad idea, at least from the company's perspective. But they're still rentals, so really best suited for new grads trying to wait out the market (a strategy I definitely recommend). The company store ... who doesn't have a company store?
Until the labor-based enterprise running them faces some sort of competition, and really has nothing else to squeeze.
"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 labourers, the prosperity of the 1920s saw workers’ material well-being improve significantly."
So, company towns were so exploitative, workers wealthed up before long and made them obsolete?
3. http://clio.lib.olemiss.edu/cdm/ref/collection/aah/id/29047 (page 7, 'Abusive Practices')
etc. etc. ad nauseum. This is a pretty well documented terrible thing.
If someone decides to share some information on HN, it isn't their responsibility to provide a robust argument and complete set of citations. If you'd like them to you're free to ask politely, or to volunteer your own (or even better, provide counterpoints). But a terse summary of the HN rules is, "add meaningfully to the conversation." The individual you're berating added context that they felt was missing from the original article; this certainly qualifies.
The burden of accessing the veracity of the information lies on you. If they provide you with citations, then they're generously offering you a shortcut. If you're having a hard time finding support for their claims, then ask them for a pointer in the right direction. But if you haven't looked at all, then you should decide if this question is worth your time to research, and act accordingly, rather than asking other people to do the legwork for you.
And what exactly kept the families from just packing up and leaving? It would seem that it must have offered a better value proposition that anything else if people chose to stay there. Unless they were slaves, your whole point is moot.
It's very likely, that it was incredibly difficult to file for bankruptcy in the era of company towns in the US---i.e. 1880 (first bankruptcy bill was filed in 1889) through 1934.
For example, someone in a company town may not know that moving to the city will most definitely result in a better job, and out of fear of this ignorance, they continue to stay in a poor situation until it reaches a point where emotionally (rather than rationally), it becomes intolerable.
To me, the one of the purposes of good governance is to ensure that information is spread widely, and citizens are well educated in order to understand and take advantage of it.
To add to it... recruiting children, laying debt upon them, and ensuring they only know about 1 kind of job is exactly the kind of asymmetric information that we make laws to prevent the formation of.
Plus there's always the chance that wherever you're moving TO is just a case of grass being greener across the fence and won't actually help anyway.
THAT is why the word "just" does not belong in that argument at all.
The company owned everything. The only way out without paying for company run transport, which you won't get without settling your debt, is to walk. Walkers are easily rounded up by debt collectors, and if you had a wife and children you wouldn't leave them.
These towns were set up to create a supply of indentured labour.
It is also why everyone is locked into sites like facebook (network effects) or cities like NYC even if they say they want to leave
GREAT SCENE: http://m.youtube.com/watch?v=LWZk24MA7TE
If the ridiculous scenario the GP suggested actually worked, we would see, you know, examples of it.
You mean like all the documented examples people posted? (see https://news.ycombinator.com/item?id=12178695 for an example)
Company towns enforcing debt slavery are an actual, genuine, true, real, factual part of US history. They existed. They really did work as described. People really did not manage to escape them. In several places it took literal armed revolution to break this system.
So if your theory of economics somehow predicts that such things are impossible, the problem is with your theory of economics.
Interesting place. You weren't supposed to drink the water so people would go to town and get distilled water (though I was at school and we just drank from the water fountains connected to mains water). In general though it had much better facilities than similar towns of that size due to being funded by the mining company.
Wikipedia says it still has about 700 people - though I believe the town was shut for several years while the mine was in care and maintenance (the nickel price is not high enough to justify mining at the time so they operate on barebones staff doing equiment maintenance and dewatering) - and by the sounds of things that is happening again now so I'm not sure what it's like.
The downside is that when BHP closes the site (temporarily or permenantly, as is happening now), the primary workforce is moved out and the secondary businesses (school/shops/cafes) become unfeasible - not a good place to build a long term business!
Are you paid in cash, or in company scrip?
I would be very surprised to hear that people were paid in anything other than cash, though wages would have taken into consideration that accommodation and food was free (as it does with all on site mine workers).
Mine workers in Australia are paid very well in comparison to a lot of other industries so a debt cycle mentioned by others probably didn't apply as much.
For all their faults they can potentially be hugely beneficial to employers and employees in driving down the amount of money put towards housing, avoid poor planning and design outcomes caused by the interface between government and developers and also can be planned for strategic locations where governments have not shown initiative.
Public housing could do similar things (and as a case study was a major factor in the econmic success of hong kong - for all its faults) and isnt a million miles away in what it does although is often considered very differently, but most modern governments shy away from this.
I think they will go with the former.
If we just run the numbers as an example, taking the 11000 Google employees at Mountain View, and assuming that each wants a ~$500k house, that's $5.5Bn of housing!
Or to put it another way, we live in the age of taxi companies not admitting they have employees rather than contractors paid per fare, just like they have always done since foundation.
But universities run a nice little business with student dorms and graduate student housing. I don't see why companies can't build apartments...
>>> One big issue is still outstanding: Google’s proposal does not include new housing for the area, but company executives have said on several occasions that they want to add housing near their campus.
More recent article points to 9000 units proposed by anther company: http://www.bizjournals.com/sanjose/news/2016/01/13/sobrato-k...
>>> Sobrato’s proposal — which is still in early form and could yet change — is the first application for a project that includes housing in North Bayshore, but others could follow. The council has identified roughly a half-dozens sites where housing is being studied, and has laid the groundwork for up to 9,000 new units. Most of those potential housing sites are owned by Google, which has publicly stated its interest in redeveloping at least some of them for housing, though it has not moved forward on any plans.
I was older than most of these 'freshers', though, and really began to resent the amount of control the company had over my life 24/7. I don't think it was a matter of nickel and diming the workers on food or other supplies at the company's stores, just that it really blurred the line between work and non-work time and space.
Long story short, I know this experience has really turned me off to offshoring, H1Bs, globalization, guest workers, etc. from places like India. And it has nothing to do with race or religion, but instead what's considered an acceptable relationship between labor and capital.
Silicon Valley / the big tech companies are the biggest abuser of foreign workers (a large majority from India). I don't see it as a good thing for US companies to be building out living spaces for their employees as is done in places like India or China, even though I'm sure Google would build very nice and convenient apartments with all the amenities.
This is definitely a bad thing for the working class. Instead I'd like to see India, China, and the US itself all rise up to the American dream of past decades - ability to support a family, house, cars and kids on one income, with less time devoted to work, as globalism promised.
It seems appropriate given Facebook's strategy of building apartments.
It's very common for deployed families to come back after 2 or 3 years overseas with almost no knowledge of the local language, area or customs because the comprehensiveness of the "little America" on-post is so complete. You can even buy cars, American breakfast cereal and fast foods and get TV shows and radio all pumped in at almost no cost differential to being in the U.S.
If the bases aren't large enough, they'll often set up an American enclave nearby that extends the services and provides a few neighborhoods for the families to have extended social interactions. When I was touring in Germany, I came across the town of Vilseck, which has a large American base nearby. The town was full of deployed families, and imagine my surprise when I came across an honest to god Soul Food restaurant! After eating German and Italian food for a couple weeks, getting some very traditional American food was a very welcome site.
The commissary (military supermarket) is run as a benefit of service, and even if you live in base housing, you're welcome to buy on the economy. The commissary doesn't ship everything in from the US, just items they can't source locally. So Pop-Tarts were imported from the US (accept no substitute!), but the meat and the Brötchen were bought from German suppliers.
Whereas the company store in the company town, as was said elsewhere, was run to the benefit of the company. Prices were set such that even buying just staples there (eggs, flour, etc) would keep you in perpetual debt.
The military pays you in cash, which is useful anywhere US dollars are accepted.
Cash gives you freedom to exit the company town without losing all that stored value.
I was talking this over with a couple vet friends of mine and both mentioned cases where they were paid in some kind of scrip (usually in combat zones where bringing in cash was dangerous) or in dollars in cases where dollars weren't accepted on the local economy making it effectively the same.
> Fordlândia was established by American industrialist Henry Ford in 1928 as a prefabricated industrial town in the Amazon rainforest of Brazil. Intended to be inhabited by 10 thousand people, it failed; and the city was abandoned in 1934.
More details at https://en.wikipedia.org/wiki/Fordl%C3%A2ndia
15201 Maple Systems Road was the Simpsons’ home
while living in Cypress Creek after Homer was
headhunted by the Globex Corporation. From the
outside it appeared structurally similar to the
Simpson's home in Springfield; however, the
interior was much larger and more modern.
They were welcomed shortly after arriving by the
CEO of the Globex Corporation, Hank Scorpio, who
was participating in a fun run.
Many of the house's functions were automated,
including a self-cleaning oven, dirt-patrolling
vacuum cleaner, and an automatic sprinkler system.
After Homer tackled an escaping secret agent at
work, Hank Scorpio promised that when he returned
home there would be another story in his house.