Common from the early nineteenth century to the midtwentieth century, company towns were planned communities established and dominated by a single, dominant business. Residents of company towns were almost exclusively employees of the dominant business, along with employees' families. The dominant business would own all housing, services, stores, and utilities. Thus, a large percentage of employees' wages would be returned to their employer in the form of rent, bills, and other living expenses. As the United States industrialized beginning in the late eighteenth century, company towns proliferated, providing a common means for housing the American labor force, as well as an influential model for urban planning. While many company towns exploited their residents, they were instrumental in determining the pattern of labor organization and economic development for a substantial period of U.S. history.
The first company towns in the United States were developed alongside New England textile mills. In the late eighteenth century Samuel Slater built company-owned dormitories alongside his mills in Pawtucket, Rhode
Island, and near Worcester, Massachusetts. Although unprofitable, Slater's system of employee housing proved influential. In 1821 a group of investors called the Boston Associates built a large company town in Lowell, Massachusetts. With everything from its schools, houses, and factories to its literary journal and churches owned by the company, Lowell was a pleasant and successful town of some 20,000 people by 1830.
The company-town model soon spread to other industries. Mining companies, which were largely located far from population centers, were especially receptive to the idea of building and owning the communities where their workers lived. Throughout Appalachia, as well as in the Rocky Mountains, company towns were built alongside coal mines. Unlike Lowell and other urban mill towns that were designed to provide employees with desirable housing, however, most mining towns were harshly run, with poor but expensive amenities. In part this was due to the remoteness of the mines, which meant workers were often left without a choice but to appeal to their employers for food, housing, and other goods.
Some company towns did exploit residents, often charging higher prices for goods and housing than would exist in competitive markets and evicting residents who had been laid off. However, the concentration of a single company's workers in these communities also helped spurn the organization of labor unions. In 1844, for example, one of the first women's unions in the United States, the Lowell Female Labor Reform Association, was formed. Unions of miners, ironworkers, and other laborers were organized in various company towns throughout the nineteenth and twentieth centuries.
With the popularization of automobiles and the development of highways, company towns declined, as workers were afforded increasing mobility and choice about where to live. The massive unemployment during the Great Depression (1929–39) caused more company towns to disband. Although a few scattered mining and lumber towns lasted until the late twentieth century, they were rare by the 1940s. Despite their eventual disappearance, company towns were an importance influence on American labor history, urban design, the development of affordable housing, and patterns of settlement throughout the country.
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