How did living in company towns make union membership more difficult for workers?

A. Workers received free homes, food, and clothing.

B. Company guards and agents spied on and reported workers.

C. Workers made enough money that they did not need unions.

D. Company stores did not sell goods to workers who joined a union.

The answer is D: Because company stores didn’t sell goods to workers who joined a union.

The town based union membership is quite difficult for working-class people because if the company stores couldn’t sell goods to the workers who joined the union, they won’t be able to benefit. Because these stores cannot benefit the union and its members and vice versa, this makes union membership in towns hard.

Living in company towns make union membership more difficult for workers.

Organized labor and trade unions

Organized labor is when workers unite as a solo, representative entity to improve the worker’s conditions of work and economic status through collective bargaining. Such organized labor groups are also known as Labor Unions or Trade Unions.

A Trade Union is an organization of workers who come together to achieve common goals such as better wages and benefits, better safety standards etc.

How unions help workers

Unions impact the work lives and compensation of workers. A worker alone will not be able to voice his concerns or bargain with employers on his own. So instead, if he joins a union, he can indirectly have his concerns heard.

Unions work for the welfare of all workers and because of their huge numbers, have the bargaining power. The following are the ways in which Unions can help workers:

  • Unions set a pay standard, and their impact on non-union wages is similar to union wages.
  • Unions can raise the wages of unionized workers significantly, compared to other workers.
  • Unionized workers receive fringe benefits. For example, a unionized worker is more likely to get paid leave, health insurance and pension plan.
  • Unions play an important role in securing legislated rights and protection for workers.

Changes brought on by labor unions

After the Industrial Age, the organized unions in the United States grew. Factories led to long working hours, deplorable conditions and measly paid workers.

The condition of work was very strenuous, and the working class was taken advantage of by the rich company owners. A single man alone couldn’t do much to improve his situation, and the Companies took undue advantage of it.

During the industrialization days, workers would be on the job for 6 days a week and often worked more than 8 hours a day. Children were employed, and there was no security for workers on the job. If a man was injured at work, he was fired, and if a woman got pregnant, she was fired too without pay.

Such practices led to the formation of labor unions. Once the Labor Unions were formed, they would bargain collectively, as a whole for better work conditions and pay. A lot of legislation in relation to work conditions and pay are enforced because unions are informed.

Company town

A Company Town is one where all houses and stores are owned by one company that is also the largest employer. These are planned townships with houses, school, markets and stores, built by the company and are bigger than a model village.

It is typically isolated from other towns and is centered around a large factory like an automobile plant, steel or cement factory.

The citizens or their family members work for the main employer, who runs the factory or work at the related small businesses. They can grow to become regular cities as well, as they attract other settlers, businessman and infrastructure.

Company towns were established as certain industries existed far beyond the city or town limits and the workers would have to commute for a long time to get to work. In order to reduce commute time, many companies just made their own towns – complete with housing and entertainment.

In some cases, they were constructed to create utopian villages while in other cases the company’s motivations were not the best. The remote location and lack of transportation forced workers and prevented them from dealing with other merchants or leaving for another job. Such an environment lead to monopoly and a higher chance of exploitation by the company.

Company town’s in the USA

Between the 1800s and the 1900s, many minorities and immigrants found opportunities in company towns in the USA, while the companies found cheap labor.

Most such towns had prevalent characteristics like ethnic diversity, paternalism, and labor opportunity. The companies wanted to attract the labor force and provide easy housing.

A company town would contain housing, cookhouse, store, church, library, swimming pool, theater and bowling alley. The main company owned and maintained the land and the buildings, if not the supplementary businesses.

The town was managed by the company who was the food supplier, the landlord and the source of amenities and entertainment. There was a high dependence on the employer.

The Pullman case

Many company towns existed in Pennsylvania and one in particular, Pullman, was developed in the 1800s outside Chicago. The whole town was company owned and had houses, markets churches, library and entertainment for 6000 odd employees and their families. They were forced to live in Pullman even if they found cheaper accommodations in nearby communes.

In 1893, the demand for Pullman products declined, and the wages of workers were lowered. However, the rent for housing was not reduced, nor were the prices of goods in the shop. This caused the strike in 1894 and the eventual downfall of the town.


Company towns were fully controlled by the main employers who was the banker, lawyer, landlord, law and food supplier apart from being the employer. Unions were there to counter the employer’s decisions if it didn’t protect the workers.

So, the companies would try to discourage union memberships. If a worker were to join a union, the company stores did not sell anything to him.

Companies had complete monopoly over their towns. Such acts made the life of a worker difficult as he couldn’t survive without purchasing the basic necessities of life.

There was no law that regulated a company town when the company was the master, and they did what they wanted. Such hardships for a union worker made the union membership not seem like a lucrative idea. Therefore, it made memberships hard for unions.


  1. Introduction to Trade Union: Retrieved from (From
  2. Benefits of Union Membership: Taken from (From
  3. Impact of Union on the compensation and worker’s lives: Retrieved from
  4. Union Membership and Overall Worker’s Living Standards: Taken from (From


Please enter your comment!
Please enter your name here