History of American Business


Prior to the Second Industrial Revolution, the locally oriented American economy did not need offices as they are defined today. The early merchant was his own importer, exporter, banker, wholesaler, retailer, and even shipowner. At most, a successful business owner had no more than three men helping him with administrative tasks. The nature of American business shifted radically, however, between 1850 and the early 20th century. A range of technological innovations, including the telegraph and railroad, increased production and allowed for more large-scale organizations. Many iconic American businesses, including Johnson & Johnson, General Motors, Carnegie Steel, Coca-Cola, and Campbells Soup, were established during this period. At the same time, rising incomes, population growth, and urbanization radically altered the demand side of the economy. The following timeline broadly examines the nature of American work from the Second Industrial Revolution, when the modern organization was established, through the 20th century, and up to the nature of the American business today.

1830: The American railroad industry begins with the first 13-mile track. The railroad industry was at the cusp of the economic and labor revolution, and its radical corporate structure almost singlehandedly redefined American labor. The system demanded operational activities and budgets on an entirely new scale, and raising, investing, and managing funds on the scale of the railroads had important ripple effects. For one thing, such activity helped create American capital markets, particularly the New York Stock Exchange, in the broad outlines we know them today. Railroad companies also employed thousands of workers—conductors, ticket sellers, engineers, construction workers, accountants, clerks, payroll officers—who were distributed throughout the country, serving the entire transportation network and offices along the way. The companies developed a vast interoffice communication system, and, probably more importantly, a large-scale system of management. Railroad organizations established an enormous hierarchical system, with clearly defined positions and responsibilities, which included individual managers to oversee operations.

1836: Massachusetts becomes the first state to pass a law restricting child labor.

1871: JP Morgan establishes Drexel, Morgan & Company on Wall Street in NYC. He is soon earning over half a million dollars a year.

1882: Engineer Frederick W. Taylor performs time studies at Midvale Steel. This work lays the foundation of scientific management: a tightly organized organization of labor, based on its division into precise parts, that aims to achieve greater efficiency.

1906: Upton Sinclair publishes The Jungle, detailing gruesome conditions in the Chicago meatpacking industry. Congress passes the Pure Food and Drug Act and the Meat Inspection Act the same year.

1908: Henry Ford introduces the Model T car. During the next 10 years, his assembly line production of this automobile will be widely copied and drive production costs down. By 1927, mass-production techniques will be capable of manufacturing a Model T in 24 seconds. In six years, he announces that workers for the Ford Motor Company will be paid $5 a day and have a shortened work day. The new wage more than doubles an average worker’s salary.

1920: Only one-fourth of the population work as farmers, compared to three-fourths of the labor force at the end of the 19th century. The rest of the population works in manufacturing, trade, transportation, and domestic service.

1942: WWII begins. The draft causes a sudden depletion of workers, and women begin fulfilling nontraditionally female roles. At the beginning of the war, 12 million women comprised 25 percent of the workforce; by the end, 18 million women comprise one-third of the workforce.

1945: WWII ends. Consumer demand skyrockets, and office and management environments change to attract more workers. Factory jobs paid far more for unskilled and semi- skilled labor than were office jobs; in response, clerical systems emphasnized the respectabily and status of office work. Advertisements for jobs described “friendly” offices and bosses; attractive health insurance and retirement plans became part of the financial rewards for working; and offices were physically being “landscaped.” They became color-coordinated with attractive furniture and comfortable music and lighting, not only for executive and upper management workers, but even for the office clerks and secretaries.

1956: White-collar workers become the majority of the workforce for the first time, as the number of service jobs surpasses those involved in producing goods.

1963: Congress passes the Equal Pay Act in the hopes of abolishing wage disparity based on gender.

1960: Robert Propst introduces the Action Office, a layout of desks and workspaces meant to allow freedom of movement for optimal  productivity. The second version of the Action Office was composed of mobile wall unites, eventually dubbed Cubicles. The cubicle came to represent bureaucracy at its worst, the exact opposite of what Probst intended–“monolithic insanity” as he described it. By 1980, half of American white collar workers were situated in cubicle farms.

1974: Congress passes the Employee Retirement Income Security Act, providing for the regulation of most pension and health funds established by private employers.

1980: The Equal Employment Opportunity Commission issues regulations defining sexual harassment and declaring that it is a form of sexual discrimination banned by the 1964 Civil Rights Act. Six years later, the Supreme Court recognizes this as well.

2001: The ratio of average pay between a CEO and an average production worker (that is, non management) worker is 525:1, a major jump from 42:1 in 1982.

2004: Mark Zuckerberg launches Facebook. He drops out of Harvard University due to the company’s resounding financial success, making his rise to fame something of a modern day Horatio Alger story. by 2013, his personal wealth is estimated to be about $19 billion.

2007: Higher education becomes increasingly important as qualification formwork. in this year, nearly 29 percent of Americans over the age of 25 have completed four years of college, up from about 20 percent in 1987, 10 percent in 1967, and 5 percent in 1947.

2011: Steve Jobs, co-founder of Apple, Inc. and worth more than $8 billion, dies. A biography and film quickly appear, revealing his unique and controversial management style. Described as an “egomaniac,” “perfectionist,” “aggressive,” and “colder than an ice cube,” he was both feared and respected as a leader.


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