“We need to become more like Europe.”  “Back in the 1900’s capitalism was brutal to the average worker.” This is the custom tailored history that has been used to convince people that the nation needs to be “fundamentally changed”.  However, this is not consistent with a close examination of the facts.  We often hear about how low the average worker was paid, but this has to be put in terms of  price index of the time.  And put these figures in proper context provides some understanding on the direction that needs to be pursued today. 

 In 1901, census data revealed that the age male’s estate was worth $5000, and they had on average $750 in bank and equity savings.  Those in the city earned $750 per year, as compared $550 annual income for farmers.  Low skilled workers averaged $484 a year.  The New York Times ads reported that farm equipment managers could make as much as $2000 a year.

The tendency of modern historical critiques of the age attempt to compare these values to what people are paid now, and suggest that politically driven reform and increased power of unions saved the people from this injustice.  But were these wages really that low?  

During this times, average American annual expenses were as follows:

Clothes $30

Food $82  ( a quart of milk 6 cents, pound of pork 17 cents.)

Religion and charity $9

Healthcare $4

Tobacco $6  

Historian Scott Derks reports that working women earned $365 a year, with annual expenditures of $55 for clothes, $78 for food, and around $200 for room and board.  Women dominated the clerk positions, where their male employers preferred hiring them to men.  Often men had significantly higher termination rate.  The popular slogan managers of the time was “what to do want,  honest girls or boys you smoke and play cards?”

By the second decade of the century, American women’s average earnings and standard of living exceeded that of European men of the same time!  America became the leading steel producer by the 1890’s, a decade where nation’s wealth doubled.  Theodore Roosevelt biographer George Mowry discusses those executives who  touted this growth  as “the three winning cards, iron, steel, and coal.”

America’s lower tax rate was a major factor in this ascendency over Europe.  Mowry reports :

Americans were vastly better off, leading the world with a per capita income of  $227 as opposed to the British male’s $181 and a Frenchman’s $161- partially because of lower taxes (British men paid 9 percent of their income, and the French, 12 percent). as compared to a 3% rate for American men.

The British pulled ahead of the rest of in previous centuries by having lower energy prices, and abundance of coal, and higher wages that allowed their people to acquire better education and increased job skills. America pulled ahead of the British by allowing their people to keep a higher percentage of their income, thus providing them with the means to save and invest.   Throughout the twentieth century, America overseas investments soared, as the nation achieved favorable trade balalnces.  During World War I, America was engaged in loans and investment to both sides, and Britian was dependant on the US suppplies to survive the conflict.

So when  people talk about Europeans being angry at America, instead of looking to George Bush’s presidency, maybe we should look to the 1900’s, when America passed them up!

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