Date of Graduation
Some of the most violent labor struggles in American history were fought by residents of coal company towns. This study investigates whether these struggles grew out of a competitive, or noncompetitive, labor market. In some areas, during the early part of the twentieth century, coal mine labor and capital were brought together through the institution of the company town. In order to capture this institutional context Stephen N. Cheung's sharecropping model was adapted to piece rate coal miners who lived in company towns. Competitive and noncompetitive models predicted: (a) despite the number of firms which operated in a market, miners who worked in areas where company towns predominated would earn lower real wages than miners who worked in areas where company towns were absent, and, (b) concentration (monopsony) would reduce real wages in a local labor market relative to markets with low concentration. Using data from the 1922 Coal Commission's Report, price indices and real wages were calculated for districts with and without company towns. Multiple regressions used county level data from the West Virginia Department of Mines for the years 1901-1910 to test whether concentration affected employees wages. It was found that miners in districts where company towns predominated earned lower incomes, and paid higher food prices, than miners in other districts. Consequently wide real income differentials existed between the two types of districts. Regression results indicated that concentration lowered the daily wages of "trackmen." However, concentration did not lower the wages of "miners." It was also found that miners who worked in southern West Virginia counties earned lower wages than miners in northern counties. These results lead to the several conclusions. The market for mine labor was a local market and wage differentials could exist even between counties in a small state. Furthermore the institution of the company town appeared to lower real wages, and incomes, for miners. Because trackmen were apparently boys and young men evidence was found that monopsony affected secondary workers. "Miners," an occupation made up of prime age males, were not affected by monopsony.
Boyd, Lawrence William, "The economics of the coal company town: Institutional relationships, monopsony, and distributional conflicts in American coal towns." (1993). Graduate Theses, Dissertations, and Problem Reports. 8523.