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Why did Pullman Palace Car Company cut workers' wages in 1894?
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Pullman Strike
A shantytown on the lakefront in Chicago during the Pullman Strike and general economic downturn of 1893β94.
The Pullman Palace Car Company reduced workers' wages in 1894 as a direct response to the economic depression that began in 1893, which caused the company's business and revenue to decline.12
To lower operational costs during this period, the company cut more than 2,000 jobs and reduced wages by 25 percent. While the company sought to decrease expenses, it notably did not reduce the dividends paid to stockholders, nor did it lower the rents or the prices of goods and utilities in the company town of Pullman, where many employees resided. This failure to adjust living costs while simultaneously slashing wages left many workers and their families facing starvation, ultimately serving as a primary catalyst for the Pullman Strike.12