The $3 Million Strike: How the Great Northern Railway Bet on Breaking Workers
In the winter of 1893, the railroad’s board calculated that paying workers less was cheaper than losing millions to a strike. They were right—and Seattle paid the price.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
The cost of labor is a question that has been a costly one to the Burlington, and a tough one it has achieved complete victory and gained all the points for which it fought; yet it is doubtful whether the cost will not have been better off in the end had it made some concessions at the beginning of the contest and averted the strike.
The trouble arose at a time when the company could act as an onward to stand the heavy losses the strike entailed. The company accepted the strike rather than to grant the increase in salaries by its employees. Operating expenses were already much higher than its business warranted, and it had to choose between two evils—either to grant the unreasonable demands of its men, assume still further increase in operating expenses, or to accept a strike and its consequent losses.
In short, the company could not at the time calculate the cost of a strike; it evidently had no idea of the dimensions the conflict would assume. Had they known beforehand what the cost would be they would have made greater efforts to avoid such a conflict. But after the issue had been raised the company could not afford to recede from its position, and it was compelled to carry it through to the end regardless.
Correct showing of what has cost the company is impossible. The only way by which an approximate estimate can be made is to take the decrease in net earnings this year as compared with last and then make due allowance for what the decrease from natural causes would have been had there been no strike. As stated above, the decrease in net earnings from January 1, 1893, to the beginning of the strike amounted to about $2,000,000. As there was no perceptible improvement in business or rates up to the end of August, it is fair to presume that the additional decrease in the earnings of the company would have been about $1,500,000, making a total decrease of $3,500,000 had there been no strike.
The records of the company show that from January 1, 1893, to October 1, 1893, the decrease in net earnings was about $5,500,000. Therefore, deducting the $1,500,000 which, it is estimated, the company would have lost had there been no strike from the above amount, there remains a loss of about $4,000,000 that can be attributed directly to the strike.
The company's officials estimate their loss on account of the strike at about $2,000,000, but this is no doubt a mistake, as the loss during the first month of the strike alone exceeded $1,700,000 and the losses for the three months averaged about $700,000 each. Consequently the estimate that the strike cost the company about $3,000,000 is not too high.
This money, however, is not irretrievably lost, as it would have been had the strikers carried their point. The saving from decreased salaries will amount to about $60,000 a month or $600,000 a year.
This 1893 analysis of the Great Northern Railway strike reveals a chillingly modern corporate calculus: treating labor disputes as balance sheet line items rather than human conflicts. The company’s admission that they 'accepted the strike' because it was cheaper than raising wages mirrors today's debates over gig-economy pay and union busting, where profit margins are often defended by absorbing short-term losses to break long-term collective power.
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