Are we living in a second Gilded Age?Ultimately, one can argue for or against the idea that modern day society is living in a second Gilded Age. This period of time stretching from the mid-1870s to the turn of the century was coined the Gilded Age by Mark Twain in the 1920s and was meant to portray the period as having a glittering golden surface, but a corrupt underbelly. During this time, America’s economy grew at an inconceivable rate, creating unparalleled levels of wealth. Railroads, and later telephone lines had expanded across the country establishing new opportunities, especially for young entrepreneurs and cheaper consumer goods.
However, a nation that had considered itself a simple land with peaceful terms, a land of small farms, artisans and builders, was forced to confront the evolution of an increasingly divided society. In this society, millions of poor workers struggled to survive while the emerging industrial and financial nobles lived in extravagant mansions and indulged in luxurious amusement. There is considerable research to support the idea that today, history is repeating itself. However, despite the similarities between the Gilded Age and today in terms of immigration, the wealth gap, and economic growth, the paths taken by society to reach these points are very different. ImmigrationA person’s or family’s purpose for immigrating has essentially remained the same throughout history. Either they were seeking better wages, or they were driven away by religious discrimination, political upheaval, and crop failures in their homeland. In the beginning of the 19th century, the “Old Immigrants” who migrated to the States were based mainly in northern or western Europe, and were compelled to immigrate for these very reasons.
They came in search of better work and a better life. By the end of the century, civilization had reached an era of “New Immigration”. These individuals “chasing the American Dream” would come from southern and eastern Europe for the same reasons: better wages and a better life. Some were wealthy farmers who had the ability to buy land and equipment in the Western states, however many were poor peasants who lacked skills, and were therefore forced into harsh manual labor environments such as mines and factories.
To accommodate such a large influx of people, the government opened Ellis Island, a reception center near the Statue of Liberty, in 1892. Today, immigrants are still forced from their homelands because of poverty and bad working conditions. While an immigrant’s reasoning for coming to the United States may have remained the same throughout history, the rates have fluctuated, and immigrants no longer come from specific locations at specific periods of time.
According to the Migration Policy Institute (MPI), a Washington D.C. think tank, “In 2015, 1.38 million foreign-born individuals moved to the United States, a 2 percent increase from 1.36 million in 2014.” Compared to the 11.7 million immigrants that came during the Gilded Age (and adjusting for inflation), modern day America is not receiving as many immigrants as it did during an age of major industrialism. Back in the 1800s, the majority of immigrants came from Europe, however today foreigners come from all continents except Antarctica.
In fact, in 2015 the largest amount of immigrants came from India, a country which, in the Gilded Age, was under the rule of Britain who strictly forbid Indian civilians from leaving their homeland.Wealth Inequality, Then vs. NowDecades ago, many economists predicted that the United States would remain a middle-class society. The high income and wealth inequality of the Gilded Age was, and continues to be, looked at as a peculiar result of the first era of industrialization. Thanks to innovations in technology, public investments in education, and a more progressive tax system, equality was valued much more in the late-20th century than it was in the Gilded Age.
Therefore, one would expect the 21st century to be even more of middle-class society than in the past. However that turned out to be wrong. The wealth gap has risen to an all-time high since the late 1800s. In order to understand modern day society, one must understand the ways of the past. The industrial era began with national reconstruction after the Civil War, and with the promise that African Americans would not only ascend in social status, but also be included in the community. This opened new doors for the working man to improve his status by starting his own business, thus leading to the rise of prosperous industrialists.More than 70 years ago, the term “Robber Barons” was a derogatory name given to these ‘Captains of Industry’ who were vastly known for using unscrupulous methods to obtain control over the railroads as well as the oil and steel industries. At the height of their power, these Barons refused to be controlled by federal authority, permanently exposing to the public the lack of government regulation over their corporations.
This subsequently resulted in the uprising of numerous new companies run by Robber Barons. These major corporations worked to maximize profits by decreasing the cost of producing goods and services by paying workers the lowest possible wages and paying as little as they could for raw-materials. Seeing that there were millions of immigrants entering the country who desperately needed jobs, powerful businessmen realized that they could alter wages as they pleased maximizing profit margins while paying the least amount possible. They kept wages to a minimum, and reduced them as they saw fit, resulting in an unequal distribution of wealth. From 1860 to the turn of the century, roughly 2% of the wealthiest American households owned more than 1/3 of the population’s wealth, while the top 10% owned about 3/4. Consequently, the nation’s lower echelon had almost no wealth, claiming only 1.1% of land.Today’s income statistics are similar, however the reasoning behind such wealth gap and rising income inequality is actually quite different.
In the Gilded Age, there were millions of jobs for unskilled immigrants. Factories and sweatshops would employ thousands of people to work long hours on machines making mass-produced items. In 1880, the machine industry was valued at nearly $111 million (roughly $2.5 billion in today’s dollars) and by the start of the 20th century, it nearly quadrupled to an exceptional $432 million ($9.8 billion in today’s dollars) – a 389% increase. Nowadays, due to massive technological advancements, factory-made products are almost entirely made by machines, with only a few dozen skilled workers to operate them and oversee production. Therefore, today’s society is experiencing income inequality not because of Robber Barons and the exploitation of workers, but because upward mobility, specifically moving from an unskilled job to a skilled job, is far more difficult than it used to be.Economic GrowthBetween the 1860s and 1910s, the US economy expanded at an exceptional rate, one that has never before been topped in America’s history.
During this time, people experienced higher wages, indisputable wealth, and increased Gross Domestic Product (GDP). As large corporations led by Robber Barons like Andrew Carnegie and John D. Rockefeller pushed the US through huge surges in industrialization, it quickly surpassed Great Britain in terms of technological advancement. In 1869, the first Transcontinental Railroad opened up, quickening travel from New York to San Francisco from six months to six days. Between 1860 and 1880, railroad track mileage nearly tripled, and by 1920 that figure doubled, for a 567% increase in railway tracks over the course of 60 years. As a result of new railways, isolated areas of land were connected to the big cities, making it easier to transport goods to cities full of consumers.
Following this major advancement, the harvest of wheat was able to increase by 256% while the product of corn was able to increase by 222% between the years 1865 and 1898. The late 19th century still resembles the 21st century in the sense that the large corporations of the past still exist today. However, despite how similar these corporations may seem from the outside, they don’t surpass the real economic growth that took place during the end of the 1800s.
Although the numbers look big, and the growth rates seem impressive, they can be somewhat misleading. Contrary to the booming coal, oil, and steel industries of the Gilded Age, the tech industry and stock market are what rule modern times. From 1865 to 1900, the GDP increased by 600%, which after averaging and taking compound interest into account, comes down to a 5.7% annual GDP rate. Meanwhile in the 4th quarter of 2017, the same annual rate was averaged down to only 2.6% growth, allowing one to conclude that the US economy is no longer growing as fast as it used to.In Conclusion Despite the similarities between the Gilded Age and today, and the much documented trends around immigration, wealth inequality, and economic growth, it would be a mistake to assume that history is repeating itself.
While immigration is still a crucial part of society, the rate at which it exists has fluctuated. While income and wealth inequality remain, society’s path to such a gap has differed. Lastly compared to the 19th century, today’s economic figures can be highly misleading. Real economic growth as defined by GDP is actually lower than that of the Gilded Age. So are we living in a second Gilded Age or one that is falsely represented? At the end of the day, one must decide for themself.