This isn't actually true at all. Rising productivity in the United States at the end of the 19th Century, coupled with monetary deflation caused by the retirement of Civil War fiat currency, actually caused a dramatic rise in personal wealth for the working class in the United States. What we consider horrible conditions today are horrible, but they were much more common then as a high general standard of living couldn't be supported at the previous level of development.
The aforementioned period is called the Gilded Age for a reason...it is also known as the age of the Robber Barrons.
They created a new technology, made a new business style or created a new market. They added something to the world that didn't exist before. Carnegie created new ways of mass producing steel in such a way that railroads and skyscrapers became far more feasible. Rockefeller made transportation cheaper, allowed people to stay up after dark despite having little money and accidentally saved the whales by replacing whale oil with ground oil.
These men did FAR more to help poor people with their inventions and paychecks than any social program or welfare ever conceived. But because they did it out of their own self interest, some people consider it bad and something to be regulated or sometimes even extinguished.
http://www.amazon.com/Myth-Robber-Barons-Business-America/dp/0963020315
The Myth of the Robber Barons describes the role of key entrepreneurs in the economic growth of the United States from 1850 to 1910. The entrepreneurs studied are Cornelius Vanderbilt, John D. Rockefeller, James J. Hill, Andrew Mellon, Charles Schwab, and the Scranton family. Most historians argue that these men, and others like them, were Robber Barons. The story, however, is more complicated. The author, Burton Folsom, divides the entrepreneurs into two groups market entrepreneurs and political entrepreneurs. The market entrepreneurs, such as Hill, Vanderbilt, and Rockefeller, succeeded by producing a quality product at a competitive price. The political entrepreneurs such as Edward Collins in steamships and in railroads the leaders of the Union Pacific Railroad were men who used the power of government to succeed. They tried to gain subsidies, or in some way use government to stop competitors. The market entrepreneurs helped lead to the rise of the U. S. as a major economic power. By 1910, the U. S. dominated the world in oil, steel, and railroads led by Rockefeller, Schwab (and Carnegie), and Hill. The political entrepreneurs, by contrast, were a drain on the taxpayers and a thorn in the side of the market entrepreneurs. Interestingly, the political entrepreneurs often failed without help from government they could not produce competitive products. The author describes this clash of the market entrepreneurs and the political entrepreneurs. In the Mellon chapter, the author describes how Andrew Mellon an entrepreneur in oil and aluminum became Secretary of Treasury under Coolidge. In office, Mellon was the first American to practice supply-side economics. He supported cuts on income tax rates for all groups. The rate cut on the wealthiest Americans, from 73 percent to 25 percent, freed up investment capital and led to American economic growth during the 1920s. Also, the amount of revenue into the federal treasury increased sharply after tax rates were cut. The Myth of the Robber Barons has separate chapters on Vanderbilt, Hill, Schwab, Mellon, and the Scrantons. The author also has a conclusion, in which he looks at the textbook bias on the subject of Robber Barons and the rise of the U. S. in the late 1800s. This chapter explores three leading college texts in U. S. history and shows how they misread American history and disparage market entrepreneurs instead of the political entrepreneurs. This book is in its fifth edition, and is widely adopted in college and high school classrooms across the U. S.
