North Carolina's furniture industry grew rapidly in the 1890s. At the start of the decade, six establishments produced an estimated $159,000 worth of furniture. By 1900, 44 furniture factories operated in High Point and the surrounding towns of Thomasville, Lexington, Salem, Marion, Mount Airy, Statesville, Hickory, and Greensboro. In that year, they produced an estimated $1.5 million worth of furniture. (See table.) Related industries had set up factories to supply the furniture makers with veneers, plate glass, mirrors, and paints.
The almost tenfold growth in furniture production was facilitated by an ample supply of inexpensive labor. The agricultural depression of the 1890s had devastated farmers across the nation. In the face of weak crop prices, many of North Carolina's farmers left the countryside and migrated to the area's towns, where they sought work in the developing textile mills, tobacco processing plants, and furniture factories.
Farming was a hard life in North Carolina's Piedmont region, where cotton was the predominant crop. The farms were small, due to hilly topography, and the land was only moderately fertile and required substantial fertilization. In good years, farmers who owned their land typically made just enough to pay off their debts, and a string of bad years could result in foreclosure. Most tenant farmers — about a third of all farmers — lived in poverty with poor diets and health care. The extreme difficulty of the farming life made factory work alluring, and depressed crop prices heightened the attraction.
Many North Carolina furniture makers made large profits during the first decade of the 20th century, but by 1910, the profits became harder to come by. In response to the initial profits, new factories had been built, which resulted in intense competition — for both market share and skilled workers. It was at about this time that the first formal Southern Furniture Market was held in High Point. The market proved to be an effective and enduring means of marketing the industry's product, and expositions continue to be held twice a year in High Point to this day (with a notable exception in the spring of 2020, when it was canceled due to the COVID-19 pandemic).
The agricultural depression of the 1920s changed the industry's direction. The value of North Carolina's cotton crop — which had been $2 billion in 1919 — declined to $643 million in 1921. The purchasing power of Southern consumers plummeted, and the state's furniture manufacturers sought out alternative markets in the North. At first, their products were scoffed at by Northerners. But North Carolina manufacturers gained market share by copying high-end contemporary furniture designs and producing them at mid-market prices. Focusing on household furniture, the industry's production roughly doubled over the next 10 years — from $29.8 million in 1919 to $56.7 million in 1929.
The industry's success in penetrating the Northern market relied heavily on its price competitiveness, which, in turn, hinged on its access to low-wage labor. Wages for North Carolina furniture workers were roughly $821 per year in 1929. This was about half the $1,647 wage paid to workers in New York and substantially lower than the $1,332 wage paid to workers in Michigan.
Although the large supply of labor coming from the region's farms undoubtedly depressed furniture industry wage rates, there is little doubt that the inability of unions to gain a foothold also played a role. A major obstacle to unionization was the industry's geographical dispersion among company towns that usually had textile mills in close proximity to furniture factories. Men would mostly work in the furniture factories, while women and children would work in the textile mills. "Agitators find it more difficult to foment strikes in such industrial communities," according to an analysis of the industry by Ben Lemert in the journal Economic Geography in 1934. "In the furniture region of the Piedmont they must agitate disturbances in not only the furniture, but also the knitting, cotton and silk industries simultaneously in order to have a chance of winning." In company towns, industrialists and civic leaders formed a united front against unionization, and workers were harassed, fired, or worse for organizing. Once fired, they typically would be left with no nearby employment alternatives and would have to uproot their families.
But Lemert's account made it plain that race was also an important factor. According to his analysis, the industry's lower wages partly reflected lower living costs. But he cited another reason: "They are lower because farm labor and common labor wages are much lower; and these wages are much lower than those for similar occupations in the North due to the fact that a great black laboring force has always done the hard labor of the South and is willing to do so and ofttimes do it better for less wages than those paid the white man." The racial divide between black and white workers was often used to enforce labor discipline and discourage unionization.
The Glory Days
During the 1930s and 1940s, furniture sales were depressed — at first because of the Depression and then due to World War II, when many companies shifted to war production. The industry's situation turned around after the war, thanks to pent-up demand and a booming U.S. housing market. "The Greatest Generation went to college on the G.I. Bill, married, had children, bought houses, and filled them with furniture," in the words of former industry executive and Lenoir-Rhyne University business professor Michael Dugan, author of The Furniture Wars: How America Lost a Fifty Billion Dollar Industry. Thus, North Carolina furniture companies that survived the Great Depression and World War II experienced unprecedented prosperity.
These were the industry's glory days. There was no significant offshore competition and plenty of demand. "If you could make it, you could find a buyer for it," according to Dugan. During the 1960s and into the 1970s, Dugan wrote, "The weakest competitors made money; the strongest made a lot of money." North Carolina became the nation's top producer of both upholstered and wooden household furniture, and within North Carolina, the industry expanded to become the state's second-largest manufacturing industry — the textiles and apparel sector was the only one larger.
Yet the industry remained highly fragmented and competitive, even during this period of prosperity. According to Dugan, two-thirds of the 5,350 companies employed fewer than 20 people, and only 75 had sales in excess of $10 million. Many people were surprised by a 1957 study by Dartmouth College marketing professor Kenneth Davis that found that the industry's profitability was only average or slightly above normal. The study concluded that this reflected structural features of the market — in particular, the desire of customers for differentiated products. The need to accommodate varied and changing consumer tastes made it difficult to achieve economies of scale, and this fact encouraged fragmentation and intense competition. Firms vied for market share through marketing and creative design (although firms regularly copied the designs of rivals). Yet despite the efforts of firms to differentiate themselves, consumer brand preferences generally remained weak, with some notable exceptions, such as Thomasville, Drexel, and a handful of others.
A Reversal of Fortune
China's growth as an export power in the wake of its WTO entry was swift, and its magnitude was unexpected. The country's share of world manufacturing exports more than tripled between 2000 and 2012 — from roughly 5 percent in 2000 to more than 17 percent in 2012.
