How top executives live (Fortune, 1955)

July 20, 2012 4:16 PM

"The executive's home today is likely to be unpretentious and relatively small--perhaps seven rooms and two and a half baths. (Servants are hard to come by and many a vice president's wife gets along with part-time help. So many have done so for so long, in fact, that they no longer complain much about it.)"

Fortune re-prints an article about the lives of American executives in 1955. Maybe new trends we've been observing aren't so new:

"The successful American executive, for example, gets up early--about 7:00 A.M.--eats a large breakfast, and rushes to his office by train or auto. It is not unusual for him, after spending from 9:00 A.M. until 6:00 P.M. in his office, to hurry home, eat dinner, and crawl into bed with a briefcase full of homework. He is constantly pressed for time, and a great deal of the time he spends in his office is extraneous to his business."

posted by benbenson (30 comments total)

I read that same thing and thought exactly the opposite, that these days that seems a delightfully short workday.

As an aside to the main points of interest in the article, the photo of the TV embedded in the trunk of an oak tree inside the house is equal parts appalling and fantastic. I want to see that now, with the tree mostly grown over the screen so there's just an eerie glow from amongst the leaves.
posted by Joh at 4:44 PM on July 20, 2012 [7 favorites]

Twenty-five years have altered the executive way of life noticeably; in 1930 the average businessman had been buffeted by the economic storms but he had not yet been battered by the income tax.

Fascinating, especially the mourning of a lost lifestyle.
posted by corb at 5:09 PM on July 20, 2012

I'd love to see the same data today; yachts are ... houses have ... rooms, etc.

453 ft, 8th largest
posted by headless at 5:10 PM on July 20, 2012

Relevant in this political season:
He surrenders around 40 per cent of his salary to the Bureau of Internal Revenue (he may cough up as much as 75 per cent)
posted by wanderingstan at 5:13 PM on July 20, 2012 [8 favorites]

7 bedrooms is relatively small? Compared to the billionaire CEOs of today, perhaps, but that seems to be actually quite large by 1955 standards (my house is a bit newer than '55, but only by a few years, and it actually seems outlandish to me that people would have raised a family in this tiny, two bedroom home of mine).
posted by asnider at 5:24 PM on July 20, 2012

Don't worry, the executives did pretty well for themselves in the end. Pretty interesting to compare that graph against the marginal income tax rate.
posted by jedicus at 5:38 PM on July 20, 2012 [1 favorite]

wanderingstan, you beat me to it! Funny how the politicians who rhapsodize most about the 50s never seem to want to bring the era's progressive tax structure back.
posted by Sidhedevil at 5:40 PM on July 20, 2012 [3 favorites]

asnider, I read that as 7 rooms, not 7 bedrooms.
posted by monkeymadness at 6:09 PM on July 20, 2012

7 rooms is probably 3 or 4 bedrooms, after the living room, kitchen, den, and perhaps a dining room are accounted for.
posted by brainmouse at 6:36 PM on July 20, 2012

7:00 AM is early? When I'm teaching, I get up at 5:00.
posted by jrochest at 6:45 PM on July 20, 2012

Of course, on the days I don't teach, I sleep in: couldn't do the 5 AM nonsense every day, or I'd go mad.
posted by jrochest at 6:46 PM on July 20, 2012

Of course, on the days I don't teach, I sleep in: couldn't do the 5 AM nonsense every day, or I'd go mad.

I started out that way, but after 15 years of teaching I wake up every day at ~5:30, even in the summer. My 20-year-old self would be horrified.
posted by Huck500 at 7:26 PM on July 20, 2012 [4 favorites]

I still find it impossible to fathom that anyone, even the most idealistic leftists, much less American captains of industry, would allow themselves to be taxed at a 90% rate. I guess it has to do with the vastly lower cost of living, but still. Imagine being allowed to keep only ten percent of your salary. It's just unfathomable to me. For many years I thought it was just a historical canard, but it was true, and considered the norm in the conservative fifties.
posted by Balok at 9:17 PM on July 20, 2012 [1 favorite]

If my country had recently helped the world overcome a huge threat to civilization, if hundreds of thousands of my countrymen (and millions around the world) had given their lives in that pursuit, if the world economy was now hinging on the charity of my nation's government, and if an existential threat (which I probably viewed as all but wholly evil) was threatening my way of life... then why would I begrudge the instrument of protection, civilization, and freedom my salary?

After basic expenses, they still had most of what they got to keep left, and many of them came from money. Their salaries were just gravy. Plus, what were they gonna do? Buy an election by pouring millions into TV advertising?
posted by GnomeChompsky at 9:27 PM on July 20, 2012 [1 favorite]

Imagine being allowed to keep only ten percent of your salary.

Thanks to the miracle of progressive taxation, even in the 50s only those making an order of magnitude more than the top bracket cut-off had to conceive of such a thing.
posted by no regrets, coyote at 9:44 PM on July 20, 2012 [5 favorites]

Balok: "Imagine being allowed to keep only ten percent of your salary. It's just unfathomable to me. For many years I thought it was just a historical canard, but it was true, and considered the norm in the conservative fifties."

Not exactly, 90% was just for the top bracket of income. So all of your money over $xxxx is taxed at 90%, but the rest is taxed at progressively lower rates. Income taxation still works this way today.
posted by Defenestrator at 9:48 PM on July 20, 2012 [8 favorites]

There are in the U.S. approximately 30,000 executives, with incomes of $50,000 or more. These men sit on the top-most rungs of the business ladder either as managers or as owners of their own businesses.

An income of $50,000 doesn't seem like that much, so I just had to look that up. According to this inflation calculator, $50,000.00 in 1955 had the same buying power as $422,606.74 in 2012. You've got to multiply most of the dollar amounts in the article by eight or nine to get a sense of what that would mean now.
posted by twoleftfeet at 10:10 PM on July 20, 2012 [1 favorite]

Yes, it makes me weep for the sad plight of the executives.
posted by BlueHorse at 10:14 PM on July 20, 2012 [1 favorite]

Further elaborating on what Defenestrator wrote, there were many more tax brackets in 1955 (see this historical listing) Filing as "head of household", a worker would have over $24,000 in taxable income (which is roughly $200,000 in 2011 dollars) to get taxed more than 50% on anything over $24,000. The brackets crept up 3% or so at a time (and $4k or so at a time), until reaching 90% for anything over $200,000 ($1,674,475 in 2011 dollars), and the top rate of 91% for anything over $300,000 ($2,511,712 in 2011 dollars).

Even earning $300,000 in taxable income meant paying a tax of $235,480 (78% of $300k), because only the amount between $200k and $300k was taxed at 91%. Having $60,000 of taxable income ($502,342 in 2011) meant an income tax of just over $30k (50%)

78% for $300k was still very high. The top rate wasn't so much about actually collecting revenue at that rate. It was about effectively setting a maximum wage, which it seemed to do (hence this article).

That said, even someone earning a lot back then probably still had a few options for sheltering income, and also had the opportunity to donate money to a nonprofit and get their name put on stuff. Hence all of the buildings and foundations named after rich people from that era.
posted by robla at 11:25 PM on July 20, 2012 [2 favorites]

The 90% marginal tax rate applied to incomes that were more like $x,xxx,xxx.

Everyone needs to understand marginal tax rates. I hate how the American tax forms hide how they work - it's clearer on the Canadian forms, though not completely spelle out. 

In fictional numbers, here's the tax breakdown for someone making $50k in a country with suspiciously round marginal tax rates.  

The first tax bracket - 10% - covers $0-20k -- so everyone's first $20k of income is taxed at 10% which would be $2000.

The second tax bracket is 20-40k taxed at 20%. So that's $4000. 

The third tax bracket is 40-60k taxed at 30% (higher than the highest marginal tax rate in Canada). I have 10k above 40k, so that's $3000.

The total tax - before any tax credits/reductions - on 50k of income would be $9000, or 18% - not 30%, even though someone would say that I have a "marginal tax rate" of 30%. 

Let's say I made a lot more money, and the marginal tax rates continued in the same pattern (10% more every 20k) -  if I made $180,000, I would only pay 90% on the last 20k. I would owe $90k before any deductions, which would still only be 50%. 
posted by jb at 11:30 PM on July 20, 2012 [4 favorites]

Extramarital relations in the top American business world are not important enough to discuss.

What a strange way to put it. Note the author didn't say that extramarital affairs didn't happen, or even that they didn't happen very often - only that they're "not important". I'm sure they were pretty damned important to the women involved (both the wives and the mistresses), but their experiences weren't even considered worthy of passing consideration.

That single sentence is more interesting to me than the rest of this article in its entirety.
posted by cilantro at 3:07 AM on July 21, 2012 [9 favorites]

Good catch, cilantro. One wonders how extramarital relations could become important enough to discuss. I'm left wondering if they were so common ( a la Mad Men) that they were not worth commenting on or if they were so secretive that nobody knew how common they were so the journalist couldn't be bothered to find out. Or perhaps the journalist simply felt that the sex lives of the executives were too personal.
posted by Secret Life of Gravy at 5:25 AM on July 21, 2012 [1 favorite]

Few really paid 90% marginal rates. After the various deductions, the effective rates were much lower than that. Still higher than today, but considerably lower than what they seemed.
posted by shivohum at 8:00 AM on July 21, 2012

I love how some of the same assumptions come into play then and now, though. A REAL man, a real executive, can of COURSE handle working hard and playing hard all the time, and driving like a maniac is a badge of honor, not a poor life decision. And nothing is said about the utter lack of togetherness engendered by long days at the office followed by manly hunting and fishing on the weekends. Ugh. I mean, I guess one benefit is that a lot of kids were probably a lot more free-range and self-sufficient than today, but God, I'm sure a lot of wives just wanted to kill themselves.
posted by limeonaire at 9:06 AM on July 21, 2012

asnider, I read that as 7 rooms, not 7 bedrooms.

You may be right. I assumed it was bedrooms because they isolated the bathrooms (is it still 7 rooms, or 9?) and also because that's typically how homes are advertised today. I mean, hell, if we're counting all of the rooms, my house has 5 rooms (6 if you count the basement); I doubt that an executive would live in a home like mine, even in the '50s, though.
posted by asnider at 9:36 AM on July 21, 2012 [1 favorite]

The Mitchells' social life he describes as "limited." "I get stimulation from business. "Mama," he says, referring to Mrs. Mitchell, "probably finds the life boring." But as he explains: "Her job is to bring up the children [there are three, two of them by now grown], and keep my health reasonably good."

Aka, "the problem that has no name".
posted by immlass at 11:03 AM on July 21, 2012 [2 favorites]

Or perhaps the journalist simply felt that the sex lives of the executives were too personal.

I wonder if the line that cilantro pointed out is actually a subtle way of saying that extramarital affairs happen frequently among this group of people. In much the same way that entertainment journalists didn't typically report on the affairs and sex lives of celebrities in the past (perhaps in order to retain access), it may be that the reporter chose not to report on this "personal" matter but still wanted to note that it happens often enough to mention (even while claiming that they are not important enough to merit discussion).
posted by asnider at 12:51 PM on July 21, 2012 [1 favorite]

is it still 7 rooms, or 9?

Or is it 36 Chambers? These numbers ain't nuthing ta fuck wit.
posted by Purposeful Grimace at 4:55 PM on July 21, 2012 [1 favorite]

FYI: room counts do not count bathrooms (in the US and Canada). Basements are usually not counted either.
posted by deborah at 10:48 PM on July 21, 2012

Its all the sentences concerning the wives that are freaking me out, tbh.
posted by infini at 6:33 AM on August 18, 2012