Labor and Economy

Hannah DavisMorgan Harrell Aaron Koch

Thesis: Although the United States began as an economic underdog, it grew to a world superpower through a combination of the shifts from an agricultural economy to an

industrial giant, from small isolated businesses to big international corporations,

and from isolated regional labor organizations to powerful national labor

unions.

Mercantilism An economic system to

gain wealth by controlling colonial trade

Navigation Acts- passed by Parliament 1. goods could only be traded with England 2. All trade goods had to be transported on English ships 3. all trade goods had to pass through English ports to be taxed

Indentured Servants 1607 first Virginia

planters arrive with indentured servants

2/3 of the Immigrants that arrived the Colonies were originally indentured servants

Indentured Slaves Indentured servants

maintained some rights unlike slavery

Contract often included land and other necessities

As demand for labor increased land owner’s turned to slavery

Slavery 1619 First Slaves

arrive in Virginia Massachusetts passed

the first slave laws in 1641 and Virginia followed 20 years later

In certain area’s the slave population made up 50-60% of the overall population

Cotton Gin

Eli Whitney invented it in 1793

Lead to an increase of cotton production (“King Cotton”)

Louisiana Purchase

The Haitian Rebellion

Louisiana Purchase Opened up New

Orleans Port, helped Western Farmers and increased Labor in the South 1803

Jefferson vs Hamilton Strong Federal Government

National Bank Constitutional

Merchant/Business Economy

National Government helps pay State Debts

Supported by the elites(Merchants, industry,

landowners, investors, lawyers, clergy)

Limited Federal Government

National Bank Unconstitutional

Farming Economy

National Government pays only National Debt

Supported by common people(farmers, tradesmen)

Jefferson vs Hamilton

Strict Construction

Opposed National Bank

Constitution is inflexible; the government can only do what is literally stated

Against Bank- not in Constitution

Loose Construction

Supported National Bank

Constitution is flexible; it sets guidelines for government power

For Bank- gov’t needed bank to regulate trade

War of 1812 British Blockade

forced Americans to become more independent

Regions became more interdependent

American System A pre-Civil War set of

measures designed to unify the nation and strengthen its economy with protective tariffs, a national bank, and such international improvements as the development of a transportation system

American System I.D.In 1815 under President Madison the American System was put into place. The goal of the American System was to help the US become economically independent. This happened by the US establishing the New National Bank (BUS) was

part of this system since it was time for a new charter to be put in place. Internal improvements such as roads and

canals were put into place which would bring the nation together. Protective tariffs (tax on imported goods) were

used to fund internal improvements and help the economy. This system was important because it allowed US citizens to

make progress and have pride in the country, it also eventually led to the “Era of Good Feelings” since there was

an increase in economic growth.

Jackson Era

1828 Third increase of “Tariff of Abominations”  

1832 Jackson vetoes Bank of the US’s Charter

1836 Specie Cicular- Jackson tried to stop inflation- required people to pay government lands with specie= gold and silver caused banks to run out of specie

1837 Panic of 1837

Antebellum Years

Economy was mostly exporting goods

Labor was indentured servants and slavery

Big Business 1860 – 1906 Rise of Big Business

1859 Oil Drilling technique created ( Cars 50 years later)

1862 Homestead Act

1867-70s Grange (Patrons of Husbandry) -- farmers against railroads(populist movement)

1869 Transcontinental Railroad

1870-1890s Bonanza Farms

1880 Bessemer process established

1887 Huge iron and coal deposits found in Minnesota

1893 Panic of 1893

1896 Debate over Gold Standard

1900 Carnegie Steel biggest company in America

1901 US Steel buys out Carnegie steel (Holding Companies form)

Andrew Carnegie I.D. Andrew Carnegie was a Scottish

immigrant who created one of the biggest businesses during the turn of the 19th Century. He was the first to use the strategies of vertical and horizontal

integration. Carnegie was important because he was the first of the big

business leaders and was America’s first “rags to riches” story.

Major Strikes

1836- Mill Girl Strikes 1870- Grange Wars 1886- Haymarket Affair 1893- Pullman Strike

Mill Girl Letter to Boston Newspaper

S- Lowell Factory working conditions for the girls O- Lowell, MA in November of 1844 (Boston Newspaper)A This letter is directed to members in the MA community.P- To inform the public of the tough treatment of the young girls who work 16 hour days and within a 24 day time period only make $14. 52 and they are punished if they don’t get their work done. There wages keep getting cut and they work harder every day.S-The author is a worker at the factory who is losing hope in her job because they have to pay for food and board while wages are low and prices and work days continue to get higher/longer. She is overworked. She is writing for all the workers at the factory.

WWI Labor Issues 1919- First Red Scare 1919- Year of Strikes Boston Police Strike Steel Mill Strike Coal Miners’ Strike IWW (International workers of the

world- accused of being communists) Labor Movement of Loft Appeal because

of connects of communism

Roaring 20s (Coolidge Era)

Laissez- fair because of WWI

Standard of Living increase but extreme income gap

Crash Black Tuesday- stock market crash (panic) Suicide Rates triple in 1929 S – Notice bottom right, “Billions lost” and

“Panic” in the title; these two phrases perfectly reflect Black Tuesday.

Great Depression Hoovers Econ Policy- “Too little, Too late” Sad and Poor S-The Great Depression not only put the US

economy into a depression but people fell into depression because there were not jobs available. People had to move out of their homes and into the street.

FDR and New Deal ABC soup Economy

FDIC SEC- securities and exchange commission

Labor Wagner Act NLRB Fair Standards Act Social Security Act of 1905

WWII and Coming out of Great Depression

1940-1945- Government takes over economy OPA NWLB WPB

Post WWII Economy 1946- Unemployment Rises (Normalizes) Inflation Skyrockets

Because of fragility during the war, people wanted to spend $

Taft Hartley Act (Anti- Labor Act)

Taft- Hartley Act The Taft-Hartley act was proposed by Senator Robert Taft and Representative Fred Hartley in 1947 to amend the Wagner Act of 1935 as well as nullifying parts of the Federal Anti-Junction

Act of 1932. The Taft- Hartley act was originally vetoed by President Truman but was passed by congress, the act was a

labor demobilization effort by congress, the Act further empowered the National Labor Relations Board, limited the union’s ability to strike, allowed the federal court to enforce collective bargaining, permitted states to pass right to work laws, and banned closed shop unions. The Taft-Hartley Act

was significant not just because it severely restricted unions but because the Taft Hartley Act shifted the balance of power

away from unions and once again back to big business owners similar to the start of the Gilded Age.

50s Laissez- Fair Automania- American obsession with

cars, lots more cars and roads, pollution rises

Rise of the Suburbs

LBJ 64-66- LBJ’s Great Society (led to decrease

poverty but increased national debt) Space Program- increased defense system

and focused on education

Nixon/Ford (1969-1974) Slagflation (67-73)- high unemployment

combined with high inflation OPEC Embargo (73- 74)- sent inflation sky

high 74 trade resumes, prices quadruple

Nixon opened up trades again with China which led to US products being made in China and 3rd world countries

Carter(77-81)/ Reagan Carter Admin- second OPEC price spike-

incomplete embargo Inflation rose to double digits

Reagan Admin.- Reaganomics- trickle- down theory, taxes cuts, budget cuts, increase defeciet spending

Discuss the economic and political reasons for the establishment of unions after the Civil War.

Although the economy was prosperous after the Civil War, conflicting views between big business owners and laborers caused the formation of unions, such as the Knights of Labor and the American Federation of Labor, due to the decreasing wages, while an increase in the cost of living, and a larger profit margin of the businesses.

Outline 1. Decrease in wages

a. Mass production b. Poverty of Population (Jungle) c. Unskilled v. Skilled labor

2. Increase in Cost of Living a. Pullman Strike

I. Due to increase in rent II. Cost of food went up

b. Population density increase ->Supply/demand imbalance I. First arrived in the Jungle

3. Larger profit margin a. Mass production -> Cheaper Product b. Business profit increase while worker wage decrease

unhappy labor

Cause and Effect Cause: British continued taxing goods that

the colonist bought and needed (helped the British economy)

Effect: The Revolutionary War Cause: Eli Whitney used interchangeable parts

in factory assembly lines Effect: Mass production and better American

economy because exports could be shipped more frequently

Cause and Effect The Pullman strike was caused by a decrease in wages while

the price of housing was maintained at the same rate. The Pullman Strike was important because it was one of the first national strikes and affected about two thirds of the United States. By the end of the strike many strikers were without jobs and were living in worse conditions than before and George Pullman, owner of the Pullman Company, lost an estimated $5 million dollars.

Slavery was caused by the need for a cheap labor force in the new colonies and lasted until the Civil War and was officially ended in 1865 when the 13th amendment abolished slavery all throughout the nation. Slavery affected the economy because it provided a cheap work force which in turn lowered the prices of goods, but slavery was one of the main causes in the Civil War.

Cause and Effect WWII is often credited with ending the Great Depression; and

it did bring unemployment to a record low. However, WWII was also responsible for the slump of the 60s and 70s. Due to war damages, European countries no longer had a high demand for American goods. This led to the high unemployment rates of the 60s and 70s.

Cause Effect WWII End of Great Depression Poorer global economy

Historians now blame Jackson’s Specie Circular for the Panic of 1837; however, land speculation and bad banking practices were the reason for the Specie Circular.

Banking Policy- Underlying Cause Specie Circular- Perceived Cause Panic of 1837- Ultimate Effect Irresponsible speculation- underlying Cause