Capital and Labor in the Age of Industrialization

8.12- Students analyze the transformation of the American economy and the changing social and political conditions in the United States in response to the Industrial Revolution
11.2- Students analyze the relationship among the rise of industrialization, large-scale rural-to-urban migration, and massive immigration from Southern and Eastern Europe

1. Why is the idea of "laissez-faire" so important to industrialization, and how does it
connect to the economic impact of big business advocates like Carnegie and Rockefeller?

2. Why was the establishment of unions so important for workers/labor?

3. How does advertising play such a major role in the industrial age?  How does advertising lead to an economic upturn?

4. Why does new technology benefit employers, but hinder their employees?

5. Why were working conditions so terrible for women and children?

6. How do the two issues of immigration and labor interconnect?

The Emergence of Big Business
The rising concern over corporate power


Significance:  Due to laissez –faire, some corporations became monopolies because the lack of government intervention and regulation in the economy and labor conditions.

Big Business
Carnegie and the Railroads

Railroad Contributions to Nation
Easy transportation
Increase in economy by providing jobs (labor)
Spread consumerism across the country (capital)

Carnegie and Steel

Transformed steel corporation into a massive corporation
Used vertical integration to become the most prominent business man of the age.
Steel became most important factor to the American economy
Enabled the construction of "skyscrapers" and more effective and precise weaponry.

Rockefeller, The Robber Baron

Controlled more than 80% of the nation's oil and oil refining facilities through horizontal integration
Invented two new forms of corporation management

Holding Company

Gospel of Wealth

Social Darwinism

Significance: Carnegie’s and Rockefeller’s corporations contributed to the establishment of the railroads, which employed different ethnicities as laborers.

Primary Source: Steel Magnate Andrew Carnegie Preaches a Gospel of Wealth, 1889


Establishment of Unions
Knights of Labor (est. 1869)

Open to all laborers
Membership reached up to 700,000
Loosely organized with vague direction
Less interested in temporary wage/condition solutions

American Federation of Labor (est. 1881)

Only open to skilled white male laborers
Supported the immediate needs of laborers rather than long term economic reform
Effective structure and organization allowed the union to orchestrate strikes across the country

Labor Union Strikes
Homestead Strike of 1892 and Pullman Strike of 1894 Labor Strikes

Major defeats of the unions
Demonstrated a negative view by the state and federal governments

Incidents were put down by armed forces.

Revealed the weaknesses of the unions

Failure of laborers to create and maintain organizations that protected their interests versus corporate interest

Primary Source: “Homestead and its Perilous Trades-Impressions of a Visit,” Hamlin Garland

Significance: Unions and strikers represented the workers stand against the big businesses’ unjust working conditions.


Mass Market

The Department Store

The giant store offered a wide selection of goods, usually organized into "departments".


Spending a portion of a business's profits to generate more profit

Significance: Mass market was created with the help of stores’ advertisements that appealed to consumers’ fears and desires


World of Work Transformed

Women and Children in Factories

Long hours in mines and factories

New Technology and Machines

Produced more goods in less time
Low–skill, easily replaceable labor to operate machinery
Workers earned low wages  and worked long, demanding hours

Significance: As new technology entered the factories, women and children were exposed to dangerous machinery and unhealthy working conditions.

Work Transformed
Hostility towards races of workers

American workers felt threatened by the other races taking their own jobs

Chinese Exclusion Act of 1882

N.I.N.A. - No Irish Need Apply
African Americans were discriminated against when employers hired them during strikes.

Significance: Employers hired immigrant workers over American because the immigrants accepted lower wages. This created hostility between immigrant and American workers.

Primary Source: Immigrant Thomas O’Donnell on the Worker’s Plight, 1883

Classroom Activity: Role-play
As a classroom activity, have the students pretend they are workers in a factory assembly-line that make books.

This classroom activity represents how factory laborers were required to produce a specific number of a products within a certain amount of time. As the demand for the product goes up, factories required their laborers to work longer hours in order to increase productivity. As the working conditions became worse, the skilled laborers who belonged in the union went on strike.  The new technology and machines introduced into the factories allowed employers to rid of the skilled workers and employ unskilled laborers at a lower wage rate.