Chapter 8 Economics: Unions
Macroeconomics– deals with the economy as a whole, including: employment, GDP, inflation, economic growth, and distribution of income
Civilian labor force – men and women 16 and over who are working, capable to work and/or looking for work
(excludes prisoners, armed forces, and crazy people)
*85% of the work force is not unionized.
Unions began during colonial times and peaked during the 1930’s.
*printers joined together in 1778 to demand higher wages – led to many other unions.
Civil War to the 1930’s – America changed from manufacturing to industrialization and farmers become hourly laborers -> more types of workers and unions into two different categories.
Craft/Trade Union – skilled workers
Industrial Union – workers of the same job description: mass production
Tools of the Union
Strike – refuse to work until certain demands are met
Picket – public display of working conditions to pressure employers
Boycott – organized by unions to get people not to buy from employers
Employers vs. the Unions
Lockout – don’t let the union members work until mgmt. demands are met
Sometimes they would just hire all new workers
Unions and the Supreme Court
Sherman Antitrust Act – set up to stop monopolies in the U.S.
*Danbury hat co. rejects union demand so the union of Hatters organizes a boycott of stores to not sell Danbury hats
DHCo. Files a suit for conspiracy in restraint of trade under Sherman Act.
Supreme court ruled that it was an illegal boycott – severe blow to unions
Unions need relief bad……The Clayton Act (1914) is passed and it expressly exempts unions from prosecution under the Sherman Act.
Chapter 8 Economics: The Great Depression
The Great Depression is the “Holy Grail” of macroeconomics.
On Black Tuesday, October 29, 1929, the stock market crashed, triggering the Great Depression, the worst economic collapse in the history of the modern industrial world. It spread from the United States to the rest of the world, lasting from the end of 1929 until the early 1940s. With banks failing and businesses closing, more than 15 million Americans (one-quarter of the workforce) became unemployed.
President Herbert Hoover, underestimating the seriousness of the crisis, called it "a passing incident in our national lives," and assured Americans that it would be over in 60 days.
Effects of the Depression:
Reduction of Incomes:In the United States the per capita income fell from about $700 in 1929 to some $400 in 1933.
Trade and manufacturing shrank:In 1929 the estimated value of United States imports and exports had reached almost ten billion dollars. By 1933 the value had dropped to three billion. Furthermore, American industrial output was cut in half.
Decline in the world birthrate:
It meant that, between 1930 and 1940, approximately 550 million babies were born into the world instead of perhaps 600 million that might have been born if there had been no Depression. Fifty million human beings is a total greater than all the soldiers and civilians killed in both world wars.
Franklin Delano Roosevelt, the rich governor from New York, offered Americans a New Deal, and was elected in a landslide victory in 1932.
The New Deal was the title FDR gave to a sequence of programs and promises he initiated between 1933 and 1938 with the goal of giving reform to the people and economyduring the Great Depression. (SEC and Social Security 1935)
African Americans suffered more than whites, since their jobs were often taken away from them and given to whites. In 1930, 50 percent of blacks were unemployed.
The Great Depression and the New Deal changed forever the relationship between Americans and their government. Government involvement and responsibility in caring for the needy and regulating the economy came to be expected.