Productivity in Industrial America The Industrial Revolution What

Productivity in Industrial America The Industrial Revolution

What is Productivity? • Productivity is the amount of goods and services produced (output) per unit of productive resources used (input) in a specific period of time such as one hour. • Productivity can be increased by producing more goods and services with the same amount of resources. • As productivity increases, production costs for each unit of a good or service decrease.

Cotton

Some questions about productivity How did the industrialists get extremely rich? What is it like to work in a factory? How is a production line organized? How can factory workers influence working conditions, wages, and hours of labor? • Who decides how profits are distributed? • •

The Industrial Revolution Before • Most Americans lived on farms or in rural villages. • They produced the goods needed for daily life. • Food, textiles, clothing, shoes for local markets were produced. • Bartering was more common than selling goods for cash. • Skilled craftsmen worked in small workshops first as apprentices, then journeymen then masters. After • Lowell, Mass. was an early industrial city in America. • The textile industry helped organize business enterprise. • Investors established manufacturing corporations with capital raised through stock sales. • Major stockholders elected corporate officers, etc.

Labor • First strikes in US history took places in Lowell in 1834 and 1836. • Three main grievances: 1. Pay cuts 2. Speed-ups (speed of machine) 3. Stretch-outs (running multiple machines) 4. Premium system (managers receiving bonuses if production goals were surpassed.

Lowell, Mass.

Lowell System

Work Rules • Do not leave your work station without your overseer’s permission. • If you are late you will not be paid. • Workers who produce poor quality work will fired. • There will be no talking except what is necessary to run the assembly line. • Those who fail to obey orders will be punished.

Who’s factory is the most productive? • You will be producing a ‘book’ and determining how productive your company is in producing the book. • It is very important that you follow directions. • The directions will be given to you verbally. • Pay very close attention to the directions…

Concepts • • Investment in capital goods Investment in human capital Productivity Specialization and division of labor