Technology and Economic Growth During the 1920’s

The advancements in manufacturing during the 1920's was so considerable that the national output rose by 60 percent during the decade. The overall annual income during the era also increased, while the inflation remained negligible. Though there was a mild recession in 1923, it had subsided by early 1924 and the result was an even more vigorous economic expansion.
Other causes of the economic boom were the debilitation of European industry folllowing WWI, which left the U.S. the only healthy industrial power, the advancement of technology, which was like a domino effect. The creation of the assembly line by Henry Ford caused a boom for the auto industry, which used products from the glass, rubber, steel, and tool companies. The auto sucess also led to sucess in the road construction industry and led to increased use of oil. The higher mobility also led to higher demand for urban housing, which led to a boom that industry. Another sucess in technological advancement was the work of Reginald Fessenden, who experimented with modulation and made it possible to transmit speech and music over short and medium distances. This led to nearly every family having a "new, modern" radio by the end of the decade. The growth of other industries, such as home appliances, the growth in use of synthetic fibers, and electric power all were the product of increased technology and contributed to the financial boom. Telephones would also continue to grow in popularity.
Transportation was also improved through technological innovation, though commercial aviation during the 1920's remained limited, the most extensive use being the government use of airplanes to deliver mail. Trains were benefitted by technology, demonstrated by their increased speed and efficiency thanks to the invention of diesel-electic engines.

Other miscellaneous information on technological advances during the 1920's:
Computers were advanced during this period, beginning with the first analog computer produced by a team from MIT led by Vannevar Bush. A few years later another updated computer created by Howard Aiken, could multiply 11 digit numbers in 3 seconds.
Genetic research took shape in the 1920’s with the rediscovery of Gregor Mendel's vegetable experiments. Thomas Hunt Morgan made some advances in understanding genes, such as how they are arranged along a chromosome.

Economic Organization
The organization of trusts during the 1920's were not 'universal,' they worked well in some industries while others simply did not support them. Businesses that did become corporations, such as General Motors, were forced to find new management styles that would allow them not only to survive during the 1923 recession, but also allowed the business to expand. Alfred P. Sloan was the leader who founded the new administrative model that saved GM. The goal of businessmen during this era was to ensure collapses would never occur on the scale that they had during the 1893, 1907, and 1920 recessions.

Labor in the New Era
The economic growth was accompanied by continuing and, in some places, increasing, maldistribution of wealth and purchasing power. Two thirds of the American people in 1929, according to one study, lived at the minimum comfort level. Half languished at or below the level subsistence and poverty.
· WELFARE CAPITALISM << Crumbled under Great Depression.
o The average industrial worker felt the ups and downs of the economy as much as any other group. They mostly saw their standard of living increase, such as improved working conditions and other benefits.
o Some owners, such as Henry Ford, adopted paternalistic views to avoid labor unrest, which prompted him to promote shortened work weeks, raised wages, and instituted paid vacations.
o U.S. Steel made efforts to improve safety and sanitation in the factories.
o In this era workers became eligible for pensions for the first time, some 3 million by 1926.
o When workers did have grievances they could voice them to ‘company unions’ which operated by the company itself and therefore did not have the independence of a real union. Company unions were the feeble vehicles of companies that were unable to raise the most important issues to workers.

  • Welfare Capitalism only affected a small number of people, however. Mostly profit was still employers’ goal and they kept workers rates low as a result.
  • The Average annual income was 1,500 or below, while 1,800 was considered necessary for a minimally standard living.
  • The rapid growth of technology, while good for industry, was bad for workers as it made many jobs obsolete, increasing unemployment (5-7 percent at any one time).
Women and Minorities in the Work Force
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The Pullman Company gave African Americans steady employment.
omen became ingratiated in the work-force ‘pink- collar’ jobs began to appear, only in the sense that they became designated as female positions. These were low-paying service occupations such as secretaries, salesclerks, telephone operators, and other similarly unskilled tasks.
Women and minorities had trouble being represented by unions, though the Brotherhood for Sleeping Car Porters founded in 1925 by A. Philip Randolph, devoutly represented the black work force. Typical northern African American jobs were janitors, dishwashers, garbage collectors, and commercial laundry attendants.
In the west unskilled jobs were largely performed by Asian immigrants, after the Chinese Exclusion Acts
the Japanese took their place as well as Filipinos. Japanese workers could break from poverty by establishing their own businesses, but their success incited riots in California and laws making it more difficult to buy land.
In the South West Mexican immigrant swelled the unskilled labor force. Nearly ½ a million entered the U.S. in the 1920’s. While they also caused unrest from their Anglo counterparts, there was no real move to exclude them in this sparsely inhabited area because the employers needed the ready pool of unskilled, low-paid, unorganized workers.

The “American Plan”
During the 1920’s corporate groups worked hard to spread the doctrine that unionism was somehow subversive. They convinced the public that the crucial element of democratic capitalism was the protection of the open shop (a system in which no one would be allowed to join a union). The crusade for the open shop became known as the American Plan and led to a campaign of ‘union busting.’ The legal system only helped this jihad. In 1921, the Supreme Court upheld a lower court ruling declaring picketing illegal and supported the right of the court to impose junctions. In 1922, the justice department intervened to quell strikers (400,000 railroad workers).

Agricultural Technology and the Plight of the FarmerCORN.jpg

Industry in the 1920 made farming more area with fewer workers possible, for example the use of the internal combustion engine quadrupled in the 1920’s alone. The result of the exponential growth was a drop in prices, substantial surpluses, which in response some farmers began to demand relief from the government. These people wanted parity, or advocated for a complicated formula that set an adequate price for farm goods and ensuring that farms would earn back at least what they spent in production no matter the how the markets fluctuated. The McNary-Haugen Bill essentially advocated this, it was introduced to congress in 1926 and 1928. President Coolidge vetoed it multiple times.
Hybrid corn was introduced to farmers in 1921 by genetic researchers. . . yay!
A Survey: American History: 12th Edition by Alan Brinkely