ECON 2200 Lecture Notes - Lecture 40: Human Capital
14 May 2018
School
Department
Course
Professor
ECON 2200
Lecture 40
Good times for (non-farm) labor
• High demand for non-farm labor, especially consumer durables
industry
o The demand for labor is a derived demand
1. Generally, if demand for the product increases, then the
demand for the labor increases
o High demand for products lead to an increase in bargaining
power for workers (like wages and benefits)
• Low unemployment
o 1923-1929: average unemployment rate 3.3%
1. Cyclical unemployment at or very near zero
• Average hours/week falling
o By 1929: 48-hr week in most jobs, but 44-hr week increasingly
common
1. Note Ford’s introduction of the 40-hour workweek at his
plant in the teens
Also, Ford started paying workers $5 a day (almost
double what others paid)
• Increases in human capital – workers’ skills and abilities
o The “High School Movement” (Table 22.2)
1. 1920s: Emergence of American High School as a
separate school with diverse curricula, changing classes
(1st, 2nd, 3rd period), extra-curricular activities and sports
find more resources at oneclass.com
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