Joshua L. Rosenbloom
The United States economy underwent major transformations between American independence and the Civil War through rapid population growth, the development of manufacturing, the onset of modern economic growth, increasing urbanization, the rapid spread of settlement into the trans-Appalachian west, and the rise of European immigration. These decades were also characterized by an increasing sectional conflict between free and slave states that culminated in 1861 in Southern secession from the Union and a bloody and destructive Civil War. Labor markets were central to each of these developments, directing the reallocation of labor between sectors and regions, channeling a growing population into productive employment, and shaping the growing North–South division within the country. Put differently, labor markets influenced the pace and character of economic development in the antebellum United States. On the one hand, the responsiveness of labor markets to economic shocks helped promote economic growth; on the other, imperfections in labor market responses to these shocks significantly affected the character and development of the national economy.
Since the introduction of “Fordism” in the early 1910s, which emphasized technological improvements and maximizing productive efficiency, US autoworkers have struggled with repetitive, exhausting, often dangerous jobs. Yet beginning with Ford’s Five Dollar Day, introduced in 1914, auto jobs have also provided higher pay than most other wage work, attracting hundreds of thousands of people, especially to Detroit, Michigan, through the 1920s, and again from World War II until the mid-1950s. Successful unionization campaigns by the United Auto Workers (UAW) in the 1930s and early 1940s resulted in contracts that guaranteed particular wage increases, reduced the power of foremen, and created a process for resolving workplace conflicts. In the late 1940s and early 1950s UAW president Walter Reuther negotiated generous medical benefits and pensions for autoworkers. The volatility of the auto industry, however, often brought layoffs that undermined economic security. By the 1950s overproduction and automation contributed heavily to instability for autoworkers. The UAW officially supported racial and gender equality, but realities in auto plants and the makeup of union leadership often belied those principles. Beginning in the 1970s US autoworkers faced disruptions caused by high oil prices, foreign competition, and outsourcing to Mexico. Contract concessions at unionized plants began in the late 1970s and continued into the 2000s. By the end of the 20th century, many American autoworkers did not belong to the UAW because they were employed by foreign automakers, who built factories in the United States and successfully opposed unionization. For good reason, autoworkers who survived the industry’s turbulence and were able to retire with guaranteed pensions and medical care look back fondly on all that they gained from working in the industry under UAW contracts. Countless others left auto work permanently and often reluctantly in periodic massive layoffs and the continuous loss of jobs from automation.
Betsy A. Beasley
American cities have been transnational in nature since the first urban spaces emerged during the colonial period. Yet the specific shape of the relationship between American cities and the rest of the world has changed dramatically in the intervening years. In the mid-20th century, the increasing integration of the global economy within the American economy began to reshape US cities. In the Northeast and Midwest, the once robust manufacturing centers and factories that had sustained their residents—and their tax bases—left, first for the South and West, and then for cities and towns outside the United States, as capital grew more mobile and businesses sought lower wages and tax incentives elsewhere. That same global capital, combined with federal subsidies, created boomtowns in the once-rural South and West. Nationwide, city boosters began to pursue alternatives to heavy industry, once understood to be the undisputed guarantor of a healthy urban economy. Increasingly, US cities organized themselves around the service economy, both in high-end, white-collar sectors like finance, consulting, and education, and in low-end pink-collar and no-collar sectors like food service, hospitality, and health care. A new legal infrastructure related to immigration made US cities more racially, ethnically, and linguistically diverse than ever before.
At the same time, some US cities were agents of economic globalization themselves. Dubbed “global cities” by celebrants and critics of the new economy alike, these cities achieved power and prestige in the late 20th century not only because they had survived the ruptures of globalization but because they helped to determine its shape. By the end of the 20th century, cities that are not routinely listed among the “global city” elite jockeyed to claim “world-class” status, investing in high-end art, entertainment, technology, education, and health care amenities to attract and retain the high-income white-collar workers understood to be the last hope for cities hollowed out by deindustrialization and global competition. Today, the extreme differences between “global cities” and the rest of US cities, and the extreme socioeconomic stratification seen in cities of all stripes, is a key concern of urbanists.
Wendy L. Wall
The New Deal generally refers to a set of domestic policies implemented by the administration of Franklin Delano Roosevelt in response to the crisis of the Great Depression. Propelled by that economic cataclysm, Roosevelt and his New Dealers pushed through legislation that regulated the banking and securities industries, provided relief for the unemployed, aided farmers, electrified rural areas, promoted conservation, built national infrastructure, regulated wages and hours, and bolstered the power of unions. The Tennessee Valley Authority prevented floods and brought electricity and economic progress to seven states in one of the most impoverished parts of the nation. The Works Progress Administration offered jobs to millions of unemployed Americans and launched an unprecedented federal venture into the arena of culture. By providing social insurance to the elderly and unemployed, the Social Security Act laid the foundation for the U.S. welfare state.
The benefits of the New Deal were not equitably distributed. Many New Deal programs—farm subsidies, work relief projects, social insurance, and labor protection programs—discriminated against racial minorities and women, while profiting white men disproportionately. Nevertheless, women achieved symbolic breakthroughs, and African Americans benefited more from Roosevelt’s policies than they had from any past administration since Abraham Lincoln’s. The New Deal did not end the Depression—only World War II did that—but it did spur economic recovery. It also helped to make American capitalism less volatile by extending federal regulation into new areas of the economy.
Although the New Deal most often refers to policies and programs put in place between 1933 and 1938, some scholars have used the term more expansively to encompass later domestic legislation or U.S. actions abroad that seemed animated by the same values and impulses—above all, a desire to make individuals more secure and a belief in institutional solutions to long-standing problems. In order to pass his legislative agenda, Roosevelt drew many Catholic and Jewish immigrants, industrial workers, and African Americans into the Democratic Party. Together with white Southerners, these groups formed what became known as the “New Deal coalition.” This unlikely political alliance endured long after Roosevelt’s death, supporting the Democratic Party and a “liberal” agenda for nearly half a century. When the coalition finally cracked in 1980, historians looked back on this extended epoch as reflecting a “New Deal order.”
Since the early 1800s railroads have served as a critical element of the transportation infrastructure in the United States and have generated profound changes in technology, finance, business-government relations, and labor policy. By the 1850s railroads, at least in the northern states, had evolved into the nation’s first big businesses, replete with managerial hierarchies that in many respects resembled the structure of the US Army. After the Civil War ended, the railroad network grew rapidly, with lines extending into the Midwest and ultimately, with the completion of the first transcontinental railroad in 1869, to the Pacific Coast. The last third of the 19th century was characterized by increased militancy among railroad workers, as well as by the growing danger that railroading posed to employees and passengers. Intense competition among railroad companies led to rate wars and discriminatory pricing. The presence of rebates and long-haul/short-haul price differentials led to the federal regulation of the railroads in 1887. The Progressive Era generated additional regulation that reduced profitability and discouraged additional investment in the railroads. As a result, the carriers were often unprepared for the traffic demands associated with World War I, leading to government operation of the railroads between 1917 and 1920. Highway competition during the 1920s and the economic crises of the 1930s provided further challenges for the railroads. The nation’s railroads performed well during World War II but declined steadily in the years that followed. High labor costs, excessive regulatory oversight, and the loss of freight and passenger traffic to cars, trucks, and airplanes ensured that by the 1960s many once-profitable companies were on the verge of bankruptcy. A wave of mergers failed to halt the downward slide. The bankruptcy of Penn Central in 1970 increased public awareness of the dire circumstances and led to calls for regulatory reform. The 1980 Staggers Act abolished most of the restrictions on operations and pricing, thus revitalizing the railroads.
In the seventy years since the end of World War II (1939–1945), postindustrialization—the exodus of manufacturing and growth of finance and services—has radically transformed the economy of North American cities. Metropolitan areas are increasingly home to transnational firms that administer dispersed production networks that span the world. A few major global centers host large banks that coordinate flows of finance capital necessary not only for production, but also increasingly for education, infrastructure, municipal government, housing, and nearly every other aspect of life. In cities of the global north, fewer workers produce goods and more produce information, entertainment, and experiences. Women have steadily entered the paid workforce, where they often do the feminized work of caring for children and the ill, cleaning homes, and preparing meals. Like the Gilded Age city, the postindustrial city creates immense social divisions, injustices, and inequalities: penthouses worth millions and rampant homelessness, fifty-dollar burgers and an epidemic of food insecurity, and unparalleled wealth and long-standing structural unemployment all exist side by side. The key features of the postindustrial service economy are the increased concentration of wealth, the development of a privileged and celebrated workforce of professionals, and an economic system reliant on hyperexploited service workers whose availability is conditioned by race, immigration status, and gender.