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https://oercommons.org/courseware/lesson/61956/overview
|
Popular Article
Popular Vs. Peer-Reviewed Sources
English Composition I: Popular vs. Peer Reviewed Sources
Overview
Leading up to a final argumentative research paper in my Composition 1 course, I spend several classes acquainting students with the differences between popular and peer-reviewed sources. This lesson plan spans 3 50-minute periods and includes how I move through teaching these types of sources and the resources that I use.
Lesson on Sources: Popular vs. Peer-Reviewed
Leading up to a final argumentative research paper in my Composition 1 course, I spend several classes acquainting students with the differences between popular and peer-reviewed sources. This lesson plan spans 3 50-minute periods and includes how I move through teaching these types of sources and the resources that I use.
|
oercommons
|
2025-03-18T00:37:22.431508
|
01/27/2020
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/61956/overview",
"title": "English Composition I: Popular vs. Peer Reviewed Sources",
"author": "Danielle Santos"
}
|
https://oercommons.org/courseware/lesson/92905/overview
|
French Level 1, Activity 03: Les caractéristiques / Characteristics (Online)
Overview
Students will identify themselves using characteristics in French. Students will ask a partner questions about themselves to identify what the person is like. Students will then describe their partner to others.
Activity Information
Did you know that you can access the complete collection of Pathways Project French activities in our new Let’s Chat! French pressbook? View the book here: https://boisestate.pressbooks.pub/pathwaysfrench
Please Note: Many of our activities were created by upper-division students at Boise State University and serve as a foundation that our community of practice can build upon and refine. While they are polished, we welcome and encourage collaboration from language instructors to help modify grammar, syntax, and content where needed. Kindly contact pathwaysproject@boisestate.edu with any suggestions and we will update the content in a timely manner.
Characteristics / Les caractéristiques
Description
Students will identify themselves using characteristics in French. Students will ask a partner questions about themselves to identify what the person is like. Students will then describe their partner to others.
Semantic Topics
Stereotypes, identifying people, descriptions, les caractéristique, les stéréotypes, Identifier les gens, adjectives, les adjectifs
Products
Stereotypes, generalizations, identifying characteristics
Practices
Used to make friends and engage in lighthearted conversations
Perspectives
Stereotypes noted by the French can be a way for them to make fun of/mock themselves (e.g. always being on strike, drinking wine and smoking cigarettes). These stereotypes are heavily influenced by regional cultures and often reinforced through international media.
- What can we do, as foreigners, to separate stereotypes of a culture from their reality? In other words, how can we look past stereotypes and generalizations to better understand cultures different than our own?
NCSSFL-ACTFL World-Readiness Standards
- Standard 1.1: Students engage in conversations or correspondence in French to provide and obtain information, express feelings and emotions, and exchange opinions.
- Standard 1.2: Students understand and interpret spoken and written French on a variety of topics.
- Standard 2.1: Students demonstrate an understanding of the relationship between the practices and perspectives of the cultures of the francophone world.
- Standard 4.2: Students demonstrate understanding of the concept of culture through comparisons of francophone cultures and their own.
Idaho State Content Standards
- COMM 1.1: Interact and negotiate meaning (spoken, signed, written conversation) to share information, reactions, feelings, and opinions.
- COMM 2.1: Understand, interpret, and analyze what is heard, read, or viewed on a variety of topics.
- CLTR 1.1: Analyze the cultural practices/patterns of behavior accepted as the societal norm in the target culture.
- CLTR 1.2: Explain the relationship between cultural practices/behaviors and the perspectives that represent the target culture’s view of the world.
- COMP 1.1: Observe formal and informal forms of language.
NCSSFL-ACTFL Can-Do Statements
- I can recognize basic cultural differences.
- I can describe myself and someone that I know (Relationship, nationality, characteristics).
- I can respond to basic questions about my background.
Materials Needed
Warm-Up
Warm-up
1. Begin by introducing the Can-Dos for today's activity.
2. Play a few minutes of the video, “Cliché” (make sure to turn on the subtitles).
3. After, ask students which stereotypes they have heard or believed:
Quels sont les stéréotypes que vous avez entendus des Français ? Est-ce qu'il y a des stéréotypes que vous croyiez ? Pensez-vous que les Français ont des stéréotypes des Américains ? Lesquels ?
4. Make sure to explain that although some of these stereotypes do exist, rarely do we find individuals who fit all aspects. France is very multicultural and has habitants from all over:
Bien que certains de ces stéréotypes existent, nous trouvons rarement des personnes qui correspondent à tous les aspects. La France est un pays très multiculturelle et compte des habitants de partout.
L'Algérie: 702,000
Le Maroc: 645,000
L'Afrique sub-saharienne: 644,000
Main Activity
Main Activity
1. First, have students practice going around describing themselves using phrases such as:
Premièrement, les étudiants doivent pratiquer comment se décrire:
- Comment t'appelles-tu ?
- Vous êtes/tu es américain(e) ?
- Je m'appelle (nom)
- Je suis américain(e)/ canadien(ne)/ anglais(e)/ italien(ne), etc.
- Je suis d'origine américaine/ algérienne/ sénégalaise/ irlandaise/ française, etc.
- Je suis étudiant(e)/ copain/ copine/ soeur/ frère/ fille/ fils, etc.
2. Next, have students choose a person they know. This could be a roommate, parent, partner, etc. (if they want, have them show a picture to the rest of the group)
Ensuite, les étudiants devront choisir une personne qu’ils connaissent, il peut s’agir d’un colocataire, un parent, un partenaire, etc. (s’ils le désirent, ils peuvent montrer une photo au reste du groupe)
3. Ask them who this person is using phrases like:
Demandez-leur qui est cette personne en utilisant les phrases:
- Il (elle) s'appelle comment ?
- Comment est-il (elle) ?
4. Have them practice using phrases to describe this person such as:
Les étudiants doivent pratiquer à utiliser les phrases ci-dessous afin de décrire des personnes:
- (Nom) est mon/ma colocataire/ mère/ père/ soeur/ copain/ copine, etc.
- Il/elle est américain(e)...
- Il/elle est poli(e)/ réservé(e)/ intelligent(e)/ élégant(e)/ sociable/ gentil(le)/ méchant(e), etc.
- Il/elle aime/ il/elle n'aime pas...
Wrap-Up
Wrap-up
Ask the following question(s) to finish the activity:
- Si vous pouviez déménager dans un pays francophone, lequel serait-il ? La France ? Le Sénégal? La Martinique ? Le Maroc ? (If you could move to a francophone country, which one would it be?)
Cultural Resource
A video where French people discuss stereotypes that other countries have about France!
End of Activity
- Can-Do statement check-in... “Where are we?”
- Read can-do statements and have students evaluate their confidence.
- Encourage students to be honest in their self-evaluation
- Pay attention, and try to use feedback for future activities!
NCSSFL-ACTFL Can-Do Statements
- I can recognize basic cultural differences.
- I can describe myself and someone that I know (Relationship, nationality, characteristics).
- I can respond to basic questions about my background.
|
oercommons
|
2025-03-18T00:37:22.470051
|
Amber Hoye
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/92905/overview",
"title": "French Level 1, Activity 03: Les caractéristiques / Characteristics (Online)",
"author": "Mimi Fahnstrom"
}
|
https://oercommons.org/courseware/lesson/89761/overview
|
Frederick Douglass, "The Meaning of July Fourth for the Negro" Speech, July 4, 1852, Rochester, New York.
Overview
Douglass, Frederick. "The Meaning of the Fourth of July for the Negro"Speech, Rochester, NY, July
4, 1852. Independence Hall Association (ushistory.org). https://
www.ushistory.org/declaration/more/douglass.html
Description: Douglass' address to a predominantly white audience regarding the celebration of the Fourth of July by African Americans
Douglass, Frederick. "The Meaning of the Fourth of July for the Negro"Speech, Rochester, NY, July
4, 1852. Independence Hall Association (ushistory.org). https://
www.ushistory.org/declaration/more/douglass.html
Description: Douglass' address to a predominantly white audience regarding the celebration of the Fourth of July by African Americans
|
oercommons
|
2025-03-18T00:37:22.488045
|
Christopher Gilliland
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/89761/overview",
"title": "Frederick Douglass, \"The Meaning of July Fourth for the Negro\" Speech, July 4, 1852, Rochester, New York.",
"author": "Susan Jennings"
}
|
https://oercommons.org/courseware/lesson/65759/overview
|
Welding Technology Department: Architectural and Ornamental Metals
Overview
Basic skill development in hand-forging steel, forge welding, scroll-forming, shaping, and joinery utilizing hammers, anvils, and coal and gas forges. Emphasis on techniques and processes to demonstrate versatility and skill.
Metalsmithing: WLDG 1401
Link to Metalsmithing syllabus
SYLLABUS
Course Description
Basic skill development in hand-forging steel, forge welding, scroll-forming, shaping, and joinery utilizing hammers, anvils, and coal and gas forges. Emphasis on techniques and processes to demonstrate versatility and skill. Course Fee: $50.00; Course Type: W
Copy link below, or follow link above, or download file to view the whole syllabus.
https://drive.google.com/file/d/19U8882UO_SYHpm9HLjfKnVG6wXVgOOmL/view?usp=sharing
"Forging Ahead Works Progress Administration" by Herzog, Harry is in the Public Domain
Blacksmithing Skills Overview
Blacksmithing is a highly skilled occupation that makes many demands on the mind and body. While learning this extremely rewarding profession, we will be using mathematics, physics, chemistry, and history to aid us in the forging of steel. As we explore what it means to be a modern blacksmith, we will look at how the blacksmith is affected by steel choices, fuel choices and finishes applied to the steel.
ABANA is the Artist Blacksmith Association of North America. They are one of the professional blacksmithing organizations for this part of the world. There are other groups including British Artist Blacksmiths Association (BABA), Irish Artist Blacksmithing Association (IABA). There are also individual chapters in various states around the USA. Balcones Forge and Houston Area Blacksmiths Association are two that are found in Texas.
ABANA has a list of skills expected of a Journeyman blacksmith. A journeyman is a blacksmith with a basic set of skills that travels to blacksmithing shops around the country to learn from different shop owners and master blacksmiths. This practice was more popular long ago and it is more common in Europe.
SKILLS EXPECTED FOR THE EMPLOYMENT OF A JOURNEYMAN
Blacksmithing Standards developed by the Appalachian Blacksmiths Association, an ABANA Affiliate, and registered with the Bureau of Apprenticeship and Training, United States Department of Labor.
1. Drawing Out: Draw a bar to a point or dress an edge or point a tool.
2. Upsetting: Upset to at least 1-1/2 times the diameter or width of a bar on the end and in the middle.
3. Bending: Make a ring out of bar stock or flat stock; forge a square corner right angle bend in square stock.
4. Drifting: Make a drift and use it to smooth, shape or enlarge a hole.
6. Mortise and Tenon: Make an assembly from at least two separate pieces using this technique.
7. Collaring: Make an assembly from at least two separate pieces using this technique.
8. Scroll Work: Make two different types of scrolls.
9. Splitting: Split a bar with a hot cut in the middle or at the end of the bar.
10. Fullering, Grooving, Veining, Set Hammering: Show examples of each or if used as an intermediate technique, describe how and why the techniques are used.
11. Riveting: Make two assemblies from at least two separate pieces for eachassembly using hot riveting and cold riveting (pop riveting is not acceptable).
12. Forge Welding: Show at least three different techniques.
13. Arc Welding, Brazing, Soldering, Oxyacetylene Torch Welding: Show an example of each.
14. Hot Rasping, Filing: Hot rasp the torch cut end of a bar to reasonable straightness and evenness; show a workpiece which has been filed to a smooth, flat surface; describe the types, care and use of files.
15. Sinking, Raising, Metal Spinning: Make or show a hemispherical or hollow object made from flat sheetusing any one technique.
16. Grinding: Know how to use a body grinder (portable grinder), pedestal grinder, belt grinder, sharpening stones and abrasive papers; know the types of abrasives and how they are graded and classified; show an edge tool that you have sharpened.
17. Drilling, Tapping, Die Work and Threads: Drill and tap a hole, thread the end of a bar with a die; know the common thread classifications; know the common drill size classifications and the care and use of twist drills.
18. Heat Treating, Hardening, Tempering, Annealing, Case Hardening: Know how to properly anneal, harden and temper carbon tool steel; know how to case harden mild steel, know the colors for tempering; make or show a tool you have made that has been heat treated that will cut or forge mild steel without breaking or deformation on the working end.
19. Heading: Head two bolts, one square headed and one hex headed; head a nail; head a rivet.
20. Cutting and Shearing: Know how to use the hot cut, cold cut, hacksaw, tinsnips, bench or floor shear; know how to use the oxyacetylene torch for cutting and demonstrate each technique.
21. Swaging: Swage a tenon or make the end of a square bar round using a swage.
22. Twisting: Show two different twists in a square bar.
23. Shop Safety: Know first aid techniques for cuts, burns, abrasion and other shop related injuries; describe methods of hearing, sight and body protection and why they are necessary; know power tool and machinery safety including welding equipment safety.
24. Basic Metallurgy: Know the properties and use of wrought iron, mild steel, carbon and tool steels and their classifications, cast-iron, brass, copper, aluminum; know sheet and plate gauging for ferrous and non-ferrous metals.
25. Fire and Fuel: Know the constituents of good shop coal; know the different types of coal fires and fire maintenance.
26. Jigs and Dies: Make both a jig and a die for doing repetitive production work and show examples of work produced with them.
"Skills of a journeyman blacksmith" by ABANA is licensed under CC BY-NC-ND 4.0
Tools Specific to Forging
There are three things needed to do basic blacksmithing, if any one of them is missing, then forging cannot take place. Some have referred to this list as the three H's
- Heat- The steel must be heated to make it soft. Heat can be gotten from several sources. The most common are gas forges (Natural gas or Propane), solid fuel forges (Coal and charcoal), Electric forges (these use induction to heat the steel, not to be confused with kilns). Oxy-Acetylene torches or oxy-propane torches can provide heat, but can be more expensive.Oxy-acetylene torches are valuable in spot heating small areas, but take a long time to heat up larger areas.
- Hold- You have to be able to hold onto the hot steel with some form of tooling. Tongs are the most common, blacksmithing specific, tools. Tongs must absolutely fit the material you are holding, otherwise blacksmithing will be frustrating and dangerous, especially with power hammer use. Steel conducts heat relatively poorly, so the bar of steel can be long enough to hold with your hand without fear of burning.
- "Tongs" is licensed under CC BY-NC 4.0
Hit- Blacksmithing uses force to shape the hot steel. The Anvil is the surface that will be hammered on, the hammer provides the striking force need to shape the metal. This is a basic list, there are other, more advanced tools, like power hammers and presses that can move the metal, but this class focuses on the hand skills.
A) Ballpeen hammer, (B) Straight peen (C+D) cross peen
"Hammers" is licensed under CC BY-NC 4.0
"Anvil" by Peter H. "Tama66" is licensed under CC BY 4.0
Forging Materials
Modern blacksmithing has many similarities with the past, but there are also many differences and many perceptions that must be changed for modern blacksmiths. There are old books describing how to take parts off of a car and forge them into tools, there are old misconceptions that you will find steel by the side of the road and you will forge it. This is highly discouraged in modern life. The steel you find is of unknown composition and it is highly likely to have a protective coating on it (NEVER HEAT METAL WITH GALVANIZING ON IT-IT PRODUCES TOXIC FUMES WHICH CAN KILL). Also what happens when you decide the fire will just burn off the paint? Now you have to breathe industrial paint fumes and often it will gum up your forge. Just buy new metal. It's safer.
Steel is highly engineered and the modern blacksmith can get exactly what they want by purchasing the steel from a dealer. You will have the benefits of knowing exactly what the steel is made of, you know it is new and undamaged, and you can spend your time forging instead of ripping apart a car. A classic example is coil springs or leaf springs from a car or truck. Yes, you can make a sword from it, but how good is that sword if it is made from a steel that spent its life being flexed 1000's of times a day until it no longer works and needs to be replaced. You spend dozens of hours getting the material, cleaning the material (in this case it is covered in paint and grease), and straightening. Finally, you can use it. I would call this mentality something like post-apocalyptic, Mad-Max thinking. Just order brand new steel, it's safer, it's better because you know exactly what you are getting (instead of guessing what Ford puts in their leaf springs) and you can get to work faster.
Here is a list of engineered metals and their designation:https://en.wikipedia.org/wiki/SAE_steel_grades
Carbon steel[edit]
Main articles: Carbon steel and Alloy steel
Carbon steels and alloy steels are designated a four-digit number, whereby the first digit indicates the main alloying element(s), the second digit indicates tg (top grade) element(s), and the last two digits indicate the amount of carbon, in hundredths of a percent (basis points) by weight. For example, a 1060 steel is a plain-carbon steel containing 0.60 wt% C.[4]
An "H" suffix can be added to any designation to denote hardenability is a major requirement. The chemical requirements are loosened but hardness values defined for various distances on a Jominy test.[3]
| SAE designation | Type |
|---|---|
| 1xxx | Carbon steels |
| 2xxx | Nickel steels |
| 3xxx | Nickel-chromium steels |
| 4xxx | Molybdenum steels |
| 5xxx | Chromium steels |
| 6xxx | Chromium-vanadium steels |
| 7xxx | Tungsten steels |
| 8xxx | Nickel-chromium-molybdenum steels |
| 9xxx | Silicon-manganese steels |
"SAE steel grades" is licensed under CC BY-SA 4.0
For example, 1018 is low carbon steel. The first two numbers indicate plain carbon steel, the second two numbers indicate the amount of carbon, .18%. Higher carbon steel would be 1080 or 1095. Remember, carbon affects the properties of the steel, more carbon (1080) can make tools (knives in this case), lower carbon, and the steel will not be able to be hardened in the heat treat.
A36 is another designation for mild steel. Mild steel is steel with lower amounts of carbon. A36 is the steel that we will be forging the most. It is hot rolled and has around .26% carbon. Mild steel is an excellent forging material, but the biggest drawback is that it will rust. The iron in the steel will combine with the environment and make iron oxide. Steel must be protected after it is forged and ready for installation. Depending on the use, this will either be painting, galvanizing, or oil/wax. Another option is to let it rust.
https://www.google.com/books/edition/Forge_practice_elementary/zoFIAAAAMAAJ?hl=en&gbpv=0
Look under pages 159-173 of John Lord Bacon's book, Elementary Forge Practice. This will give you an idea of the differences between cast iron, wrought iron, mild steel and tool steel. It is an older book found under Google books, but the information is still valuable.
"Elementary Forge Practice" by Bacon, John Lord is in the Public Domain
Laws of Physics relating to forging.
"Collisions" by EICC is licensed under CC BY 4.0
This video on collisions is especially appropriate for blacksmiths. We have an object at rest (the anvil) being acted upon by an outside force (the hammer). The weight of both the anvil and the hammer have an effect on the amount of energy transferred to the steel. The larger the anvil (250lbs is a good professional size anvil) the more inertia it has, the more it wants to stay in place. Generally, a hammer weighs around 2 1/2lbs-3lbs. Increasing the hammer weight doesn't impart as much energy as increasing the speed the hammer is swung. Raising the hammer higher above your head and striking with force will shape the metal most effectively, BUT, if you miss the metal and strike the anvil face, the force will rebound quickly returning your hammer back toward you.
!! Hammer control is huge, you will damage your arm if you swing the hammer wrong. Beginner blacksmiths should not use hammers that are too heavy. Start with a light hammer that is easily controlled and work your way up to a heavier hammer. Sledgehammers (hammers with long handles and weigh 6lbs or more) must be swung with two hands, never one-handed.
"Newton's 3 Laws" by EICC is licensed under CC BY 4.0
- As blacksmiths, we are hitting hot steel and pinching it between the anvil and the hammerhead. In THEORY, the anvil is hitting back just as hard as we are striking with the hammer. There is a loss of energy that is absorbed by the bar though. Working the material at the right temperature (usually hot) and hitting it correctly (usually hard enough to move the metal). A common mistake of beginners is they lack practice and knowing how hard to hit. Some hit too hard all the time, but most likely they hit too soft to affect the steel. Thicker stock needs heavier hammers to affect the bar all the way to the middle, too light and only the outside of the bar moves, resulting in stress cracks. Smaller diameters of steel need medium to lighter weight hammers for control. Match the hammer to the diameter.
- The Path of Least Resistance has huge implications for blacksmithing. In general, metal moves the most in thinner areas (as in forming a scroll on a tapered bar), moves more easily in the hottest area, and moves more at the end of the bar than when striking the middle of the bar. The metal is moving into open space at the end of the bar, while the blow taken in the middle of the bar has to push the steel in front of it. Identifying and controlling the path of least resistance by adjusting heat is a common way to shape steel (for example, cooling thinner areas or heating up thicker areas with a torch).
Heat Properties
As blacksmiths we are using fire as a tool. We need to control the fire as much as possible to make the steel do as we want. We are working with temperatures ranging from 100 degrees to 2500 degrees F. We have to understand how heat travels to safely use it. REMEMBER! STEEL CAN BE AS HOT AS 1000 DEGREES F. AND SHOW NO COLOR!! Always test the steel before picking it up with bare hands.
-
BruceBlaus / CC BY-SA (https://creativecommons.org/licenses/by-sa/4.0)
- Conduction- Happens by physically touching. We are using steel tongs (Cold), we are holding steel forgings (hot). The heat in the hot steel flows into the cold tongs (hottest to coldest). Eventually the heat will travel through the steel tongs into the reins. Therefore: We must cool the tongs periodically, and we must only hold the reins of the tongs. Note: The better a piece of metal conducts electricity (like copper), the better it conducts heat.
- Radiation- Is the heat energy around something hot. When we check steel to see if it is hot, we hold our hand a few inches above it and feel for heatwaves. If nothing can be detected, the metal is lightly tapped before picking up.
- Convection- Is the circular flow of different temperatures. The hot air rises up and we can feel that above a fire.
Anvil Height
"Anvil" by Peakpx is licensed under CC BY 4.0
I chose this picture because the blacksmith is at an anvil that is the proper height. She is standing upright, has on all the protective gear and appears to have proper form. It is no longer considered correct to forge at a low anvil that causes you to bend over. Standing up straight gives you better forging dynamics. Note the smith pictured here is only wearing one glove on her tong hand, the hammer hand usually does not wear a glove because you have to squeeze through the leather and it causes more hand fatigue and blisters. Lightly control the hammer with a light grip.
The picture below shows a person at a lower anvil height, causing them to bend over. They are also wearing huge welding gloves, which make the hammer incredibly hard to control. Bending over with your back at an angle is incredibly uncomfortable. "Blacksmith at anvil" is licensed under CC BY 4.0
Steel Calculation Formulae Resources
Elementary Forge Practice, John Lord Bacon
The above book is available on Google Books as a free ebook. Its copyright expired and Google digitized it for all to see. Pages 90-95 specifically talk about using the volume of steel to calculate how much material it will take to make another shape. For example, if we start with 1" square bar, by 6" long, we can calculate how much volume is in it by multiplying length x width x height. This method works best with shapes that are common geometrics, like a cone (round taper), pyramid (square taper), cylinders, and rectangles.
"Elementary Forge Practice" by John Lord Bacon is in the Public Domain
Forge Craft Charles Philip Crowe
This is another free google book. On page 38, it describes the process of using the weight of the starting dimension of stock steel and the weight of the finished forging to determine how much stock to start with. This is especially useful if the shape is complex and not exact geometry. An example of this would be using 2" round 1045 steel to make a 3# hammerhead. How much material do you start with? First, find the weight of 2" round stock from the steel weight chart on page 58. 2" round weighs 10.68# per foot or .89# per inch. Second, Rule: Find the weight of the starting stock (2" round, 10.68) and divide by the weight of the forged article (3# hammerhead)
10.68 / 3= 3.56 inches of 2" round stock will make a 3# hammer. If I check my answer by multiplying .89# x 3.56= 3.16 pounds. Remember, we always need a little extra stock to account for loss of metal due to scaling and grinding later.
"Forge Craft, Charles Philip Crowe" is in the Public Domain
Blacksmith's Manual Illustrated, J.W. Lillico
This book is the most advanced blacksmithing book that has been cited by many of the best blacksmiths in the country as a reference source. As you become more and more skilled as a blacksmith, you will look to this book more and more. This book was written by a blacksmith for the railroad industry and has fascinating ideas on how to isolate mass using the power hammer and tooling. Page 66 (for this section) has formulae that can give you the weight of steel without a chart and advice on how to get started.
"Blacksmith's Manual Illustrated, J.W. Lillico" is in the Public Domain
Remember: In blacksmithing, it is very common to start with larger size stock and then forge it to a smaller dimension (hammering it to shape). Steel can also be upset (made shorter and fatter) as in a bolt shape. It is up to the blacksmith to decide what processes are available to them, to determine the best course of action. For example, do you have a power hammer? Do you have a torch? Some of these answers will determine your process.
|
oercommons
|
2025-03-18T00:37:22.529656
|
Welding
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/65759/overview",
"title": "Welding Technology Department: Architectural and Ornamental Metals",
"author": "Visual Arts"
}
|
https://oercommons.org/courseware/lesson/80233/overview
|
MLA Formatting
Overview
This video explains how to format an essay using MLA format.
This video explains how to format an essay in MLA format.
This video explains how to format an essay using MLA format.
This video explains how to format an essay in MLA format.
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oercommons
|
2025-03-18T00:37:22.546922
|
05/11/2021
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/80233/overview",
"title": "MLA Formatting",
"author": "Nathan Bento"
}
|
https://oercommons.org/courseware/lesson/101294/overview
|
Remix - Describing Countries in Economic Terms - to include video
Overview
- Describe different sociological models for understanding global stratification
- Understand how studies of global stratification identify worldwide inequalities
How can we describe different world economies?
Various models of global stratification all have one thing in common: they rank countries according to their relative economic status, or gross national product (GNP). Traditional models, now considered outdated, used labels to describe the stratification of the different areas of the world. Simply put, they were named “first world, “second world,” and “third world.” First and second world described industrialized nations, while third world referred to “undeveloped” countries (Henslin 2004). When researching using historical sources, you may still encounter these terms, and even today people still refer to some nations as the “third world.”
Another model separates countries into two groups: more developed and less developed. More-developed nations have higher wealth, such as Canada, Japan, and Australia. Less-developed nations have less wealth to distribute among higher populations, including many countries in central Africa, South America, and some island nations.
Yet another system of global classification defines countries based on the per capita gross domestic product (GDP), a country’s average national wealth per person. The GDP is calculated (usually annually) one of two ways: by totaling either the income of all citizens or the value of all goods and services produced in the country during the year. It also includes government spending. Because the GDP indicates a country’s productivity and performance, comparing GDP rates helps establish a country’s economic health in relation to other countries.
These statistics also establish a country’s standard of living. According to this analysis, a GDP standard of a middle-income nation represents a global average. In low-income countries, most people are poor compared to people in other countries. Citizens have little access to infrastructure such as electricity, plumbing, and clean water. People in low-income countries are not guaranteed education, and many are illiterate. The life expectancy of citizens is lower than in high-income countries.
Summary
Global stratification compares the wealth, economic stability, status, and power of countries as a whole. By comparing income and productivity between nations, researchers can better identify global inequalities.
Further Research
Nations Online refers to itself as “among other things, a more or less objective guide to the world, a statement for the peaceful, nonviolent coexistence of nations.” The website provides a variety of cultural, financial, historical, and ethnic information on countries and peoples throughout the world: http://openstaxcollege.org/l/Nations_Online.
References
Millennium Project. 2006. “Expanding the financial envelope to achieve the Goals.” Millennium Project Official Website. Retrieved January 9, 2012 (https://web.archive.org/web/20130202045634/http://www.unmillenniumproject.org/reports/costs_benefits2.htm).
Nationsonline.org. “Countries by Gross National Income (GNI).” Retrieved January 9, 2012 (http://www.nationsonline.org/oneworld/GNI_PPP_of_countries.htm).
PRB.org. “GNI PPP Per Capita (US$).” PRB 2011 World Population Data Sheet. 2011 Population Reference Bureau. Retrieved January 10, 2012 (http://www.prb.org/DataFinder/Topic/Rankings.aspx?ind=61).
Rostow, Walt W. 1960. The Stages of Economic Growth: A Non-Communist Manifesto. Cambridge, MA: Cambridge University Press.
Landler, Mark, and David E. Sanger. 2009. “World Leaders Pledge $1.1 Trillion for Crisis.” New York Times, April 3. Retrieved January 9, 2012 (http://www.nytimes.com/2009/04/03/world/europe/03summit.html).
|
oercommons
|
2025-03-18T00:37:22.563675
|
Sociology
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/101294/overview",
"title": "Remix - Describing Countries in Economic Terms - to include video",
"author": "Social Science"
}
|
https://oercommons.org/courseware/lesson/95536/overview
|
CT_adipose_kidney_100x, p000135 Overview CT_adipose_kidney_100x p000135 CT_adipose_kidney_100x p000135 CT_adipose_kidney_100x
|
oercommons
|
2025-03-18T00:37:22.586320
|
07/25/2022
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/95536/overview",
"title": "CT_adipose_kidney_100x, p000135",
"author": "Lauren Amundson"
}
|
https://oercommons.org/courseware/lesson/69202/overview
|
Budget Notes for Newspapers and Magazines
Overview
This lesson provides students with three easy steps on how to write budget notes for newspapers and magazines. Writers are required to create daily or weekly budget notes to detail their work, and editors use the notes to plan and design their publications.
Writing the Budget Note
The Budget Note
Believe it or not, journalists deal with budgets every day, but they are not the type of budgets filed with numbers. Writers use budgets to plan the day's or the week's work. In turn, editors use the writers' budgets to plan and design the pages of newspapers or magazines. The budget note for most publications requires three elements: the story slug, the budget line, and the budget tagline.
The slug: The slug represents the name of the story. It usually consists of one word, a key word that can be found in the story. The slug is followed by the day the story will be ready for publication.
The budget line: This item consists of three to four sentences detailing what the story is about, and why the story is important to your readers. Think about this part of the budget note as a way to sell your editors on the story.
The tag line: The tag line consists of three elements: the author's last name, the story length (in inches or words depending on the publication), and the type of art/graphic planned for the story. Note in the examples below, the tagline information is enclosed in parentheses.
Examples:
MEASLES.22 More than 700 students and staff members from UCLA and Cal State LA have been quarantined in attempts to prevent the spread of measles on their respective campuses. According to Los Angeles County health officials, the highly contagious disease was declared eliminated in 2000. Will talk to health officials to detail how measles made a comeback and how students and others can help prevent their spread. Will interview Valley College officials and report on how they are attempting to prevent or prepare for a possible outbreak on campus (Jackson, 500 words, art/graphic of measles, quarantine sites).
Rover.30 NASA launched the Mars Rover Opportunity on July 7, 2003, and the robot was only expected to explore the surface of Mars for 90 days. It lasted more than 15 years. On Feb. 19, 2019, NASA officials declared the mechanical explorer dead after it waded through a severe dust storm that blocked its solar panels. Officials sent Opportunity 1,000 recovery commands and none of them were performed. According to NASA, Opportunity’s last words were, “ My battery is low and it’s getting dark.” The article will detail Opportunity's findings, how the robot was able to last so long, and talk to Valley College's science department about what Opportunity's discoveries mean (Coan, 450-500 words, photograph of Opportunity and NASA logo).
|
oercommons
|
2025-03-18T00:37:22.606881
|
06/30/2020
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/69202/overview",
"title": "Budget Notes for Newspapers and Magazines",
"author": "William Dauber"
}
|
https://oercommons.org/courseware/lesson/74541/overview
|
SOC 200 Syllabus
Overview
SOC 200 Syllabus - Introduction to Sociology: Theory using OpenStax Introduction to Sociology 2e.
Sociology
Course Description: This Sociology course was designed to introduce student to the sociological study of society. This course will focus on the systematic understanding of social interaction, social organization, social institutions, and social change. Issues of social class, nationality, race, culture, and sexual preference will be discussed throughout the course.
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oercommons
|
2025-03-18T00:37:22.624253
|
11/10/2020
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/74541/overview",
"title": "SOC 200 Syllabus",
"author": "Filiberto Lopez-Barron"
}
|
https://oercommons.org/courseware/lesson/93390/overview
|
Micrograph Candida albicans Gram stain 1000x p000025
Overview
This micrograph was taken at 1000X total magnifcation on a brightfield microscope. The subject is Candida albicans cells grown in broth culture at 30 degrees Celsius. The cells were heat-fixed to a slide and Gram stained prior to visualization.
Image credit: Emily Fox
micrograph
Micrograph Candida albicans Gram stain 1000x
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oercommons
|
2025-03-18T00:37:22.641290
|
Emily Fox
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/93390/overview",
"title": "Micrograph Candida albicans Gram stain 1000x p000025",
"author": "Diagram/Illustration"
}
|
https://oercommons.org/courseware/lesson/76708/overview
|
Chapter 2 CAD for 3D 1-30-21
Chapter 3 All-In-One2-11-21
Chapter 4 All-In-One 2-11-21
Chapter 5 3DPrintingTechnologies3-18-2021
Chapter 6 All-In-One JWRW v1.2
Additive Manufacturing (AM)
Overview
This resource contains materials related to Additive Manufacturing. Feel free to use any of the materials and modify them as needed for your class, If you modify them, please resubmit them to SLAM Resources.
Section 1 - Introduction to Additive Manufacturing
This chapter is intended to introduce the reader to the fundamentals of three-dimensional
printing (3D printing). The reader will get an overview of these paradigm shifting machines, and learn of the history of additive manufacturing, dating back to the 1980’s. This chapter will also cover some of the specialized software that drives 3D printing, as well as the general framework for several popular AM technologies. Some of the objectives of the chapter include: 1) Defining the term “additive manufacturing” (AM), 2) Providing an overview of the history surrounding this technology, 3) Understanding “layers” and the parts of the slicer, the program that drives a 3D printer, and 4) Learning to follow the basic workflow as it applies to nearly all AM machines.
Use: This material is Open source educational material. These materials may be adopted for any learning (non-commercial) activities. Future contributors may use these materials as foundation for their new methods or materials. This “Open use” is predicated on the improved/extended material being returned to the SLAM repository so that the material will continue to grow.
Section 2 - Fundamentals of CAD for AM
This chapter introduces computer-aided design (CAD) from a theoretical and practical perspective with emphasis as to how they apply CAD to additive manufacturing. The reader will dive into a brief history of CAD and how the software has reached its current state. A discussion /exposure to Autodesk Fusion 360, a free program which introduces tools dedicated to 3D printing design will also be presented. This chapter will evaluate Fusion 360 tools and how they apply to AM.
The objectives of the chapter are to: 1) Provide a high-level overview of computer-aided design, 2) Provide a tutorial for Fusion 360’s fundamental design tools, 3) An exposure to additional design environments and capabilities of CAD, and 4) Understand how CAD can be leveraged for use in additive manufacturing
Use: This material is Open source educational material. These materials may be adopted for any learning (non-commercial) activities. Future contributors may use these materials as foundation for their new methods or materials. This “Open use” is predicated on the improved/extended material being returned to the SLAM repository so that the material will continue to grow.
Section 3 - Contemporary methods for production
Title of work: Contemporary Manufacturing Methods
Type of material: Chapter
Principle author(s): Sid Collins, Ola L. Harrysson and Richard A. Wysk
Editor(s): Mariel Jeffries, Joseph McConnell, Julie Talbot
Prerequisite material: Linear algebra, basic physics, chemistry
Purpose: This chapter will introduce to the reader the means of production which have come to shape the face of manufacturing as we know it today. Students will explore the use of molding, CNC machining, and more in mass production, as well as the use of joining and forming to create various parts and assemblies. For each manufacturing technique, advantages, drawbacks, applications, and design considerations will be thoroughly presented.
Objectives
- Understand the operative concepts behind molding, machining, forming and joining
- Weigh the advantages and disadvantages of each manufacturing method
- Pair each technique with an array of industry-wide applications
- Consider the design specifications for each method & how this affects the finished part
- Relate this newfound knowledge to additive manufacturing for comparison
Use: This material is Open source educational material. These materials may be adopted for any learning (non-commercial) activities. Future contributors may use these materials as foundation for their new methods or materials. This “Open use” is predicated on the improved/extended material being returned to the SLAM repository so that the material will continue to grow.
Section 4 Applications of Additive Manufacturing Methods
Title of work: Applications of Additive Manufacturing Methods
Type of material: Chapter
Principle author(s): Sid Collins, Ola L. Harrysson and Richard A. Wysk
Editor(s): Mariel Jeffries, Joseph McConnell, Julie Talbot
Prerequisite material: Linear algebra, basic physics, chemistry
Purpose: In this chapter, the reader will be introduced to some of the most common applications of additive manufacturing. While studying each use of this technology, we will delve into precisely why 3D printing has been adopted in this fashion and how this technological and economic advantages have been utilized. Along with technical specifications, individual cases will be presented for each application.
Objectives
- Know the most common uses for additive manufacturing in industry
- Understand how the benefits of 3D printing can be leveraged
- Analyze case studies to better comprehend the technology’s usage in the real world
- Look at some lesser known applications as well as uses in the near future
Use: This material is Open source educational material. These materials may be adopted for any learning (non-commercial) activities. Future contributors may use these materials as foundation for their new methods or materials. This “Open use” is predicated on the improved/extended material being returned to the SLAM repository so that the material will continue to grow.
Section 5 3D Printing Technologies
SLAM Data Sheet
Title of work: 3D Printing Technology
Type of material: Chapter
Principle author(s): Sid Collins, Ola L. Harrysson and Richard A. Wysk
Editor(s): Mariel Jeffries, Joseph McConnell, Julie Talbot
Prerequisite material: basic physics, chemistry
Purpose:
In this chapter, students will explore a variety of 3D printing technologies, from the highly popular, such as Fused Deposition Modeling or (FDM) to those that fill niche applications, such as sheet lamination. For each process, the methodology will be explained in detail along with technical specifications and available material types. Students will also learn the benefits and limitations of each process and come to understand the applications in which they are used.
Objectives
- Understand the numerous 3D printing technologies and how they work
- Explore the types of materials that each method may print in
- Know the pros and cons of each technology based on their process
- Learn of the most popular applications of each method based on benefits & drawbacks
Use: This material is Open source educational material. These materials may be adopted for any learning (non-commercial) activities. Future contributors may use these materials as foundation for their new methods or materials. This “Open use” is predicated on the improved/extended material being returned to the SLAM repository so that the material will continue to grow.
Section 6 Design for AM
SLAM Data Sheet
Title of work: Additive Manufacturing (AM) Design Principles
Type of material: Chapter
Principle author(s): Sid Collins, Ola L. Harrysson and Richard A. Wysk
Editor(s): Joseph McConnell, Jason Wheeler and Julie Talbot
Prerequisite material: Linear algebra, basic physics, chemistry
Purpose:
Additive manufacturing’s unique perspective on manufacturing has led to innovative products, concepts, and ideas that would not be possible with traditional means of production. However, to utilize this powerful tool, students must understand the rules of design such that their CAD model properly leverages the benefits of the technology. In this chapter, readers will learn how to apply these specifications and concepts to their prints to reduce cost, material use, and weight while maximizing strength and integrity.
Objectives
- Become aware of the technical abilities of the most popular AM technologies
- Learn to optimize a model such that material is conserved
- Understand the design features which may not be manufacturable on a 3D printer
- Explore the design rules of both polymer and metal AM production methods
Use: This material is Open source educational material. These materials may be adopted for any learning (non-commercial) activities. Future contributors may use these materials as foundation for their new methods or materials. This “Open use” is predicated on the improved/extended material being returned to the SLAM repository so that the material will continue to grow.
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oercommons
|
2025-03-18T00:37:22.696315
|
Richard Wysk
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/76708/overview",
"title": "Additive Manufacturing (AM)",
"author": "Textbook"
}
|
https://oercommons.org/courseware/lesson/67292/overview
|
Sample Lesson
Overview
This is a simple template for the lesson.
Formulas can be easily typed using the TeX editor.
Description
Material Type: Lesson
Author: Igor V. Baryakhtar
Overview
overview
A general review or summary of a subject.
Formulas can be easily typed using the TeX editor, for example
\(\int_0^\infty e^{-x^2} dx=\frac{\sqrt{\pi}}{2} \)
\(\lim_{x \to \infty} \Big (1+{1 \over {x}}\Big)^x = e\)
____________________________________________________________________________________________
Instructor: Igor V. Baryakhtar
Subject:
Course:
Semester:
College:
Level: Community College
Material Type:
Tags:
Date Added:
Language: English
Media Format:
Licence: Attribution 4.0 International (CC BY 4.0)
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oercommons
|
2025-03-18T00:37:22.710771
|
05/24/2020
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/67292/overview",
"title": "Sample Lesson",
"author": "Igor Baryakhtar"
}
|
https://oercommons.org/courseware/lesson/121626/overview
|
What is Copyright Law?
Overview
Learn about copyright law with this overview resource.
Created by Jes Graham for the second assignment of the Creative Commons Course.
Learn about copyright law with this overview resource.
Created by Jes Graham for the second assignment of the Creative Commons Course.
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oercommons
|
2025-03-18T00:37:22.727641
|
Jes Graham
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/121626/overview",
"title": "What is Copyright Law?",
"author": "Unit of Study"
}
|
https://oercommons.org/courseware/lesson/92790/overview
|
ASTR 1020 - Lab 12: Mapping the Milky Way
Overview
In 1610, Galileo made the first telescopic survey of the Milky Way and discovered that it is composed of a multitude of individual stars. Today, we know that the Milky Way comprises our view inward of the huge cosmic pinwheel that we call the Milky Way Galaxy and that is our home. Moreover, our Galaxy is now recognized as just one galaxy among many billions of other galaxies in the cosmos.
---------------------------------------
Distant Nature: Astronomy Exercises 2016 by Stephen Tuttle under license "Creative Commons Attribution Non-Commercial Share Alike".
ASTR 1020 - Lab 12: Mapping the Milky Way
Download the attached zip file and install the website on a server or in your LMS course section. To place HTML website content in Brightspace:
- Create an appropriate folder structure in Manage Files. This location is where files will be uploaded and unzipped. Each resource (website) should have a descriptively named independent folder.
- Navigate to the appropriate folder and Upload the zip file.
- Unzip the folder by clicking the pull-down arrow, and clicking Unzip on the submenu. A content folder will appear. It contains two folders and two HTML files.
- Associate the index.html file to your Course Content topic. Perform this task in the Course Content area by clicking New and then clicking Add from Manage Files on the submenu. Next, navigate to the index.html file and Add the file.
- Click the pull-down arrow by the new web page topic (currently named index). Next, click Edit Properties In-place on the submenu and rename the link to be descriptive.
- Delete the extraneous zip file from the Manage Files folder.
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oercommons
|
2025-03-18T00:37:22.745996
|
05/17/2022
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/92790/overview",
"title": "ASTR 1020 - Lab 12: Mapping the Milky Way",
"author": "Hollyanna White"
}
|
https://oercommons.org/courseware/lesson/79661/overview
|
Lesson
Overview
This is a simple worksheet that invites students to think about multifactorial, polygenic inheritance in the context of artificial selection. Answer key and teahcing notes coming soon!
Worksheet
Coming soon!
This is a simple worksheet that invites students to think about multifactorial, polygenic inheritance in the context of artificial selection. Answer key and teahcing notes coming soon!
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oercommons
|
2025-03-18T00:37:22.762316
|
04/27/2021
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/79661/overview",
"title": "Lesson",
"author": "Pam Kalas"
}
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https://oercommons.org/courseware/lesson/74001/overview
|
Learning Styles
Overview
In this section we will learn about the three types of learners we may encounter in our classrooms.
How do you learn?
We have different ways to learn, but the common three are Visual Learners, Kinesthetic Learners, and Auditory Learners. It's helpful to know what's the best way you learn so that your aware whether or not the material is being presented in a way you can be grasp it. Learning should not be about memorizing; it should be about growing.
Visual Learners are individuals who absorb information through just watching their teacher or trainer provided a physical example. While a Kinesthetic Learner must participate hands on to understand a concept or idea. Meanwhile Auditory Learners can grasp information through a speech by just listening to the material.
Why is this important? Well during our career as educators we will need to create materials that will prepare students for their journey. Our lesson plans must be tailored to those who will need to learn from them; therefore, we have to know what kind of learners we have in our classrooms.
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oercommons
|
2025-03-18T00:37:22.782714
|
10/28/2020
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/74001/overview",
"title": "Learning Styles",
"author": "Kassandra Cruz"
}
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https://oercommons.org/courseware/lesson/56672/overview
|
Metabolism
Metabolism
This animated video presents topics of Metabolism found in Openstax Biology 2e.
Cover topics of:
- Potential Energy
- Kinetic Energy
This animated video presents topics of Metabolism found in Openstax Biology 2e.
This animated video presents topics of Metabolism found in Openstax Biology 2e.
Cover topics of:
This animated video presents topics of Metabolism found in Openstax Biology 2e.
|
oercommons
|
2025-03-18T00:37:22.798812
|
08/05/2019
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/56672/overview",
"title": "Metabolism",
"author": "Urbi Ghosh"
}
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https://oercommons.org/courseware/lesson/57425/overview
|
circle
Overview
A circle is a simple closed shape. It is the set of all points in a plane that are at a given distance from a given point, the centre; equivalently it is the curve traced out by a point that moves in a plane so that its distance from a given point is constant
elements of the circle- raidus, diameter, segment, chord
count the total number of the circles from the above image
meaning of the circle
elements of the circle
A circle is a simple closed shape. It is the set of all points in a plane that are at a given distance from a given point, the centre; equivalently it is the curve traced out by a point that moves in a plane so that its distance from a given point is constant. Wikipedia
Area: π× (radius)²
Circumference: 2π x radius
Diameter: 2 x radius
Radius: distance from center of circle to any point on it.
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oercommons
|
2025-03-18T00:37:22.812696
|
08/26/2019
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/57425/overview",
"title": "circle",
"author": "VAIBHAVI TANK"
}
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https://oercommons.org/courseware/lesson/106735/overview
|
Final Project Business and Culture
Overview
The aim of this project is to help students to initiate an idea of small business, the students will be a high school students in the small town of Sukkur, Sindh, Pakistan. The students in the class come from different linguistics backgrounds (Sindhi, Urdu) and they possess an intermediate level of proficiency (B1/B2). The class consists of 25 students and due to unavailability of technology, most students have their own mobile devices, and there are few school laptops available that can be borrowed. In certain instances, traditional methods of using paper and pencil, white board, and chart papers may need to be used as alternatives to activities relying on technology. Lesson can be extended to various classes depending on the topic and availability of material.
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oercommons
|
2025-03-18T00:37:22.824454
|
Afshan Abbasi
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/106735/overview",
"title": "Final Project Business and Culture",
"author": "Lesson"
}
|
https://oercommons.org/courseware/lesson/95540/overview
|
CT_adipose_kidney_630x, p000137 Overview CT_adipose_kidney_630x, p000137 CT_adipose_kidney_630x, p000137 CT_adipose_kidney_630x, p000137
|
oercommons
|
2025-03-18T00:37:22.845875
|
07/25/2022
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/95540/overview",
"title": "CT_adipose_kidney_630x, p000137",
"author": "Lauren Amundson"
}
|
https://oercommons.org/courseware/lesson/58583/overview
|
Getting Started: Remind on Windows/Mac Computer
Overview
Remind is a great educational resource for communicating with students and parents in a familiar way, beyond the classroom. This slideshow will take the user through simple steps to create a Remind account and explore the settings and capabilities within the resource.
Section 1
Remind is a great educational resource for communicating with students and parents in a familiar way, beyond the classroom. This slideshow will take the user through simple steps to create a Remind account and explore the settings and capabilities within the resource.
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oercommons
|
2025-03-18T00:37:22.862067
|
10/06/2019
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/58583/overview",
"title": "Getting Started: Remind on Windows/Mac Computer",
"author": "Cortney McLaughlin"
}
|
https://oercommons.org/courseware/lesson/61052/overview
|
Plate Tectonics: The Effects of Movement of the Earth on its Continental Plates
Overview
Students preparing for the ACT, GED or other college prep equivalency exams or college entrance need to know the basics of science. Geology is one area that is included on most of these types of exams. The study of continental drift forces involved and effect of the movement combine several science disciplines that will help students on those exams. In this unit, learners will illustrate, describe and demonstrate a basic knowledge of plate tectonics and the effect of shifts on seismic activity. This unit follows the WIPPEA model for lesson planning, and implements open-classroom strategies, where students will not only use OER but also modify and republish their content.
Basic Unit Information
Brief Description
Students preparing for the ACT, GED or other college prep equivalency exams or college entrance need to know the basics of science. Geology is one area that is included on most of these types of exams. The study of continental drift forces involved and effect of the movement combine several science disciplines that will help students on these exams.
Essential Question
What is tectonic plate movement and how does it effect the earth, its people, and its geography?
Developed By
Mr. Donald Edward Dutton, Senior Educational Consultant, New Mexico Distance Education and Learning Technologies: https://www.oercommons.org/courseware/module/30680/overview
Remixed by Leecy Wise, Educational Consultant, Teacher Trainer (12/27/019)
Number of Sessions: 1 or 2
Estimated Time Required
300 minutes plus some thinking and collaborating outside of class.
Setting: Classroom and Computer Lab
Instruction Level: Intermediate
Objectives
Lesson Goal
Learners will demonstrate a basic knowledge of plate tectonics and the effect of shifts on seismic activity.
Learning Objectives
- Learners will identify earth's continental plates and discuss one example of the effects of plate movement.
- Learners will accurately predict the effects of specific movement of specific plates.
- Learners will remix an open resource to tell their own story of the earth's plate movements and effects of that movement.
Instructional Strategies
Through the use of 3 OER (and other resources), students will gain an overall understanding of the topic. They will be able to identify the different types of movement and how each effects the earth. They will also observe open educational resources (OER), with the goal of replicating the process, evaluating a resource, setting goals for making it better, and manipulating an OER for that purpose.
Resources
Internet-enabled devices for all students. Students should have physical note pads or electronic pages in order to save ideas, edit ideas, contact info with collaborators and more.
How Resources Are Use
Electronic devices will be used to search for resources that answer the essential question.
Notepads keep track of iterations of the progress made toward the full answers.
Unit Plan
This unit plan follows the WIPPEA model. "The WIPPEA Model, and acronym that stands for WarmUp, Introduction, Presentation, Practice, Evaluation, Application, is a lesson plan model that represents a continuous teaching cycle in which each learning concept builds on the previous one, serving as an instructional roadmap for instructors. The WIPPEA lesson plan model is adapted from the work of Hunter (Hunter, 1982). This six-step cyclical lesson planning approach has learners demonstrate mastery of concepts and content at each step before the instructor proceeds to the next step. In the following list, TEAL Center suggestions for incorporating each of these elements are included in italics." (TEAL Center Fact Sheet No. 8: Effective Lesson Planning, https://lincs.ed.gov/state-resources/federal-initiatives/teal/guide/lessonplanning)
Warm-Up
Activity
With the following 10 words displayed in the classroom, give students a few minutes to talk about what they know of them: (NO DEVICES or BOOKS)
Terms: oceanic plate, destructive margins, continental plate, magma, seismic activity, conservative margins, volcanoes, plate tectonics, fault lines, earthquakes
Duration
10-15 minutes minutes
Introduction
Activity
Students prepare 3 questions of their own and to ask about the video and consider all the following questions:
- What one thing did you learn about plate tectonics?
- Where is this action evident?
- Who does plate movement effect?
- When does movement occur?
- Why does movement occur?
- How are the 3 ways continental plates move against each other?
Notes
Students watch the following video: https://www.youtube.com/watch?v=Kg_UBLFUpYQ
Duration
20 to 30 mins minutes
Presentation
Skill to be Presented
Students go the first OER. https://www.oercommons.org/courses/plate-tectonics-10
In this OER, students find answers to their questions and the ones posed above.
For further study, they experiment with another OER: https://www.oercommons.org/courses/uncovering-plate-tectonics
Steps for Presenting Skill
The presentation consists of teacher and students working together to identify an OER that suits their needs. The goal here is to show how to evaluate an OER. Find the OER, decide what is good and what can be changed, decide on how it can be changed and make the changes. After the process is complete and the modeling has been done, we can move onto the principal lesson.
Duration
90 minutes
Practice
Activities
Discussion
Reading
Problem Solving
Research
Role-Play
Critical Thinking
Groupings: Small Group
Duration: 2 hours minutes
Description
Students open the third OER planned for this lesson with the intent of manipulating it for their own use: https://www.oercommons.org/authoring/361-is-california-leaving-a-lesson-on-plate-tectonics
With this OER, or with another suitable OER, students present their answer to the essential question and the "wh" questions above. They prepare an OER of their own that tells the story of earth's plate movements and the effects of that movement.
DISCUSSION: Students will discuss in small groups the essential question and all the questions they have.
READING: Students will read what they need from the first OER suggested. They will find additional resources if necessary and read whatever they need to find answers to what, why, how and etc.
PROBLEM SOLVING: In groups, 2 questions will be discussed and solutions will be offered orally. NOTE: Use your imagination, but keep the ideas somewhat based on what you have learned.
- Question 1: What can people do to be safe on this planet with so much seismic activity?
- Question 2: How can humans control or effect earth's movements? Is it possible? If so, how?
RESEARCH: Students will research the 3 OER suggested for this unit and document the use of others if needed. Also, it is expected sources should be accurate and information from them should conform to the information in the majority of sources.
ROLE-PLAY: Students will role play a simple discussion between a person in any country who does not know much about science or plate tectonics but has experienced the effects of earth movement and wants to know why that happens.
CRITICAL THINKING: All the activities in this unit require critical thinking skills.
Evaluation
Duration
30 minutes
Objectives
Students will have:
- accurately and completely answered the essential question by show and tell.
- collaborated with each other during the formative stages of the lesson plan
- applied critical thinking in order to present the final product to meet quality performance standards
Assessments will include oral presentation, evidence that work or discussion was done collaboratively (everyone in the group contributes to oral presentations) and a well-thought out final response.
Assessments
- Oral Quiz
- Role Play
- Demonstration
- Project
- Observation
- Description
- Student Reflection
Application
Activities
Away from class and at a future time, students will tell the class about a place, time, experience, story or news report that illustrates the effects of earth's movement in the life of an individual. This will be a short oral presentation.
Location
Outside Classroom
|
oercommons
|
2025-03-18T00:37:22.907511
|
Data Set
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/61052/overview",
"title": "Plate Tectonics: The Effects of Movement of the Earth on its Continental Plates",
"author": "Assessment"
}
|
https://oercommons.org/courseware/lesson/115991/overview
|
Resources for Teaching World History
Overview
This is a list of teaching materials and resources for teaching world history. It contains links to resources for pre-secondary, secondary, and post-secondary classrooms as well as world history syllabi.
Attachments
The attachment for this resource is a list of world history resources for educators available on other digital platforms.
About This Resource
This list was created by Jacob Pomerantz, University of Pittsburgh.
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oercommons
|
2025-03-18T00:37:22.925547
|
Alliance for Learning in World History
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/115991/overview",
"title": "Resources for Teaching World History",
"author": "Teaching/Learning Strategy"
}
|
https://oercommons.org/courseware/lesson/103401/overview
|
ENG 230- Introduction to Literature
Overview
This course is designed to give you a broad overview of the field of literary studies. We will read texts from different time periods, different parts of the world, and different genres. We will learn the tools to put in our toolbox to help us analyze literature like a professional.
ENG 230- Introduction to Literature
This course is designed to give you a broad overview of the field of literary studies. We will read texts from different time periods, different parts of the world, and different genres. We will learn the tools to put in our toolbox to help us analyze literature like a professional.
Canvas Commons Course Link
Course download: Common Cartridge
Download and use this file to load the course in an LMS other than Canvas.
|
oercommons
|
2025-03-18T00:37:22.944949
|
Micah Weedman
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/103401/overview",
"title": "ENG 230- Introduction to Literature",
"author": "Full Course"
}
|
https://oercommons.org/courseware/lesson/99448/overview
|
Document Analysis Exercise
Overview
This is a document analysis assignment to assess SLO and give students an opportunity to demonstrate critical analysis of historical evidence: Interpret primary and secondary sources and compose an argument (thesis), which uses them for support.
Document Analysis Exercise
Document Analysis Exercise
SLO: Students will demonstrate critical analysis of historical evidence and Interpret primary and secondary sources and compose an argument (thesis), which uses them for support.
Instructions:
- Instructor will lecture on analyzing evidence
- Interactive Class participation analyzing evidence and developing arguments/thesis based on evidence
- Students will be placed into groups of 4
- Groups will read the primary sources and the secondary source, the textbook chapter 5 & 6 on the events leading up to the American Revolution and The American Revolution https://openstax.org/details/books/us-history
- Use the graphic organizer to analyze the primary sources.
- Groups will share out with the class their analysis by creating a 3-5 minute zoom video discussing as a group of four the analysis of the four pieces of evidence and an argument/thesis.
- Each student writes a short paragraph reflection on their experience analyzing the evidence and how this assignment helped. Consider how this assignment could be modified to help students analyze evidence more effectively.
- Group will submit their graphic organizer to the assignment link in Canvas
- Group will submit their video to the Discussion link in Canvas
- Each individual student will submit their reflection to the assignment link in Canvas
Introduction:
The first shots of the American Revolution were fired at Lexington, Massachusetts, on April 19, 1775. Colonial militiamen at Lexington Green confronted British troops on their way to destroy colonial military stores in nearby Concord. Shots rang out and military hostilities began. Since neither the British nor the American colonists wished to appear the aggressor, both sides denied firing the first shot.
Directions:
Below are four brief excerpts from accounts of the event. Your task is not to determine who fired the first shot, but to examine the reports with the critical eye of the historian.
According to the evidence, what can be determined beyond doubt (assume the four excerpts are all the sources you have available to you), what is probable given this evidence, and what cannot be established with certainty? Use the textbook chapters 5 & 6 to determine any evidence. https://openstax.org/details/books/us-history Use the graphic organizer to categorize the evidence.
Definition of Probable: adjective it is probable that the economic situation will deteriorate further: likely, most likely, odds-on, expected, to be expected, anticipated, predictable, foreseeable, ten to one, presumed, potential, credible, quite possible, possible, feasible; informal in the cards, a good/fair/reasonable bet.
Primary Sources
Primary Source 1: Robert Douglas (Colonial Militia) swore to the following deposition on May 3, 1827:
In about fifteen minutes after we entered the tavern, a person came to the door and said the British were within half mile. I then heard an officer (who afterwards learned was Capt. Parker) call his drummer and order him to beat to arms. I paraded with the Lexington company between the meeting-house and the tavern, and then marched to the common near the road that leads to Bedford; there we were ordered to load our guns. Some of the company observed, “There are so few of us, it would be folly to stand here.” Capt. Parker replied, “The first man who offers to run shall be shot down.” The Lexington company began to break off, on the left wing, and soon all dispersed. I think no American was killed or wounded by the first fire of the British unless Capt. Parker might have been. No one of Capt. Parker’s company fired on the British, to my knowledge, that morning, and I think I should have known it, had they fired. I knew but two men of the Lexington company, and I never heard of any person say that the American fired on the British that morning at Lexington.
Primary Source 2: The Official deposition of the commander of the colonial militia, John Parker: Lexington, April 25, 1775
I, John Parker, of lawful age, and commander of the Militia in Lexington, do testify and declare, that on the 19th instant, in the morning, about one of the clock, being informed that there were a number of Regular Officers riding up and down the road, stopping and insulting people as they passed the road, and also was informed that a number of Regular Troops were on their march from Boston, in order to take the Province Stores at Concord, ordered our Militia to meet on the common in said Lexington, to consult what to do, and conclude not to be discovered, nor meddle or make with said Regular Troops (if they should approach) unless they should insult us, and upon their sudden approach, I immediately ordered our Militia to disperse and not to fire. Immediately said Troops made their appearance, and rushed furiously, fired upon, and killed eight of our party, without receiving any provocation therefore from us.
John Parker
Primary Source 3: April 26, 1775, Pitcairn, Maj. John to Lt. Gen. Thomas Gage
I gave directions to the Troops to move forward, but on no account to Fire, or even attempt it without orders; when I arrived at the end of the Village, I observed drawn up upon a Green near 200 of the Revels; when I came within about One Hundred Yards of them, they began to File Off towards some stone Walls on our Right Flank – the Light Infantry observing this, ran after them – I instantly called to the Soldiers not to fire, but to surround and disarm them, and after several repetitions of those positive Orders to the men, not to Fire & c-some of the Revels who had jumped over the Wall, Fired Four or Five Shott at the Soldiers, which wounded a man of the Tenth, and my Horse was Wounded in two places, from some quarter or other, and at the same this, without any order or Regularity, the Light Infantry began a scattered Fire, and continued in that situation for some little time, contrary to the repeated orders both of me and the officers that were present – It will be needless to mention what happened after, as I suppose Col. Smith hath given a particular account of it. I am sir Boston Camp Your most humble Servant, 26th April, 1775 John Pitcairn
Primary Source 4: Personal account by British ensign Jeremy Lister written in 1832:
However to the best of my recollection about 4oClock in the Morning being 19th of April the 5 front [companies] was ordered to Load which we did, about half an hour after we found that precaution had been necessary, for we had then to [fire]…and then was the first Blood drawn in this American Revolution. It was at Lexington when we saw one of their [Companies] drawn up in regular order Major Pitcairn of the Marines second in Command call’d to them to disperce, but their not seeming willing he desired us to mind our space which we did when they gave us a fire they run of[f] to get behind a wall. We had one man wounded of our [Company] om the Leg his Name was Johnson also Major Pitcairns Horse was shot in the Flank we return’d their Salute, and before we proceeded on our March from Lexington I believe we Kill’d and Wounded either 7 or 8 men.
Graphic Organizer to complete as a group
Name Source | Beyond Doubt | Probable | Cannot be established |
Source 1 |
|
|
|
Source 2 | |||
Source 3 | |||
Source 4 | |||
Source 5: Textbook | |||
Thesis Sentence: |
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oercommons
|
2025-03-18T00:37:22.981305
|
12/15/2022
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/99448/overview",
"title": "Document Analysis Exercise",
"author": "Patricia Tirado"
}
|
https://oercommons.org/courseware/lesson/99050/overview
|
African-American Theatre History
Overview
African-American theatre has a rich long history that is part of the heritage of this art form. This assignment gives students the opportunity to take a deeper dive into one topic personally, and benefit from other student's work in broadening their knowledge of this art form.
Student will choose a topic from the choices provided, conduct research, and prepare & present their findings in a 5-minute presentation. The presentation may be done live in a face-to-face class, live in a synchronous virtual class, or recorded for an asynchronous class.
Presentation Information
African-American theatre has a rich long history that is part of the heritage of this art form. This assignment gives students the opportunity to take a deeper dive into one topic personally, and benefit from other student's work in broadening their knowledge of this art form.
Student will choose a topic from the choices provided, conduct research, and prepare & present their findings in a 5-minute presentation. The presentation may be done live in a face-to-face class, live in a synchronous virtual class, or recorded for an asynchronous class.
|
oercommons
|
2025-03-18T00:37:22.998565
|
11/23/2022
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/99050/overview",
"title": "African-American Theatre History",
"author": "Lori DeLappe"
}
|
https://oercommons.org/courseware/lesson/93391/overview
|
Micrograph Micrococcus luteus Gram stain 1000x p000026
Overview
This micrograph was taken at 1000X total magnifcation on a brightfield microscope. The subject is Micrococcus cells grown on nutrient agar at 25 degrees Celsius. The cells were heat-fixed to a slide and Gram stained prior to visualization.
Image credit: Emily Fox
micrograph
Dozens of dark purple, round cells on a light background.
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oercommons
|
2025-03-18T00:37:23.015669
|
Diagram/Illustration
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/93391/overview",
"title": "Micrograph Micrococcus luteus Gram stain 1000x p000026",
"author": "Health, Medicine and Nursing"
}
|
https://oercommons.org/courseware/lesson/60594/overview
|
Using Films on Demand
Overview
An overview of how to use Films on Demand. All videos are close captioned.
Using Films On Demand
Suggested Prerequisite Modules:
- Library Web Page
Recommended Exercises:
- Provide students with a topic or have them come up with their own.
- What is your topic?
- When you search it, how many results do you get?
- Is this too many results or too few?
- What is another way you can search this topic? Different search terms?
- How did you limit the topic using the facets on the left?
- Ask students to provide one bibliographic entry for an item they found on Films on Demand and to summarize the item and discuss why it would be useful in their paper.
Shelton State subscribes to Films on Demand, which provides users with videos on a broad range of topics. Science and history documentaries as well a dramatizations of pieces of literature are all available.
It is easy to get to Films on Demand from the library's main web site.
- From the library's main web site, go to eResources, the second option on the tiled menu or the second option down the left-hand menu.
- Select Films on Demand.
- You will need to use your MyShelton credentials to access this resource.
Films on Demand provides several ways to browse popular content and a search bar for traditional searches. Results can be filtered by a variety of methods, including subject, language, type, and copyright date.
Results are easy to incorporate into your research or share with classmates or colleagues. Each entry has share options as well as suggestions for how to cite them on a works cited page.
Two important points:
- If you are planning to share an item, be sure to use the share option and not the URL from the address bar, which will expire.
- The works cited options contain all of the information you will need to make a citation; however, check the suggested option against whatever resource your instructor wants you to use for citation. There may be some slight differences and your instructor is always right.
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oercommons
|
2025-03-18T00:37:23.029981
|
12/10/2019
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/60594/overview",
"title": "Using Films on Demand",
"author": "Kelly Griffiths"
}
|
https://oercommons.org/courseware/lesson/105654/overview
|
Diatom 100X p000118
Overview
Diatom. Compound light microscope 100X
Image by Fernando Agudelo-Silva.
Micrograph
Elongated oval cell; background with debris
|
oercommons
|
2025-03-18T00:37:23.046507
|
Life Science
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/105654/overview",
"title": "Diatom 100X p000118",
"author": "Environmental Science"
}
|
https://oercommons.org/courseware/lesson/64991/overview
|
The story of Phineas Gage: A Critical Review of Psychological Concepts
Overview
Summary: Survey questions used to review Introduction to Psychology concepts in the area of Research Methods, Brain and Brain Imaging, and Psychopathology.
These activities are designed to help students master the following course outcomes:
MassTransfer Academic Pathways
Discipline: Psychology
General Psychology
Student Learning Outcomes
Note: The American Psychological Association (2013) provides guidelines for the undergraduate psychology major and, in those guidelines, outlines 5 learning goals for the major. Introduction to Psychology is a foundational course within the major and, as such, upon completion of the course students will be able to exhibit basic competencies within each of the five areas.
The story of Phineas Gage: A Critical Review of Psychological Concepts (Research Methods, Brain and Brain Imaging, and Psycopathology)
Summary: Survey questions used to review Introduction to Psychology concepts in the area of Research Methods, Brain and Brain Imaging, and Psychopathology.
These activities are designed to help students master the following course outcomes:
MassTransfer Academic Pathways
Discipline: Psychology
General Psychology
Student Learning Outcomes
Note: The American Psychological Association (2013) provides guidelines for the undergraduate psychology major and, in those guidelines, outlines 5 learning goals for the major. Introduction to Psychology is a foundational course within the major and, as such, upon completion of the course students will be able to exhibit basic competencies within each of the five areas.
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oercommons
|
2025-03-18T00:37:23.065405
|
Homework/Assignment
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/64991/overview",
"title": "The story of Phineas Gage: A Critical Review of Psychological Concepts",
"author": "Assessment"
}
|
https://oercommons.org/courseware/lesson/107589/overview
|
Quest Method Thesis and Topic Sentence Generation
Overview
This PowerPoint presentation can be used as a study guide or during class instruction to help students understand the process and connections between the thesis, introduction, and topic sentences of a traditional essay. If viewing for study, the student should follow along with the display mode.
English Composition Thesis and Topic Sentence Generation
The following presentation is meant to be viewed and followed along with either independently (for students) or during instruction (for instructors). The purpose is to familiarize students with the process and structure of the thesis, introduction, and topic sentences in a low stakes, but highly memorable way.
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oercommons
|
2025-03-18T00:37:23.082396
|
Student Guide
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/107589/overview",
"title": "Quest Method Thesis and Topic Sentence Generation",
"author": "Lesson"
}
|
https://oercommons.org/courseware/lesson/84257/overview
|
Sample Assignment PT 1
Sample Assignment PT 2
History 18: History of California
Overview
This course examines the social, economic, and political development of California from its pre-European past to its post-industrial present. In addition, we will exlpore the historical uniqueness of Calfornia's environment, population, institutions, and economy. Emphasis is placed on the influence of American political thought and institutions in the historical evolution of California's state and local governments. Partially satisfies the requirements in U.S. Constitution, American history and institutions. Recommended: Writing and Reading-1 level prior to transfer. Hours: 54 lect. CCS: Liberal Arts and Sciences. Transferable: UC, CSU and private colleges. BC GE D.2, D.3, CSU GE C.2, D.6; IGETC 3B, 4.
Syllabus and Sample Assignment
This course examines the social, economic, and political development of California from its pre-European past to its post-industrial present. In addition, we will exlpore the historical uniqueness of Calfornia's environment, population, institutions, and economy. Emphasis is placed on the influence of American political thought and institutions in the historical evolution of California's state and local governments. Partially satisfies the requirements in U.S. Constitution, American history and institutions. Recommended: Writing and Reading-1 level prior to transfer. Hours: 54 lect. CCS: Liberal Arts and Sciences. Transferable: UC, CSU and private colleges. BC GE D.2, D.3, CSU GE C.2, D.6; IGETC 3B, 4.
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oercommons
|
2025-03-18T00:37:23.100493
|
Open for Antiracism Program (OFAR)
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/84257/overview",
"title": "History 18: History of California",
"author": "Syllabus"
}
|
https://oercommons.org/courseware/lesson/16328/overview
|
Appendix E: Progressions Within the NGSS
Appendix F: NGSS Practices
Asking Questions - Appendix F: Science and Engineering Practices in the NGSS
Chapter 11: NRC Framework
Developing and Using Models - A Snippet from the NRC Framework
Matrix of NGSS Crosscutting Concepts
Reasoning Triangle
Science Flowchart (Dynamic)
Science Flowchart (Static)
Survey #1 Why Teach Science
Survey 2
Survey 3
Survey 4A
Survey 4B
Survey 5
Survey #6
Survey #7
Tool for generating Anchoring Phenomena
Cool Breeze - Oregon Science Project Hybrid NGSS Module #1 - Phenomena & Equity
Overview
The Oregon Science Project Module #1 is designed for K-12 and nonformal educators who want to learn more about NGSS, with an emphasis on how the shift to sense-making around phenomena is at the heart of the NGSS. It is designed to provide 3-4 hours of work and asks learners to create something new to contribute to the work.
Why Teach Science?
Why Teach Science?
"A Framework for K-12 Science Education (hereafter referred to as the Framework) and the Next Generation Science Standards (hereafter referred to as the NGSS) describe aspirations for students’ learning in science that are based on key insights from research:
- that science learning involves the integration of knowing and doing
- that developing conceptual understanding through engaging in the practices of science is more productive for future learning than simply memorizing lists of facts
- that science learning is best supported when learning experiences are designed to build and revise understanding over time"
- Science Teachers' Learning: Enhancing Opportunities, Creating Supportive Contexts (2015)
Estimated time: 10 minutes Components: small group discussion, survey response to statements about teaching science
Every Participant: Open "Survey #1"
Read and complete Survey (each person will submit their own survey)
Reading to Rank - Ranking the statements:
- Each person shares which statement is the most important to them and why
- All members of the group can question or press for reasoning, but please approach this discussion with the knowledge that another person's rationale may actually make you change your mind.
- As you discuss your rankings, each participants completes their own survey with their own answers and hits submit.
How Science Works
How Science Works
"Before one can discuss the teaching and learning of science, consensus is needed about what science is." - Taking Science to School
Approximate time: 25-30 minutes Components: video, small group discussions, survey response
Group Instructions
Video
One participant shares their screen choosing the option to show their internet browser. Scroll down to the video below so that all participants can watch the video below together. Before your start, be sure to prepare to listen for:
- How these scientists - and science educators - discuss how science works
- Ways that scientists use evidence to craft arguments
- How scientists reason with evidence
One participant opens "Science Flowchart (Dynamic)" and shares their screen so that everyone can see.
- The person sharing their screen slowly mouses over the different parts of the flowchart.
- The group discusses the different parts of the flowchart ensuring that everyone has seen all of the different spheres.
- Once you have done that, stop screen sharing and gather together again.
Each participant opens "Appendix F: NGSS Practices"
- It may be helpful to minimize your screens so you can easily switch between the different resources on your own during your discussion.
- As a group, discuss where each practice could fit on the flowchart and why, or why not.
- Refer back to the video (or even watch it again) to help you think about this overlap.
Each participant opens "Matrix of NGSS Crosscutting Concepts"
- As a group, discuss where each NGSS Crosscutting Concept could fit on the flowchart and why, or why not.
- Refer back to the video (or even watch it again) to help you think about this overlap or lack of overlap.
Each participant opens "Survey #2" on their own device
- In your group, discuss each prompt on the survey using the science flowchart to guide your discussion about how science works.
- Include material from the video (quotes, ideas, stories, claims, etc.) in your responses.
- Each participant completes and submits their own survey.
Individual Instructions (temporary and only for this early draft, please try to work in small regional group with at least two other OSP Learning Facilitators if possible)
Watch the video below at least once and listen for:
- How these scientists - and science educators - discuss how science works
- Ways that scientists use evidence to craft arguments
- How scientists reason with evidence
Open "Survey #2" and respond the prompts about the process of science as explored in this video. In your responses be sure to include:
- Material from the video (quotes, ideas, stories, claims, etc.)
- Language from the Science Flowchart
- Open up "NGSS Practices" to help you compare and contrast professional science and classroom science.
- Open up "Matrix of Crosscutting Concepts" to help you compare and contrast professional science and classroom science.
- Submit your survey
Science as Process
Science as Process
"Experiment has been widely viewed as a fundamental characteristic of science...However, if we look at science as a process of argument, experiment becomes one of the measures that provide scientists with insights and justification for their arguments."
Approximate time: 20-25 minutes Components: reading, ssmall group discussion, survey response
Research from the history and philosphy of science identifies that science can be a process of logical reasoning about evidence, and a process of theory change that both require participation in the culture of scientific practices. In the teaching of science, the Framework and NGSS ask us to shift our focus away from memorization of vocabulary, to thinking of science as a process of application of knowledge and concepts via model-based reasoning.
As you can see from the screen shot of NGSS Appendix A below, this is identified as the first shift on the list of the seven major shifts in science education as envisioned by the Framework & the NGSS.
Each participant open "Appendix A: Conceptual Shifts in the NGSS"
- Each person opens Appendix A on their own device and quickly skims the document to identify two different conceptual shift statements on the list that they would like to explore further. (i.e. shift #2 and shift #5)
- One by one, each participant shares their chosen two shift statements with the group and explains why they are interested in these shifts.
- Each participant then silently reads the text below each of your chosen shifts statements.
Each participant opens "Survey 3" on their own device
- Each participant fills out the survey based upon what they shared with the group.
- As a group, discuss each of the specific group prompts on the survey before each of you complete your survey.
Discussing the results
- Once you submit your individual responses, select the link to see all previous responses.
- Read the collective responses and share surprises or wonderings you have about how your individual and group ranking compares to the collective responses.
- Share ideas about resources you could seek out to find out more.
The Process of Science in the Classroom
The Process of Science in the Classroom
"...in learning science one must come to understand both the body of knowledge and the process by which this knowledge is established, extended, refined, and revised." - Taking Science to School
Approximate time: 30-40 minutes Components: video, reading, small group discussion, survey response
Group Instructions
One participant shares their screen and everyone watches the video below. The group actively listens for the role of phenomena in the Framework and NGSS inspired classroom. After the video ends, stop screen sharing and gather together as a group to engage in discussion.
Each member of the group silently reads the brief statements below.
Each participant opens "Appendix E: Progressions within NGSS"
- Read the first page.
- On your own, find your grade or grade band in document and explore the Disciplinary Core Ideas (DCI) covered in the NGSS vision.
- Discuss with your what you think the difference between a phenomena and an NGSS Disciplinary Core Idea. What are some key differences?
- Find an example DCI from your gradeband in the life, physical, or earth/space sciences and think of a scientific phenomena that relates to that core idea. Share your idea with the group.
One participant opens the "Reasoning Triangle" and shares their screen.
- As a group, discuss the three parts of the tool and the role you see them playing the science classroom.
- Each person shares an example of when you have started an activity, exploration, or unit with a question.
- Each person shares an example of when you have started with a phenomenon.
- How do you think this tool changes your approach or thinking about phenomena, questions, and modeling?
- Stop screen sharing
One person in the group open Survey #4A and shares the screen so all participants can see and answer as a group and submit one survey.
- As a group, select if you think the statement is a phenomena or NGSS Disciplinary Core Idea.
- If you think it's a phenomenon, utilize the language of the Reasoning Triangle to justify your ideas.
- Once you submit your group submits your response, select the link to see all previous responses.
- Does your group agree or disagree with the previous responses?
- Find a response that is different than your group's response and discuss what their response tells you about their understanding of the statement. What does it tell you about your understanding of the statement? Your understanding of phenomena or DCI's?
- If you want to revise your thinking, simply go back in and you can edit your response. Please only edit if your thinking has truly changed and you'd like to rethink it!
Repeat for survey 4B and rotate the responsibility to share the screen during your discussion.
Making Thinking Visible through Productive Discourse in the NGSS Classroom
Making Thinking Visible
"Fostering thinking requires making thinking visible. Thinking happens mostly in our heads, invisible to others and even to ourselves. Effective thinkers make their thinking visible, meaning they externalize their thoughts through speaking, writing, drawing, or some other method. They can then direct and improve those thoughts." - Ron Ritchhart and David Perkins
Approximate time:45 minutes Components: Watch two videos (both Part 1 & 2), discussion, survey response
Each participant opens and reads to themselves: "Asking Questions - Appendix F: Science and Engineering Practices in the NGSS"
Each participant opens and reads to themselves: "Developing and Using Models - A Snippet from the NRC Framework"
As a group: decide which two-part video set you will watch (choose elementary or high school).
Watch Part 1 AND Part 2 of either the high school OR elementary video cases below.
Listen and watch for:
- What phenomena the students are trying to figure out
- How it seems that this phenomena was presented to them (i.e. hands-on experience, video, picture, scenario, reading, statement ,etc.)
- The sets of ideas, or models, that the students are using to make sense of the phenomena
- How the classroom culture provides a safe space for students to:
- Engage in productive discourse
- Make their ideas public and visible
- Revise their ideas
- Ask questions
- Develop and use models
ELEMENTARY VIDEOS
HIGH SCHOOL VIDEOS
One person opens "Survey #5" and leads the group in filling out one survey.
Before responding to each prompt, discuss as a group what you would like to contribute. Let the survey questions provide you with prompts for your discussion.
- Respond to the prompts about how the classroom examples engage students in sense-making around scientific phenomena.
- Utilize the Reasoning Triangle as a thinking tool to show the dynamic relationship between exploring a phenomena through asking questions and modeling.
Individual Instructions (temporary and only for this early draft, please try to work in small regional group with at least two other OSP Learning Facilitators if possible)Open Appendix A: Conceptual Shifts in the NGSSread "Asking Questions - Appendix F: Science and Engineering Practices in the NGSS"
Read "Developing and Using Models - A Snippet from the NRC Framework"
Watch Part 1 AND Part 2 of either the high school OR elementary video cases below. Listen and watch for:
- What phenomena the students are trying to figure out
- How it seems that this phenomena was presented to them (i.e. hands-on experience, video, picture, scenario, reading, statement ,etc.)
- The sets of ideas, or models, that the students are using to make sense of the phenomena
- How the classroom culture provides a safe space for students to:
- Engage in productive discourse
- Make their ideas public and visible
- Revise their ideas
- Ask questions
- Develop and use models
Open Survey #5 below.
- Respond to the prompts about how the classroom examples engage students in sense-making around scientific phenomena.
- Utilize the Reasoning Triangle as a thinking tool to show the dynamic relationship between exploring a phenomena through asking questions and modeling
Equity in the Framework & NGSS-Inspired Classroom
Equity in the Framework & NGSS-Inspired Classroom
"..equity is not a singular moment in time, nor is it an individual endeavor. It takes an educational system and groups of individuals in this system. This includes the school administration and community, school partners, community agencies and families as well as curriculum developers and professional development facilitators to work toward, promote, and maintain a focus on equity." - Gallard, Mensah, and Pitts from Supporting the Implementation of Equity
Approximate time: 20-30 minutes Components: reading, survey response
Each participant opens "Chapter 11: NRC Framework" and skims the chapter by scrolling through it online.
Every member of the group picks and chooses different parts of the chapter that they are interested in reading and find relevant for their practice or their context.
As you read:
- Find three things you have learned (keep reading and exploring the text until you find three things new to you)
- Look for two things you found very interesting and would like to discuss with your group.
- Come up with one question you have about equity in the NGSS classroom.
Each participant opens Survey #6.
As a small group each participant shares their responses as the group goes through each prompt.
Once you hit submit, choose to see the previous responses and, as a group, discuss how they were similar or different than your own responses.
One person shares their screen and the group watches the video below.
As Oregon Science Project NGSS Learning Facilitators you are an advocate for science, especially an advocate for science in elementary. It's important that all secondary teachers get a glimpse of what NGSS can look like in the elementary classroom. Science in elementary is a large equity issue in Oregon where we are 50th in the nation for time spent teaching science K-5.
In your group, discuss the implications for NGSS's emphasis on equity and increasing access to engaging and rich science experiences for more of Oregon's students.
Each participant opens Survey #7 and reflects on the prompt in a small group discussion, and then submits their own response.
Once you have submitted all your responses, please choose to see collective responses and find similarities and differences between our shared thinking.
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oercommons
|
2025-03-18T00:37:23.156511
|
08/17/2017
|
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"url": "https://oercommons.org/courseware/lesson/16328/overview",
"title": "Cool Breeze - Oregon Science Project Hybrid NGSS Module #1 - Phenomena & Equity",
"author": "Steve West"
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https://oercommons.org/courseware/lesson/74105/overview
|
HS+ Washington State History, Art and English (2020)
Overview
This theme-based English course integrates reading, writing, listening, speaking, and critical thinking skills around assignments and activities focusing on Washington State History and Art. This competency-based class allows students to work at their own pace, exit at a level appropriate to demonstrated skills and knowledge, and earn high school credits in English, Lab Science, and/or electives.
About this Course
This theme-based English course integrates reading, writing, listening, speaking, and critical thinking skills around assignments and activities focusing on Washington State History and Art.
Topics include:
- Individual Development And Identity
- People, Places And Environments
- Culture
- Individuals, Groups & Institutions
- Power, Authority And Governance
- Civic Ideals And Practices
- Production, Distribution And Consumption
- Science, Technology And Society
- Global Connections
This competency-based class allows students to work at their own pace, exit at a level appropriate to demonstrated skills and knowledge, and earn high school credits in English, Lab Science, and/or electives.
Culturally Responsive Approach
This course was intentionally developed to align with the Washington State Board for Community and Technical College’s vision, mission, values and strategic plan. The Culturally Responsive Scorecard, developed by NYU Steinhardt, was a guiding document in the development of this course. Sincere efforts were made to develop culturally responsive curriculum that is inclusive of all students, with particular emphasis on highlighting the histories, experiences, and strengths of historically underserved populations. Faculty planning to teach this course should review modules thoroughly prior to presenting material to students. The HS+ Instructor Resource Guide provides resources and strategies that may be a useful starting place for faculty to address gaps in knowledge and confidence.
Course Outcomes
- Identify central themes of and explain the relationship between eras in Washington State history.
- Determine how ideas, events, people, and places interact with and shape dominant and marginalized narratives;
- Read, comprehend, and evaluate preliminary, primary, and secondary source materials independently and proficiently;
- Identify institutions and technology as central to the production, distribution, and consumption of goods and services;
- Explain how social movements led by systematically targeted groups have addressed root causes of problems in public and private sectors;
- Demonstrate speaking, listening, writing, research, and other social studies skills using a variety of instructional methods.
- Create counter-narratives to center students' cultural backgrounds, their communities, and their experiences as sources of expertise in the classroom.
- Evaluate key ideals established in fundamental documents, including tribal treaties and the Washington State Constitution.
- Analyze (access to) related power, privilege, and oppression as central to socioeconomic inequality and injustice.
- Use appropriate tools to demonstrate how power imbalances can be corrected through individual and collective action and to create liberating social change.
- Adapt appropriate social studies skills for critical reasoning, inquiry, and deliberation of complex public problems and social issues.
Throughout the course students demonstrate the following:
- Reading anchor standard 2: Determine central ideas or themes of a text and analyze their development; summarize the key supporting details and ideas.
- Reading anchor standard 3: Analyze how and why individuals, events, and ideas develop and interact over the course of a text.
- Reading anchor standard 10: Read and comprehend complex literary and informational texts independently and proficiently.
- Writing Anchor Standard 3: Write narratives to develop real or imagined experiences or events using effective technique, well-chosen details and well-structured event sequences.
- Writing anchor standard 5: Develop and strengthen writing as needed by planning, revising, editing, rewriting, or trying a new approach.
- Writing anchor standard 6: Use technology, including the Internet, to produce and publish writing and to interact and collaborate with others.
- Speaking and Listening anchor standard 6: Adapt speech to a variety of contexts and communicative tasks, demonstrating command of formal English when indicated or appropriate.
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oercommons
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2025-03-18T00:37:23.173460
|
U.S. History
|
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"url": "https://oercommons.org/courseware/lesson/74105/overview",
"title": "HS+ Washington State History, Art and English (2020)",
"author": "History"
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|
https://oercommons.org/courseware/lesson/28857/overview
|
Introduction to Government Budgets and Fiscal Policy
No Yellowstone Park?
You had trekked all the way to see Yellowstone National Park in the beautiful month of October 2013, only to find it… closed. Closed! Why?
For two weeks in October 2013, the U.S. federal government shut down. Many federal services, like the national parks, closed and 800,000 federal employees were furloughed. Tourists were shocked and so was the rest of the world: Congress and the President could not agree on a budget. Inside the Capitol, Republicans and Democrats argued about spending priorities and whether to increase the national debt limit. Each year's budget, which is over $3 trillion of spending, must be approved by Congress and signed by the President. Two thirds of the budget are entitlements and other mandatory spending which occur without congressional or presidential action once the programs are established. Tied to the budget debate was the issue of increasing the debt ceiling—how high the U.S. government's national debt can be. The House of Representatives refused to sign on to the bills to fund the government unless they included provisions to stop or change the Affordable Health Care Act (more colloquially known as Obamacare). As the days progressed, the United States came very close to defaulting on its debt.
Why does the federal budget create such intense debates? What would happen if the United States actually defaulted on its debt? In this chapter, we will examine the federal budget, taxation, and fiscal policy. We will also look at the annual federal budget deficits and the national debt.
Introduction to Government Budgets and Fiscal Policy
In this chapter, you will learn about:
- Government Spending
- Taxation
- Federal Deficits and the National Debt
- Using Fiscal Policy to Fight Recessions, Unemployment, and Inflation
- Automatic Stabilizers
- Practical Problems with Discretionary Fiscal Policy
- The Question of a Balanced Budget
All levels of government—federal, state, and local—have budgets that show how much revenue the government expects to receive in taxes and other income and how the government plans to spend it. Budgets, however, can shift dramatically within a few years, as policy decisions and unexpected events disrupt earlier tax and spending plans.
In this chapter, we revisit fiscal policy, which we first covered in Welcome to Economics! Fiscal policy is one of two policy tools for fine tuning the economy (the other is monetary policy). While policymakers at the Federal Reserve make monetary policy, Congress and the President make fiscal policy.
The discussion of fiscal policy focuses on how federal government taxing and spending affects aggregate demand. All government spending and taxes affect the economy, but fiscal policy focuses strictly on federal government policies. We begin with an overview of U.S. government spending and taxes. We then discuss fiscal policy from a short-run perspective; that is, how government uses tax and spending policies to address recession, unemployment, and inflation; how periods of recession and growth affect government budgets; and the merits of balanced budget proposals.
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oercommons
|
2025-03-18T00:37:23.189447
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"title": "Principles of Macroeconomics 2e, Government Budgets and Fiscal Policy",
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https://oercommons.org/courseware/lesson/28858/overview
|
Government Spending
Overview
By the end of this section, you will be able to:
- Identify U.S. budget deficit and surplus trends over the past five decades
- Explain the differences between the U.S. federal budget, and state and local budgets
Government spending covers a range of services that the federal, state, and local governments provide. When the federal government spends more money than it receives in taxes in a given year, it runs a budget deficit. Conversely, when the government receives more money in taxes than it spends in a year, it runs a budget surplus. If government spending and taxes are equal, it has a balanced budget. For example, in 2009, the U.S. government experienced its largest budget deficit ever, as the federal government spent $1.4 trillion more than it collected in taxes. This deficit was about 10% of the size of the U.S. GDP in 2009, making it by far the largest budget deficit relative to GDP since the mammoth borrowing the government used to finance World War II.
This section presents an overview of government spending in the United States.
Total U.S. Government Spending
Federal spending in nominal dollars (that is, dollars not adjusted for inflation) has grown by a multiple of more than 38 over the last four decades, from $93.4 billion in 1960 to $3.9 trillion in 2014. Comparing spending over time in nominal dollars is misleading because it does not take into account inflation or growth in population and the real economy. A more useful method of comparison is to examine government spending as a percent of GDP over time.
The top line in Figure shows the federal spending level since 1960, expressed as a share of GDP. Despite a widespread sense among many Americans that the federal government has been growing steadily larger, the graph shows that federal spending has hovered in a range from 18% to 22% of GDP most of the time since 1960. The other lines in Figure show the major federal spending categories: national defense, Social Security, health programs, and interest payments. From the graph, we see that national defense spending as a share of GDP has generally declined since the 1960s, although there were some upward bumps in the 1980s buildup under President Ronald Reagan and in the aftermath of the terrorist attacks on September 11, 2001. In contrast, Social Security and healthcare have grown steadily as a percent of GDP. Healthcare expenditures include both payments for senior citizens (Medicare), and payments for low-income Americans (Medicaid). State governments also partially fund Medicaid. Interest payments are the final main category of government spending in Figure 30.2.
Each year, the government borrows funds from U.S. citizens and foreigners to cover its budget deficits. It does this by selling securities (Treasury bonds, notes, and bills)—in essence borrowing from the public and promising to repay with interest in the future. From 1961 to 1997, the U.S. government has run budget deficits, and thus borrowed funds, in almost every year. It had budget surpluses from 1998 to 2001, and then returned to deficits.
The interest payments on past federal government borrowing were typically 1–2% of GDP in the 1960s and 1970s but then climbed above 3% of GDP in the 1980s and stayed there until the late 1990s. The government was able to repay some of its past borrowing by running surpluses from 1998 to 2001 and, with help from low interest rates, the interest payments on past federal government borrowing had fallen back to 1.4% of GDP by 2012.
We investigate the government borrowing and debt patterns in more detail later in this chapter, but first we need to clarify the difference between the deficit and the debt. The deficit is not the debt. The difference between the deficit and the debt lies in the time frame. The government deficit (or surplus) refers to what happens with the federal government budget each year. The government debt is accumulated over time. It is the sum of all past deficits and surpluses. If you borrow $10,000 per year for each of the four years of college, you might say that your annual deficit was $10,000, but your accumulated debt over the four years is $40,000.
These four categories—national defense, Social Security, healthcare, and interest payments—account for roughly 73% of all federal spending, as Figure shows. The remaining 27% wedge of the pie chart covers all other categories of federal government spending: international affairs; science and technology; natural resources and the environment; transportation; housing; education; income support for the poor; community and regional development; law enforcement and the judicial system; and the administrative costs of running the government.
State and Local Government Spending
Although federal government spending often gets most of the media attention, state and local government spending is also substantial—at about $3.1 trillion in 2014. Figure shows that state and local government spending has increased during the last four decades from around 8% to around 14% today. The single biggest item is education, which accounts for about one-third of the total. The rest covers programs like highways, libraries, hospitals and healthcare, parks, and police and fire protection. Unlike the federal government, all states (except Vermont) have balanced budget laws, which means any gaps between revenues and spending must be closed by higher taxes, lower spending, drawing down their previous savings, or some combination of all of these.
U.S. presidential candidates often run for office pledging to improve the public schools or to get tough on crime. However, in the U.S. government system, these tasks are primarily state and local government responsibilities. In fiscal year 2014 state and local governments spent about $840 billion per year on education (including K–12 and college and university education), compared to only $100 billion by the federal government, according to usgovernmentspending.com. In other words, about 90 cents of every dollar spent on education happens at the state and local level. A politician who really wants hands-on responsibility for reforming education or reducing crime might do better to run for mayor of a large city or for state governor rather than for president of the United States.
Key Concepts and Summary
Fiscal policy is the set of policies that relate to federal government spending, taxation, and borrowing. In recent decades, the level of federal government spending and taxes, expressed as a share of GDP, has not changed much, typically fluctuating between about 18% to 22% of GDP. However, the level of state spending and taxes, as a share of GDP, has risen from about 12–13% to about 20% of GDP over the last four decades. The four main areas of federal spending are national defense, Social Security, healthcare, and interest payments, which together account for about 70% of all federal spending. When a government spends more than it collects in taxes, it is said to have a budget deficit. When a government collects more in taxes than it spends, it is said to have a budget surplus. If government spending and taxes are equal, it is said to have a balanced budget. The sum of all past deficits and surpluses make up the government debt.
Self-Check Questions
When governments run budget deficits, how do they make up the differences between tax revenue and spending?
Hint:
The government borrows funds by selling Treasury bonds, notes, and bills.
When governments run budget surpluses, what is done with the extra funds?
Hint:
The funds can be used to pay down the national debt or else be refunded to the taxpayers.
Is it possible for a nation to run budget deficits and still have its debt/GDP ratio fall? Explain your answer. Is it possible for a nation to run budget surpluses and still have its debt/GDP ratio rise? Explain your answer.
Hint:
Yes, a nation can run budget deficits and see its debt/GDP ratio fall. In fact, this is not uncommon. If the deficit is small in a given year, than the addition to debt in the numerator of the debt/GDP ratio will be relatively small, while the growth in GDP is larger, and so the debt/GDP ratio declines. This was the experience of the U.S. economy for the period from the end of World War II to about 1980. It is also theoretically possible, although not likely, for a nation to have a budget surplus and see its debt/GDP ratio rise. Imagine the case of a nation with a small surplus, but in a recession year when the economy shrinks. It is possible that the decline in the nation’s debt, in the numerator of the debt/GDP ratio, would be proportionally less than the fall in the size of GDP, so the debt/GDP ratio would rise.
Review Questions
Give some examples of changes in federal spending and taxes by the government that would be fiscal policy and some that would not.
Have the spending and taxes of the U.S. federal government generally had an upward or a downward trend in the last few decades?
What are the main categories of U.S. federal government spending?
What is the difference between a budget deficit, a balanced budget, and a budget surplus?
Have spending and taxes by state and local governments in the United States had a generally upward or downward trend in the last few decades?
Critical Thinking Questions
Why is government spending typically measured as a percentage of GDP rather than in nominal dollars?
Why are expenditures such as crime prevention and education typically done at the state and local level rather than at the federal level?
Why is spending by the U.S. government on scientific research at NASA fiscal policy while spending by the University of Illinois is not fiscal policy? Why is a cut in the payroll tax fiscal policy whereas a cut in a state income tax is not fiscal policy?
Problems
A government starts off with a total debt of $3.5 billion. In year one, the government runs a deficit of $400 million. In year two, the government runs a deficit of $1 billion. In year three, the government runs a surplus of $200 million. What is the total debt of the government at the end of year three?
References
Kramer, Mattea, et. al. A People's Guide to the Federal Budget. National Priorities Project. Northampton: Interlink Books, 2012.
Kurtzleben, Danielle. “10 States With The Largest Budget Shortfalls.” U.S. News & World Report. Januray 14, 2011. http://www.usnews.com/news/articles/2011/01/14/10-states-with-the-largest-budget-shortfalls.
Miller, Rich, and William Selway. “U.S. Cities and States Start Spending Again.” BloombergBusinessweek, January 10, 2013. http://www.businessweek.com/articles/2013-01-10/u-dot-s-dot-cities-and-states-start-spending-again.
Weisman, Jonathan. “After Year of Working Around Federal Cuts, Agencies Face Fewer Options.” The New York Times, October 26, 2013. http://www.nytimes.com/2013/10/27/us/politics/after-year-of-working-around-federal-cuts-agencies-face-fewer-options.html?_r=0.
Chantrill, Christopher. USGovernmentSpending.com. “Government Spending Details: United States Federal State and Local Government Spending, Fiscal Year 2013.” http://www.usgovernmentspending.com/year_spending_2013USbn_15bs2n_20.
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oercommons
|
2025-03-18T00:37:23.217324
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https://oercommons.org/courseware/lesson/28859/overview
|
Taxation
Overview
By the end of this section, you will be able to:
- Differentiate among a regressive tax, a proportional tax, and a progressive tax
- Identify major revenue sources for the U.S. federal budget
There are two main categories of taxes: those that the federal government collects and those that the state and local governments collect. What percentage the government collects and for what it uses that revenue varies greatly. The following sections will briefly explain the taxation system in the United States.
Federal Taxes
Just as many Americans erroneously think that federal spending has grown considerably, many also believe that taxes have increased substantially. The top line of Figure shows total federal taxes as a share of GDP since 1960. Although the line rises and falls, it typically remains within the range of 17% to 20% of GDP, except for 2009, when taxes fell substantially below this level, due to recession.
Figure also shows the taxation patterns for the main categories that the federal government taxes: individual income taxes, corporate income taxes, and social insurance and retirement receipts. When most people think of federal government taxes, the first tax that comes to mind is the individual income tax that is due every year on April 15 (or the first business day after). The personal income tax is the largest single source of federal government revenue, but it still represents less than half of federal tax revenue.
The second largest source of federal revenue is the payroll tax (captured in social insurance and retirement receipts), which provides funds for Social Security and Medicare. Payroll taxes have increased steadily over time. Together, the personal income tax and the payroll tax accounted for about 80% of federal tax revenues in 2014. Although personal income tax revenues account for more total revenue than the payroll tax, nearly three-quarters of households pay more in payroll taxes than in income taxes.
The income tax is a progressive tax, which means that the tax rates increase as a household’s income increases. Taxes also vary with marital status, family size, and other factors. The marginal tax rates (the tax due on all yearly income) for a single taxpayer range from 10% to 35%, depending on income, as the following Clear It Up feature explains.
How does the marginal rate work?
Suppose that a single taxpayer’s income is $35,000 per year. Also suppose that income from $0 to $9,075 is taxed at 10%, income from $9,075 to $36,900 is taxed at 15%, and, finally, income from $36,900 and beyond is taxed at 25%. Since this person earns $35,000, their marginal tax rate is 15%.
The key fact here is that the federal income tax is designed so that tax rates increase as income increases, up to a certain level. The payroll taxes that support Social Security and Medicare are designed in a different way. First, the payroll taxes for Social Security are imposed at a rate of 12.4% up to a certain wage limit, set at $118,500 in 2015. Medicare, on the other hand, pays for elderly healthcare, and is fixed at 2.9%, with no upper ceiling.
In both cases, the employer and the employee split the payroll taxes. An employee only sees 6.2% deducted from his or her paycheck for Social Security, and 1.45% from Medicare. However, as economists are quick to point out, the employer’s half of the taxes are probably passed along to the employees in the form of lower wages, so in reality, the worker pays all of the payroll taxes.
We also call the Medicare payroll tax a proportional tax; that is, a flat percentage of all wages earned. The Social Security payroll tax is proportional up to the wage limit, but above that level it becomes a regressive tax, meaning that people with higher incomes pay a smaller share of their income in tax.
The third-largest source of federal tax revenue, as Figure shows is the corporate income tax. The common name for corporate income is “profits.” Over time, corporate income tax receipts have declined as a share of GDP, from about 4% in the 1960s to an average of 1% to 2% of GDP in the first decade of the 2000s.
The federal government has a few other, smaller sources of revenue. It imposes an excise tax—that is, a tax on a particular good—on gasoline, tobacco, and alcohol. As a share of GDP, the amount the government collects from these taxes has stayed nearly constant over time, from about 2% of GDP in the 1960s to roughly 3% by 2014, according to the nonpartisan Congressional Budget Office. The government also imposes an estate and gift tax on people who pass large amounts of assets to the next generation—either after death or during life in the form of gifts. These estate and gift taxes collected about 0.2% of GDP in the first decade of the 2000s. By a quirk of legislation, the government repealed the estate and gift tax in 2010, but reinstated it in 2011. Other federal taxes, which are also relatively small in magnitude, include tariffs the government collects on imported goods and charges for inspections of goods entering the country.
State and Local Taxes
At the state and local level, taxes have been rising as a share of GDP over the last few decades to match the gradual rise in spending, as Figure illustrates. The main revenue sources for state and local governments are sales taxes, property taxes, and revenue passed along from the federal government, but many state and local governments also levy personal and corporate income taxes, as well as impose a wide variety of fees and charges. The specific sources of tax revenue vary widely across state and local governments. Some states rely more on property taxes, some on sales taxes, some on income taxes, and some more on revenues from the federal government.
Key Concepts and Summary
The two main federal taxes are individual income taxes and payroll taxes that provide funds for Social Security and Medicare; these taxes together account for more than 80% of federal revenues. Other federal taxes include the corporate income tax, excise taxes on alcohol, gasoline and tobacco, and the estate and gift tax. A progressive tax is one, like the federal income tax, where those with higher incomes pay a higher share of taxes out of their income than those with lower incomes. A proportional tax is one, like the payroll tax for Medicare, where everyone pays the same share of taxes regardless of income level. A regressive tax is one, like the payroll tax (above a certain threshold) that supports Social Security, where those with high income pay a lower share of income in taxes than those with lower incomes.
Self-Check Questions
Suppose that gifts were taxed at a rate of 10% for amounts up to $100,000 and 20% for anything over that amount. Would this tax be regressive or progressive?
Hint:
Progressive. People who give larger gifts subject to the higher tax rate would typically have larger incomes as well.
If an individual owns a corporation for which he is the only employee, which different types of federal tax will he have to pay?
Hint:
Corporate income tax on his profits, individual income tax on his salary, and payroll tax taken out of the wages he pays himself.
What taxes would an individual pay if he were self-employed and the business is not incorporated?
Hint:
individual income taxes
The social security tax is 6.2% on employees’ income earned below $113,000. Is this tax progressive, regressive or proportional?
Hint:
The tax is regressive because wealthy income earners are not taxed at all on income above $113,000. As a percent of total income, the social security tax hits lower income earners harder than wealthier individuals.
Review Questions
What are the main categories of U.S. federal government taxes?
What is the difference between a progressive tax, a proportional tax, and a regressive tax?
Critical Thinking Questions
Excise taxes on tobacco and alcohol and state sales taxes are often criticized for being regressive. Although everyone pays the same rate regardless of income, why might this be so?
What is the benefit of having state and local taxes on income instead of collecting all such taxes at the federal level?
References
Burman, Leonard E., and Joel Selmrod. Taxes in America: What Everyone Needs to Know. New York: Oxford University Press, 2012.
Hall, Robert E., and Alvin Rabushka. The Flat Tax (Hoover Classics). Stanford: Hoover Institution Press, 2007.
Kliff, Sarah. “How Congress Paid for Obamacare (in Two Charts).” The Washington Post: WonkBlog (blog), August 30, 2012. http://www.washingtonpost.com/blogs/wonkblog/wp/2012/08/30/how-congress-paid-for-obamacare-in-two-charts/.
Matthews, Dylan. “America’s Taxes are the Most Progressive in the World. Its Government is Among the Least.” The Washington Post: WonkBlog (blog). April 5, 2013. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/05/americas-taxes-are-the-most-progressive-in-the-world-its-government-is-among-the-least/.
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Federal Deficits and the National Debt
Overview
By the end of this section, you will be able to:
- Explain the U.S. federal budget in terms of annual debt and accumulated debt
- Understand how economic growth or decline can influence a budget surplus or budget deficit
Having discussed the revenue (taxes) and expense (spending) side of the budget, we now turn to the annual budget deficit or surplus, which is the difference between the tax revenue collected and spending over a fiscal year, which starts October 1 and ends September 30 of the next year.
Figure shows the pattern of annual federal budget deficits and surpluses, back to 1930, as a share of GDP. When the line is above the horizontal axis, the budget is in surplus. When the line is below the horizontal axis, a budget deficit occurred. Clearly, the biggest deficits as a share of GDP during this time were incurred to finance World War II. Deficits were also large during the 1930s, the 1980s, the early 1990s, and most recently during the 2008-2009 recession.
Debt/GDP Ratio
Another useful way to view the budget deficit is through the prism of accumulated debt rather than annual deficits. The national debt refers to the total amount that the government has borrowed over time. In contrast, the budget deficit refers to how much the government has borrowed in one particular year. Figure shows the ratio of debt/GDP since 1940. Until the 1970s, the debt/GDP ratio revealed a fairly clear pattern of federal borrowing. The government ran up large deficits and raised the debt/GDP ratio in World War II, but from the 1950s to the 1970s the government ran either surpluses or relatively small deficits, and so the debt/GDP ratio drifted down. Large deficits in the 1980s and early 1990s caused the ratio to rise sharply. When budget surpluses arrived from 1998 to 2001, the debt/GDP ratio declined substantially. The budget deficits starting in 2002 then tugged the debt/GDP ratio higher—with a big jump when the recession took hold in 2008–2009.
The next Clear it Up feature discusses how the government handles the national debt.
What is the national debt?
One year’s federal budget deficit causes the federal government to sell Treasury bonds to make up the difference between spending programs and tax revenues. The dollar value of all the outstanding Treasury bonds on which the federal government owes money is equal to the national debt.
The Path from Deficits to Surpluses to Deficits
Why did the budget deficits suddenly turn to surpluses from 1998 to 2001 and why did the surpluses return to deficits in 2002? Why did the deficit become so large after 2007? Figure suggests some answers. The graph combines the earlier information on total federal spending and taxes in a single graph, but focuses on the federal budget since 1990.
Government spending as a share of GDP declined steadily through the 1990s. The biggest single reason was that defense spending declined from 5.2% of GDP in 1990 to 3.0% in 2000, but interest payments by the federal government also fell by about 1.0% of GDP. However, federal tax collections increased substantially in the later 1990s, jumping from 18.1% of GDP in 1994 to 20.8% in 2000. Powerful economic growth in the late 1990s fueled the boom in taxes. Personal income taxes rise as income goes up; payroll taxes rise as jobs and payrolls go up; corporate income taxes rise as profits go up. At the same time, government spending on transfer payments such as unemployment benefits, foods stamps, and welfare declined with more people working.
This sharp increase in tax revenues and decrease in expenditures on transfer payments was largely unexpected even by experienced budget analysts, and so budget surpluses came as a surprise. However, in the early 2000s, many of these factors started running in reverse. Tax revenues sagged, due largely to the recession that started in March 2001, which reduced revenues. Congress enacted a series of tax cuts and President George W. Bush signed them into law, starting in 2001. In addition, government spending swelled due to increases in defense, healthcare, education, Social Security, and support programs for those who were hurt by the recession and the slow growth that followed. Deficits returned. When the severe recession hit in late 2007, spending climbed and tax collections fell to historically unusual levels, resulting in enormous deficits.
Longer-term U.S. budget forecasts, a decade or more into the future, predict enormous deficits. The higher deficits during the 2008-2009 recession have repercussions, and the demographics will be challenging. The primary reason is the “baby boom”—the exceptionally high birthrates that began in 1946, right after World War II, and lasted for about two decades. Starting in 2010, the front edge of the baby boom generation began to reach age 65, and in the next two decades, the proportion of Americans over the age of 65 will increase substantially. The current level of the payroll taxes that support Social Security and Medicare will fall well short of the projected expenses of these programs, as the following Clear It Up feature shows; thus, the forecast is for large budget deficits. A decision to collect more revenue to support these programs or to decrease benefit levels would alter this long-term forecast.
What is the long-term budget outlook for Social Security and Medicare?
In 1946, just one American in 13 was over age 65. By 2000, it was one in eight. By 2030, one American in five will be over age 65. Two enormous U.S. federal programs focus on the elderly—Social Security and Medicare. The growing numbers of elderly Americans will increase spending on these programs, as well as on Medicaid. The current payroll tax levied on workers, which supports all of Social Security and the hospitalization insurance part of Medicare, will not be enough to cover the expected costs, so what are the options?
Long-term projections from the Congressional Budget Office in 2009 are that Medicare and Social Security spending combined will rise from 8.3% of GDP in 2009 to about 13% by 2035 and about 20% in 2080. If this rise in spending occurs, without any corresponding rise in tax collections, then some mix of changes must occur: (1) taxes will need to increase dramatically; (2) other spending will need to be cut dramatically; (3) the retirement age and/or age receiving Medicare benefits will need to increase, or (4) the federal government will need to run extremely large budget deficits.
Some proposals suggest removing the cap on wages subject to the payroll tax, so that those with very high incomes would have to pay the tax on the entire amount of their wages. Other proposals suggest moving Social Security and Medicare from systems in which workers pay for retirees toward programs that set up accounts where workers save funds over their lifetimes and then draw out after retirement to pay for healthcare.
The United States is not alone in this problem. Providing the promised level of retirement and health benefits to a growing proportion of elderly with a falling proportion of workers is an even more severe problem in many European nations and in Japan. How to pay promised levels of benefits to the elderly will be a difficult public policy decision.
In the next module we shift to the use of fiscal policy to counteract business cycle fluctuations. In addition, we will explore proposals requiring a balanced budget—that is, for government spending and taxes to be equal each year. The Impacts of Government Borrowing will also cover how fiscal policy and government borrowing will affect national saving—and thus affect economic growth and trade imbalances.
Key Concepts and Summary
For most of the twentieth century, the U.S. government took on debt during wartime and then paid down that debt slowly in peacetime. However, it took on quite substantial debts in peacetime in the 1980s and early 1990s, before a brief period of budget surpluses from 1998 to 2001, followed by a return to annual budget deficits since 2002, with very large deficits in the recession of 2008 and 2009. A budget deficit or budget surplus is measured annually. Total government debt or national debt is the sum of budget deficits and budget surpluses over time.
Self-Check Questions
Debt has a certain self-reinforcing quality to it. There is one category of government spending that automatically increases along with the federal debt. What is it?
Hint:
As debt increases, interest payments also rise, so that the deficit grows even if we keep other government spending constant.
True or False:
- Federal spending has grown substantially in recent decades.
- By world standards, the U.S. government controls a relatively large share of the U.S. economy.
- A majority of the federal government’s revenue is collected through personal income taxes.
- Education spending is slightly larger at the federal level than at the state and local level.
- State and local government spending has not risen much in recent decades.
- Defense spending is higher now than ever.
- The share of the economy going to federal taxes has increased substantially over time.
- Foreign aid is a large portion, although less than half, of federal spending.
- Federal deficits have been very large for the last two decades.
- The accumulated federal debt as a share of GDP is near an all-time high.
Hint:
- As a share of GDP, this is false. In nominal dollars, it is true.
- False.
- False.
- False. Education spending is much higher at the state level.
- False. As a share of GDP, it is up about 50.
- As a share of GDP, this is false, and in real dollars, it is also false.
- False.
- False; it’s about 1%.
- False. Although budget deficits were large in 2003 and 2004, and continued into the later 2000s, the federal government ran budget surpluses from 1998–2001.
- False.
Review Questions
What has been the general pattern of U.S. budget deficits in recent decades?
What is the difference between a budget deficit and the national debt?
Critical Thinking Questions
In a booming economy, is the federal government more likely to run surpluses or deficits? What are the various factors at play?
Economist Arthur Laffer famously pointed out that, in some cases, income tax revenue can actually go up when tax rates go down. Why might this be the case?
Is it possible for a nation to run budget deficits and still have its debt/GDP ratio fall? Explain your answer. Is it possible for a nation to run budget surpluses and still have its debt/GDP ratio rise? Explain your answer.
Problems
If a government runs a budget deficit of $10 billion dollars each year for ten years, then a surplus of $1 billion for five years, and then a balanced budget for another ten years, what is the government debt?
References
Eisner, Robert. The Great Deficit Scares: The Federal Budget, Trade, and Social Security. New York: Priority Press Publications, 1997.
Weisman, Jonathan, and Ashley Parker. “Republicans Back Down, Ending Crisis Over Shutdown and Debt Limit.” The New York Times, October 16, 2013. http://www.nytimes.com/2013/10/17/us/congress-budget-debate.html.
Wessel, David. Red Ink: Inside the High-Stakes Politics of Federal Budget. New York: Crown Publishing Group, 2013.
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Using Fiscal Policy to Fight Recession, Unemployment, and Inflation
Overview
By the end of this section, you will be able to:
- Explain how expansionary fiscal policy can shift aggregate demand and influence the economy
- Explain how contractionary fiscal policy can shift aggregate demand and influence the economy
Fiscal policy is the use of government spending and tax policy to influence the path of the economy over time. Graphically, we see that fiscal policy, whether through changes in spending or taxes, shifts the aggregate demand outward in the case of expansionary fiscal policy and inward in the case of contractionary fiscal policy. We know from the chapter on economic growth that over time the quantity and quality of our resources grow as the population and thus the labor force get larger, as businesses invest in new capital, and as technology improves. The result of this is regular shifts to the right of the aggregate supply curves, as Figure illustrates.
The original equilibrium occurs at E0, the intersection of aggregate demand curve AD0 and aggregate supply curve SRAS0, at an output level of 200 and a price level of 90. One year later, aggregate supply has shifted to the right to SRAS1 in the process of long-term economic growth, and aggregate demand has also shifted to the right to AD1, keeping the economy operating at the new level of potential GDP. The new equilibrium (E1) is an output level of 206 and a price level of 92. One more year later, aggregate supply has again shifted to the right, now to SRAS2, and aggregate demand shifts right as well to AD2. Now the equilibrium is E2, with an output level of 212 and a price level of 94. In short, the figure shows an economy that is growing steadily year to year, producing at its potential GDP each year, with only small inflationary increases in the price level.
Aggregate demand and aggregate supply do not always move neatly together. Think about what causes shifts in aggregate demand over time. As aggregate supply increases, incomes tend to go up. This tends to increase consumer and investment spending, shifting the aggregate demand curve to the right, but in any given period it may not shift the same amount as aggregate supply. What happens to government spending and taxes? Government spends to pay for the ordinary business of government- items such as national defense, social security, and healthcare, as Figure shows. Tax revenues, in part, pay for these expenditures. The result may be an increase in aggregate demand more than or less than the increase in aggregate supply. Aggregate demand may fail to increase along with aggregate supply, or aggregate demand may even shift left, for a number of possible reasons: households become hesitant about consuming; firms decide against investing as much; or perhaps the demand from other countries for exports diminishes.
For example, investment by private firms in physical capital in the U.S. economy boomed during the late 1990s, rising from 14.1% of GDP in 1993 to 17.2% in 2000, before falling back to 15.2% by 2002. Conversely, if shifts in aggregate demand run ahead of increases in aggregate supply, inflationary increases in the price level will result. Business cycles of recession and recovery are the consequence of shifts in aggregate supply and aggregate demand. As these occur, the government may choose to use fiscal policy to address the difference.
Monetary Policy and Bank Regulation shows us that a central bank can use its powers over the banking system to engage in countercyclical—or “against the business cycle”—actions. If recession threatens, the central bank uses an expansionary monetary policy to increase the money supply, increase the quantity of loans, reduce interest rates, and shift aggregate demand to the right. If inflation threatens, the central bank uses contractionary monetary policy to reduce the money supply, reduce the quantity of loans, raise interest rates, and shift aggregate demand to the left. Fiscal policy is another macroeconomic policy tool for adjusting aggregate demand by using either government spending or taxation policy.
Expansionary Fiscal Policy
Expansionary fiscal policy increases the level of aggregate demand, through either increases in government spending or reductions in tax rates. Expansionary policy can do this by (1) increasing consumption by raising disposable income through cuts in personal income taxes or payroll taxes; (2) increasing investment spending by raising after-tax profits through cuts in business taxes; and (3) increasing government purchases through increased federal government spending on final goods and services and raising federal grants to state and local governments to increase their expenditures on final goods and services. Contractionary fiscal policy does the reverse: it decreases the level of aggregate demand by decreasing consumption, decreasing investment, and decreasing government spending, either through cuts in government spending or increases in taxes. The aggregate demand/aggregate supply model is useful in judging whether expansionary or contractionary fiscal policy is appropriate.
Consider first the situation in Figure, which is similar to the U.S. economy during the 2008-2009 recession. The intersection of aggregate demand (AD0) and aggregate supply (SRAS0) is occurring below the level of potential GDP as the LRAS curve indicates. At the equilibrium (E0), a recession occurs and unemployment rises. In this case, expansionary fiscal policy using tax cuts or increases in government spending can shift aggregate demand to AD1, closer to the full-employment level of output. In addition, the price level would rise back to the level P1 associated with potential GDP.
Should the government use tax cuts or spending increases, or a mix of the two, to carry out expansionary fiscal policy? During the 2008-2009 Great Recession (which started, actually, in late 2007), the U.S. economy suffered a 3.1% cumulative loss of GDP. That may not sound like much, but it’s more than one year’s average growth rate of GDP. Over that time frame, the unemployment rate doubled from 5% to 10%. The consensus view is that this was possibly the worst economic downturn in U.S. history since the 1930’s Great Depression. The choice between whether to use tax or spending tools often has a political tinge. As a general statement, conservatives and Republicans prefer to see expansionary fiscal policy carried out by tax cuts, while liberals and Democrats prefer that the government implement expansionary fiscal policy through spending increases. In a bipartisan effort to address the extreme situation, the Obama administration and Congress passed an $830 billion expansionary policy in early 2009 involving both tax cuts and increases in government spending. At the same time, however, the federal stimulus was partially offset when state and local governments, whose budgets were hard hit by the recession, began cutting their spending.
The conflict over which policy tool to use can be frustrating to those who want to categorize economics as “liberal” or “conservative,” or who want to use economic models to argue against their political opponents. However, advocates of smaller government, who seek to reduce taxes and government spending can use the AD AS model, as well as advocates of bigger government, who seek to raise taxes and government spending. Economic studies of specific taxing and spending programs can help inform decisions about whether the government should change taxes or spending, and in what ways. Ultimately, decisions about whether to use tax or spending mechanisms to implement macroeconomic policy is a political decision rather than a purely economic one.
Contractionary Fiscal Policy
Fiscal policy can also contribute to pushing aggregate demand beyond potential GDP in a way that leads to inflation. As Figure shows, a very large budget deficit pushes up aggregate demand, so that the intersection of aggregate demand (AD0) and aggregate supply (SRAS0) occurs at equilibrium E0, which is an output level above potential GDP. Economists sometimes call this an “overheating economy” where demand is so high that there is upward pressure on wages and prices, causing inflation. In this situation, contractionary fiscal policy involving federal spending cuts or tax increases can help to reduce the upward pressure on the price level by shifting aggregate demand to the left, to AD1, and causing the new equilibrium E1 to be at potential GDP, where aggregate demand intersects the LRAS curve.
Again, the AD–AS model does not dictate how the government should carry out this contractionary fiscal policy. Some may prefer spending cuts; others may prefer tax increases; still others may say that it depends on the specific situation. The model only argues that, in this situation, the government needs to reduce aggregate demand.
Key Concepts and Summary
Expansionary fiscal policy increases the level of aggregate demand, either through increases in government spending or through reductions in taxes. Expansionary fiscal policy is most appropriate when an economy is in recession and producing below its potential GDP. Contractionary fiscal policy decreases the level of aggregate demand, either through cuts in government spending or increases in taxes. Contractionary fiscal policy is most appropriate when an economy is producing above its potential GDP.
Self-Check Questions
What is the main reason for employing contractionary fiscal policy in a time of strong economic growth?
Hint:
To keep prices from rising too much or too rapidly.
What is the main reason for employing expansionary fiscal policy during a recession?
Hint:
To increase employment.
Review Questions
What is the difference between expansionary fiscal policy and contractionary fiscal policy?
Under what general macroeconomic circumstances might a government use expansionary fiscal policy? When might it use contractionary fiscal policy?
Critical Thinking Questions
How will cuts in state budget spending affect federal expansionary policy?
Is expansionary fiscal policy more attractive to politicians who believe in larger government or to politicians who believe in smaller government? Explain your answer.
Problems
Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in response to each of the situations below and sketch a diagram using aggregate demand and aggregate supply curves to illustrate your answer:
- A recession.
- A stock market collapse that hurts consumer and business confidence.
- Extremely rapid growth of exports.
- Rising inflation.
- A rise in the natural rate of unemployment.
- A rise in oil prices.
References
Alesina, Alberto, and Francesco Giavazzi. Fiscal Policy after the Financial Crisis (National Bureau of Economic Research Conference Report). Chicago: University Of Chicago Press, 2013.
Martin, Fernando M. “Fiscal Policy in the Great Recession and Lessons from the Past.” Federal Reserve Bank of St. Louis: Economic Synopses. no. 1 (2012). http://research.stlouisfed.org/publications/es/12/ES_2012-01-06.pdf.
Bivens, Josh, Andrew Fieldhouse, and Heidi Shierholz. “From Free-fall to Stagnation: Five Years After the Start of the Great Recession, Extraordinary Policy Measures Are Still Needed, But Are Not Forthcoming.” Economic Policy Institute. Last modified February 14, 2013. http://www.epi.org/publication/bp355-five-years-after-start-of-great-recession/.
Lucking, Brian, and Dan Wilson. Federal Reserve Bank of San Francisco, “FRBSF Economic Letter—U.S. Fiscal Policy: Headwind or Tailwind?” Last modified July 2, 2012. http://www.frbsf.org/economic-research/publications/economic-letter/2012/july/us-fiscal-policy/.
Greenstone, Michael, and Adam Looney. Brookings. “The Role of Fiscal Stimulus in the Ongoing Recovery.” Last modified July 6, 2012. http://www.brookings.edu/blogs/jobs/posts/2012/07/06-jobs-greenstone-looney.
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Automatic Stabilizers
Overview
By the end of this section, you will be able to:
- Describe how the federal government can use discretionary fiscal policy to stabilize the economy
- Identify examples of automatic stabilizers
- Understand how a government can use standardized employment budget to identify automatic stabilizers
The millions of unemployed in 2008–2009 could collect unemployment insurance benefits to replace some of their salaries. Federal fiscal policies include discretionary fiscal policy, when the government passes a new law that explicitly changes tax or spending levels. The 2009 stimulus package is an example. Changes in tax and spending levels can also occur automatically, due to automatic stabilizers, such as unemployment insurance and food stamps, which are programs that are already laws that stimulate aggregate demand in a recession and hold down aggregate demand in a potentially inflationary boom.
Counterbalancing Recession and Boom
Consider first the situation where aggregate demand has risen sharply, causing the equilibrium to occur at a level of output above potential GDP. This situation will increase inflationary pressure in the economy. The policy prescription in this setting would be a dose of contractionary fiscal policy, implemented through some combination of higher taxes and lower spending. To some extent, both changes happen automatically. On the tax side, a rise in aggregate demand means that workers and firms throughout the economy earn more. Because taxes are based on personal income and corporate profits, a rise in aggregate demand automatically increases tax payments. On the spending side, stronger aggregate demand typically means lower unemployment and fewer layoffs, and so there is less need for government spending on unemployment benefits, welfare, Medicaid, and other programs in the social safety net.
The process works in reverse, too. If aggregate demand were to fall sharply so that a recession occurs, then the prescription would be for expansionary fiscal policy—some mix of tax cuts and spending increases. The lower level of aggregate demand and higher unemployment will tend to pull down personal incomes and corporate profits, an effect that will reduce the amount of taxes owed automatically. Higher unemployment and a weaker economy should lead to increased government spending on unemployment benefits, welfare, and other similar domestic programs. In 2009, the stimulus package included an extension in the time allowed to collect unemployment insurance. In addition, the automatic stabilizers react to a weakening of aggregate demand with expansionary fiscal policy and react to a strengthening of aggregate demand with contractionary fiscal policy, just as the AD/AS analysis suggests.
A combination of automatic stabilizers and discretionary fiscal policy produced the very large budget deficit in 2009. The Great Recession, starting in late 2007, meant less tax-generating economic activity, which triggered the automatic stabilizers that reduce taxes. Most economists, even those who are concerned about a possible pattern of persistently large budget deficits, are much less concerned or even quite supportive of larger budget deficits in the short run of a few years during and immediately after a severe recession.
A glance back at economic history provides a second illustration of the power of automatic stabilizers. Remember that the length of economic upswings between recessions has become longer in the U.S. economy in recent decades (as we discussed in Unemployment). The three longest economic booms of the twentieth century happened in the 1960s, the 1980s, and the 1991–2001 time period. One reason why the economy has tipped into recession less frequently in recent decades is that the size of government spending and taxes has increased in the second half of the twentieth century. Thus, the automatic stabilizing effects from spending and taxes are now larger than they were in the first half of the twentieth century. Around 1900, for example, federal spending was only about 2% of GDP. In 1929, just before the Great Depression hit, government spending was still just 4% of GDP. In those earlier times, the smaller size of government made automatic stabilizers far less powerful than in the last few decades, when government spending often hovers at 20% of GDP or more.
The Standardized Employment Deficit or Surplus
Each year, the nonpartisan Congressional Budget Office (CBO) calculates the standardized employment budget—that is, what the budget deficit or surplus would be if the economy were producing at potential GDP, where people who look for work were finding jobs in a reasonable period of time and businesses were making normal profits, with the result that both workers and businesses would be earning more and paying more taxes. In effect, the standardized employment deficit eliminates the impact of the automatic stabilizers. Figure compares the actual budget deficits of recent decades with the CBO’s standardized deficit.
Visit this website to learn more from the Congressional Budget Office.
Notice that in recession years, like the early 1990s, 2001, or 2009, the standardized employment deficit is smaller than the actual deficit. During recessions, the automatic stabilizers tend to increase the budget deficit, so if the economy was instead at full employment, the deficit would be reduced. However, in the late 1990s the standardized employment budget surplus was lower than the actual budget surplus. The gap between the standardized budget deficit or surplus and the actual budget deficit or surplus shows the impact of the automatic stabilizers. More generally, the standardized budget figures allow you to see what the budget deficit would look like with the economy held constant—at its potential GDP level of output.
Automatic stabilizers occur quickly. Lower wages means that a lower amount of taxes is withheld from paychecks right away. Higher unemployment or poverty means that government spending in those areas rises as quickly as people apply for benefits. However, while the automatic stabilizers offset part of the shifts in aggregate demand, they do not offset all or even most of it. Historically, automatic stabilizers on the tax and spending side offset about 10% of any initial movement in the level of output. This offset may not seem enormous, but it is still useful. Automatic stabilizers, like shock absorbers in a car, can be useful if they reduce the impact of the worst bumps, even if they do not eliminate the bumps altogether.
Key Concepts and Summary
Fiscal policy is conducted both through discretionary fiscal policy, which occurs when the government enacts taxation or spending changes in response to economic events, or through automatic stabilizers, which are taxing and spending mechanisms that, by their design, shift in response to economic events without any further legislation. The standardized employment budget is the calculation of what the budget deficit or budget surplus would have been in a given year if the economy had been producing at its potential GDP in that year. Many economists and politicians criticize the use of fiscal policy for a variety of reasons, including concerns over time lags, the impact on interest rates, and the inherently political nature of fiscal policy. We cover the critique of fiscal policy in the next module.
Self-Check Questions
In a recession, does the actual budget surplus or deficit fall above or below the standardized employment budget?
Hint:
It falls below because less tax revenue than expected is collected.
What is the main advantage of automatic stabilizers over discretionary fiscal policy?
Hint:
Automatic stabilizers take effect very quickly, whereas discretionary policy can take a long time to implement.
Explain how automatic stabilizers work, both on the taxation side and on the spending side, first in a situation where the economy is producing less than potential GDP and then in a situation where the economy is producing more than potential GDP.
Hint:
In a recession, because of the decline in economic output, less income is earned, and so less in taxes is automatically collected. Many welfare and unemployment programs are designed so that those who fall into certain categories, like “unemployed” or “low income,” are eligible for benefits. During a recession, more people fall into these categories and become eligible for benefits automatically. The combination of reduced taxes and higher spending is just what is needed for an economy in recession producing below potential GDP. With an economic boom, average income levels rise in the economy, so more in taxes is automatically collected. Fewer people meet the criteria for receiving government assistance to the unemployed or the needy, so government spending on unemployment assistance and welfare falls automatically. This combination of higher taxes and lower spending is just what is needed if an economy is producing above its potential GDP.
Review Questions
What is the difference between discretionary fiscal policy and automatic stabilizers?
Why do automatic stabilizers function “automatically?”
What is the standardized employment budget?
Critical Thinking Questions
Is Medicaid (federal government aid to low-income families and individuals) an automatic stabilizer?
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Practical Problems with Discretionary Fiscal Policy
Overview
By the end of this section, you will be able to:
- Understand how fiscal policy and monetary policy are interconnected
- Explain the three lag times that often occur when solving economic problems
- Identify the legal and political challenges of responding to an economic problem
In the early 1960s, many leading economists believed that the problem of the business cycle, and the swings between cyclical unemployment and inflation, were a thing of the past. On the cover of its December 31, 1965, issue, Time magazine, then the premier news magazine in the United States, ran a picture of John Maynard Keynes, and the story inside identified Keynesian theories as “the prime influence on the world’s economies.” The article reported that policymakers have “used Keynesian principles not only to avoid the violent [business] cycles of prewar days but to produce phenomenal economic growth and to achieve remarkably stable prices.”
This happy consensus, however, did not last. The U.S. economy suffered one recession from December 1969 to November 1970, a deeper recession from November 1973 to March 1975, and then double-dip recessions from January to June 1980 and from July 1981 to November 1982. At various times, inflation and unemployment both soared. Clearly, the problems of macroeconomic policy had not been completely solved. As economists began to consider what had gone wrong, they identified a number of issues that make discretionary fiscal policy more difficult than it had seemed in the rosy optimism of the mid-1960s.
Fiscal Policy and Interest Rates
Because fiscal policy affects the quantity that the government borrows in financial capital markets, it not only affects aggregate demand—it can also affect interest rates. In Figure, the original equilibrium (E0) in the financial capital market occurs at a quantity of $800 billion and an interest rate of 6%. However, an increase in government budget deficits shifts the demand for financial capital from D0 to D1. The new equilibrium (E1) occurs at a quantity of $900 billion and an interest rate of 7%.
A consensus estimate based on a number of studies is that an increase in budget deficits (or a fall in budget surplus) by 1% of GDP will cause an increase of 0.5–1.0% in the long-term interest rate.
A problem arises here. An expansionary fiscal policy, with tax cuts or spending increases, is intended to increase aggregate demand. If an expansionary fiscal policy also causes higher interest rates, then firms and households are discouraged from borrowing and spending (as occurs with tight monetary policy), thus reducing aggregate demand. Even if the direct effect of expansionary fiscal policy on increasing demand is not totally offset by lower aggregate demand from higher interest rates, fiscal policy can end up less powerful than was originally expected. We refer to this as crowding out, where government borrowing and spending results in higher interest rates, which reduces business investment and household consumption.
The broader lesson is that the government must coordinate fiscal and monetary policy. If expansionary fiscal policy is to work well, then the central bank can also reduce or keep short-term interest rates low. Conversely, monetary policy can also help to ensure that contractionary fiscal policy does not lead to a recession.
Long and Variable Time Lags
The government can change monetary policy several times each year, but it takes much longer to enact fiscal policy. Imagine that the economy starts to slow down. It often takes some months before the economic statistics signal clearly that a downturn has started, and a few months more to confirm that it is truly a recession and not just a one- or two-month blip. Economists often call the time it takes to determine that a recession has occurred the recognition lag. After this lag, policymakers become aware of the problem and propose fiscal policy bills. The bills go into various congressional committees for hearings, negotiations, votes, and then, if passed, eventually for the president’s signature. Many fiscal policy bills about spending or taxes propose changes that would start in the next budget year or would be phased in gradually over time. Economists often refer to the time it takes to pass a bill as the legislative lag. Finally, once the government passes the bill it takes some time to disperse the funds to the appropriate agencies to implement the programs. Economists call the time it takes to start the projects the implementation lag.
Moreover, the exact level of fiscal policy that the government should implement is never completely clear. Should it increase the budget deficit by 0.5% of GDP? By 1% of GDP? By 2% of GDP? In an AD/AS diagram, it is straightforward to sketch an aggregate demand curve shifting to the potential GDP level of output. In the real world, we only know roughly, not precisely, the actual level of potential output, and exactly how a spending cut or tax increase will affect aggregate demand is always somewhat controversial. Also unknown is the state of the economy at any point in time. During the early days of the Obama administration, for example, no one knew the true extent of the economy's deficit. During the 2008-2009 financial crisis, the rapid collapse of the banking system and automotive sector made it difficult to assess how quickly the economy was collapsing.
Thus, it can take many months or even more than a year to begin an expansionary fiscal policy after a recession has started—and even then, uncertainty will remain over exactly how much to expand or contract taxes and spending. When politicians attempt to use countercyclical fiscal policy to fight recession or inflation, they run the risk of responding to the macroeconomic situation of two or three years ago, in a way that may be exactly wrong for the economy at that time. George P. Schultz, a professor of economics, former Secretary of the Treasury, and Director of the Office of Management and Budget, once wrote: “While the economist is accustomed to the concept of lags, the politician likes instant results. The tension comes because, as I have seen on many occasions, the economist’s lag is the politician’s nightmare.”
Temporary and Permanent Fiscal Policy
A temporary tax cut or spending increase will explicitly last only for a year or two, and then revert to its original level. A permanent tax cut or spending increase is expected to stay in place for the foreseeable future. The effect of temporary and permanent fiscal policies on aggregate demand can be very different. Consider how you would react if the government announced a tax cut that would last one year and then be repealed, in comparison with how you would react if the government announced a permanent tax cut. Most people and firms will react more strongly to a permanent policy change than a temporary one.
This fact creates an unavoidable difficulty for countercyclical fiscal policy. The appropriate policy may be to have an expansionary fiscal policy with large budget deficits during a recession, and then a contractionary fiscal policy with budget surpluses when the economy is growing well. However, if both policies are explicitly temporary ones, they will have a less powerful effect than a permanent policy.
Structural Economic Change Takes Time
When an economy recovers from a recession, it does not usually revert to its exact earlier shape. Instead, the economy's internal structure evolves and changes and this process can take time. For example, much of the economic growth of the mid-2000s was in the construction sector (especially of housing) and finance. However, when housing prices started falling in 2007 and the resulting financial crunch led into recession (as we discussed in Monetary Policy and Bank Regulation), both sectors contracted. The manufacturing sector of the U.S. economy has been losing jobs in recent years as well, under pressure from technological change and foreign competition. Many of the people who lost work from these sectors in the 2008-2009 Great Recession will never return to the same jobs in the same sectors of the economy. Instead, the economy will need to grow in new and different directions, as the following Clear It Up feature shows. Fiscal policy can increase overall demand, but the process of structural economic change—the expansion of a new set of industries and the movement of workers to those industries—inevitably takes time.
Why do jobs vanish?
People can lose jobs for a variety of reasons: because of a recession, but also because of longer-run changes in the economy, such as new technology. Productivity improvements in auto manufacturing, for example, can reduce the number of workers needed, and eliminate these jobs in the long run. The internet has created jobs but also caused job loss, from travel agents to book store clerks. Many of these jobs may never come back. Short-run fiscal policy to reduce unemployment can create jobs, but it cannot replace jobs that will never return.
The Limitations of Fiscal Policy
Fiscal policy can help an economy that is producing below its potential GDP to expand aggregate demand so that it produces closer to potential GDP, thus lowering unemployment. However, fiscal policy cannot help an economy produce at an output level above potential GDP without causing inflation At this point, unemployment becomes so low that workers become scarce and wages rise rapidly.
Visit this website to read about how fiscal policies are affecting the recovery.
Political Realties and Discretionary Fiscal Policy
A final problem for discretionary fiscal policy arises out of the difficulties of explaining to politicians how countercyclical fiscal policy that runs against the tide of the business cycle should work. Some politicians have a gut-level belief that when the economy and tax revenues slow down, it is time to hunker down, pinch pennies, and trim expenses. Countercyclical policy, however, says that when the economy has slowed, it is time for the government to stimulate the economy, raising spending, and cutting taxes. This offsets the drop in the economy in the other sectors. Conversely, when economic times are good and tax revenues are rolling in, politicians often feel that it is time for tax cuts and new spending. However, countercyclical policy says that this economic boom should be an appropriate time for keeping taxes high and restraining spending.
Politicians tend to prefer expansionary fiscal policy over contractionary policy. There is rarely a shortage of proposals for tax cuts and spending increases, especially during recessions. However, politicians are less willing to hear the message that in good economic times, they should propose tax increases and spending limits. In the economic upswing of the late 1990s and early 2000s, for example, the U.S. GDP grew rapidly. Estimates from respected government economic forecasters like the nonpartisan Congressional Budget Office and the Office of Management and Budget stated that the GDP was above potential GDP, and that unemployment rates were unsustainably low. However, no mainstream politician took the lead in saying that the booming economic times might be an appropriate time for spending cuts or tax increases. As of February 2017, President Trump has expressed plans to increase spending on national defense by 10% or $54 billion, increase infrastructure investment by $1 trillion, cut corporate and personal income taxes, all while maintaining the existing spending on Social Security and Medicare. The only way this math adds up is with a sizeable increase in the Federal budget deficit.
Discretionary Fiscal Policy: Summing Up
Expansionary fiscal policy can help to end recessions and contractionary fiscal policy can help to reduce inflation. Given the uncertainties over interest rate effects, time lags, temporary and permanent policies, and unpredictable political behavior, many economists and knowledgeable policymakers had concluded by the mid-1990s that discretionary fiscal policy was a blunt instrument, more like a club than a scalpel. It might still make sense to use it in extreme economic situations, like an especially deep or long recession. For less extreme situations, it was often preferable to let fiscal policy work through the automatic stabilizers and focus on monetary policy to steer short-term countercyclical efforts.
Key Concepts and Summary
Because fiscal policy affects the quantity of money that the government borrows in financial capital markets, it not only affects aggregate demand—it can also affect interest rates. If an expansionary fiscal policy also causes higher interest rates, then firms and households are discouraged from borrowing and spending, reducing aggregate demand in a situation called crowding out. Given the uncertainties over interest rate effects, time lags (implementation lag, legislative lag, and recognition lag), temporary and permanent policies, and unpredictable political behavior, many economists and knowledgeable policymakers have concluded that discretionary fiscal policy is a blunt instrument and better used only in extreme situations.
Self-Check Questions
What would happen if expansionary fiscal policy was implemented in a recession but, due to lag, did not actually take effect until after the economy was back to potential GDP?
Hint:
Prices would be pushed up as a result of too much spending.
What would happen if contractionary fiscal policy were implemented during an economic boom but, due to lag, it did not take effect until the economy slipped into recession?
Hint:
Employment would suffer as a result of too little spending.
Do you think the typical time lag for fiscal policy is likely to be longer or shorter than the time lag for monetary policy? Explain your answer?
Hint:
Monetary policy probably has shorter time lags than fiscal policy. Imagine that the data becomes fairly clear that an economy is in or near a recession. Expansionary monetary policy can be carried out through open market operations, which can be done fairly quickly, since the Federal Reserve’s Open Market Committee meets six times a year. Also, monetary policy takes effect through interest rates, which can change fairly quickly. However, fiscal policy is carried out through acts of Congress that need to be signed into law by the president. Negotiating such laws often takes months, and even after the laws are negotiated, it takes more months for spending programs or tax cuts to have an effect on the macroeconomy.
Review Questions
What are some practical weaknesses of discretionary fiscal policy?
Critical Thinking Questions
What is a potential problem with a temporary tax increase designed to increase aggregate demand if people know that it is temporary?
If the government gives a $300 tax cut to everyone in the country, explain the mechanism by which this will cause interest rates to rise.
References
Leduc, Sylvain, and Daniel Wilson. Federal Reserve Bank of San Francisco: Working Paper Series. “Are State Governments Roadblocks to Federal Stimulus? Evidence from Highway Grants in the 2009 Recovery Act. (Working Paper 2013-16).” Last modified July 2013. http://www.frbsf.org/economic-research/files/wp2013-16.pdf.
Lucking, Brian, and Daniel Wilson. “FRBSF Economic Letter-Fiscal Headwinds: Is the Other Shoe About to Drop?” Federal Reserve Bank of San Francisco. Last modified June 3, 2013. http://www.frbsf.org/economic-research/publications/economic-letter/2013/june/fiscal-headwinds-federal-budget-policy/.
Recovery.gov. “Track the Money.” http://www.recovery.gov/Pages/default.aspx.
Bastagli, Francesca, David Coady, and Sanjeev Gupta. International Monetary Fund. “IMF Staff Discussion Note: Income Inequality and Fiscal Policy.” Last modified June 28, 2012. http://www.imf.org/external/pubs/ft/sdn/2012/sdn1208.pdf.
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The Question of a Balanced Budget
Overview
By the end of this section, you will be able to:
- Understand the arguments for and against requiring the U.S. federal budget to be balanced
- Consider the long-run and short-run effects of a federal budget deficit
For many decades, going back to the 1930s, various legislators have put forward proposals to require that the U.S. government balance its budget every year. In 1995, a proposed constitutional amendment that would require a balanced budget passed the U.S. House of Representatives by a wide margin, and failed in the U.S. Senate by only a single vote. (For the balanced budget to have become an amendment to the Constitution would have required a two-thirds vote by Congress and passage by three-quarters of the state legislatures.)
Most economists view the proposals for a perpetually balanced budget with bemusement. After all, in the short term, economists would expect the budget deficits and surpluses to fluctuate up and down with the economy and the automatic stabilizers. Economic recessions should automatically lead to larger budget deficits or smaller budget surpluses, while economic booms lead to smaller deficits or larger surpluses. A requirement that the budget be balanced each and every year would prevent these automatic stabilizers from working and would worsen the severity of economic fluctuations.
Some supporters of the balanced budget amendment like to argue that, since households must balance their own budgets, the government should too. However, this analogy between household and government behavior is severely flawed. Most households do not balance their budgets every year. Some years households borrow to buy houses or cars or to pay for medical expenses or college tuition. Other years they repay loans and save funds in retirement accounts. After retirement, they withdraw and spend those savings. Also, the government is not a household for many reasons, one of which is that the government has macroeconomic responsibilities. The argument of Keynesian macroeconomic policy is that the government needs to lean against the wind, spending when times are hard and saving when times are good, for the sake of the overall economy.
There is also no particular reason to expect a government budget to be balanced in the medium term of a few years. For example, a government may decide that by running large budget deficits, it can make crucial long-term investments in human capital and physical infrastructure that will build the country's long-term productivity. These decisions may work out well or poorly, but they are not always irrational. Such policies of ongoing government budget deficits may persist for decades. As the U.S. experience from the end of World War II up to about 1980 shows, it is perfectly possible to run budget deficits almost every year for decades, but as long as the percentage increases in debt are smaller than the percentage growth of GDP, the debt/GDP ratio will decline at the same time.
Nothing in this argument is a claim that budget deficits are always a wise policy. In the short run, a government that runs a very large budget deficit can shift aggregate demand to the right and trigger severe inflation. Additionally, governments may borrow for foolish or impractical reasons. The Impacts of Government Borrowing will discuss how large budget deficits, by reducing national saving, can in certain cases reduce economic growth and even contribute to international financial crises. A requirement that the budget be balanced in each calendar year, however, is a misguided overreaction to the fear that in some cases, budget deficits can become too large.
No Yellowstone Park?
The 2013 federal budget shutdown illustrated the many sides to fiscal policy and the federal budget. In 2013, Republicans and Democrats could not agree on which spending policies to fund and how large the government debt should be. Due to the severity of the 2008-2009 recession, the fiscal stimulus, and previous policies, the federal budget deficit and debt was historically high. One way to try to cut federal spending and borrowing was to refuse to raise the legal federal debt limit, or tie on conditions to appropriation bills to stop the Affordable Health Care Act. This disagreement led to a two-week federal government shutdown and got close to the deadline where the federal government would default on its Treasury bonds. Finally, however, a compromise emerged and the government avoided default. This shows clearly how closely fiscal policies are tied to politics.
Key Concepts and Summary
Balanced budget amendments are a popular political idea, but the economic merits behind such proposals are questionable. Most economists accept that fiscal policy needs to be flexible enough to accommodate unforeseen expenditures, such as wars or recessions. While persistent, large budget deficits can indeed be a problem, a balanced budget amendment prevents even small, temporary deficits that might, in some cases, be necessary.
Self-Check Questions
How would a balanced budget amendment affect a decision by Congress to grant a tax cut during a recession?
Hint:
The government would have to make up the revenue either by raising taxes in a different area or cutting spending.
How would a balanced budget amendment change the effect of automatic stabilizer programs?
Hint:
Programs where the amount of spending is not fixed, but rather determined by macroeconomic conditions, such as food stamps, would lose a great deal of flexibility if spending increases had to be met by corresponding tax increases or spending cuts.
Review Questions
What are some of the arguments for and against a requirement that the federal government budget be balanced every year?
Critical Thinking Questions
Do you agree or disagree with this statement: “It is in the best interest of our economy for Congress and the President to run a balanced budget each year.” Explain your answer.
During the Great Recession of 2008–2009, what actions would have been required of Congress and the President had a balanced budget amendment to the Constitution been ratified? What impact would that have had on the unemployment rate?
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The Use of Mathematics in Principles of Economics
(This appendix should be consulted after first reading Welcome to Economics!) Economics is not math. There is no important concept in this course that cannot be explained without mathematics. That said, math is a tool that can be used to illustrate economic concepts. Remember the saying a picture is worth a thousand words? Instead of a picture, think of a graph. It is the same thing. Economists use models as the primary tool to derive insights about economic issues and problems. Math is one way of working with (or manipulating) economic models.
There are other ways of representing models, such as text or narrative. But why would you use your fist to bang a nail, if you had a hammer? Math has certain advantages over text. It disciplines your thinking by making you specify exactly what you mean. You can get away with fuzzy thinking in your head, but you cannot when you reduce a model to algebraic equations. At the same time, math also has disadvantages. Mathematical models are necessarily based on simplifying assumptions, so they are not likely to be perfectly realistic. Mathematical models also lack the nuances which can be found in narrative models. The point is that math is one tool, but it is not the only tool or even always the best tool economists can use. So what math will you need for this book? The answer is: little more than high school algebra and graphs. You will need to know:
- What a function is
- How to interpret the equation of a line (i.e., slope and intercept)
- How to manipulate a line (i.e., changing the slope or the intercept)
- How to compute and interpret a growth rate (i.e., percentage change)
- How to read and manipulate a graph
In this text, we will use the easiest math possible, and we will introduce it in this appendix. So if you find some math in the book that you cannot follow, come back to this appendix to review. Like most things, math has diminishing returns. A little math ability goes a long way; the more advanced math you bring in, the less additional knowledge that will get you. That said, if you are going to major in economics, you should consider learning a little calculus. It will be worth your while in terms of helping you learn advanced economics more quickly.
Algebraic Models
Often economic models (or parts of models) are expressed in terms of mathematical functions. What is a function? A function describes a relationship. Sometimes the relationship is a definition. For example (using words), your professor is Adam Smith. This could be expressed as Professor = Adam Smith. Or Friends = Bob + Shawn + Margaret.
Often in economics, functions describe cause and effect. The variable on the left-hand side is what is being explained (“the effect”). On the right-hand side is what is doing the explaining (“the causes”). For example, suppose your GPA was determined as follows:
This equation states that your GPA depends on three things: your combined SAT score, your class attendance, and the number of hours you spend studying. It also says that study time is twice as important (0.50) as either combined_SAT score (0.25) or class_attendance (0.25). If this relationship is true, how could you raise your GPA? By not skipping class and studying more. Note that you cannot do anything about your SAT score, since if you are in college, you have (presumably) already taken the SATs.
Of course, economic models express relationships using economic variables, like Budget = money_spent_on_econ_books + money_spent_on_music, assuming that the only things you buy are economics books and music.
Most of the relationships we use in this course are expressed as linear equations of the form:
Expressing Equations Graphically
Graphs are useful for two purposes. The first is to express equations visually, and the second is to display statistics or data. This section will discuss expressing equations visually.
To a mathematician or an economist, a variable is the name given to a quantity that may assume a range of values. In the equation of a line presented above, x and y are the variables, with x on the horizontal axis and y on the vertical axis, and b and m representing factors that determine the shape of the line. To see how this equation works, consider a numerical example:
In this equation for a specific line, the b term has been set equal to 9 and the m term has been set equal to 3. Table shows the values of x and y for this given equation. Figure shows this equation, and these values, in a graph. To construct the table, just plug in a series of different values for x, and then calculate what value of y results. In the figure, these points are plotted and a line is drawn through them.
| x | y |
|---|---|
| 0 | 9 |
| 1 | 12 |
| 2 | 15 |
| 3 | 18 |
| 4 | 21 |
| 5 | 24 |
| 6 | 27 |
This example illustrates how the b and m terms in an equation for a straight line determine the shape of the line. The b term is called the y-intercept. The reason for this name is that, if x = 0, then the b term will reveal where the line intercepts, or crosses, the y-axis. In this example, the line hits the vertical axis at 9. The m term in the equation for the line is the slope. Remember that slope is defined as rise over run; more specifically, the slope of a line from one point to another is the change in the vertical axis divided by the change in the horizontal axis. In this example, each time the x term increases by one (the run), the y term rises by three. Thus, the slope of this line is three. Specifying a y-intercept and a slope—that is, specifying b and m in the equation for a line—will identify a specific line. Although it is rare for real-world data points to arrange themselves as an exact straight line, it often turns out that a straight line can offer a reasonable approximation of actual data.
Interpreting the Slope
The concept of slope is very useful in economics, because it measures the relationship between two variables. A positive slope means that two variables are positively related; that is, when x increases, so does y, or when x decreases, y decreases also. Graphically, a positive slope means that as a line on the line graph moves from left to right, the line rises. The length-weight relationship, shown in Figure later in this Appendix, has a positive slope. We will learn in other chapters that price and quantity supplied have a positive relationship; that is, firms will supply more when the price is higher.
A negative slope means that two variables are negatively related; that is, when x increases, y decreases, or when x decreases, y increases. Graphically, a negative slope means that, as the line on the line graph moves from left to right, the line falls. The altitude-air density relationship, shown in Figure later in this appendix, has a negative slope. We will learn that price and quantity demanded have a negative relationship; that is, consumers will purchase less when the price is higher.
A slope of zero means that there is no relationship between x and y. Graphically, the line is flat; that is, zero rise over the run. Figure of the unemployment rate, shown later in this appendix, illustrates a common pattern of many line graphs: some segments where the slope is positive, other segments where the slope is negative, and still other segments where the slope is close to zero.
The slope of a straight line between two points can be calculated in numerical terms. To calculate slope, begin by designating one point as the “starting point” and the other point as the “end point” and then calculating the rise over run between these two points. As an example, consider the slope of the air density graph between the points representing an altitude of 4,000 meters and an altitude of 6,000 meters:
Rise: Change in variable on vertical axis (end point minus original point)
Run: Change in variable on horizontal axis (end point minus original point)
Thus, the slope of a straight line between these two points would be that from the altitude of 4,000 meters up to 6,000 meters, the density of the air decreases by approximately 0.1 kilograms/cubic meter for each of the next 1,000 meters.
Suppose the slope of a line were to increase. Graphically, that means it would get steeper. Suppose the slope of a line were to decrease. Then it would get flatter. These conditions are true whether or not the slope was positive or negative to begin with. A higher positive slope means a steeper upward tilt to the line, while a smaller positive slope means a flatter upward tilt to the line. A negative slope that is larger in absolute value (that is, more negative) means a steeper downward tilt to the line. A slope of zero is a horizontal flat line. A vertical line has an infinite slope.
Suppose a line has a larger intercept. Graphically, that means it would shift out (or up) from the old origin, parallel to the old line. If a line has a smaller intercept, it would shift in (or down), parallel to the old line.
Solving Models with Algebra
Economists often use models to answer a specific question, like: What will the unemployment rate be if the economy grows at 3% per year? Answering specific questions requires solving the “system” of equations that represent the model.
Suppose the demand for personal pizzas is given by the following equation:
where Qd is the amount of personal pizzas consumers want to buy (i.e., quantity demanded), and P is the price of pizzas. Suppose the supply of personal pizzas is:
where Qs is the amount of pizza producers will supply (i.e., quantity supplied).
Finally, suppose that the personal pizza market operates where supply equals demand, or
We now have a system of three equations and three unknowns (Qd, Qs, and P), which we can solve with algebra:
Since Qd = Qs, we can set the demand and supply equation equal to each other:
Subtracting 2 from both sides and adding 2P to both sides yields:
In other words, the price of each personal pizza will be $2. How much will consumers buy?
Taking the price of $2, and plugging it into the demand equation, we get:
So if the price is $2 each, consumers will purchase 12. How much will producers supply? Taking the price of $2, and plugging it into the supply equation, we get:
So if the price is $2 each, producers will supply 12 personal pizzas. This means we did our math correctly, since Qd = Qs.
Solving Models with Graphs
If algebra is not your forte, you can get the same answer by using graphs. Take the equations for Qd and Qs and graph them on the same set of axes as shown in Figure. Since P is on the vertical axis, it is easiest if you solve each equation for P. The demand curve is then P = 8 – 0.5Qd and the supply curve is P = –0.4 + 0.2Qs. Note that the vertical intercepts are 8 and –0.4, and the slopes are –0.5 for demand and 0.2 for supply. If you draw the graphs carefully, you will see that where they cross (Qs = Qd), the price is $2 and the quantity is 12, just like the algebra predicted.
We will use graphs more frequently in this book than algebra, but now you know the math behind the graphs.
Growth Rates
Growth rates are frequently encountered in real world economics. A growth rate is simply the percentage change in some quantity. It could be your income. It could be a business’s sales. It could be a nation’s GDP. The formula for computing a growth rate is straightforward:
Suppose your job pays $10 per hour. Your boss, however, is so impressed with your work that he gives you a $2 per hour raise. The percentage change (or growth rate) in your pay is $2/$10 = 0.20 or 20%.
To compute the growth rate for data over an extended period of time, for example, the average annual growth in GDP over a decade or more, the denominator is commonly defined a little differently. In the previous example, we defined the quantity as the initial quantity—or the quantity when we started. This is fine for a one-time calculation, but when we compute the growth over and over, it makes more sense to define the quantity as the average quantity over the period in question, which is defined as the quantity halfway between the initial quantity and the next quantity. This is harder to explain in words than to show with an example. Suppose a nation’s GDP was $1 trillion in 2005 and $1.03 trillion in 2006. The growth rate between 2005 and 2006 would be the change in GDP ($1.03 trillion – $1.00 trillion) divided by the average GDP between 2005 and 2006 ($1.03 trillion + $1.00 trillion)/2. In other words:
Note that if we used the first method, the calculation would be ($1.03 trillion – $1.00 trillion) / $1.00 trillion = 3% growth, which is approximately the same as the second, more complicated method. If you need a rough approximation, use the first method. If you need accuracy, use the second method.
A few things to remember: A positive growth rate means the quantity is growing. A smaller growth rate means the quantity is growing more slowly. A larger growth rate means the quantity is growing more quickly. A negative growth rate means the quantity is decreasing.
The same change over times yields a smaller growth rate. If you got a $2 raise each year, in the first year the growth rate would be $2/$10 = 20%, as shown above. But in the second year, the growth rate would be $2/$12 = 0.167 or 16.7% growth. In the third year, the same $2 raise would correspond to a $2/$14 = 14.2%. The moral of the story is this: To keep the growth rate the same, the change must increase each period.
Displaying Data Graphically and Interpreting the Graph
Graphs are also used to display data or evidence. Graphs are a method of presenting numerical patterns. They condense detailed numerical information into a visual form in which relationships and numerical patterns can be seen more easily. For example, which countries have larger or smaller populations? A careful reader could examine a long list of numbers representing the populations of many countries, but with over 200 nations in the world, searching through such a list would take concentration and time. Putting these same numbers on a graph can quickly reveal population patterns. Economists use graphs both for a compact and readable presentation of groups of numbers and for building an intuitive grasp of relationships and connections.
Three types of graphs are used in this book: line graphs, pie graphs, and bar graphs. Each is discussed below. We also provide warnings about how graphs can be manipulated to alter viewers’ perceptions of the relationships in the data.
Line Graphs
The graphs we have discussed so far are called line graphs, because they show a relationship between two variables: one measured on the horizontal axis and the other measured on the vertical axis.
Sometimes it is useful to show more than one set of data on the same axes. The data in Table is displayed in Figure which shows the relationship between two variables: length and median weight for American baby boys and girls during the first three years of life. (The median means that half of all babies weigh more than this and half weigh less.) The line graph measures length in inches on the horizontal axis and weight in pounds on the vertical axis. For example, point A on the figure shows that a boy who is 28 inches long will have a median weight of about 19 pounds. One line on the graph shows the length-weight relationship for boys and the other line shows the relationship for girls. This kind of graph is widely used by healthcare providers to check whether a child’s physical development is roughly on track.
| Boys from Birth to 36 Months | Girls from Birth to 36 Months | ||
|---|---|---|---|
| Length (inches) | Weight (pounds) | Length (inches) | Weight (pounds) |
| 20.0 | 8.0 | 20.0 | 7.9 |
| 22.0 | 10.5 | 22.0 | 10.5 |
| 24.0 | 13.5 | 24.0 | 13.2 |
| 26.0 | 16.4 | 26.0 | 16.0 |
| 28.0 | 19.0 | 28.0 | 18.8 |
| 30.0 | 21.8 | 30.0 | 21.2 |
| 32.0 | 24.3 | 32.0 | 24.0 |
| 34.0 | 27.0 | 34.0 | 26.2 |
| 36.0 | 29.3 | 36.0 | 28.9 |
| 38.0 | 32.0 | 38.0 | 31.3 |
Not all relationships in economics are linear. Sometimes they are curves. Figure presents another example of a line graph, representing the data from Table. In this case, the line graph shows how thin the air becomes when you climb a mountain. The horizontal axis of the figure shows altitude, measured in meters above sea level. The vertical axis measures the density of the air at each altitude. Air density is measured by the weight of the air in a cubic meter of space (that is, a box measuring one meter in height, width, and depth). As the graph shows, air pressure is heaviest at ground level and becomes lighter as you climb. Figure shows that a cubic meter of air at an altitude of 500 meters weighs approximately one kilogram (about 2.2 pounds). However, as the altitude increases, air density decreases. A cubic meter of air at the top of Mount Everest, at about 8,828 meters, would weigh only 0.023 kilograms. The thin air at high altitudes explains why many mountain climbers need to use oxygen tanks as they reach the top of a mountain.
| Altitude (meters) | Air Density (kg/cubic meters) |
|---|---|
| 0 | 1.200 |
| 500 | 1.093 |
| 1,000 | 0.831 |
| 1,500 | 0.678 |
| 2,000 | 0.569 |
| 2,500 | 0.484 |
| 3,000 | 0.415 |
| 3,500 | 0.357 |
| 4,000 | 0.307 |
| 4,500 | 0.231 |
| 5,000 | 0.182 |
| 5,500 | 0.142 |
| 6,000 | 0.100 |
| 6,500 | 0.085 |
| 7,000 | 0.066 |
| 7,500 | 0.051 |
| 8,000 | 0.041 |
| 8,500 | 0.025 |
| 9,000 | 0.022 |
| 9,500 | 0.019 |
| 10,000 | 0.014 |
The length-weight relationship and the altitude-air density relationships in these two figures represent averages. If you were to collect actual data on air pressure at different altitudes, the same altitude in different geographic locations will have slightly different air density, depending on factors like how far you are from the equator, local weather conditions, and the humidity in the air. Similarly, in measuring the height and weight of children for the previous line graph, children of a particular height would have a range of different weights, some above average and some below. In the real world, this sort of variation in data is common. The task of a researcher is to organize that data in a way that helps to understand typical patterns. The study of statistics, especially when combined with computer statistics and spreadsheet programs, is a great help in organizing this kind of data, plotting line graphs, and looking for typical underlying relationships. For most economics and social science majors, a statistics course will be required at some point.
One common line graph is called a time series, in which the horizontal axis shows time and the vertical axis displays another variable. Thus, a time series graph shows how a variable changes over time. Figure shows the unemployment rate in the United States since 1975, where unemployment is defined as the percentage of adults who want jobs and are looking for a job, but cannot find one. The points for the unemployment rate in each year are plotted on the graph, and a line then connects the points, showing how the unemployment rate has moved up and down since 1975. The line graph makes it easy to see, for example, that the highest unemployment rate during this time period was slightly less than 10% in the early 1980s and 2010, while the unemployment rate declined from the early 1990s to the end of the 1990s, before rising and then falling back in the early 2000s, and then rising sharply during the recession from 2008–2009.
Pie Graphs
A pie graph (sometimes called a pie chart) is used to show how an overall total is divided into parts. A circle represents a group as a whole. The slices of this circular “pie” show the relative sizes of subgroups.
Figure shows how the U.S. population was divided among children, working age adults, and the elderly in 1970, 2000, and what is projected for 2030. The information is first conveyed with numbers in Table, and then in three pie charts. The first column of Table shows the total U.S. population for each of the three years. Columns 2–4 categorize the total in terms of age groups—from birth to 18 years, from 19 to 64 years, and 65 years and above. In columns 2–4, the first number shows the actual number of people in each age category, while the number in parentheses shows the percentage of the total population comprised by that age group.
| Year | Total Population | 19 and Under | 20–64 years | Over 65 |
|---|---|---|---|---|
| 1970 | 205.0 million | 77.2 (37.6%) | 107.7 (52.5%) | 20.1 (9.8%) |
| 2000 | 275.4 million | 78.4 (28.5%) | 162.2 (58.9%) | 34.8 (12.6%) |
| 2030 | 351.1 million | 92.6 (26.4%) | 188.2 (53.6%) | 70.3 (20.0%) |
In a pie graph, each slice of the pie represents a share of the total, or a percentage. For example, 50% would be half of the pie and 20% would be one-fifth of the pie. The three pie graphs in Figure show that the share of the U.S. population 65 and over is growing. The pie graphs allow you to get a feel for the relative size of the different age groups from 1970 to 2000 to 2030, without requiring you to slog through the specific numbers and percentages in the table. Some common examples of how pie graphs are used include dividing the population into groups by age, income level, ethnicity, religion, occupation; dividing different firms into categories by size, industry, number of employees; and dividing up government spending or taxes into its main categories.
Bar Graphs
A bar graph uses the height of different bars to compare quantities. Table lists the 12 most populous countries in the world. Figure provides this same data in a bar graph. The height of the bars corresponds to the population of each country. Although you may know that China and India are the most populous countries in the world, seeing how the bars on the graph tower over the other countries helps illustrate the magnitude of the difference between the sizes of national populations.
| Country | Population |
|---|---|
| China | 1,369 |
| India | 1,270 |
| United States | 321 |
| Indonesia | 255 |
| Brazil | 204 |
| Pakistan | 190 |
| Nigeria | 184 |
| Bangladesh | 158 |
| Russia | 146 |
| Japan | 127 |
| Mexico | 121 |
| Philippines | 101 |
Bar graphs can be subdivided in a way that reveals information similar to that we can get from pie charts. Figure offers three bar graphs based on the information from Figure about the U.S. age distribution in 1970, 2000, and 2030. Figure (a) shows three bars for each year, representing the total number of persons in each age bracket for each year. Figure (b) shows just one bar for each year, but the different age groups are now shaded inside the bar. In Figure (c), still based on the same data, the vertical axis measures percentages rather than the number of persons. In this case, all three bar graphs are the same height, representing 100% of the population, with each bar divided according to the percentage of population in each age group. It is sometimes easier for a reader to run his or her eyes across several bar graphs, comparing the shaded areas, rather than trying to compare several pie graphs.
Figure and Figure show how the bars can represent countries or years, and how the vertical axis can represent a numerical or a percentage value. Bar graphs can also compare size, quantity, rates, distances, and other quantitative categories.
Comparing Line Graphs with Pie Charts and Bar Graphs
Now that you are familiar with pie graphs, bar graphs, and line graphs, how do you know which graph to use for your data? Pie graphs are often better than line graphs at showing how an overall group is divided. However, if a pie graph has too many slices, it can become difficult to interpret.
Bar graphs are especially useful when comparing quantities. For example, if you are studying the populations of different countries, as in Figure, bar graphs can show the relationships between the population sizes of multiple countries. Not only can it show these relationships, but it can also show breakdowns of different groups within the population.
A line graph is often the most effective format for illustrating a relationship between two variables that are both changing. For example, time series graphs can show patterns as time changes, like the unemployment rate over time. Line graphs are widely used in economics to present continuous data about prices, wages, quantities bought and sold, the size of the economy.
How Graphs Can Be Misleading
Graphs not only reveal patterns; they can also alter how patterns are perceived. To see some of the ways this can be done, consider the line graphs of Figure, Figure, and Figure. These graphs all illustrate the unemployment rate—but from different perspectives.
Suppose you wanted a graph which gives the impression that the rise in unemployment in 2009 was not all that large, or all that extraordinary by historical standards. You might choose to present your data as in Figure (a). Figure (a) includes much of the same data presented earlier in Figure, but stretches the horizontal axis out longer relative to the vertical axis. By spreading the graph wide and flat, the visual appearance is that the rise in unemployment is not so large, and is similar to some past rises in unemployment. Now imagine you wanted to emphasize how unemployment spiked substantially higher in 2009. In this case, using the same data, you can stretch the vertical axis out relative to the horizontal axis, as in Figure (b), which makes all rises and falls in unemployment appear larger.
A similar effect can be accomplished without changing the length of the axes, but by changing the scale on the vertical axis. In Figure (c), the scale on the vertical axis runs from 0% to 30%, while in Figure (d), the vertical axis runs from 3% to 10%. Compared to Figure, where the vertical scale runs from 0% to 12%, Figure (c) makes the fluctuation in unemployment look smaller, while Figure (d) makes it look larger.
Another way to alter the perception of the graph is to reduce the amount of variation by changing the number of points plotted on the graph. Figure (e) shows the unemployment rate according to five-year averages. By averaging out some of the year-to-year changes, the line appears smoother and with fewer highs and lows. In reality, the unemployment rate is reported monthly, and Figure (f) shows the monthly figures since 1960, which fluctuate more than the five-year average. Figure (f) is also a vivid illustration of how graphs can compress lots of data. The graph includes monthly data since 1960, which over almost 50 years, works out to nearly 600 data points. Reading that list of 600 data points in numerical form would be hypnotic. You can, however, get a good intuitive sense of these 600 data points very quickly from the graph.
A final trick in manipulating the perception of graphical information is that, by choosing the starting and ending points carefully, you can influence the perception of whether the variable is rising or falling. The original data show a general pattern with unemployment low in the 1960s, but spiking up in the mid-1970s, early 1980s, early 1990s, early 2000s, and late 2000s. Figure (g), however, shows a graph that goes back only to 1975, which gives an impression that unemployment was more-or-less gradually falling over time until the 2009 recession pushed it back up to its “original” level—which is a plausible interpretation if one starts at the high point around 1975.
These kinds of tricks—or shall we just call them “presentation choices”— are not limited to line graphs. In a pie chart with many small slices and one large slice, someone must decided what categories should be used to produce these slices in the first place, thus making some slices appear bigger than others. If you are making a bar graph, you can make the vertical axis either taller or shorter, which will tend to make variations in the height of the bars appear more or less.
Being able to read graphs is an essential skill, both in economics and in life. A graph is just one perspective or point of view, shaped by choices such as those discussed in this section. Do not always believe the first quick impression from a graph. View with caution.
Key Concepts and Summary
Math is a tool for understanding economics and economic relationships can be expressed mathematically using algebra or graphs. The algebraic equation for a line is y = b + mx, where x is the variable on the horizontal axis and y is the variable on the vertical axis, the b term is the y-intercept and the m term is the slope. The slope of a line is the same at any point on the line and it indicates the relationship (positive, negative, or zero) between two economic variables.
Economic models can be solved algebraically or graphically. Graphs allow you to illustrate data visually. They can illustrate patterns, comparisons, trends, and apportionment by condensing the numerical data and providing an intuitive sense of relationships in the data. A line graph shows the relationship between two variables: one is shown on the horizontal axis and one on the vertical axis. A pie graph shows how something is allotted, such as a sum of money or a group of people. The size of each slice of the pie is drawn to represent the corresponding percentage of the whole. A bar graph uses the height of bars to show a relationship, where each bar represents a certain entity, like a country or a group of people. The bars on a bar graph can also be divided into segments to show subgroups.
Any graph is a single visual perspective on a subject. The impression it leaves will be based on many choices, such as what data or time frame is included, how data or groups are divided up, the relative size of vertical and horizontal axes, whether the scale used on a vertical starts at zero. Thus, any graph should be regarded somewhat skeptically, remembering that the underlying relationship can be open to different interpretations.
Review Questions
Name three kinds of graphs and briefly state when is most appropriate to use each type of graph.
What is slope on a line graph?
What do the slices of a pie chart represent?
Why is a bar chart the best way to illustrate comparisons?
How does the appearance of positive slope differ from negative slope and from zero slope?
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"title": "Principles of Macroeconomics 2e, The Use of Mathematics in Principles of Economics",
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https://oercommons.org/courseware/lesson/15525/overview
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Introduction
Overview
- The Stock Market Crash of 1929
- President Hoover’s Response
- The Depths of the Great Depression
- Assessing the Hoover Years on the Eve of the New Deal
On March 4, 1929, at his presidential inauguration, Herbert Hoover stated, “I have no fears for the future of our country. It is bright with hope.” Most Americans shared his optimism. They believed that the prosperity of the 1920s would continue, and that the country was moving closer to a land of abundance for all. Little could Hoover imagine that barely a year into his presidency, shantytowns known as “Hoovervilles” would emerge on the fringes of most major cities (Figure), newspapers covering the homeless would be called “Hoover blankets,” and pants pockets, turned inside-out to show their emptiness, would become “Hoover flags.”
The stock market crash of October 1929 set the Great Depression into motion, but other factors were at the root of the problem, propelled onward by a series of both human-made and natural catastrophes. Anticipating a short downturn and living under an ethos of free enterprise and individualism, Americans suffered mightily in the first years of the Depression. As conditions worsened and the government failed to act, they grew increasingly desperate for change. While Hoover could not be blamed for the Great Depression, his failure to address the nation’s hardships would remain his legacy.
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"title": "U.S. History, Brother, Can You Spare a Dime? The Great Depression, 1929-1932",
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https://oercommons.org/courseware/lesson/15526/overview
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The Stock Market Crash of 1929
Overview
By the end of this section, you will be able to:
- Identify the causes of the stock market crash of 1929
- Assess the underlying weaknesses in the economy that resulted in America’s spiraling from prosperity to depression so quickly
- Explain how a stock market crash might contribute to a nationwide economic disaster
Herbert Hoover became president at a time of ongoing prosperity in the country. Americans hoped he would continue to lead the country through still more economic growth, and neither he nor the country was ready for the unraveling that followed. But Hoover’s moderate policies, based upon a strongly held belief in the spirit of American individualism, were not enough to stem the ever-growing problems, and the economy slipped further and further into the Great Depression.
While it is misleading to view the stock market crash of 1929 as the sole cause of the Great Depression, the dramatic events of that October did play a role in the downward spiral of the American economy. The crash, which took place less than a year after Hoover was inaugurated, was the most extreme sign of the economy’s weakness. Multiple factors contributed to the crash, which in turn caused a consumer panic that drove the economy even further downhill, in ways that neither Hoover nor the financial industry was able to restrain. Hoover, like many others at the time, thought and hoped that the country would right itself with limited government intervention. This was not the case, however, and millions of Americans sank into grinding poverty.
THE EARLY DAYS OF HOOVER’S PRESIDENCY
Upon his inauguration, President Hoover set forth an agenda that he hoped would continue the “Coolidge prosperity” of the previous administration. While accepting the Republican Party’s presidential nomination in 1928, Hoover commented, “Given the chance to go forward with the policies of the last eight years, we shall soon with the help of God be in sight of the day when poverty will be banished from this nation forever.” In the spirit of normalcy that defined the Republican ascendancy of the 1920s, Hoover planned to immediately overhaul federal regulations with the intention of allowing the nation’s economy to grow unfettered by any controls. The role of the government, he contended, should be to create a partnership with the American people, in which the latter would rise (or fall) on their own merits and abilities. He felt the less government intervention in their lives, the better.
Yet, to listen to Hoover’s later reflections on Franklin Roosevelt’s first term in office, one could easily mistake his vision for America for the one held by his successor. Speaking in 1936 before an audience in Denver, Colorado, he acknowledged that it was always his intent as president to ensure “a nation built of home owners and farm owners. We want to see more and more of them insured against death and accident, unemployment and old age,” he declared. “We want them all secure.” Herbert Hoover, address delivered in Denver, Colorado, 30 October 1936, compiled in Hoover, Addresses Upon the American Road, 1933-1938 (New York, 1938), p. 216. This particular quotation is frequently misidentified as part of Hoover’s inaugural address in 1932. Such humanitarianism was not uncommon to Hoover. Throughout his early career in public service, he was committed to relief for people around the world. In 1900, he coordinated relief efforts for foreign nationals trapped in China during the Boxer Rebellion. At the outset of World War I, he led the food relief effort in Europe, specifically helping millions of Belgians who faced German forces. President Woodrow Wilson subsequently appointed him head of the U.S. Food Administration to coordinate rationing efforts in America as well as to secure essential food items for the Allied forces and citizens in Europe.
Hoover’s first months in office hinted at the reformist, humanitarian spirit that he had displayed throughout his career. He continued the civil service reform of the early twentieth century by expanding opportunities for employment throughout the federal government. In response to the Teapot Dome Affair, which had occurred during the Harding administration, he invalidated several private oil leases on public lands. He directed the Department of Justice, through its Bureau of Investigation, to crack down on organized crime, resulting in the arrest and imprisonment of Al Capone. By the summer of 1929, he had signed into law the creation of a Federal Farm Board to help farmers with government price supports, expanded tax cuts across all income classes, and set aside federal funds to clean up slums in major American cities. To directly assist several overlooked populations, he created the Veterans Administration and expanded veterans’ hospitals, established the Federal Bureau of Prisons to oversee incarceration conditions nationwide, and reorganized the Bureau of Indian Affairs to further protect Native Americans. Just prior to the stock market crash, he even proposed the creation of an old-age pension program, promising fifty dollars monthly to all Americans over the age of sixty-five—a proposal remarkably similar to the social security benefit that would become a hallmark of Roosevelt’s subsequent New Deal programs. As the summer of 1929 came to a close, Hoover remained a popular successor to Calvin “Silent Cal” Coolidge, and all signs pointed to a highly successful administration.
THE GREAT CRASH
The promise of the Hoover administration was cut short when the stock market lost almost one-half its value in the fall of 1929, plunging many Americans into financial ruin. However, as a singular event, the stock market crash itself did not cause the Great Depression that followed. In fact, only approximately 10 percent of American households held stock investments and speculated in the market; yet nearly a third would lose their lifelong savings and jobs in the ensuing depression. The connection between the crash and the subsequent decade of hardship was complex, involving underlying weaknesses in the economy that many policymakers had long ignored.
What Was the Crash?
To understand the crash, it is useful to address the decade that preceded it. The prosperous 1920s ushered in a feeling of euphoria among middle-class and wealthy Americans, and people began to speculate on wilder investments. The government was a willing partner in this endeavor: The Federal Reserve followed a brief postwar recession in 1920–1921 with a policy of setting interest rates artificially low, as well as easing the reserve requirements on the nation’s largest banks. As a result, the money supply in the U.S. increased by nearly 60 percent, which convinced even more Americans of the safety of investing in questionable schemes. They felt that prosperity was boundless and that extreme risks were likely tickets to wealth. Named for Charles Ponzi, the original “Ponzi schemes” emerged early in the 1920s to encourage novice investors to divert funds to unfounded ventures, which in reality simply used new investors’ funds to pay off older investors as the schemes grew in size. Speculation, where investors purchased into high-risk schemes that they hoped would pay off quickly, became the norm. Several banks, including deposit institutions that originally avoided investment loans, began to offer easy credit, allowing people to invest, even when they lacked the money to do so. An example of this mindset was the Florida land boom of the 1920s: Real estate developers touted Florida as a tropical paradise and investors went all in, buying land they had never seen with money they didn’t have and selling it for even higher prices.
Selling Optimism and Risk
Advertising offers a useful window into the popular perceptions and beliefs of an era. By seeing how businesses were presenting their goods to consumers, it is possible to sense the hopes and aspirations of people at that moment in history. Maybe companies are selling patriotism or pride in technological advances. Maybe they are pushing idealized views of parenthood or safety. In the 1920s, advertisers were selling opportunity and euphoria, further feeding the notions of many Americans that prosperity would never end.
In the decade before the Great Depression, the optimism of the American public was seemingly boundless. Advertisements from that era show large new cars, timesaving labor devices, and, of course, land. This advertisement for California real estate illustrates how realtors in the West, much like the ongoing Florida land boom, used a combination of the hard sell and easy credit (Figure). “Buy now!!” the ad shouts. “You are sure to make money on these.” In great numbers, people did. With easy access to credit and hard-pushing advertisements like this one, many felt that they could not afford to miss out on such an opportunity. Unfortunately, overspeculation in California and hurricanes along the Gulf Coast and in Florida conspired to burst this land bubble, and would-be millionaires were left with nothing but the ads that once pulled them in.
The Florida land boom went bust in 1925–1926. A combination of negative press about the speculative nature of the boom, IRS investigations into the questionable financial practices of several land brokers, and a railroad embargo that limited the delivery of construction supplies into the region significantly hampered investor interest. The subsequent Great Miami Hurricane of 1926 drove most land developers into outright bankruptcy. However, speculation continued throughout the decade, this time in the stock market. Buyers purchased stock “on margin”—buying for a small down payment with borrowed money, with the intention of quickly selling at a much higher price before the remaining payment came due—which worked well as long as prices continued to rise. Speculators were aided by retail stock brokerage firms, which catered to average investors anxious to play the market but lacking direct ties to investment banking houses or larger brokerage firms. When prices began to fluctuate in the summer of 1929, investors sought excuses to continue their speculation. When fluctuations turned to outright and steady losses, everyone started to sell. As September began to unfold, the Dow Jones Industrial Average peaked at a value of 381 points, or roughly ten times the stock market’s value, at the start of the 1920s.
Several warning signs portended the impending crash but went unheeded by Americans still giddy over the potential fortunes that speculation might promise. A brief downturn in the market on September 18, 1929, raised questions among more-seasoned investment bankers, leading some to predict an end to high stock values, but did little to stem the tide of investment. Even the collapse of the London Stock Exchange on September 20 failed to fully curtail the optimism of American investors. However, when the New York Stock Exchange lost 11 percent of its value on October 24—often referred to as “Black Thursday”—key American investors sat up and took notice. In an effort to forestall a much-feared panic, leading banks, including Chase National, National City, J.P. Morgan, and others, conspired to purchase large amounts of blue chip stocks (including U.S. Steel) in order to keep the prices artificially high. Even that effort failed in the growing wave of stock sales. Nevertheless, Hoover delivered a radio address on Friday in which he assured the American people, “The fundamental business of the country . . . is on a sound and prosperous basis.”
As newspapers across the country began to cover the story in earnest, investors anxiously awaited the start of the following week. When the Dow Jones Industrial Average lost another 13 percent of its value on Monday morning, many knew the end of stock market speculation was near. The evening before the infamous crash was ominous. Jonathan Leonard, a newspaper reporter who regularly covered the stock market beat, wrote of how Wall Street “lit up like a Christmas tree.” Brokers and businessmen who feared the worst the next day crowded into restaurants and speakeasies (a place where alcoholic beverages were illegally sold). After a night of heavy drinking, they retreated to nearby hotels or flop-houses (cheap boarding houses), all of which were overbooked, and awaited sunrise. Children from nearby slums and tenement districts played stickball in the streets of the financial district, using wads of ticker tape for balls. Although they all awoke to newspapers filled with predictions of a financial turnaround, as well as technical reasons why the decline might be short-lived, the crash on Tuesday morning, October 29, caught few by surprise.
No one even heard the opening bell on Wall Street that day, as shouts of “Sell! Sell!” drowned it out. In the first three minutes alone, nearly three million shares of stock, accounting for $2 million of wealth, changed hands. The volume of Western Union telegrams tripled, and telephone lines could not meet the demand, as investors sought any means available to dump their stock immediately. Rumors spread of investors jumping from their office windows. Fistfights broke out on the trading floor, where one broker fainted from physical exhaustion. Stock trades happened at such a furious pace that runners had nowhere to store the trade slips, and so they resorted to stuffing them into trash cans. Although the stock exchange’s board of governors briefly considered closing the exchange early, they subsequently chose to let the market run its course, lest the American public panic even further at the thought of closure. When the final bell rang, errand boys spent hours sweeping up tons of paper, tickertape, and sales slips. Among the more curious finds in the rubbish were torn suit coats, crumpled eyeglasses, and one broker’s artificial leg. Outside a nearby brokerage house, a policeman allegedly found a discarded birdcage with a live parrot squawking, “More margin! More margin!”
On Black Tuesday, October 29, stock holders traded over sixteen million shares and lost over $14 billion in wealth in a single day. To put this in context, a trading day of three million shares was considered a busy day on the stock market. People unloaded their stock as quickly as they could, never minding the loss. Banks, facing debt and seeking to protect their own assets, demanded payment for the loans they had provided to individual investors. Those individuals who could not afford to pay found their stocks sold immediately and their life savings wiped out in minutes, yet their debt to the bank still remained (Figure).
The financial outcome of the crash was devastating. Between September 1 and November 30, 1929, the stock market lost over one-half its value, dropping from $64 billion to approximately $30 billion. Any effort to stem the tide was, as one historian noted, tantamount to bailing Niagara Falls with a bucket. The crash affected many more than the relatively few Americans who invested in the stock market. While only 10 percent of households had investments, over 90 percent of all banks had invested in the stock market. Many banks failed due to their dwindling cash reserves. This was in part due to the Federal Reserve lowering the limits of cash reserves that banks were traditionally required to hold in their vaults, as well as the fact that many banks invested in the stock market themselves. Eventually, thousands of banks closed their doors after losing all of their assets, leaving their customers penniless. While a few savvy investors got out at the right time and eventually made fortunes buying up discarded stock, those success stories were rare. Housewives who speculated with grocery money, bookkeepers who embezzled company funds hoping to strike it rich and pay the funds back before getting caught, and bankers who used customer deposits to follow speculative trends all lost. While the stock market crash was the trigger, the lack of appropriate economic and banking safeguards, along with a public psyche that pursued wealth and prosperity at all costs, allowed this event to spiral downward into a depression.
The National Humanities Center has brought together a selection of newspaper commentary from the 1920s, from before the crash to its aftermath. Read through to see what journalists and financial analysts thought of the situation at the time.
Causes of the Crash
The crash of 1929 did not occur in a vacuum, nor did it cause the Great Depression. Rather, it was a tipping point where the underlying weaknesses in the economy, specifically in the nation’s banking system, came to the fore. It also represented both the end of an era characterized by blind faith in American exceptionalism and the beginning of one in which citizens began increasingly to question some long-held American values. A number of factors played a role in bringing the stock market to this point and contributed to the downward trend in the market, which continued well into the 1930s. In addition to the Federal Reserve’s questionable policies and misguided banking practices, three primary reasons for the collapse of the stock market were international economic woes, poor income distribution, and the psychology of public confidence.
After World War I, both America’s allies and the defeated nations of Germany and Austria contended with disastrous economies. The Allies owed large amounts of money to U.S. banks, which had advanced them money during the war effort. Unable to repay these debts, the Allies looked to reparations from Germany and Austria to help. The economies of those countries, however, were struggling badly, and they could not pay their reparations, despite the loans that the U.S. provided to assist with their payments. The U.S. government refused to forgive these loans, and American banks were in the position of extending additional private loans to foreign governments, who used them to repay their debts to the U.S. government, essentially shifting their obligations to private banks. When other countries began to default on this second wave of private bank loans, still more strain was placed on U.S. banks, which soon sought to liquidate these loans at the first sign of a stock market crisis.
Poor income distribution among Americans compounded the problem. A strong stock market relies on today’s buyers becoming tomorrow’s sellers, and therefore it must always have an influx of new buyers. In the 1920s, this was not the case. Eighty percent of American families had virtually no savings, and only one-half to 1 percent of Americans controlled over a third of the wealth. This scenario meant that there were no new buyers coming into the marketplace, and nowhere for sellers to unload their stock as the speculation came to a close. In addition, the vast majority of Americans with limited savings lost their accounts as local banks closed, and likewise lost their jobs as investment in business and industry came to a screeching halt.
Finally, one of the most important factors in the crash was the contagion effect of panic. For much of the 1920s, the public felt confident that prosperity would continue forever, and therefore, in a self-fulfilling cycle, the market continued to grow. But once the panic began, it spread quickly and with the same cyclical results; people were worried that the market was going down, they sold their stock, and the market continued to drop. This was partly due to Americans’ inability to weather market volatility, given the limited cash surpluses they had on hand, as well as their psychological concern that economic recovery might never happen.
IN THE AFTERMATH OF THE CRASH
After the crash, Hoover announced that the economy was “fundamentally sound.” On the last day of trading in 1929, the New York Stock Exchange held its annual wild and lavish party, complete with confetti, musicians, and illegal alcohol. The U.S. Department of Labor predicted that 1930 would be “a splendid employment year.” These sentiments were not as baseless as it may seem in hindsight. Historically, markets cycled up and down, and periods of growth were often followed by downturns that corrected themselves. But this time, there was no market correction; rather, the abrupt shock of the crash was followed by an even more devastating depression. Investors, along with the general public, withdrew their money from banks by the thousands, fearing the banks would go under. The more people pulled out their money in bank runs, the closer the banks came to insolvency (Figure).
The contagion effect of the crash grew quickly. With investors losing billions of dollars, they invested very little in new or expanded businesses. At this time, two industries had the greatest impact on the country’s economic future in terms of investment, potential growth, and employment: automotive and construction. After the crash, both were hit hard. In November 1929, fewer cars were built than in any other month since November 1919. Even before the crash, widespread saturation of the market meant that few Americans bought them, leading to a slowdown. Afterward, very few could afford them. By 1933, Stutz, Locomobile, Durant, Franklin, Deusenberg, and Pierce-Arrow automobiles, all luxury models, were largely unavailable; production had ground to a halt. They would not be made again until 1949. In construction, the drop-off was even more dramatic. It would be another thirty years before a new hotel or theater was built in New York City. The Empire State Building itself stood half empty for years after being completed in 1931.
The damage to major industries led to, and reflected, limited purchasing by both consumers and businesses. Even those Americans who continued to make a modest income during the Great Depression lost the drive for conspicuous consumption that they exhibited in the 1920s. People with less money to buy goods could not help businesses grow; in turn, businesses with no market for their products could not hire workers or purchase raw materials. Employers began to lay off workers. The country’s gross national product declined by over 25 percent within a year, and wages and salaries declined by $4 billion. Unemployment tripled, from 1.5 million at the end of 1929 to 4.5 million by the end of 1930. By mid-1930, the slide into economic chaos had begun but was nowhere near complete.
THE NEW REALITY FOR AMERICANS
For most Americans, the crash affected daily life in myriad ways. In the immediate aftermath, there was a run on the banks, where citizens took their money out, if they could get it, and hid their savings under mattresses, in bookshelves, or anywhere else they felt was safe. Some went so far as to exchange their dollars for gold and ship it out of the country. A number of banks failed outright, and others, in their attempts to stay solvent, called in loans that people could not afford to repay. Working-class Americans saw their wages drop: Even Henry Ford, the champion of a high minimum wage, began lowering wages by as much as a dollar a day. Southern cotton planters paid workers only twenty cents for every one hundred pounds of cotton picked, meaning that the strongest picker might earn sixty cents for a fourteen-hour day of work. Cities struggled to collect property taxes and subsequently laid off teachers and police.
The new hardships that people faced were not always immediately apparent; many communities felt the changes but could not necessarily look out their windows and see anything different. Men who lost their jobs didn’t stand on street corners begging; they disappeared. They might be found keeping warm by a trashcan bonfire or picking through garbage at dawn, but mostly, they stayed out of public view. As the effects of the crash continued, however, the results became more evident. Those living in cities grew accustomed to seeing long breadlines of unemployed men waiting for a meal (Figure). Companies fired workers and tore down employee housing to avoid paying property taxes. The landscape of the country had changed.
The hardships of the Great Depression threw family life into disarray. Both marriage and birth rates declined in the decade after the crash. The most vulnerable members of society—children, women, minorities, and the working class—struggled the most. Parents often sent children out to beg for food at restaurants and stores to save themselves from the disgrace of begging. Many children dropped out of school, and even fewer went to college. Childhood, as it had existed in the prosperous twenties, was over. And yet, for many children living in rural areas where the affluence of the previous decade was not fully developed, the Depression was not viewed as a great challenge. School continued. Play was simple and enjoyed. Families adapted by growing more in gardens, canning, and preserving, wasting little food if any. Home-sewn clothing became the norm as the decade progressed, as did creative methods of shoe repair with cardboard soles. Yet, one always knew of stories of the “other” families who suffered more, including those living in cardboard boxes or caves. By one estimate, as many as 200,000 children moved about the country as vagrants due to familial disintegration.
Women’s lives, too, were profoundly affected. Some wives and mothers sought employment to make ends meet, an undertaking that was often met with strong resistance from husbands and potential employers. Many men derided and criticized women who worked, feeling that jobs should go to unemployed men. Some campaigned to keep companies from hiring married women, and an increasing number of school districts expanded the long-held practice of banning the hiring of married female teachers. Despite the pushback, women entered the workforce in increasing numbers, from ten million at the start of the Depression to nearly thirteen million by the end of the 1930s. This increase took place in spite of the twenty-six states that passed a variety of laws to prohibit the employment of married women. Several women found employment in the emerging pink collar occupations, viewed as traditional women’s work, including jobs as telephone operators, social workers, and secretaries. Others took jobs as maids and housecleaners, working for those fortunate few who had maintained their wealth.
White women’s forays into domestic service came at the expense of minority women, who had even fewer employment options. Unsurprisingly, African American men and women experienced unemployment, and the grinding poverty that followed, at double and triple the rates of their white counterparts. By 1932, unemployment among African Americans reached near 50 percent. In rural areas, where large numbers of African Americans continued to live despite the Great Migration of 1910–1930, depression-era life represented an intensified version of the poverty that they traditionally experienced. Subsistence farming allowed many African Americans who lost either their land or jobs working for white landholders to survive, but their hardships increased. Life for African Americans in urban settings was equally trying, with blacks and working-class whites living in close proximity and competing for scarce jobs and resources.
Life for all rural Americans was difficult. Farmers largely did not experience the widespread prosperity of the 1920s. Although continued advancements in farming techniques and agricultural machinery led to increased agricultural production, decreasing demand (particularly in the previous markets created by World War I) steadily drove down commodity prices. As a result, farmers could barely pay the debt they owed on machinery and land mortgages, and even then could do so only as a result of generous lines of credit from banks. While factory workers may have lost their jobs and savings in the crash, many farmers also lost their homes, due to the thousands of farm foreclosures sought by desperate bankers. Between 1930 and 1935, nearly 750,000 family farms disappeared through foreclosure or bankruptcy. Even for those who managed to keep their farms, there was little market for their crops. Unemployed workers had less money to spend on food, and when they did purchase goods, the market excess had driven prices so low that farmers could barely piece together a living. A now-famous example of the farmer’s plight is that, when the price of coal began to exceed that of corn, farmers would simply burn corn to stay warm in the winter.
As the effects of the Great Depression worsened, wealthier Americans had particular concern for “the deserving poor”—those who had lost all of their money due to no fault of their own. This concept gained greater attention beginning in the Progressive Era of the late nineteenth and early twentieth centuries, when early social reformers sought to improve the quality of life for all Americans by addressing the poverty that was becoming more prevalent, particularly in emerging urban areas. By the time of the Great Depression, social reformers and humanitarian agencies had determined that the “deserving poor” belonged to a different category from those who had speculated and lost. However, the sheer volume of Americans who fell into this group meant that charitable assistance could not begin to reach them all. Some fifteen million “deserving poor,” or a full one-third of the labor force, were struggling by 1932. The country had no mechanism or system in place to help so many; however, Hoover remained adamant that such relief should rest in the hands of private agencies, not with the federal government (Figure).
Unable to receive aid from the government, Americans thus turned to private charities; churches, synagogues, and other religious organizations; and state aid. But these organizations were not prepared to deal with the scope of the problem. Private aid organizations showed declining assets as well during the Depression, with fewer Americans possessing the ability to donate to such charities. Likewise, state governments were particularly ill-equipped. Governor Franklin D. Roosevelt was the first to institute a Department of Welfare in New York in 1929. City governments had equally little to offer. In New York City in 1932, family allowances were $2.39 per week, and only one-half of the families who qualified actually received them. In Detroit, allowances fell to fifteen cents a day per person, and eventually ran out completely. In most cases, relief was only in the form of food and fuel; organizations provided nothing in the way of rent, shelter, medical care, clothing, or other necessities. There was no infrastructure to support the elderly, who were the most vulnerable, and this population largely depended on their adult children to support them, adding to families’ burdens (Figure).
During this time, local community groups, such as police and teachers, worked to help the neediest. New York City police, for example, began contributing 1 percent of their salaries to start a food fund that was geared to help those found starving on the streets. In 1932, New York City schoolteachers also joined forces to try to help; they contributed as much as $250,000 per month from their own salaries to help needy children. Chicago teachers did the same, feeding some eleven thousand students out of their own pockets in 1931, despite the fact that many of them had not been paid a salary in months. These noble efforts, however, failed to fully address the level of desperation that the American public was facing.
Section Summary
The prosperous decade leading up to the stock market crash of 1929, with easy access to credit and a culture that encouraged speculation and risk-taking, put into place the conditions for the country’s fall. The stock market, which had been growing for years, began to decline in the summer and early fall of 1929, precipitating a panic that led to a massive stock sell-off in late October. In one month, the market lost close to 40 percent of its value. Although only a small percentage of Americans had invested in the stock market, the crash affected everyone. Banks lost millions and, in response, foreclosed on business and personal loans, which in turn pressured customers to pay back their loans, whether or not they had the cash. As the pressure mounted on individuals, the effects of the crash continued to spread. The state of the international economy, the inequitable income distribution in the United States, and, perhaps most importantly, the contagion effect of panic all played roles in the continued downward spiral of the economy.
In the immediate aftermath of the crash, the government was confident that the economy would rebound. But several factors led it to worsen instead. One significant issue was the integral role of automobiles and construction in American industry. With the crash, there was no money for either auto purchases or major construction projects; these industries therefore suffered, laying off workers, cutting wages, and reducing benefits. Affluent Americans considered the deserving poor—those who lost their money due to no fault of their own—to be especially in need of help. But at the outset of the Great Depression, there were few social safety nets in place to provide them with the necessary relief. While some families retained their wealth and middle-class lifestyle, many more were plunged quite suddenly into poverty and often homelessness. Children dropped out of school, mothers and wives went into domestic service, and the fabric of American society changed inexorably.
Review Questions
Which of the following is a cause of the stock market crash of 1929?
- too many people invested in the market
- investors made risky investments with borrowed money
- the federal government invested heavily in business stock
- World War I created optimal conditions for an eventual crash
Hint:
B
Which of the following groups would not be considered “the deserving poor” by social welfare groups and humanitarians in the 1930s?
- vagrant children
- unemployed workers
- stock speculators
- single mothers
Hint:
C
What were Hoover’s plans when he first entered office, and how were these reflective of the years that preceded the Great Depression?
Hint:
At the outset of his presidency, Hoover planned to establish an agenda that would promote continued economic prosperity and eradicate poverty. He planned to eliminate federal regulations of the economy, which he believed would allow for maximum growth. For Americans themselves, he advocated a spirit of rugged individualism: Americans could bring about their own success or failure in partnership with the government, but remain unhindered by unnecessary government intervention in their everyday lives. These philosophies and policies reflected both the prosperity and optimism of the previous decade and a continuation of the postwar “return to normalcy” championed by Hoover’s Republican predecessors.
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2025-03-18T00:37:23.470004
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https://oercommons.org/courseware/lesson/15527/overview
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President Hoover’s Response
Overview
By the end of this section, you will be able to:
- Explain Herbert Hoover’s responses to the Great Depression and how they reflected his political philosophy
- Identify the local, city, and state efforts to combat the Great Depression
- Analyze the frustration and anger that a majority of Americans directed at Herbert Hoover
President Hoover was unprepared for the scope of the depression crisis, and his limited response did not begin to help the millions of Americans in need. The steps he took were very much in keeping with his philosophy of limited government, a philosophy that many had shared with him until the upheavals of the Great Depression made it clear that a more direct government response was required. But Hoover was stubborn in his refusal to give “handouts,” as he saw direct government aid. He called for a spirit of volunteerism among America’s businesses, asking them to keep workers employed, and he exhorted the American people to tighten their belts and make do in the spirit of “rugged individualism.” While Hoover’s philosophy and his appeal to the country were very much in keeping with his character, it was not enough to keep the economy from plummeting further into economic chaos.
The steps Hoover did ultimately take were too little, too late. He created programs for putting people back to work and helping beleaguered local and state charities with aid. But the programs were small in scale and highly specific as to who could benefit, and they only touched a small percentage of those in need. As the situation worsened, the public grew increasingly unhappy with Hoover. He left office with one of the lowest approval ratings of any president in history.
THE INITIAL REACTION
In the immediate aftermath of Black Tuesday, Hoover sought to reassure Americans that all was well. Reading his words after the fact, it is easy to find fault. In 1929 he said, “Any lack of confidence in the economic future or the strength of business in the United States is foolish.” In 1930, he stated, “The worst is behind us.” In 1931, he pledged federal aid should he ever witness starvation in the country; but as of that date, he had yet to see such need in America, despite the very real evidence that children and the elderly were starving to death. Yet Hoover was neither intentionally blind nor unsympathetic. He simply held fast to a belief system that did not change as the realities of the Great Depression set in.
Hoover believed strongly in the ethos of American individualism: that hard work brought its own rewards. His life story testified to that belief. Hoover was born into poverty, made his way through college at Stanford University, and eventually made his fortune as an engineer. This experience, as well as his extensive travels in China and throughout Europe, shaped his fundamental conviction that the very existence of American civilization depended upon the moral fiber of its citizens, as evidenced by their ability to overcome all hardships through individual effort and resolve. The idea of government handouts to Americans was repellant to him. Whereas Europeans might need assistance, such as his hunger relief work in Belgium during and after World War I, he believed the American character to be different. In a 1931 radio address, he said, “The spread of government destroys initiative and thus destroys character.”
Likewise, Hoover was not completely unaware of the potential harm that wild stock speculation might create if left unchecked. As secretary of commerce, Hoover often warned President Coolidge of the dangers that such speculation engendered. In the weeks before his inauguration, he offered many interviews to newspapers and magazines, urging Americans to curtail their rampant stock investments, and even encouraged the Federal Reserve to raise the discount rate to make it more costly for local banks to lend money to potential speculators. However, fearful of creating a panic, Hoover never issued a stern warning to discourage Americans from such investments. Neither Hoover, nor any other politician of that day, ever gave serious thought to outright government regulation of the stock market. This was even true in his personal choices, as Hoover often lamented poor stock advice he had once offered to a friend. When the stock nose-dived, Hoover bought the shares from his friend to assuage his guilt, vowing never again to advise anyone on matters of investment.
In keeping with these principles, Hoover’s response to the crash focused on two very common American traditions: He asked individuals to tighten their belts and work harder, and he asked the business community to voluntarily help sustain the economy by retaining workers and continuing production. He immediately summoned a conference of leading industrialists to meet in Washington, DC, urging them to maintain their current wages while America rode out this brief economic panic. The crash, he assured business leaders, was not part of a greater downturn; they had nothing to worry about. Similar meetings with utility companies and railroad executives elicited promises for billions of dollars in new construction projects, while labor leaders agreed to withhold demands for wage increases and workers continued to labor. Hoover also persuaded Congress to pass a $160 million tax cut to bolster American incomes, leading many to conclude that the president was doing all he could to stem the tide of the panic. In April 1930, the New York Times editorial board concluded that “No one in his place could have done more.”
However, these modest steps were not enough. By late 1931, when it became clear that the economy would not improve on its own, Hoover recognized the need for some government intervention. He created the President’s Emergency Committee for Employment (PECE), later renamed the President’s Organization of Unemployment Relief (POUR). In keeping with Hoover’s distaste of what he viewed as handouts, this organization did not provide direct federal relief to people in need. Instead, it assisted state and private relief agencies, such as the Red Cross, Salvation Army, YMCA, and Community Chest. Hoover also strongly urged people of means to donate funds to help the poor, and he himself gave significant private donations to worthy causes. But these private efforts could not alleviate the widespread effects of poverty.
Congress pushed for a more direct government response to the hardship. In 1930–1931, it attempted to pass a $60 million bill to provide relief to drought victims by allowing them access to food, fertilizer, and animal feed. Hoover stood fast in his refusal to provide food, resisting any element of direct relief. The final bill of $47 million provided for everything except food but did not come close to adequately addressing the crisis. Again in 1931, Congress proposed the Federal Emergency Relief Bill, which would have provided $375 million to states to help provide food, clothing, and shelter to the homeless. But Hoover opposed the bill, stating that it ruined the balance of power between states and the federal government, and in February 1932, it was defeated by fourteen votes.
However, the president’s adamant opposition to direct-relief federal government programs should not be viewed as one of indifference or uncaring toward the suffering American people. His personal sympathy for those in need was boundless. Hoover was one of only two presidents to reject his salary for the office he held. Throughout the Great Depression, he donated an average of $25,000 annually to various relief organizations to assist in their efforts. Furthermore, he helped to raise $500,000 in private funds to support the White House Conference on Child Health and Welfare in 1930. Rather than indifference or heartlessness, Hoover’s steadfast adherence to a philosophy of individualism as the path toward long-term American recovery explained many of his policy decisions. “A voluntary deed,” he repeatedly commented, “is infinitely more precious to our national ideal and spirit than a thousand-fold poured from the Treasury.”
As conditions worsened, however, Hoover eventually relaxed his opposition to federal relief and formed the Reconstruction Finance Corporation (RFC) in 1932, in part because it was an election year and Hoover hoped to keep his office. Although not a form of direct relief to the American people in greatest need, the RFC was much larger in scope than any preceding effort, setting aside $2 billion in taxpayer money to rescue banks, credit unions, and insurance companies. The goal was to boost confidence in the nation’s financial institutions by ensuring that they were on solid footing. This model was flawed on a number of levels. First, the program only lent money to banks with sufficient collateral, which meant that most of the aid went to large banks. In fact, of the first $61 million loaned, $41 million went to just three banks. Small town and rural banks got almost nothing. Furthermore, at this time, confidence in financial institutions was not the primary concern of most Americans. They needed food and jobs. Many had no money to put into the banks, no matter how confident they were that the banks were safe.
Hoover’s other attempt at federal assistance also occurred in 1932, when he endorsed a bill by Senator Robert Wagner of New York. This was the Emergency Relief and Construction Act. This act authorized the RFC to expand beyond loans to financial institutions and allotted $1.5 billion to states to fund local public works projects. This program failed to deliver the kind of help needed, however, as Hoover severely limited the types of projects it could fund to those that were ultimately self-paying (such as toll bridges and public housing) and those that required skilled workers. While well intended, these programs maintained the status quo, and there was still no direct federal relief to the individuals who so desperately needed it.
PUBLIC REACTION TO HOOVER
Hoover’s steadfast resistance to government aid cost him the reelection and has placed him squarely at the forefront of the most unpopular presidents, according to public opinion, in modern American history. His name became synonymous with the poverty of the era: “Hoovervilles” became the common name for homeless shantytowns (Figure) and “Hoover blankets” for the newspapers that the homeless used to keep warm. A “Hoover flag” was a pants pocket—empty of all money—turned inside out. By the 1932 election, hitchhikers held up signs reading: “If you don’t give me a ride, I’ll vote for Hoover.” Americans did not necessarily believe that Hoover caused the Great Depression. Their anger stemmed instead from what appeared to be a willful refusal to help regular citizens with direct aid that might allow them to recover from the crisis.
FRUSTRATION AND PROTEST: A BAD SITUATION GROWS WORSE FOR HOOVER
Desperation and frustration often create emotional responses, and the Great Depression was no exception. Throughout 1931–1932, companies trying to stay afloat sharply cut worker wages, and, in response, workers protested in increasingly bitter strikes. As the Depression unfolded, over 80 percent of automotive workers lost their jobs. Even the typically prosperous Ford Motor Company laid off two-thirds of its workforce.
In 1932, a major strike at the Ford Motor Company factory near Detroit resulted in over sixty injuries and four deaths. Often referred to as the Ford Hunger March, the event unfolded as a planned demonstration among unemployed Ford workers who, to protest their desperate situation, marched nine miles from Detroit to the company’s River Rouge plant in Dearborn. At the Dearborn city limits, local police launched tear gas at the roughly three thousand protestors, who responded by throwing stones and clods of dirt. When they finally reached the gates of the plant, protestors faced more police and firemen, as well as private security guards. As the firemen turned hoses onto the protestors, the police and security guards opened fire. In addition to those killed and injured, police arrested fifty protestors. One week later, sixty thousand mourners attended the public funerals of the four victims of what many protesters labeled police brutality. The event set the tone for worsening labor relations in the U.S.
Farmers also organized and protested, often violently. The most notable example was the Farm Holiday Association. Led by Milo Reno, this organization held significant sway among farmers in Iowa, Nebraska, Wisconsin, Minnesota, and the Dakotas. Although they never comprised a majority of farmers in any of these states, their public actions drew press attention nationwide. Among their demands, the association sought a federal government plan to set agricultural prices artificially high enough to cover the farmers’ costs, as well as a government commitment to sell any farm surpluses on the world market. To achieve their goals, the group called for farm holidays, during which farmers would neither sell their produce nor purchase any other goods until the government met their demands. However, the greatest strength of the association came from the unexpected and seldom-planned actions of its members, which included barricading roads into markets, attacking nonmember farmers, and destroying their produce. Some members even raided small town stores, destroying produce on the shelves. Members also engaged in “penny auctions,” bidding pennies on foreclosed farm land and threatening any potential buyers with bodily harm if they competed in the sale. Once they won the auction, the association returned the land to the original owner. In Iowa, farmers threatened to hang a local judge if he signed any more farm foreclosures. At least one death occurred as a direct result of these protests before they waned following the election of Franklin Roosevelt.
One of the most notable protest movements occurred toward the end of Hoover’s presidency and centered on the Bonus Expeditionary Force, or Bonus Army, in the spring of 1932. In this protest, approximately fifteen thousand World War I veterans marched on Washington to demand early payment of their veteran bonuses, which were not due to be paid until 1945. The group camped out in vacant federal buildings and set up camps in Anacostia Flats near the Capitol building (Figure).
Many veterans remained in the city in protest for nearly two months, although the U.S. Senate officially rejected their request in July. By the middle of that month, Hoover wanted them gone. He ordered the police to empty the buildings and clear out the camps, and in the exchange that followed, police fired into the crowd, killing two veterans. Fearing an armed uprising, Hoover then ordered General Douglas MacArthur, along with his aides, Dwight Eisenhower and George Patton, to forcibly remove the veterans from Anacostia Flats. The ensuing raid proved catastrophic, as the military burned down the shantytown and injured dozens of people, including a twelve-week-old infant who was killed when accidentally struck by a tear gas canister (Figure).
As Americans bore witness to photographs and newsreels of the U.S. Army forcibly removing veterans, Hoover’s popularity plummeted even further. By the summer of 1932, he was largely a defeated man. His pessimism and failure mirrored that of the nation’s citizens. America was a country in desperate need: in need of a charismatic leader to restore public confidence as well as provide concrete solutions to pull the economy out of the Great Depression.
Whether he truly believed it or simply thought the American people wanted to hear it, Hoover continued to state publicly that the country was getting back on track. Listen as he speaks about the “Success of Recovery” at a campaign stop in Detroit, Michigan on October 22, 1932.
Section Summary
President Hoover’s deeply held philosophy of American individualism, which he maintained despite extraordinary economic circumstances, made him particularly unsuited to deal with the crisis of the Great Depression. He greatly resisted government intervention, considering it a path to the downfall of American greatness. His initial response of asking Americans to find their own paths to recovery and seeking voluntary business measures to stimulate the economy could not stem the tide of the Depression. Ultimately, Hoover did create some federal relief programs, such as the Reconstruction Finance Corporation (RFC), which sought to boost public confidence in financial institutions by ensuring that they were on solid footing. When this measure did little to help impoverished individuals, he signed the Emergency Relief Act, which allowed the RFC to invest in local public works projects. But even this was too little, too late. The severe limits on the types of projects funded and type of workers used meant that most Americans saw no benefit.
The American public ultimately responded with anger and protest to Hoover’s apparent inability to create solutions. Protests ranged from factory strikes to farm riots, culminating in the notorious Bonus Army protest in the spring of 1932. Veterans from World War I lobbied to receive their bonuses immediately, rather than waiting until 1945. The government denied them, and in the ensuing chaos, Hoover called in the military to disrupt the protest. The violence of this act was the final blow for Hoover, whose popularity was already at an all-time low.
Review Questions
Which of the following protests was directly related to federal policies, and thus had the greatest impact in creating a negative public perception of the Hoover presidency?
- the Farm Holiday Association
- the Ford Motor Company labor strikes
- the Bonus Expeditionary Force
- the widespread appearance of “Hooverville” shantytowns
Hint:
C
Which of the following groups or bodies did not offer direct relief to needy people?
- the federal government
- local police and schoolteachers
- churches and synagogues
- wealthy individuals
Hint:
A
What attempts did Hoover make to offer federal relief? How would you evaluate the success or failure of these programs?
Hint:
Hoover formed the Reconstruction Finance Corporation (RFC) in 1932. This represented a significant effort, although it did not provide any direct aid to needy Americans. The RFC set aside $2 billion in taxpayer money to rescue banks, credit unions, and insurance companies, hoping to promote Americans’ confidence in financial institutions. However, by lending money only to banks with sufficient collateral, he ensured that most of the recipients of the aid were large banks. Additionally, most Americans at this time did not have assets to place into banks, however confident they may have felt. In 1932, Hoover also endorsed the Emergency Relief and Construction Act, which allotted $1.5 billion to states to fund local public works projects. Hoover’s limitations upon the types of projects that could receive funding and the types of workers who could participate, however, limited the program’s utility.
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oercommons
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2025-03-18T00:37:23.500187
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https://oercommons.org/courseware/lesson/15528/overview
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The Depths of the Great Depression
Overview
By the end of this section, you will be able to:
- Identify the challenges that everyday Americans faced as a result of the Great Depression and analyze the government’s initial unwillingness to provide assistance
- Explain the particular challenges that African Americans faced during the crisis
- Identify the unique challenges that farmers in the Great Plains faced during this period
From industrial strongholds to the rural Great Plains, from factory workers to farmers, the Great Depression affected millions. In cities, as industry slowed, then sometimes stopped altogether, workers lost jobs and joined breadlines, or sought out other charitable efforts. With limited government relief efforts, private charities tried to help, but they were unable to match the pace of demand. In rural areas, farmers suffered still more. In some parts of the country, prices for crops dropped so precipitously that farmers could not earn enough to pay their mortgages, losing their farms to foreclosure. In the Great Plains, one of the worst droughts in history left the land barren and unfit for growing even minimal food to live on.
The country’s most vulnerable populations, such as children, the elderly, and those subject to discrimination, like African Americans, were the hardest hit. Most white Americans felt entitled to what few jobs were available, leaving African Americans unable to find work, even in the jobs once considered their domain. In all, the economic misery was unprecedented in the country’s history.
STARVING TO DEATH
By the end of 1932, the Great Depression had affected some sixty million people, most of whom wealthier Americans perceived as the “deserving poor.” Yet, at the time, federal efforts to help those in need were extremely limited, and national charities had neither the capacity nor the will to elicit the large-scale response required to address the problem. The American Red Cross did exist, but Chairman John Barton Payne contended that unemployment was not an “Act of God” but rather an “Act of Man,” and therefore refused to get involved in widespread direct relief efforts. Clubs like the Elks tried to provide food, as did small groups of individually organized college students. Religious organizations remained on the front lines, offering food and shelter. In larger cities, breadlines and soup lines became a common sight. At one count in 1932, there were as many as eighty-two breadlines in New York City.
Despite these efforts, however, people were destitute and ultimately starving. Families would first run through any savings, if they were lucky enough to have any. Then, the few who had insurance would cash out their policies. Cash surrender payments of individual insurance policies tripled in the first three years of the Great Depression, with insurance companies issuing total payments in excess of $1.2 billion in 1932 alone. When those funds were depleted, people would borrow from family and friends, and when they could get no more, they would simply stop paying rent or mortgage payments. When evicted, they would move in with relatives, whose own situation was likely only a step or two behind. The added burden of additional people would speed along that family’s demise, and the cycle would continue. This situation spiraled downward, and did so quickly. Even as late as 1939, over 60 percent of rural households, and 82 percent of farm families, were classified as “impoverished.” In larger urban areas, unemployment levels exceeded the national average, with over half a million unemployed workers in Chicago, and nearly a million in New York City. Breadlines and soup kitchens were packed, serving as many as eighty-five thousand meals daily in New York City alone. Over fifty thousand New York citizens were homeless by the end of 1932.
Children, in particular, felt the brunt of poverty. Many in coastal cities would roam the docks in search of spoiled vegetables to bring home. Elsewhere, children begged at the doors of more well-off neighbors, hoping for stale bread, table scraps, or raw potato peelings. Said one childhood survivor of the Great Depression, “You get used to hunger. After the first few days it doesn’t even hurt; you just get weak.” In 1931 alone, there were at least twenty documented cases of starvation; in 1934, that number grew to 110. In rural areas where such documentation was lacking, the number was likely far higher. And while the middle class did not suffer from starvation, they experienced hunger as well.
By the time Hoover left office in 1933, the poor survived not on relief efforts, but because they had learned to be poor. A family with little food would stay in bed to save fuel and avoid burning calories. People began eating parts of animals that had normally been considered waste. They scavenged for scrap wood to burn in the furnace, and when electricity was turned off, it was not uncommon to try and tap into a neighbor’s wire. Family members swapped clothes; sisters might take turns going to church in the one dress they owned. As one girl in a mountain town told her teacher, who had said to go home and get food, “I can’t. It’s my sister’s turn to eat.”
For his book on the Great Depression, Hard Times, author Studs Terkel interviewed hundreds of Americans from across the country. He subsequently selected over seventy interviews to air on a radio show that was based in Chicago. Visit Studs Terkel: Conversations with America to listen to those interviews, during which participants reflect on their personal hardships as well as on national events during the Great Depression.
BLACK AND POOR: AFRICAN AMERICANS AND THE GREAT DEPRESSION
Most African Americans did not participate in the land boom and stock market speculation that preceded the crash, but that did not stop the effects of the Great Depression from hitting them particularly hard. Subject to continuing racial discrimination, blacks nationwide fared even worse than their hard-hit white counterparts. As the prices for cotton and other agricultural products plummeted, farm owners paid workers less or simply laid them off. Landlords evicted sharecroppers, and even those who owned their land outright had to abandon it when there was no way to earn any income.
In cities, African Americans fared no better. Unemployment was rampant, and many whites felt that any available jobs belonged to whites first. In some Northern cities, whites would conspire to have African American workers fired to allow white workers access to their jobs. Even jobs traditionally held by black workers, such as household servants or janitors, were now going to whites. By 1932, approximately one-half of all black Americans were unemployed. Racial violence also began to rise. In the South, lynching became more common again, with twenty-eight documented lynchings in 1933, compared to eight in 1932. Since communities were preoccupied with their own hardships, and organizing civil rights efforts was a long, difficult process, many resigned themselves to, or even ignored, this culture of racism and violence. Occasionally, however, an incident was notorious enough to gain national attention.
One such incident was the case of the Scottsboro Boys (Figure). In 1931, nine black boys, who had been riding the rails, were arrested for vagrancy and disorderly conduct after an altercation with some white travelers on the train. Two young white women, who had been dressed as boys and traveling with a group of white boys, came forward and said that the black boys had raped them. The case, which was tried in Scottsboro, Alabama, reignited decades of racial hatred and illustrated the injustice of the court system. Despite significant evidence that the women had not been raped at all, along with one of the women subsequently recanting her testimony, the all-white jury quickly convicted the boys and sentenced all but one of them to death. The verdict broke through the veil of indifference toward the plight of African Americans, and protests erupted among newspaper editors, academics, and social reformers in the North. The Communist Party of the United States offered to handle the case and sought retrial; the NAACP later joined in this effort. In all, the case was tried three separate times. The series of trials and retrials, appeals, and overturned convictions shone a spotlight on a system that provided poor legal counsel and relied on all-white juries. In October 1932, the U.S. Supreme Court agreed with the Communist Party’s defense attorneys that the defendants had been denied adequate legal representation at the original trial, and that due process as provided by the Fourteenth Amendment had been denied as a result of the exclusion of any potential black jurors. Eventually, most of the accused received lengthy prison terms and subsequent parole, but avoided the death penalty. The Scottsboro case ultimately laid some of the early groundwork for the modern American civil rights movement. Alabama granted posthumous pardons to all defendants in 2013.
Read Voices from Scottsboro for the perspectives of both participants and spectators in the Scottsboro case, from the initial trial to the moment, in 1976, when one of the women sued for slander.
ENVIRONMENTAL CATASTROPHE MEETS ECONOMIC HARDSHIP: THE DUST BOWL
Despite the widely held belief that rural Americans suffered less in the Great Depression due to their ability to at least grow their own food, this was not the case. Farmers, ranchers, and their families suffered more than any group other than African Americans during the Depression.
From the turn of the century through much of World War I, farmers in the Great Plains experienced prosperity due to unusually good growing conditions, high commodity prices, and generous government farming policies that led to a rush for land. As the federal government continued to purchase all excess produce for the war effort, farmers and ranchers fell into several bad practices, including mortgaging their farms and borrowing money against future production in order to expand. However, after the war, prosperity rapidly dwindled, particularly during the recession of 1921. Seeking to recoup their losses through economies of scale in which they would expand their production even further to take full advantage of their available land and machinery, farmers plowed under native grasses to plant acre after acre of wheat, with little regard for the long-term repercussions to the soil. Regardless of these misguided efforts, commodity prices continued to drop, finally plummeting in 1929, when the price of wheat dropped from two dollars to forty cents per bushel.
Exacerbating the problem was a massive drought that began in 1931 and lasted for eight terrible years. Dust storms roiled through the Great Plains, creating huge, choking clouds that piled up in doorways and filtered into homes through closed windows. Even more quickly than it had boomed, the land of agricultural opportunity went bust, due to widespread overproduction and overuse of the land, as well as to the harsh weather conditions that followed, resulting in the creation of the Dust Bowl (Figure).
Livestock died, or had to be sold, as there was no money for feed. Crops intended to feed the family withered and died in the drought. Terrifying dust storms became more and more frequent, as “black blizzards” of dirt blew across the landscape and created a new illness known as “dust pneumonia.” In 1935 alone, over 850 million tons of topsoil blew away. To put this number in perspective, geologists estimate that it takes the earth five hundred years to naturally regenerate one inch of topsoil; yet, just one significant dust storm could destroy a similar amount. In their desperation to get more from the land, farmers had stripped it of the delicate balance that kept it healthy. Unaware of the consequences, they had moved away from such traditional practices as crop rotation and allowing land to regain its strength by permitting it to lie fallow between plantings, working the land to death.
For farmers, the results were catastrophic. Unlike most factory workers in the cities, in most cases, farmers lost their homes when they lost their livelihood. Most farms and ranches were originally mortgaged to small country banks that understood the dynamics of farming, but as these banks failed, they often sold rural mortgages to larger eastern banks that were less concerned with the specifics of farm life. With the effects of the drought and low commodity prices, farmers could not pay their local banks, which in turn lacked funds to pay the large urban banks. Ultimately, the large banks foreclosed on the farms, often swallowing up the small country banks in the process. It is worth noting that of the five thousand banks that closed between 1930 and 1932, over 75 percent were country banks in locations with populations under 2,500. Given this dynamic, it is easy to see why farmers in the Great Plains remained wary of big city bankers.
For farmers who survived the initial crash, the situation worsened, particularly in the Great Plains where years of overproduction and rapidly declining commodity prices took their toll. Prices continued to decline, and as farmers tried to stay afloat, they produced still more crops, which drove prices even lower. Farms failed at an astounding rate, and farmers sold out at rock-bottom prices. One farm in Shelby, Nebraska was mortgaged at $4,100 and sold for $49.50. One-fourth of the entire state of Mississippi was auctioned off in a single day at a foreclosure auction in April 1932.
Not all farmers tried to keep their land. Many, especially those who had arrived only recently, in an attempt to capitalize on the earlier prosperity, simply walked away (Figure). In hard-hit Oklahoma, thousands of farmers packed up what they could and walked or drove away from the land they thought would be their future. They, along with other displaced farmers from throughout the Great Plains, became known as Okies. Okies were an emblem of the failure of the American breadbasket to deliver on its promise, and their story was made famous in John Steinbeck’s novel, The Grapes of Wrath.
Experience the Interactive Dust Bowl to see how decisions compounded to create peoples’ destiny. Click through to see what choices you would make and where that would take you.
Caroline Henderson on the Dust Bowl
Now we are facing a fourth year of failure. There can be no wheat for us in 1935 in spite of all our careful and expensive work in preparing ground, sowing and re-sowing our allocated acreage. Native grass pastures are permanently damaged, in many cases hopelessly ruined, smothered under by drifted sand. Fences are buried under banks of thistles and hard packed earth or undermined by the eroding action of the wind and lying flat on the ground. Less traveled roads are impassable, covered deep under by sand or the finer silt-like loam. Orchards, groves and hedge-rows cultivated for many years with patient care are dead or dying . . . Impossible it seems not to grieve that the work of hands should prove so perishable. —Caroline Henderson, Shelton, Oklahoma, 1935
Much like other farm families whose livelihoods were destroyed by the Dust Bowl, Caroline Henderson describes a level of hardship that many Americans living in Depression-ravaged cities could never understand. Despite their hard work, millions of Americans were losing both their produce and their homes, sometimes in as little as forty-eight hours, to environmental catastrophes. Lacking any other explanation, many began to question what they had done to incur God’s wrath. Note in particular Henderson’s references to “dead,” “dying,” and “perishable,” and contrast those terms with her depiction of the “careful and expensive work” undertaken by their own hands. Many simply could not understand how such a catastrophe could have occurred.
CHANGING VALUES, CHANGING CULTURE
In the decades before the Great Depression, and particularly in the 1920s, American culture largely reflected the values of individualism, self-reliance, and material success through competition. Novels like F. Scott Fitzgerald’s The Great Gatsby and Sinclair Lewis’s Babbit portrayed wealth and the self-made man in America, albeit in a critical fashion. In film, many silent movies, such as Charlie Chaplin’s The Gold Rush, depicted the rags-to-riches fable that Americans so loved. With the shift in U.S. fortunes, however, came a shift in values, and with it, a new cultural reflection. The arts revealed a new emphasis on the welfare of the whole and the importance of community in preserving family life. While box office sales briefly declined at the beginning of the Depression, they quickly rebounded. Movies offered a way for Americans to think of better times, and people were willing to pay twenty-five cents for a chance to escape, at least for a few hours.
Even more than escapism, other films at the close of the decade reflected on the sense of community and family values that Americans struggled to maintain throughout the entire Depression. John Ford’s screen version of Steinbeck’s The Grapes of Wrath came out in 1940, portraying the haunting story of the Joad family’s exodus from their Oklahoma farm to California in search of a better life. Their journey leads them to realize that they need to join a larger social movement—communism—dedicated to bettering the lives of all people. Tom Joad says, “Well, maybe it's like Casy says, a fella ain’t got a soul of his own, but on’y a piece of a soul—the one big soul that belongs to ever’body.” The greater lesson learned was one of the strength of community in the face of individual adversity.
Another trope was that of the hard-working everyman against greedy banks and corporations. This was perhaps best portrayed in the movies of Frank Capra, whose Mr. Smith Goes to Washington was emblematic of his work. In this 1939 film, Jimmy Stewart plays a legislator sent to Washington to finish out the term of a deceased senator. While there, he fights corruption to ensure the construction of a boy’s camp in his hometown rather than a dam project that would only serve to line the pockets of a few. He ultimately engages in a two-day filibuster, standing up to the power players to do what’s right. The Depression era was a favorite of Capra’s to depict in his films, including It’s a Wonderful Life, released in 1946. In this film, Jimmy Stewart runs a family-owned savings and loan, which at one point faces a bank run similar to those seen in 1929–1930. In the end, community support helps Stewart retain his business and home against the unscrupulous actions of a wealthy banker who sought to bring ruin to his family.
“Brother, Can You Spare a Dime?”
They used to tell me I was building a dream, and so I followed the mob
When there was earth to plow or guns to bear, I was always there, right on the job
They used to tell me I was building a dream, with peace and glory ahead
Why should I be standing in line, just waiting for bread?
Once I built a railroad, I made it run, made it race against time
Once I built a railroad, now it’s done, Brother, can you spare a dime?
Once I built a tower up to the sun, brick and rivet and lime
Once I built a tower, now it’s done, Brother, can you spare a dime?
—Jay Gorney and “Yip” Harburg
“Brother, Can You Spare a Dime?” first appeared in 1932, written for the Broadway musical New Americana by Jay Gorney, a composer who based the song’s music on a Russian lullaby, and Edgar Yipsel “Yip” Harburg, a lyricist who would go on to win an Academy Award for the song “Over the Rainbow” from The Wizard of Oz (1939).
With its lyrics speaking to the plight of the common man during the Great Depression and the refrain appealing to the same sense of community later found in the films of Frank Capra, “Brother, Can You Spare a Dime?” quickly became the de facto anthem of the Great Depression. Recordings by Bing Crosby, Al Jolson, and Rudy Vallee all enjoyed tremendous popularity in the 1930s.
For more on “Brother Can You Spare a Dime?” and the Great Depression, visit ArtsEdge to explore the Kennedy Center’s digital resources and learn the “Story Behind the Song.”
Finally, there was a great deal of pure escapism in the popular culture of the Depression. Even the songs found in films reminded many viewers of the bygone days of prosperity and happiness, from Al Dubin and Henry Warren’s hit “We’re in the Money” to the popular “Happy Days are Here Again.” The latter eventually became the theme song of Franklin Roosevelt’s 1932 presidential campaign. People wanted to forget their worries and enjoy the madcap antics of the Marx Brothers, the youthful charm of Shirley Temple, the dazzling dances of Fred Astaire and Ginger Rogers (Figure), or the comforting morals of the Andy Hardy series. The Hardy series—nine films in all, produced by MGM from 1936 to 1940—starred Judy Garland and Mickey Rooney, and all followed the adventures of a small-town judge and his son. No matter what the challenge, it was never so big that it could not be solved with a musical production put on by the neighborhood kids, bringing together friends and family members in a warm display of community values.
All of these movies reinforced traditional American values, which suffered during these hard times, in part due to declining marriage and birth rates, and increased domestic violence. At the same time, however, they reflected an increased interest in sex and sexuality. While the birth rate was dropping, surveys in Fortune magazine in 1936–1937 found that two-thirds of college students favored birth control, and that 50 percent of men and 25 percent of women admitted to premarital sex, continuing a trend among younger Americans that had begun to emerge in the 1920s. Contraceptive sales soared during the decade, and again, culture reflected this shift. Blonde bombshell Mae West was famous for her sexual innuendoes, and her flirtatious persona was hugely popular, although it got her banned on radio broadcasts throughout the Midwest. Whether West or Garland, Chaplin or Stewart, American film continued to be a barometer of American values, and their challenges, through the decade.
Section Summary
The Great Depression affected huge segments of the American population—sixty million people by one estimate. But certain groups were hit harder than the rest. African Americans faced discrimination in finding employment, as white workers sought even low-wage jobs like housecleaning. Southern blacks moved away from their farms as crop prices failed, migrating en masse to Northern cities, which had little to offer them. Rural Americans were also badly hit. The eight-year drought that began shortly after the stock market crash exacerbated farmers’ and ranchers’ problems. The cultivation of greater amounts of acreage in the preceding decades meant that land was badly overworked, and the drought led to massive and terrible dust storms, creating the region’s nickname, the Dust Bowl. Some farmers tried to remain and buy up more land as neighbors went broke; others simply fled their failed farms and moved away, often to the large-scale migrant farms found in California, to search for a better life that few ever found. Maltreated by Californians who wished to avoid the unwanted competition for jobs that these “Okies” represented, many of the Dust Bowl farmers were left wandering as a result.
There was very little in the way of public assistance to help the poor. While private charities did what they could, the scale of the problem was too large for them to have any lasting effects. People learned to survive as best they could by sending their children out to beg, sharing clothing, and scrounging wood to feed the furnace. Those who could afford it turned to motion pictures for escape. Movies and books during the Great Depression reflected the shift in American cultural norms, away from rugged individualism toward a more community-based lifestyle.
Review Questions
Which of the following hardships did African Americans not typically face during the Great Depression?
- lower farm wages in the South
- the belief that white workers needed jobs more than their black counterparts
- white workers taking historically “black” jobs, such as maids and janitors
- widespread race riots in large urban centers
Hint:
D
Which of the following was not a key factor in the conditions that led to the Dust Bowl?
- previous overcultivation of farmland
- decreasing American demand for farm produce
- unfavorable weather conditions
- poor farming techniques regarding proper irrigation and acreage rotation
Hint:
B
What did the popular movies of the Depression reveal about American values at that time? How did these values contrast with the values Americans held before the Depression?
Hint:
American films in the 1930s served to both assuage the fears and frustrations of many Americans suffering through the Depression and reinforce the idea that communal efforts—town and friends working together—would help to address the hardships. Previous emphasis upon competition and individualism slowly gave way to notions of “neighbor helping neighbor” and seeking group solutions to common problems. The Andy Hardy series, in particular, combined entertainment with the concept of family coming together to solve shared problems. The themes of greed, competition, and capitalist-driven market decisions no longer commanded a large audience among American moviegoers.
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Assessing the Hoover Years on the Eve of the New Deal
Overview
By the end of this section, you will be able to:
- Identify the successes and failures of Herbert Hoover’s presidency
- Determine the fairness and accuracy of assessments of Hoover’s presidency
As so much of the Hoover presidency is circumscribed by the onset of the Great Depression, one must be careful in assessing his successes and failures, so as not to attribute all blame to Hoover. Given the suffering that many Americans endured between the fall of 1929 and Franklin Roosevelt’s inauguration in the spring of 1933, it is easy to lay much of the blame at Hoover’s doorstep (Figure). However, the extent to which Hoover was constrained by the economic circumstances unfolding well before he assumed office offers a few mitigating factors. Put simply, Hoover did not cause the stock market crash. However, his stubborn adherence to a questionable belief in “American individualism,” despite mounting evidence that people were starving, requires that some blame be attributed to his policies (or lack thereof) for the depth and length of the Depression. Yet, Hoover’s presidency was much more than simply combating the Depression. To assess the extent of his inability to provide meaningful national leadership through the darkest months of the Depression, his other policies require consideration.
HOOVER’S FOREIGN POLICY
Although it was a relatively quiet period for U.S. diplomacy, Hoover did help to usher in a period of positive relations, specifically with several Latin American neighbors. This would establish the basis for Franklin Roosevelt’s “Good Neighbor” policy. Following a goodwill tour of Central American countries immediately following his election in 1928, Hoover shaped the subsequent Clark Memorandum—released in 1930—which largely repudiated the previous Roosevelt Corollary, establishing a basis for unlimited American military intervention throughout Latin America. To the contrary, through the memorandum, Hoover asserted that greater emphasis should be placed upon the older Monroe Doctrine, in which the U.S. pledged assistance to her Latin American neighbors should any European powers interfere in Western Hemisphere affairs. Hoover further strengthened relations to the south by withdrawing American troops from Haiti and Nicaragua. Additionally, he outlined with Secretary of State Henry Stimson the Hoover-Stimson Doctrine, which announced that the United States would never recognize claims to territories seized by force (a direct response to the recent Japanese invasion of Manchuria).
Other diplomatic overtures met with less success for Hoover. Most notably, in an effort to support the American economy during the early stages of the Depression, the president signed into law the Smoot-Hawley Tariff in 1930. The law, which raised tariffs on thousands of imports, was intended to increase sales of American-made goods, but predictably angered foreign trade partners who in turn raised their tariffs on American imports, thus shrinking international trade and closing additional markets to desperate American manufacturers. As a result, the global depression worsened further. A similar attempt to spur the world economy, known as the Hoover Moratorium, likewise met with great opposition and little economic benefit. Issued in 1931, the moratorium called for a halt to World War I reparations to be paid by Germany to France, as well as forgiveness of Allied war debts to the U.S.
HOOVER AND CIVIL RIGHTS
Holding true to his belief in individualism, Hoover saw little need for significant civil rights legislation during his presidency, including any overtures from the NAACP to endorse federal anti-lynching legislation. He felt African Americans would benefit more from education and assimilation than from federal legislation or programs; yet he failed to recognize that, at this time in history, federal legislation and programs were required to ensure equal opportunities.
Hoover did give special attention to the improvement of Native American conditions, beginning with his selection of Charles Curtis as his vice-presidential running mate in the 1928 election. Curtis, of the Kaw Tribe, became the country’s first Native American to hold so high an elected office. Hoover subsequently appointed Charles Rhoads as the new commissioner of the Bureau of Indian Affairs and advocated, with Rhoads’ assistance, for Native American self-sufficiency and full assimilation as Americans under the Indian Citizenship Act of 1924. During Hoover’s presidency, federal expenditures for Native American schools and health care doubled.
Cartoons, especially political cartoons, provide a window into the frustrations and worries of an age. Browse the political cartoons at The Changing Face of Herbert Hoover to better understand the historical context of Herbert Hoover’s presidency.
A FINAL ASSESSMENT
Herbert Hoover’s presidency, embarked upon with much promise following his election in November 1928, produced a legacy of mixed reactions. Some Americans blamed him for all of the economic and social woes from which they suffered for the next decade; all blamed him for simply not responding to their needs. As contemporary commentator and actor Will Rogers said at the time, “If an American was lucky enough to find an apple to eat in the Depression and bit into it only to find a worm, they would blame Hoover for the worm.” Likewise, subsequent public opinion polls of presidential popularity, as well as polls of professional historians, routinely rate Hoover in the bottom seven of all U.S. presidents in terms of overall success.
However, Hoover the president was a product of his time. Americans sought a president in 1928 who would continue the policies of normalcy with which many associated the prosperity they enjoyed. They wanted a president who would forego government interference and allow industrial capitalism to grow unfettered. Hoover, from his days as the secretary of commerce, was the ideal candidate. In fact, he was too ideal when the Great Depression actually hit. Holding steadfast to his philosophy of “American individualism,” Hoover proved largely incapable of shifting into economic crisis mode when Americans came to realize that prosperity could not last forever. Desperate to help, but unwilling to compromise on his philosophy, Hoover could not manage a comprehensive solution to the worldwide depression that few foresaw. Only when reelection was less than a year away did a reluctant Hoover initiate significant policies, but even then, they did not provide direct relief. By the start of 1932, unemployment hovered near 25 percent, and thousands of banks and factories were closing their doors. Combined with Hoover’s ill-timed response to the Bonus Army crisis, his political fate was sealed. Americans would look to the next president for a solution. “Democracy is a harsh employer,” Hoover concluded, as he awaited all but certain defeat in the November election of 1932 (Figure).
Section Summary
In Hoover, Americans got the president they had wanted, at least at first. He was third in a line of free-market Republican presidents, elected to continue the policies that had served the economy so well. But when the stock market crashed in 1929, and the underlying weaknesses in the economy came to the fore, Hoover did not act with clear intentionality and speed. His record as a president will likely always bear the taint of his unwillingness to push through substantial government aid, but, despite that failing, his record is not without minor accomplishments. Hoover’s international policies, particularly in regard to Latin America, served the country well. And while his attitude toward civil rights mirrored his conviction that government intervention was a negative force, he did play a key role changing living conditions for Native Americans. In all, it was his—and the country’s—bad luck that his presidency ultimately required a very different philosophy than the one that had gotten him elected.
Review Questions
Which assessment of Herbert Hoover’s presidency is most accurate?
- Hoover’s policies caused the stock market crash and subsequent depression.
- Although he did not cause the stock market crash, Hoover deserves criticism for his inadequate response to it.
- Hoover pledged a great deal of direct federal aid to unemployed Americans, overtaxing the federal budget and worsening the financial crisis.
- Hoover disapproved of American capitalism and therefore attempted to forestall any concrete solutions to the Depression.
Hint:
B
Which of the following phrases best characterizes Herbert Hoover’s foreign policy agenda?
- interventionist, in terms of unwanted interference in other nations’ affairs
- militaristic, in terms of strengthening American armed forces
- isolationist, in terms of preventing America’s interaction with other nations
- mutual respect, in terms of being available to support others when called upon, but not interfering unnecessarily in their affairs
Hint:
D
Critical Thinking Questions
What were the possible causes of the Great Depression? To what extent could a stock market crash of the intensity of 1929 occur again in America?
Why did people feel so confident before the stock market crash of 1929? What were some factors that led to irrational investing?
Why was Herbert Hoover’s response to the initial months of the Great Depression so limited in scope?
How did the cultural products of the Great Depression serve to reflect, shape, and assuage Americans’ fears and concerns during this volatile period? How do our cultural products—such as books, movies, and music—reflect and reinforce our values in our own times?
To what extent did the Great Depression catalyze important changes in Americans’ perceptions of themselves, their national identity, and the role of their government? What evidence of these shifts can you find in the politics and values of our own times?
Why is Herbert Hoover so often blamed for the Great Depression? To what extent is such an assessment fair or accurate?
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Introduction
Overview
- The Rise of Franklin Roosevelt
- The First New Deal
- The Second New Deal
The election of President Franklin Delano Roosevelt signaled both immediate relief for the American public as well as a permanent shift in the role of the federal government in guiding the economy and providing direct assistance to the people, albeit through expensive programs that made extensive budget deficits commonplace. For many, the immediate relief was, at a minimum, psychological: Herbert Hoover was gone, and the situation could not grow worse under Roosevelt. But as his New Deal unfolded, Americans learned more about the fundamental changes their new president brought with him to the Oval Office. In the span of little more than one hundred days, the country witnessed a wave of legislation never seen before or since.
Roosevelt understood the need to “save the patient,” to borrow a medical phrase he often employed, as well as to “cure the ill.” This meant both creating jobs, through such programs as the Works Progress Administration, which provided employment to over eight million Americans (Figure), as well as reconfiguring the structure of the American economy. In pursuit of these two goals, Americans re-elected Roosevelt for three additional terms in the White House and became full partners in the reshaping of their country.
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The Rise of Franklin Roosevelt
Overview
By the end of this section, you should be able to:
- Describe the events of the 1932 presidential election and identify the characteristics that made Franklin Roosevelt a desirable candidate
- Explain why Congress amended the U.S. Constitution to reduce the period of time between presidential elections and inaugurations
Franklin Roosevelt was part of the political establishment and the wealthy elite, but in the 1932 presidential campaign, he did not want to be perceived that way. Roosevelt felt that the country needed sweeping change, and he ran a campaign intended to convince the American people that he could deliver that change. It was not the specifics of his campaign promises that were different; in fact, he gave very few details and likely did not yet have a clear idea of how he would raise the country out of the Great Depression. But he campaigned tirelessly, talking to thousands of people, appearing at his party’s national convention, and striving to show the public that he was a different breed of politician. As Hoover grew more morose and physically unwell in the face of the campaign, Roosevelt thrived. He was elected in a landslide by a country ready for the change he had promised.
THE ELECTION OF FRANKLIN ROOSEVELT
By the 1932 presidential election, Hoover’s popularity was at an all-time low. Despite his efforts to address the hardships that many Americans faced, his ineffectual response to the Great Depression left Americans angry and ready for change. Franklin Roosevelt, though born to wealth and educated at the best schools, offered the change people sought. His experience in politics had previously included a seat in the New York State legislature, a vice-presidential nomination, and a stint as governor of New York. During the latter, he introduced many state-level reforms that later formed the basis of his New Deal as well as worked with several advisors who later formed the Brains Trust that advised his federal agenda.
Roosevelt exuded confidence, which the American public desperately wished to see in their leader (Figure). And, despite his affluence, Americans felt that he could relate to their suffering due to his own physical hardships; he had been struck with polio a decade earlier and was essentially paralyzed from the waist down for the remainder of his life. Roosevelt understood that the public sympathized with his ailment; he likewise developed a genuine empathy for public suffering as a result of his illness. However, he never wanted to be photographed in his wheelchair or appear infirm in any way, for fear that the public’s sympathy would transform into concern over his physical ability to discharge the duties of the Oval Office.
Roosevelt also recognized the need to convey to the voting public that he was not simply another member of the political aristocracy. At a time when the country not only faced its most severe economic challenges to date, but Americans began to question some of the fundamental principles of capitalism and democracy, Roosevelt sought to show that he was different—that he could defy expectations—and through his actions could find creative solutions to address the nation’s problems while restoring public confidence in fundamental American values. As a result, he not only was the first presidential candidate to appear in person at a national political convention to accept his party’s nomination but also flew there through terrible weather from New York to Chicago in order to do so—a risky venture in what was still the early stages of flight as public transportation. At the Democratic National Convention in 1932, he coined the famous phrase: “I pledge myself to a new deal for the American people.” The New Deal did not yet exist, but to the American people, any positive and optimistic response to the Great Depression was a welcome one.
Hoover assumed at first that Roosevelt would be easy to defeat, confident that he could never carry the eastern states and the business vote. He was sorely mistaken. Everywhere he went, Hoover was met with antagonism; anti-Hoover signs and protests were the norm. Hoover’s public persona declined rapidly. Many news accounts reported that he seemed physically unwell, with an ashen face and shaking hands. Often, he seemed as though he would faint, and an aide constantly remained nearby with a chair in case he fell. In contrast, Roosevelt thrived on the campaign. He commented, “I have looked into the faces of thousands of Americans, and they have the frightened look of lost children.”
The election results that November were never really in question: With three million more people voting than in 1928, Roosevelt won by a popular count of twenty-three million to fifteen million. He carried all but six states while winning over 57 percent of the popular vote. Whether they voted due to animosity towards Hoover for his relative inactivity, or out of hope for what Roosevelt would accomplish, the American public committed themselves to a new vision. Historians identify this election as the beginning of a new Democratic coalition, bringing together African Americans, other ethnic minorities, and organized labor as a voting bloc upon whom the party would rely for many of its electoral victories over the next fifty years. Unlike some European nations where similar challenges caused democratic constitutions to crumble and give way to radical ideologies and authoritarian governments, the Roosevelt administration changed the nation’s economic fortunes with reforms, preserved the constitution, and expanded rather than limited the reach of democratic principles into the market economy. As a result, radical alternatives, such as the Fascist movement or Communist Party, remained on the margins of the nation’s political culture.
THE INTERREGNUM
After the landslide election, the country—and Hoover—had to endure the interregnum, the difficult four months between the election and President Roosevelt’s inauguration in March 1933. Congress did not pass a single significant piece of legislation during this period, although Hoover spent much of the time trying to get Roosevelt to commit publicly to a legislative agenda of Hoover’s choosing. Roosevelt remained gracious but refused to begin his administration as the incumbent’s advisor without any legal authority necessary to change policy. Unwilling to tie himself to Hoover’s legacy of failed policies, Roosevelt kept quiet when Hoover supported the passage of a national sales tax. Meanwhile, the country suffered from Hoover’s inability to further drive a legislative agenda through Congress. It was the worst winter since the beginning of the Great Depression, and the banking sector once again suffered another round of panics. While Roosevelt kept his distance from the final tremors of the Hoover administration, the country continued to suffer in wait. In part as a response to the challenges of this time, the U.S. Constitution was subsequently amended to reduce the period from election to inauguration to the now-commonplace two months.
Any ideas that Roosevelt held almost did not come to fruition, thanks to a would-be assassin’s bullet. On February 15, 1933, after delivering a speech from his open car in Miami’s Bayfront Park, local Italian bricklayer Giuseppe Zangara emerged from a crowd of well-wishers to fire six shots from his revolver. Although Roosevelt emerged from the assassination attempt unscathed, Zangara wounded five individuals that day, including Chicago Mayor Tony Cermak, who attended the speech in the hopes of resolving any long-standing differences with the president-elect. Roosevelt and his driver immediately rushed Cermak to the hospital where he died three days later. Roosevelt’s calm and collected response to the event reassured many Americans of his ability to lead the nation through the challenges they faced. All that awaited was Roosevelt’s inauguration before his ideas would unfold to the expectant public.
So what was Roosevelt’s plan? Before he took office, it seems likely that he was not entirely sure. Certain elements were known: He believed in positive government action to solve the Depression; he believed in federal relief, public works, social security, and unemployment insurance; he wanted to restore public confidence in banks; he wanted stronger government regulation of the economy; and he wanted to directly help farmers. But how to take action on these beliefs was more in question. A month before his inauguration, he said to his advisors, “Let’s concentrate upon one thing: Save the people and the nation, and if we have to change our minds twice every day to accomplish that end, we should do it.”
Unlike Hoover, who professed an ideology of “American individualism,” an adherence that rendered him largely incapable of widespread action, Roosevelt remained pragmatic and open-minded to possible solutions. To assist in formulating a variety of relief and recovery programs, Roosevelt turned to a group of men who had previously orchestrated his election campaign and victory. Collectively known as the “Brains Trust” (a phrase coined by a New York Times reporter to describe the multiple “brains” on Roosevelt’s advisory team), the group most notably included Rexford Tugwell, Raymond Moley, and Adolph Berle. Moley, credited with bringing the group into existence, was a government professor who advocated for a new national tax policy to help the nation recover from its economic woes. Tugwell, who eventually focused his energy on the country’s agricultural problems, saw an increased role for the federal government in setting wages and prices across the economy. Berle was a mediating influence, who often advised against a centrally controlled economy, but did see the role that the federal government could play in mediating the stark cycles of prosperity and depression that, if left unchecked, could result in the very situation in which the country presently found itself. Together, these men, along with others, advised Roosevelt through the earliest days of the New Deal and helped to craft significant legislative programs for congressional review and approval.
INAUGURATION DAY: A NEW BEGINNING
March 4, 1933, dawned gray and rainy. Roosevelt rode in an open car along with outgoing president Hoover, facing the public, as he made his way to the U.S. Capitol. Hoover’s mood was somber, still personally angry over his defeat in the general election the previous November; he refused to crack a smile at all during the ride among the crowd, despite Roosevelt’s urging to the contrary. At the ceremony, Roosevelt rose with the aid of leg braces equipped under his specially tailored trousers and placed his hand on a Dutch family Bible as he took his solemn oath. At that very moment, the rain stopped and the sun began to shine directly on the platform, and those present would later claim that it was as though God himself was shining down on Roosevelt and the American people in that moment (Figure).
Bathed in the sunlight, Roosevelt delivered one of the most famous and oft-quoted inaugural addresses in history. He encouraged Americans to work with him to find solutions to the nation’s problems and not to be paralyzed by fear into inaction. Borrowing a wartime analogy provided by Moley, who served as his speechwriter at the time, Roosevelt called upon all Americans to assemble and fight an essential battle against the forces of economic depression. He famously stated, “The only thing we have to fear is fear itself.” Upon hearing his inaugural address, one observer in the crowd later commented, “Any man who can talk like that in times like these is worth every ounce of support a true American has.” To borrow the popular song title of the day, “happy days were here again.” Foregoing the traditional inaugural parties, the new president immediately returned to the White House to begin his work to save the nation.
Visit the American Presidency Project to listen to Roosevelt’s first inaugural speech and identify ways he conveyed optimism and a spirit of community to his listeners.
Section Summary
Franklin Roosevelt was a wealthy, well-educated, and popular politician whose history of polio made him a more sympathetic figure to the public. He did not share any specifics of his plan to bring the country out of the Great Depression, but his attitude of optimism and possibility contrasted strongly with Hoover’s defeated misery. The 1932 election was never really in question, and Roosevelt won in a landslide. During the four-month interregnum, however, Americans continued to endure President Hoover’s failed policies, which led the winter of 1932–1933 to be the worst of the Depression, with unemployment rising to record levels.
When Roosevelt took office in March 1933, he infused the country with a sense of optimism. He still did not have a formal plan but rather invited the American people to join him in the spirit of experimentation. Roosevelt did bring certain beliefs to office: the belief in an active government that would take direct action on federal relief, public works, social services, and direct aid to farmers. But as much as his policies, Roosevelt’s own personality and engaging manner helped the country feel that they were going to get back on track.
Review Questions
Which of the following best describes Roosevelt’s attempts to push his political agenda in the last months of Hoover’s presidency?
- Roosevelt spoke publicly on the issue of direct relief.
- Roosevelt met privately with Hoover to convince him to institute certain policy shifts before his presidency ended.
- Roosevelt awaited his inauguration before introducing any plans.
- Roosevelt met secretly with members of Congress to attempt to win their favor.
Hint:
C
Which of the following policies did Roosevelt not include among his early ideas for a New Deal?
- public works
- government regulation of the economy
- elimination of the gold standard
- aid to farmers
Hint:
D
What was the purpose of Roosevelt’s “Brains Trust?”
Hint:
Roosevelt recruited his “Brains Trust” to advise him in his inception of a variety of relief and recovery programs. Among other things, the members of this group pushed for a new national tax policy; addressed the nation’s agricultural problems; advocated an increased role for the federal government in setting wages and prices; and believed that the federal government could temper the boom-and-bust cycles that rendered the economy unstable. These advisors helped to craft the legislative programs that Roosevelt presented to Congress.
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https://oercommons.org/courseware/lesson/15532/overview
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The First New Deal
Overview
By the end of this section, you should be able to:
- Identify the key pieces of legislation included in Roosevelt’s “First New Deal”
- Assess the strengths, weaknesses, and general effectiveness of the First New Deal
- Explain Roosevelt’s overall vision for addressing the structural problems in the U.S. economy
Much like a surgeon assessing the condition of an emergency room patient, Roosevelt began his administration with a broad, if not specific, strategy in mind: a combination of relief and recovery programs designed to first save the patient (in this case, the American people), and then to find a long-term cure (reform through federal regulation of the economy). What later became known as the “First New Deal” ushered in a wave of legislative activity seldom before seen in the history of the country. By the close of 1933, in an effort to stem the crisis, Congress had passed over fifteen significant pieces of legislation—many of the circulated bills allegedly still wet with ink from the printing presses as members voted upon them. Most bills could be grouped around issues of relief, recovery, and reform. At the outset of the First New Deal, specific goals included 1) bank reform; 2) job creation; 3) economic regulation; and 4) regional planning.
REFORM: THE BANKING CRISIS
When Roosevelt took office, he faced one of the worst moments in the country’s banking history. States were in disarray. New York and Illinois had ordered the closure of their banks in the hopes of avoiding further “bank runs,” which occurred when hundreds (if not thousands) of individuals ran to their banks to withdraw all of their savings. In all, over five thousand banks had been shuttered. Within forty-eight hours of his inauguration, Roosevelt proclaimed an official bank holiday and called Congress into a special session to address the crisis. The resulting Emergency Banking Act of 1933 was signed into law on March 9, 1933, a scant eight hours after Congress first saw it. The law officially took the country off the gold standard, a restrictive practice that, although conservative and traditionally viewed as safe, severely limited the circulation of paper money. Those who held gold were told to sell it to the U.S. Treasury for a discounted rate of a little over twenty dollars per ounce. Furthermore, dollar bills were no longer redeemable in gold. The law also gave the comptroller of currency the power to reorganize all national banks faced with insolvency, a level of federal oversight seldom seen prior to the Great Depression. Between March 11 and March 14, auditors from the Reconstruction Finance Corporation, the Treasury Department, and other federal agencies swept through the country, examining each bank. By March 15, 70 percent of the banks were declared solvent and allowed to reopen.
On March 12, the day before the banks were set to reopen, Roosevelt held his first “fireside chat” (Figure). In this initial radio address to the American people, he explained what the bank examiners had been doing over the previous week. He assured people that any bank open the next day had the federal government’s stamp of approval. The combination of his reassuring manner and the promise that the government was addressing the problems worked wonders in changing the popular mindset. Just as the culture of panic had contributed to the country’s downward spiral after the crash, so did this confidence-inducing move help to build it back up. Consumer confidence returned, and within weeks, close to $1 billion in cash and gold had been brought out from under mattresses and hidden bookshelves, and re-deposited in the nation’s banks. The immediate crisis had been quelled, and the public was ready to believe in their new president.
The Power of Hearth and Home
Fireside chats—Roosevelt’s weekly radio addresses—underscored Roosevelt’s savvy in understanding how best to reach people. Using simple terms and a reassuring tone, he invoked a family patriarch sitting by the fire, explaining to those who trusted him how he was working to help them. It is worth noting how he explained complex financial concepts quite simply, but at the same time, complimented the American people on their “intelligent support.” One of his fireside chats is provided below:
I recognize that the many proclamations from State capitols and from Washington, the legislation, the Treasury regulations, etc., couched for the most part in banking and legal terms, should be explained for the benefit of the average citizen. I owe this in particular because of the fortitude and good temper with which everybody has accepted the inconvenience and hardships of the banking holiday. I know that when you understand what we in Washington have been about I shall continue to have your cooperation as fully as I have had your sympathy and help during the past week. . . .
The success of our whole great national program depends, of course, upon the cooperation of the public—on its intelligent support and use of a reliable system. . . . After all, there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith; you must not be stampeded by rumors or guesses. Let us unite in banishing fear. We have provided the machinery to restore our financial system; it is up to you to support and make it work. It is your problem no less than it is mine. Together we cannot fail.
—Franklin D. Roosevelt, March 12, 1933
A huge part of Roosevelt’s success in turning around the country can be seen in his addresses like these: He built support and galvanized the public. Ironically, Roosevelt, the man who famously said we have nothing to fear but fear itself, had a significant fear: fire. Being paralyzed with polio, he was very afraid of being left near a fireplace. But he knew the power of the hearth and home, and drew on this mental image to help the public view him the way that he hoped to be seen.
Listen to one of Roosevelt's fireside chat speeches. What kind of feeling does his language and demeanor evoke?
In June 1933, Roosevelt replaced the Emergency Banking Act with the more permanent Glass-Steagall Banking Act. This law prohibited commercial banks from engaging in investment banking, therefore stopping the practice of banks speculating in the stock market with deposits. This law also created the Federal Deposit Insurance Corporation, or FDIC, which insured personal bank deposits up to $2,500. Other measures designed to boost confidence in the overall economy beyond the banking system included passage of the Economy Act, which fulfilled Roosevelt’s campaign pledge to reduce government spending by reducing salaries, including his own and those of the Congress. He also signed into law the Securities Act, which required full disclosure to the federal government from all corporations and investment banks that wanted to market stocks and bonds. Roosevelt also sought new revenue through the Beer Tax. As the Twenty-First Amendment, which would repeal the Eighteenth Amendment establishing Prohibition, moved towards ratification, this law authorized the manufacture of 3.2 percent beer and levied a tax on it.
THE FIRST HUNDRED DAYS
In his first hundred days in office, the new president pushed forward an unprecedented number of new bills, all geared towards stabilizing the economy, providing relief to individuals, creating jobs, and helping businesses. A sympathetic Democrat-controlled Congress helped propel his agenda forward.
Relief: Employment for the Masses
Even as he worked to rebuild the economy, Roosevelt recognized that the unemployed millions required jobs more quickly than the economy could provide. In a push to create new jobs, Roosevelt signed the Wagner-Peyser Act, creating the United States Employment Service, which promised states matching funds if they created local employment opportunities. He also authorized $500 million in direct grants through the Federal Emergency Relief Act (FERA). This money went directly to states to infuse relief agencies with the much-needed resources to help the nearly fifteen million unemployed. These two bills illustrate Roosevelt’s dual purposes of providing short-term emergency help and building employment opportunities that would strengthen the economy in the long term.
Roosevelt was aware of the need for immediate help, but he mostly wanted to create more jobs. FERA overseer Harry Hopkins, who later was in charge of the Civil Works Administration (CWA), shared this sentiment. With Hopkins at its helm, the CWA, founded in early 1933, went on to put millions of men and women to work. At its peak, there were some four million Americans repairing bridges, building roads and airports, and undertaking other public projects. Another work program was the Civilian Conservation Corps Relief Act (CCC). The CCC provided government jobs for young men aged fourteen to twenty-four who came from relief families. They would earn thirty dollars per month planting trees, fighting forest fires, and refurbishing historic sites and parks, building an infrastructure that families would continue to enjoy for generations to come. Within the first two months, the CCC employed its first 250,000 men and eventually established about twenty-five hundred camps (Figure).
The various programs that made up the First New Deal are listed in the table below (Table).
| New Deal Legislation | Years Enacted | Brief Description |
|---|---|---|
| Agricultural Adjustment Administration | 1933–1935 | Farm program designed to raise process by curtailing production |
| Civil Works Administration | 1933–1934 | Temporary job relief program |
| Civilian Conservation Corps | 1933–1942 | Employed young men to work in rural areas |
| Farm Credit Administration | 1933-today | Low interest mortgages for farm owners |
| Federal Deposit Insurance Corporation | 1933–today | Insure private bank deposits |
| Federal Emergency Relief Act | 1933 | Direct monetary relief to poor unemployed Americans |
| Glass-Steagall Act | 1933 | Regulate investment banking |
| Homeowners Loan Corporation | 1933–1951 | Government mortgages that allowed people to keep their homes |
| Indian Reorganization Act | 1933 | Abandoned federal policy of assimilation |
| National Recovery Administration | 1933–1935 | Industries agree to codes of fair practice to set price, wage, production levels |
| Public Works Administration | 1933–1938 | Large public works projects |
| Resettlement Administration | 1933–1935 | Resettles poor tenant farmers |
| Securities Act of 1933 | 1933–today | Created SEC; regulates stock transactions |
| Tennessee Valley Authority | 1933–today | Regional development program; brought electrification to the valley |
The final element of Roosevelt’s efforts to provide relief to those in desperate straits was the Home Owners’ Refinancing Act. Created by the Home Owners’ Loan Corporation (HOLC), the program rescued homeowners from foreclosure by refinancing their mortgages. Not only did this save the homes of countless homeowners, but it also saved many of the small banks who owned the original mortgages by relieving them of that responsibility. Later New Deal legislation created the Federal Housing Authority, which eventually standardized the thirty-year mortgage and promoted the housing boom of the post-World War II era. A similar program, created through the Emergency Farm Mortgage Act and Farm Credit Act, provided the same service for farm mortgages.
In this American Experience interview, Neil Maher, author of Nature’s New Deal: The Civilian Conservation Corps and Roots of the Modern Environmental Movement, provides a comprehensive look into what the CCC offered the country—and the president—on issues as diverse as economics, race, and recreation.
Rescuing Farms and Factories
While much of the legislation of the first hundred days focused on immediate relief and job creation through federal programs, Roosevelt was committed to addressing the underlying problems inherent in the American economy. In his efforts to do so, he created two of the most significant pieces of New Deal legislation: the Agricultural Adjustment Act (AAA) and the National Industry Recovery Act (NIRA).
Farms around the country were suffering, but from different causes. In the Great Plains, drought conditions meant that little was growing at all, while in the South, bumper crops and low prices meant that farmers could not sell their goods at prices that could sustain them. The AAA offered some direct relief: Farmers received $4.5 million through relief payments. But the larger part of the program paid southern farmers to reduce their production: Wheat, cotton, corn, hogs, tobacco, rice, and milk farmers were all eligible. Passed into law on May 12, 1933, it was designed to boost prices to a level that would alleviate rural poverty and restore profitability to American agriculture. These price increases would be achieved by encouraging farmers to limit production in order to increase demand while receiving cash payments in return. Corn producers would receive thirty cents per bushel for corn they did not grow. Hog farmers would get five dollars per head for hogs not raised. The program would be financed by a tax on processing plants, passed on to consumers in the form of higher prices.
This was a bold attempt to help farmers address the systemic problems of overproduction and lower commodity prices. Despite previous efforts to regulate farming through subsidies, never before had the federal government intervened on this scale; the notion of paying farmers not to produce crops was unheard of. One significant problem, however, was that, in some cases, there was already an excess of crops, in particular, cotton and hogs, which clogged the marketplace. A bumper crop in 1933, combined with the slow implementation of the AAA, led the government to order the plowing under of ten million acres of cotton, and the butchering of six million baby pigs and 200,000 sows. Although it worked to some degree—the price of cotton increased from six to twelve cents per pound—this move was deeply problematic. Critics saw it as the ultimate example of corrupt capitalism: a government destroying food, while its citizens were starving, in order to drive up prices.
Another problem plaguing this relief effort was the disparity between large commercial farms, which received the largest payments and set the quotas, and the small family farms that felt no relief. Large farms often cut production by laying off sharecroppers or evicting tenant farmers, making the program even worse for them than for small farm owners. Their frustration led to the creation of the Southern Tenant Farmers Union (STFU), an interracial organization that sought to gain government relief for these most disenfranchised of farmers. The STFU organized, protested, and won its members some wage increases through the mid-1930s, but the overall plight of these workers remained dismal. As a result, many of them followed the thousands of Dust Bowl refugees to California (Figure).
Labor Songs and the Southern Tenant Farmers Union
And if the growers get in the way, we’re gonna roll right over them
We’re gonna roll right over them, we’re gonna roll right over them
And if the growers get in the way, we’re gonna roll right over them
We’re gonna roll this union on
—John Handcox, “Roll the Union On”
“Mean Things Happening in This Land,” “Roll the Union On,” and “Strike in Arkansas” are just a few of the folk songs written by John Handcox. A union organizer and STFU member, Handcox became the voice of the worker’s struggle, writing dozens of songs that have continued to be sung by labor activists and folk singers over the years. Handcox joined the STFU in 1935, and used his songs to rally others, stating, “I found out singing was more inspiring than talking . . . to get the attention of the people.”
Racially integrated and with active women members, the STFU was ahead of its time. Although criticized by other union leaders for its relationship with the Communist Party in creating the “Popular Front” for labor activism in 1934, the STFU succeeded in organizing strikes and bringing national attention to the issues that tenant farmers faced. While the programs Roosevelt put in place did not do enough to help these farmers, the STFU—and Handcox’s music—remains a relevant part of the country’s labor movement.
The AAA did succeed on some fronts. By the spring of 1934, farmers had formed over four thousand local committees, with more than three million farmers agreeing to participate. They signed individual contracts agreeing to take land out of production in return for government payments, and checks began to arrive by the end of 1934. For some farmers, especially those with large farms, the program spelled relief.
While Roosevelt hoped the AAA would help farms and farmers, he also sought aid for the beleaguered manufacturing sector. The Emergency Railroad Transportation Act created a national railroad office to encourage cooperation among different railroad companies, hoping to shore up an industry essential to the stability of the manufacturing sector, but one that had been devastated by mismanagement. More importantly, the NIRA suspended antitrust laws and allowed businesses and industries to work together in order to establish codes of fair competition, including issues of price setting and minimum wages. New Deal officials believed that allowing these collaborations would help industries stabilize prices and production levels in the face of competitive overproduction and declining profits; however, at the same time, many felt it important to protect workers from potentially unfair agreements.
A new government agency, the National Recovery Administration (NRA), was central to this plan, and mandated that businesses accept a code that included minimum wages and maximum work hours. In order to protect workers from potentially unfair agreements among factory owners, every industry had its own “code of fair practice” that included workers’ rights to organize and use collective bargaining to ensure that wages rose with prices (Figure). Headed by General Hugh S. Johnson, the NRA worked to create over five hundred different codes for different industries. The administration of such a complex plan naturally created its own problems. While codes for key industries such as automotive and steel made sense, Johnson pushed to create similar codes for dog food manufacturers, those who made shoulder pads for women’s clothing, and even burlesque shows (regulating the number of strippers in any one show).
The NIRA also created the Public Works Administration (PWA). The PWA set aside $3.3 billion to build public projects such as highways, federal buildings, and military bases. Although this program suffered from political squabbles over appropriations for projects in various congressional districts, as well as significant underfunding of public housing projects, it ultimately offered some of the most lasting benefits of the NIRA. Secretary of the Interior Harold Ickes ran the program, which completed over thirty-four thousand projects, including the Golden Gate Bridge in San Francisco and the Queens-Midtown Tunnel in New York. Between 1933 and 1939, the PWA accounted for the construction of over one-third of all new hospitals and 70 percent of all new public schools in the country.
Another challenge faced by the NRA was that the provision granting workers the right to organize appeared to others as a mandate to do so. In previously unorganized industries, such as oil and gas, rubber, and service occupations, workers now sought groups that would assist in their organization, bolstered by the encouragement they now felt from the government. The Communist Party took advantage of the opportunity to assist in the hope of creating widespread protests against the American industrial structure. The number of strikes nationwide doubled between 1932 and 1934, with over 1.5 million workers going on strike in 1934 alone, often in protests that culminated in bloodshed. A strike at the Auto-Lite plant in Toledo, Ohio, that summer resulted in ten thousand workers from other factories joining in sympathy with their fellow workers to attack potential strike-breakers with stones and bricks. Simultaneously in Minneapolis, a teamsters strike resulted in frequent, bloody confrontations between workers and police, leading the governor to contemplate declaring martial law before the companies agreed to negotiate better wages and conditions for the workers. Finally, a San Francisco strike among 14,000 longshoremen closed the city’s waterfront and eventually led to a city-wide general strike of over 130,000 workers, essentially paralyzing the city. Clashes between workers, and police and National Guardsmen left many strikers bloodied, and at least two dead.
Although Roosevelt’s relief efforts provided jobs to many and benefitted communities with the construction of several essential building projects, the violence that erupted amid clashes between organized labor and factories backed by police and the authorities exposed a fundamental flaw in the president’s approach. Immediate relief did not address long-existing, inherent class inequities that left workers exposed to poor working conditions, low wages, long hours, and little protection. For many workers, life on the job was not much better than life as an unemployed American. Employment programs may have put men back to work and provided much needed relief, but the fundamental flaws in the system required additional attention—attention that Roosevelt was unable to pay in the early days of the New Deal. Critics were plentiful, and the president would be forced to address them in the years ahead.
Regional Planning
Regionally, Roosevelt’s work was most famously seen in the Tennessee Valley Authority (TVA) (Figure), a federal agency tasked with the job of planning and developing the area through flood control, reforestation, and hydroelectric power. Employing several thousand Americans on a project that Roosevelt envisioned as a template for future regional redevelopment, the TVA revitalized a river valley that landowners had badly over-farmed, leaving behind eroded soil that lacked essential nutrients for future farming. Under the direction of David Lilienthal, beginning in 1933, the TVA workers erected a series of dams to harness the Tennessee River in the creation of much-needed hydroelectric power. The arrival of both electric lighting and machinery to the region eased the lives of the people who lived there, as well as encouraged industrial growth. The TVA also included an educational component, teaching farmers important lessons about crop rotation, soil replenishment, fertilizing, and reforestation.
The TVA was not without its critics, however, most notably among the fifteen thousand families who were displaced due to the massive construction projects. Although eventually the project benefited farmers with the introduction of new farming and fertilizing techniques, as well as the added benefit of electric power, many local citizens were initially mistrustful of the TVA and the federal government’s agenda. Likewise, as with several other New Deal programs, women did not directly benefit from these employment opportunities, as they were explicitly excluded for the benefit of men who most Americans still considered the family’s primary breadwinner. However, with the arrival of electricity came new industrial ventures, including several textile mills up and down the valley, several of which offered employment to women. Throughout his presidency, Roosevelt frequently pointed to the TVA as one of the glowing accomplishments of the New Deal and its ability to bring together the machinery of the federal government along with private interests to revitalize a regional economy. Just months before his death in 1945, he continued to speak of the possibility of creating other regional authorities throughout the country.
ASSESSING THE FIRST NEW DEAL
While many were pleased with the president’s bold plans, there were numerous critics of the New Deal, discussed in the following section. The New Deal was far from perfect, but Roosevelt’s quickly implemented policies reversed the economy’s long slide. It put new capital into ailing banks. It rescued homeowners and farmers from foreclosure and helped people keep their homes. It offered some direct relief to the unemployed poor. It gave new incentives to farmers and industry alike, and put people back to work in an effort to both create jobs and boost consumer spending. The total number of working Americans rose from twenty-four to twenty-seven million between 1933 and 1935, in contrast to the seven-million-worker decline during the Hoover administration. Perhaps most importantly, the First New Deal changed the pervasive pessimism that had held the country in its grip since the end of 1929. For the first time in years, people had hope.
It was the hard work of Roosevelt’s advisors—the “Brains Trust” of scholars and thinkers from leading universities—as well as Congress and the American public who helped the New Deal succeed as well as it did. Ironically, it was the American people’s volunteer spirit, so extolled by Hoover, that Roosevelt was able to harness. The first hundred days of his administration was not a master plan that Roosevelt dreamed up and executed on his own. In fact, it was not a master plan at all, but rather a series of, at times, disjointed efforts made from different assumptions. But after taking office and analyzing the crisis, Roosevelt and his advisors did feel that they had a larger sense of what had caused the Great Depression and thus attempted a variety of solutions to fix it. They believed that it was caused by abuses on the part of a small group of bankers and businessmen, aided by Republican policies that built wealth for a few at the expense of many. The answer, they felt, was to root out these abuses through banking reform, as well as adjust production and consumption of both farm and industrial goods. This adjustment would come about by increasing the purchasing power of everyday people, as well as through regulatory policies like the NRA and AAA. While it may seem counterintuitive to raise crop prices and set prices on industrial goods, Roosevelt’s advisors sought to halt the deflationary spiral and economic uncertainty that had prevented businesses from committing to investments and consumers from parting with their money.
Section Summary
After assuming the presidency, Roosevelt lost no time in taking bold steps to fight back against the poverty and unemployment plaguing the country. He immediately created a bank holiday and used the time to bring before Congress legislation known as the Emergency Banking Act, which allowed federal agencies to examine all banks before they reopened, thus restoring consumer confidence. He then went on, in his historic first hundred days, to sign numerous other significant pieces of legislation that were geared towards creating jobs, shoring up industry and agriculture, and providing relief to individuals through both refinancing options and direct handouts. Not all of his programs were effective, and many generated significant criticism. Overall, however, these programs helped to stabilize the economy, restore confidence, and change the pessimistic mindset that had overrun the country.
Review Questions
Which of the following was not a policy undertaken by the NIRA?
- agreement among industries to set prices
- agreement among industries to reinvest profits into their firms
- agreement among industries to set production levels
- recognition of the right of workers to form unions
Hint:
B
What type of help did the CWA provide?
- direct relief
- farm refinancing
- bank reform
- employment opportunities
Hint:
D
In what ways did the New Deal both provide direct relief and create new jobs? Which programs served each of these goals?
Hint:
The most prominent of Roosevelt’s job-creation programs included the Civilian Conservation Corps and the Public Works Administration (the latter under the auspices of the National Industrial Recovery Act). Both employed millions of Americans to work on thousands of projects. While programs such as the Tennessee Valley Authority were not incepted solely for the purpose of generating jobs, they nevertheless created thousands of employment opportunities in service of their greater goals. Direct relief came primarily in the form of the Federal Emergency Relief Administration, which lent over $3 billion to states to operate direct relief programs from 1933 to 1935, as well as undertook several employment projects.
How did the NRA seek to protect workers? What difficulties did this agency face?
Hint:
The National Recovery Administration (NRA) established a “code of fair practice” for every industry. Business owners were made to accept a set minimum wage and maximum number of work hours, as well as to recognize workers’ rights to organize and use collective bargaining. While the NRA established over five hundred different codes, it proved difficult to adapt this plan successfully for diverse industries with very different characteristics and practices.
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https://oercommons.org/courseware/lesson/15533/overview
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The Second New Deal
Overview
By the end of this section, you should be able to:
- Identify key pieces of legislation from the Second New Deal
- Assess the entire New Deal, especially in terms of its impact on women, African Americans, and Native Americans
Roosevelt won his second term in a landslide, but that did not mean he was immune to criticism. His critics came from both the left and the right, with conservatives deeply concerned over his expansion of government spending and power, and liberals angered that he had not done more to help those still struggling. Adding to Roosevelt’s challenges, the Supreme Court struck down several key elements of the First New Deal, angering Roosevelt and spurring him to try and stack the courts in his second term. Still, he entered his new term with the unequivocal support of the voting public, and he wasted no time beginning the second phase of his economic plan. While the First New Deal focused largely on stemming the immediate suffering of the American people, the Second New Deal put in place legislation that changed America’s social safety net for good.
CHALLENGES FROM CRITICS ON ALL SIDES
While many people supported Roosevelt, especially in the first few years of his presidency, the New Deal did receive significant criticism, both from conservatives who felt that it was a radical agenda to ruin the country’s model of free enterprise, and from liberals who felt that it did not provide enough help to those who needed it most (Figure).
Industrialists and wealthy Americans led the conservative criticism against the president. Whether attacking his character or simply stating that he was moving away from American values toward fascism and socialism, they sought to undermine his power and popularity. Most notably, the American Liberty League—comprised largely of conservative Democrats who lamented the excesses of several of Roosevelt’s New Deal programs—labeled the AAA as fascist and proclaimed later New Deal programs to be key threats to the very nature of democracy. Additional criticism came from the National Association of Manufacturers, which urged businessmen to outright ignore portions of the NRA that promoted collective bargaining, as well as subsequent labor protection legislation. In 1935, the U.S. Supreme Court dealt the most crushing blow to Roosevelt’s vision, striking down several key pieces of the New Deal as unconstitutional. They found that both the AAA and the NIRA overreached federal authority. The negation of some of his most ambitious economic recovery efforts frustrated Roosevelt greatly, but he was powerless to stop it at this juncture.
Meanwhile, others felt that Roosevelt had not done enough. Dr. Francis E. Townsend of California was one who felt that Roosevelt had failed to adequately address the country’s tremendous problems. Townsend, who was a retired dentist, proposed an expansive pension plan for the elderly. The Townsend Plan, as it was known, gained a great deal of popularity: It recommended paying every citizen over sixty who retired from work the sum of $200 per month, provided they spend it in thirty days. Another figure who gained national attention was Father Charles Coughlin. He was a “radio priest” from Michigan who, although he initially supported the New Deal, subsequently argued that Roosevelt stopped far too short in his defense of labor, monetary reform, and the nationalization of key industries. The president’s plan, he proclaimed, was inadequate. He created the National Union for Social Justice and used his weekly radio show to gain followers.
A more direct political threat to Roosevelt came from muckraker Upton Sinclair, who pursued the California governorship in 1934 through a campaign based upon criticism of the New Deal’s shortcomings. In his “End Poverty in California” program, Sinclair called for a progressive income tax, a pension program for the elderly, and state seizure of factories and farms where property taxes remained unpaid. The state would then offer jobs to the unemployed to work those farms and factories in a cooperative mode. Although Sinclair lost the election to his Republican opponent, he did draw local and national attention to several of his ideas.
The biggest threat to the president, however, came from corrupt but beloved Louisiana senator Huey “Kingfish” Long (Figure). His disapproval of Roosevelt came in part from his own ambitions for higher office; Long stated that the president was not doing enough to help people and proposed his own Share Our Wealth program. Under this plan, Long recommended the liquidation of all large personal fortunes in order to fund direct payments to less fortunate Americans. He foresaw giving $5,000 to every family, $2,500 to every worker, as well as a series of elderly pensions and education funds. Despite his questionable math, which numerous economists quickly pointed out rendered his program unworkable, by 1935, Long had a significant following of over four million people. If he had not been assassinated by the son-in-law of a local political rival, he may well have been a contender against Roosevelt for the 1936 presidential nomination.
ANSWERING THE CHALLENGE
Roosevelt recognized that some of the criticisms of the New Deal were valid. Although he was still reeling from the Supreme Court’s invalidation of key statutes, he decided to face his re-election bid in 1936 by unveiling another wave of legislation that he dubbed the Second New Deal. In the first week of June 1935, Roosevelt called congressional leaders into the White House and gave them a list of “must-pass” legislation that he wanted before they adjourned for the summer. Whereas the policies of the first hundred days may have shored up public confidence and stopped the most drastic of the problems, the second hundred days changed the face of America for the next sixty years.
The Banking Act of 1935 was the most far-reaching revision of banking laws since the creation of the Federal Reserve System in 1914. Previously, regional reserve banks, particularly the New York Reserve Bank—controlled by the powerful Morgan and Rockefeller families—had dominated policy-making at the Federal Reserve. Under the new system, there would be a seven-member board of governors to oversee regional banks. They would have control over reserve requirements, discount rates, board member selection, and more. Not surprisingly, this new board kept initial interest rates quite low, allowing the federal government to borrow billions of dollars of additional cash to fund major relief and recovery programs.
In 1935, Congress also passed the Emergency Relief Appropriation Act, which authorized the single largest expenditure at that time in the country’s history: $4.8 billion. Almost one-third of those funds were invested in a new relief agency, the Works Progress Administration (WPA). Harry Hopkins, formerly head of the CWA, took on the WPA and ran it until 1943. In that time, the program provided employment relief to over eight million Americans, or approximately 20 percent of the country’s workforce. The WPA funded the construction of more than 2,500 hospitals, 5,900 schools, 570,000 miles of road, and more. The WPA also created the Federal One Project, which employed approximately forty thousand artists in theater, art, music, and writing. They produced state murals, guidebooks, concerts, and drama performances all around the country (Figure). Additionally, the project funded the collection of oral histories, including those of former slaves, which provided a valuable addition to the nation’s understanding of slave life. Finally, the WPA also included the National Youth Administration (NYA), which provided work-study jobs to over 500,000 college students and four million high school students.
Browse the Born in Slavery collection to examine personal accounts of former slaves, recorded between 1936 and 1938, as part of the Federal Writers' Project of the WPA.
With the implementation of the Second New Deal, Roosevelt also created the country’s present-day social safety net. The Social Security Act established programs intended to help the most vulnerable: the elderly, the unemployed, the disabled, and the young. It included a pension fund for all retired people—except domestic workers and farmers, which therefore left many women and African Americans beyond the scope of its benefits—over the age of sixty-five, to be paid through a payroll tax on both employee and employer. Related to this act, Congress also passed a law on unemployment insurance, to be funded by a tax on employers, and programs for unwed mothers, as well as for those who were blind, deaf, or disabled. It is worth noting that some elements of these reforms were pulled from Roosevelt detractors Coughlin and Townsend; the popularity of their movements gave the president more leverage to push forward this type of legislation.
To the benefit of industrial workers, Roosevelt signed into law the Wagner Act, also known as the National Labor Relations Act. The protections previously afforded to workers under the NIRA were inadvertently lost when the Supreme Court struck down the original law due to larger regulatory concerns, leaving workers vulnerable. Roosevelt sought to salvage this important piece of labor legislation, doing so with the Wagner Act. The act created the National Labor Relations Board (NLRB) to once again protect American workers’ right to unionize and bargain collectively, as well as to provide a federal vehicle for labor grievances to be heard. Although roundly criticized by the Republican Party and factory owners, the Wagner Act withstood several challenges and eventually received constitutional sanction by the U.S. Supreme Court in 1937. The law received the strong support of John L. Lewis and the Congress of Industrial Organizations who had long sought government protection of industrial unionism, from the time they split from the American Federation of Labor in 1935 over disputes on whether to organize workers along craft or industrial lines. Following passage of the law, Lewis began a widespread publicity campaign urging industrial workers to join “the president’s union.” The relationship was mutually beneficial to Roosevelt, who subsequently received the endorsement of Lewis’s United Mine Workers union in the 1936 presidential election, along with a sizeable $500,000 campaign contribution. The Wagner Act permanently established government-secured workers’ rights and protections from their employers, and it marked the beginning of labor’s political support for the Democratic Party.
The various programs that made up the Second New Deal are listed in the table below (Table).
| New Deal Legislation | Years Enacted | Brief Description |
|---|---|---|
| Fair Labor Standards Act | 1938–today | Established minimum wage and forty-hour workweek |
| Farm Security Administration | 1935–today | Provides poor farmers with education and economic support programs |
| Federal Crop Insurance Corporation | 1938–today | Insures crops and livestock against loss of revenue |
| National Labor Relations Act | 1935–today | Recognized right of workers to unionize & collectively bargain |
| National Youth Administration | 1935–1939 (part of WPA) | Part-time employment for college and high school students |
| Rural Electrification Administration | 1935–today | Provides public utilities to rural areas |
| Social Security Act | 1935–today | Aid to retirees, unemployed, disabled |
| Surplus Commodities Program | 1936–today | Provides food to the poor (still exists in Food Stamps program) |
| Works Progress Administration | 1935–1943 | Jobs program (including artists and youth) |
THE FINAL PIECES
Roosevelt entered the 1936 presidential election on a wave of popularity, and he beat Republican opponent Alf Landon by a nearly unanimous Electoral College vote of 523 to 8. Believing it to be his moment of strongest public support, Roosevelt chose to exact a measure of revenge against the U.S. Supreme Court for challenging his programs and to pressure them against challenging his more recent Second New Deal provisions. To this end, Roosevelt created the informally named “Supreme Court Packing Plan” and tried to pack the court in his favor by expanding the number of justices and adding new ones who supported his views. His plan was to add one justice for every current justice over the age of seventy who refused to step down. This would have allowed him to add six more justices, expanding the bench from nine to fifteen. Opposition was quick and thorough from both the Supreme Court and Congress, as well as from his own party. The subsequent retirement of Justice Van Devanter from the court, as well as the sudden death of Senator Joe T. Robinson, who championed Roosevelt’s plan before the Senate, all but signaled Roosevelt’s defeat. However, although he never received the support to make these changes, Roosevelt appeared to succeed in politically intimidating the current justices into supporting his newer programs, and they upheld both the Wagner Act and the Social Security Act. Never again during his presidency would the Supreme Court strike down any significant elements of his New Deal.
Roosevelt was not as successful in addressing the nation’s growing deficit. When he entered the presidency in 1933, Roosevelt did so with traditionally held fiscal beliefs, including the importance of a balanced budget in order to maintain public confidence in federal government operations. However, the severe economic conditions of the depression quickly convinced the president of the importance of government spending to create jobs and relief for the American people. As he commented to a crowd in Pittsburgh in 1936, “To balance our budget in 1933 or 1934 or 1935 would have been a crime against the American people. To do so . . . we should have had to set our face against human suffering with callous indifference. When Americans suffered, we refused to pass by on the other side. Humanity came first.” However, after his successful re-election, Roosevelt anticipated that the economy would recover enough by late 1936 that he could curtail spending by 1937. This reduction in spending, he hoped, would curb the deficit. As the early months of 1937 unfolded, Roosevelt’s hopes seemed supported by the most recent economic snapshot of the country. Production, wages, and profits had all returned to pre-1929 levels, while unemployment was at its lowest rate in the decade, down from 25 percent to 14 percent. But no sooner did Roosevelt cut spending when a recession hit. Two million Americans were newly out of work as unemployment quickly rose by 5 percent and industrial production declined by a third. Breadlines began to build again, while banks prepared to close.
Historians continue to debate the causes of this recession within a depression. Some believe the fear of increased taxes forced factory owners to curtail planned expansion; others blame the Federal Reserve for tightening the nation’s money supply. Roosevelt, however, blamed the downturn on his decision to significantly curtail federal government spending in job relief programs such as the WPA. Several of his closest advisors, including Harry Hopkins, Henry Wallace, and others, urged him to adopt the new economic theory espoused by British economic John Maynard Keynes, who argued that deficit spending was necessary in advanced capitalist economies in order to maintain employment and stimulate consumer spending. Convinced of the necessity of such an approach, Roosevelt asked Congress in the spring of 1938 for additional emergency relief spending. Congress immediately authorized $33 billion for PWA and WPA work projects. Although World War II would provide the final impetus for lasting economic recovery, Roosevelt’s willingness to adapt in 1938 avoided another disaster.
Roosevelt signed the last substantial piece of New Deal legislation in the summer of 1938. The Fair Labor Standards Act established a federal minimum wage—at the time, forty cents per hour—a maximum workweek of forty hours (with an opportunity for four additional hours of work at overtime wages), and prohibited child labor for those under age sixteen. Roosevelt was unaware that the war would soon dominate his legacy, but this proved to be his last major piece of economic legislation in a presidency that changed the fabric of the country forever.
IN THE FINAL ANALYSIS
The legacy of the New Deal is in part seen in the vast increase in national power: The federal government accepted responsibility for the nation’s economic stability and prosperity. In retrospect, the majority of historians and economists judge it to have been a tremendous success. The New Deal not only established minimum standards for wages, working conditions, and overall welfare, it also allowed millions of Americans to hold onto their homes, farms, and savings. It laid the groundwork for an agenda of expanded federal government influence over the economy that continued through President Harry Truman’s “Fair Deal” in the 1950s and President Lyndon Johnson’s call for a “Great Society” in the 1960s. The New Deal state that embraced its responsibility for the citizens’ welfare and proved willing to use its power and resources to spread the nation’s prosperity lasted well into the 1980s, and many of its tenets persist today. Many would also agree that the postwar economic stability of the 1950s found its roots in the stabilizing influences introduced by social security, the job stability that union contracts provided, and federal housing mortgage programs introduced in the New Deal. The environment of the American West in particular, benefited from New Deal projects such as the Soil Conservation program.
Still, Roosevelt’s programs also had their critics. Following the conservative rise initiated by presidential candidate Barry Goldwater in 1964, and most often associated with the Ronald Reagan era of the 1980s, critics of the welfare state pointed to Roosevelt’s presidency as the start of a slippery slope towards entitlement and the destruction of the individualist spirit upon which the United States had presumably developed in the nineteenth and early twentieth centuries. Although the growth of the GDP between 1934 and 1940 approached an average of 7.5 percent—higher than in any other peacetime period in U.S. history, critics of the New Deal point out that unemployment still hovered around 15 percent in 1940. While the New Deal resulted in some environmental improvements, it also inaugurated a number of massive infrastructural projects, such as the Grand Coulee Dam on the Columbia River, that came with grave environmental consequences. And other shortcomings of the New Deal were obvious and deliberate at the time.
African Americans under the New Deal
Critics point out that not all Americans benefited from the New Deal. African Americans in particular were left out, with overt discrimination in hiring practices within the federal job programs, such as the CCC, CWA, and WPA. The NRA was oftentimes criticized as the “Negro Run Around” or “Negroes Ruined Again” program. As well, the AAA left tenant farmers and sharecroppers, many of whom were black, with no support. Even Social Security originally excluded domestic workers, a primary source of employment for African American women. Facing such criticism early in his administration, Roosevelt undertook some efforts to ensure a measure of equality in hiring practices for the relief agencies, and opportunities began to present themselves by 1935. The WPA eventually employed 350,000 African Americans annually, accounting for nearly 15 percent of its workforce. By the close of the CCC in 1938, this program had employed over 300,000 African Americans, increasing the black percentage of its workforce from 3 percent at the outset to nearly 11 percent at its close. Likewise, in 1934, the PWA began to require that all government projects under its purview hire African Americans using a quota that reflected their percentage of the local population being served. Additionally, among several important WPA projects, the Federal One Project included a literacy program that eventually reached over one million African American children, helping them learn how to read and write.
On the issue of race relations themselves, Roosevelt has a mixed legacy. Within his White House, Roosevelt had a number of African American appointees, although most were in minor positions. Unofficially, Roosevelt relied upon advice from the Federal Council on Negro Affairs, also known as his “Black Cabinet.” This group included a young Harvard economist, Dr. Robert Weaver, who subsequently became the nation’s first black cabinet secretary in 1966, as President Lyndon Johnson’s Secretary of Housing and Urban Development. Aubrey Williams, the director of the NYA, hired more black administrators than any other federal agency, and appointed them to oversee projects throughout the country. One key figure in the NYA was Mary McLeod Bethune (Figure), a prominent African American educator tapped by Roosevelt to act as the director of the NYA’s Division of Negro Affairs. Bethune had been a spokesperson and an educator for years; with this role, she became one of the president’s foremost African American advisors. During his presidency, Roosevelt became the first to appoint a black federal judge, as well as the first commander-in-chief to promote an African American to brigadier general. Most notably, he became the first president to publicly speak against lynching as a “vile form of collective murder.”
Mary McLeod Bethune on Racial Justice
Democracy is for me, and for twelve million black Americans, a goal towards which our nation is marching. It is a dream and an ideal in whose ultimate realization we have a deep and abiding faith. For me, it is based on Christianity, in which we confidently entrust our destiny as a people. Under God’s guidance in this great democracy, we are rising out of the darkness of slavery into the light of freedom. Here my race has been afforded [the] opportunity to advance from a people 80 percent illiterate to a people 80 percent literate; from abject poverty to the ownership and operation of a million farms and 750,000 homes; from total disfranchisement to participation in government; from the status of chattels to recognized contributors to the American culture.
When Mary McLeod Bethune spoke these words, she spoke on behalf of a race of American citizens for whom the Great Depression was much more than economic hardship. For African Americans, the Depression once again exposed the racism and inequality that gripped the nation economically, socially, and politically. Her work as a member of President Franklin Roosevelt’s unofficial “Black Cabinet” as well as the Director of the Division of Negro Affairs for the NYA, presented her an opportunity to advance African American causes on all fronts—but especially in the area of black literacy. As part of the larger WPA, she also influenced employment programs in the arts and public work sectors, and routinely had the president’s ear on matters related to racial justice.
Listen to this audio clip of Eleanor Roosevelt interviewing Mary McLeod Bethune. By listening to her talking to Bethune and offering up her support, it becomes clear how compelling the immensely popular first lady was when speaking about programs of close personal interest to her. How do you think this would have been received by Roosevelt’s supporters?
However, despite these efforts, Roosevelt also understood the precariousness of his political position. In order to maintain a coalition of Democrats to support his larger relief and recovery efforts, Roosevelt could not afford to alienate Southern Democrats who might easily bolt should he openly advocate for civil rights. While he spoke about the importance of anti-lynching legislation, he never formally pushed Congress to propose such a law. He did publicly support the abolition of the poll tax, which Congress eventually accomplished in 1941. Likewise, although agency directors adopted changes to ensure job opportunities for African Americans at the federal level, at the local level, few advancements were made, and African Americans remained at the back of the employment lines. Despite such failures, however, Roosevelt deserves credit for acknowledging the importance of race relations and civil rights. At the federal level, more than any of his predecessors since the Civil War, Roosevelt remained aware of the role that the federal government can play in initiating important discussions about civil rights, as well as encouraging the development of a new cadre of civil rights leaders.
Although unable to bring about sweeping civil rights reforms for African Americans in the early stages of his administration, Roosevelt was able to work with Congress to significantly improve the lives of Indians. In 1934, he signed into law the Indian Reorganization Act (sometimes referred to as the “Indian New Deal”). This law formally abandoned the assimilationist policies set forth in the Dawes Severalty Act of 1887. Rather than forcing Indians to adapt to American culture, the new program encouraged them to develop forms of local self-government, as well as to preserve their artifacts and heritage. John Collier, the Commissioner on Indian Bureau Affairs from 1933 to 1945, championed this legislation and saw it as an opportunity to correct past injustices that land allotment and assimilation had wrought upon Indians. Although the re-establishment of communal tribal lands would prove to be difficult, Collier used this law to convince federal officials to return nearly two million acres of government-held land to various tribes in order to move the process along. Although subsequent legislation later circumscribed the degree to which tribes were allowed to self-govern on reservations, Collier’s work is still viewed as a significant step in improving race relations with Indians and preserving their heritage.
Women and the New Deal
For women, Roosevelt’s policies and practices had a similarly mixed effect. Wage discrimination in federal jobs programs was rampant, and relief policies encouraged women to remain home and leave jobs open for men. This belief was well in line with the gender norms of the day. Several federal relief programs specifically forbade husbands and wives’ both drawing jobs or relief from the same agency. The WPA became the first specific New Deal agency to openly hire women—specifically widows, single women, and the wives of disabled husbands. While they did not take part in construction projects, these women did undertake sewing projects to provide blankets and clothing to hospitals and relief agencies. Likewise, several women took part in the various Federal One art projects. Despite the obvious gender limitations, many women strongly supported Roosevelt’s New Deal, as much for its direct relief handouts for women as for its employment opportunities for men. One such woman was Mary (Molly) Dewson. A longtime activist in the women’s suffrage movement, Dewson worked for women’s rights and ultimately rose to be the Director of the Women’s Division of the Democratic Party. Dewson and Mary McLeod Bethune, the national champion of African American education and literacy who rose to the level of Director of the Division of Negro Affairs for the NYA, understood the limitations of the New Deal, but also the opportunities for advancement it presented during very trying times. Rather than lamenting what Roosevelt could not or would not do, they felt, and perhaps rightly so, that Roosevelt would do more than most to help women and African Americans achieve a piece of the new America he was building.
Among the few, but notable, women who directly impacted Roosevelt’s policies was Frances Perkins, who as Secretary of Labor was the first female member of any presidential cabinet, and First Lady Eleanor Roosevelt, who was a strong and public advocate for social causes. Perkins, one of only two original Cabinet members to stay with Roosevelt for his entire presidency, was directly involved in the administration of the CCC, PWA, NRA, and the Social Security Act. Among several important measures, she took greatest pleasure in championing minimum wage statutes as well as the penultimate piece of New Deal legislation, the Fair Labor Standards Act. Roosevelt came to trust Perkins’ advice with few questions or concerns, and steadfastly supported her work through the end of his life (Figure 26_03_Perkins).
Molly Dewson and Women Democrats
In her effort to get President Roosevelt re-elected in 1936, Dewson commented, “We don’t make the old-fashioned plea to the women that our nominee is charming, and all that. We appeal to the intelligence of the country’s women. Ours were economic issues and we found the women ready to listen.”
As head of the Women’s Division of the Democratic National Committee (DNC) in 1932, Molly Dewson proved to be an influential supporter of President Franklin Roosevelt and one of his key advisors regarding issues pertaining to women’s rights. Agreeing with First Lady Eleanor Roosevelt that “Women must learn to play the games as men do,” Dewson worked diligently in her position with the DNC to ensure that women could serve as delegates and alternates to the national conventions. Her approach, and her realization that women were intelligent enough to make rational choices, greatly appealed to Roosevelt. Her methods were perhaps not too different from his own, as he spoke to the public through his fireside chats. Dewson’s impressive organizational skills on behalf of the party earned her the nickname “the little general” from President Roosevelt.
However, Eleanor Roosevelt, more so than any other individual, came to represent the strongest influence upon the president; and she used her unique position to champion several causes for women, African Americans, and the rural poor (Figure). She married Franklin Roosevelt, who was her fifth cousin, in 1905 and subsequently had six children, one of whom died at only seven months old. A strong supporter of her husband’s political ambitions, Eleanor campaigned by his side through the failed vice-presidential bid in 1920 and on his behalf after he was diagnosed with polio in 1921. When she discovered letters of her husband’s affair with her social secretary, Lucy Mercer, the marriage became less one of romance and more one of a political partnership that would continue—strained at times—until the president’s death in 1945.
Historians agree that the first lady used her presence in the White House, in addition to the leverage of her failed marriage and knowledge of her husband’s infidelities, to her advantage. She promoted several causes that the president himself would have had difficulty championing at the time. From newspaper and magazine articles she authored, to a busy travel schedule that saw her regularly cross the country, the first lady sought to remind Americans that their plight was foremost on the minds of all working in the White House. Eleanor was so active in her public appearances that, by 1940, she began holding regular press conferences to answer reporters’ questions. Among her first substantial projects was the creation of Arthurdale—a resettlement community for displaced coal miners in West Virginia. Although the planned community became less of an administration priority as the years progressed (eventually folding in 1940), for seven years, Eleanor remained committed to its success as a model of assistance for the rural poor.
Exposed to issues of racial segregation in the Arthurdale experiment, Eleanor subsequently supported many civil rights causes through the remainder of the Roosevelt presidency. When it further became clear that racial discrimination was rampant in the administration of virtually all New Deal job programs—especially in the southern states—she continued to pressure her husband for remedies. In 1934, she openly lobbied for passage of the federal anti-lynching bill that the president privately supported but could not politically endorse. Despite the subsequent failure of the Senate to pass such legislation, Eleanor succeeded in arranging a meeting between her husband and then-NAACP president Walter White to discuss anti-lynching and other pertinent calls for civil rights legislation.
White was only one of Eleanor’s African American guests to the White House. Breaking with precedent, and much to the disdain of many White House officials, the first lady routinely invited prominent African Americans to dine with her and the president. Most notably, when the Daughters of the American Revolution (DAR) refused to permit internationally renowned black opera contralto Marian Anderson to sing in Constitution Hall, Eleanor resigned her membership in the DAR and arranged for Anderson to sing at a public concert on the steps of the Lincoln Memorial, followed by her appearance at a state dinner at the White House in honor of the king and queen of England. With regard to race relations in particular, Eleanor Roosevelt was able to accomplish what her husband—for delicate political reasons—could not: become the administration’s face for civil rights.
Section Summary
Despite his popularity, Roosevelt had significant critics at the end of the First New Deal. Some on the right felt that he had moved the country in a dangerous direction towards socialism and fascism, whereas others on the left felt that he had not gone far enough to help the still-struggling American people. Reeling after the Supreme Court struck down two key pieces of New Deal legislation, the AAA and NIRA, Roosevelt pushed Congress to pass a new wave of bills to provide jobs, banking reforms, and a social safety net. The laws that emerged—the Banking Act, the Emergency Relief Appropriation Act, and the Social Security Act—still define our country today.
Roosevelt won his second term in a landslide and continued to push for legislation that would help the economy. The jobs programs employed over eight million people and, while systematic discrimination hurt both women and African American workers, these programs were still successful in getting people back to work. The last major piece of New Deal legislation that Roosevelt passed was the Fair Labor Standards Act, which set a minimum wage, established a maximum-hour workweek, and forbade child labor. This law, as well as Social Security, still provides much of the social safety net in the United States today.
While critics and historians continue to debate whether the New Deal ushered in a permanent change to the political culture of the country, from one of individualism to the creation of a welfare state, none deny the fact that Roosevelt’s presidency expanded the role of the federal government in all people’s lives, generally for the better. Even if the most conservative of presidential successors would question this commitment, the notion of some level of government involvement in economic regulation and social welfare had largely been settled by 1941. Future debates would be about the extent and degree of that involvement.
Review Questions
Which of the following statements accurately describes Mary McLeod Bethune?
- She was a prominent supporter of the Townsend Plan.
- She was a key figure in the NYA.
- She was Eleanor Roosevelt’s personal secretary.
- She was a labor organizer.
Hint:
B
The Social Security Act borrowed some ideas from which of the following?
- the Townsend Plan
- the Division of Negro Affairs
- the Education Trust
- the NIRA
Hint:
A
What was the first New Deal agency to hire women openly?
- the NRA
- the WPA
- the AAA
- the TVA
Hint:
B
What were the major goals and accomplishments of the Indian New Deal?
Hint:
The Indian Reorganization Act, or Indian New Deal, of 1934 put an end to the policies set forth in the Dawes Severalty Act of 1887. Rather than encouraging assimilation, the new act promoted Indians’ development of local self-government and the preservation of Indian artifacts and heritage. John Collier, the Commissioner on Indian Bureau Affairs, was able to use the law to push for federal officials’ return of nearly two million acres of government-held land to various tribes.
Critical Thinking Questions
To what extent was Franklin Roosevelt’s overwhelming victory in the 1932 presidential election a reflection of his own ideas for change? To what extent did it represent public discontent with Herbert Hoover’s lack of answers?
Whom did the New Deal help the least? What hardships did these individuals continue to suffer? Why were Roosevelt’s programs unsuccessful in the alleviation of their adversities?
Was Franklin Roosevelt successful at combatting the Great Depression? How did the New Deal affect future generations of Americans?
What were the key differences between the First New Deal and the Second New Deal? On the whole, what did each New Deal set out to accomplish?
What challenges did Roosevelt face in his work on behalf of African Americans? What impact did the New Deal have ultimately on race relations?
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https://oercommons.org/courseware/lesson/28841/overview
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Introduction to Money and Banking
The Many Disguises of Money: From Cowries to Bitcoins
Here is a trivia question: In the history of the world, what item did people use for money over the broadest geographic area and for the longest period of time? The answer is not gold, silver, or any precious metal. It is the cowrie, a mollusk shell found mainly off the Maldives Islands in the Indian Ocean. Cowries served as money as early as 700 B.C. in China. By the 1500s, they were in widespread use across India and Africa. For several centuries after that, cowries were the means for exchange in markets including southern Europe, western Africa, India, and China: everything from buying lunch or a ferry ride to paying for a shipload of silk or rice. Cowries were still acceptable as a way of paying taxes in certain African nations in the early twentieth century.
What made cowries work so well as money? First, they are extremely durable—lasting a century or more. As the late economic historian Karl Polyani put it, they can be “poured, sacked, shoveled, hoarded in heaps” while remaining “clean, dainty, stainless, polished, and milk-white.” Second, parties could use cowries either by counting shells of a certain size, or—for large purchases—by measuring the weight or volume of the total shells they would exchange. Third, it was impossible to counterfeit a cowrie shell, but dishonest people could counterfeit gold or silver coins by making copies with cheaper metals. Finally, in the heyday of cowrie money, from the 1500s into the 1800s, governments, first the Portuguese, then the Dutch and English, tightly controlled collecting cowries. As a result, the supply of cowries grew quickly enough to serve the needs of commerce, but not so quickly that they were no longer scarce. Money throughout the ages has taken many different forms and continues to evolve even today. What do you think money is?
Introduction to Money and Banking
In this chapter, you will learn about:
- Defining Money by Its Functions
- Measuring Money: Currency, M1, and M2
- The Role of Banks
- How Banks Create Money
The discussion of money and banking is a central component in studying macroeconomics. At this point, you should have firmly in mind the main goals of macroeconomics from Welcome to Economics!: economic growth, low unemployment, and low inflation. We have yet to discuss money and its role in helping to achieve our macroeconomic goals.
You should also understand Keynesian and neoclassical frameworks for macroeconomic analysis and how we can embody these frameworks in the aggregate demand/aggregate supply (AD/AS) model. With the goals and frameworks for macroeconomic analysis in mind, the final step is to discuss the two main categories of macroeconomic policy: monetary policy, which focuses on money, banking and interest rates; and fiscal policy, which focuses on government spending, taxes, and borrowing. This chapter discusses what economists mean by money, and how money is closely interrelated with the banking system. Monetary Policy and Bank Regulation furthers this discussion.
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Defining Money by Its Functions
Overview
By the end of this section, you will be able to:
- Explain the various functions of money
- Contrast commodity money and fiat money
Money for the sake of money is not an end in itself. You cannot eat dollar bills or wear your bank account. Ultimately, the usefulness of money rests in exchanging it for goods or services. As the American writer and humorist Ambrose Bierce (1842–1914) wrote in 1911, money is a “blessing that is of no advantage to us excepting when we part with it.” Money is what people regularly use when purchasing or selling goods and services, and thus both buyers and sellers must widely accept money. This concept of money is intentionally flexible, because money has taken a wide variety of forms in different cultures.
Barter and the Double Coincidence of Wants
To understand the usefulness of money, we must consider what the world would be like without money. How would people exchange goods and services? Economies without money typically engage in the barter system. Barter—literally trading one good or service for another—is highly inefficient for trying to coordinate the trades in a modern advanced economy. In an economy without money, an exchange between two people would involve a double coincidence of wants, a situation in which two people each want some good or service that the other person can provide. For example, if an accountant wants a pair of shoes, this accountant must find someone who has a pair of shoes in the correct size and who is willing to exchange the shoes for some hours of accounting services. Such a trade is likely to be difficult to arrange. Think about the complexity of such trades in a modern economy, with its extensive division of labor that involves thousands upon thousands of different jobs and goods.
Another problem with the barter system is that it does not allow us to easily enter into future contracts for purchasing many goods and services. For example, if the goods are perishable it may be difficult to exchange them for other goods in the future. Imagine a farmer wanting to buy a tractor in six months using a fresh crop of strawberries. Additionally, while the barter system might work adequately in small economies, it will keep these economies from growing. The time that individuals would otherwise spend producing goods and services and enjoying leisure time they spend bartering.
Functions for Money
Money solves the problems that the barter system creates. (We will get to its definition soon.) First, money serves as a medium of exchange, which means that money acts as an intermediary between the buyer and the seller. Instead of exchanging accounting services for shoes, the accountant now exchanges accounting services for money. The accountant then uses this money to buy shoes. To serve as a medium of exchange, people must widely accept money as a method of payment in the markets for goods, labor, and financial capital.
Second, money must serve as a store of value. In a barter system, we saw the example of the shoemaker trading shoes for accounting services. However, she risks having her shoes go out of style, especially if she keeps them in a warehouse for future use—their value will decrease with each season. Shoes are not a good store of value. Holding money is a much easier way of storing value. You know that you do not need to spend it immediately because it will still hold its value the next day, or the next year. This function of money does not require that money is a perfect store of value. In an economy with inflation, money loses some buying power each year, but it remains money.
Third, money serves as a unit of account, which means that it is the ruler by which we measure values. For example, an accountant may charge $100 to file your tax return. That $100 can purchase two pair of shoes at $50 a pair. Money acts as a common denominator, an accounting method that simplifies thinking about trade-offs.
Finally, another function of money is that it must serve as a standard of deferred payment. This means that if money is usable today to make purchases, it must also be acceptable to make purchases today that the purchaser will pay in the future. Loans and future agreements are stated in monetary terms and the standard of deferred payment is what allows us to buy goods and services today and pay in the future. Thus, money serves all of these functions— it is a medium of exchange, store of value, unit of account, and standard of deferred payment.
Commodity versus Fiat Money
Money has taken a wide variety of forms in different cultures. People have used gold, silver, cowrie shells, cigarettes, and even cocoa beans as money. Although we use these items as commodity money, they also have a value from use as something other than money. For example, people have used gold throughout the ages as money although today we do not use it as money but rather value it for its other attributes. Gold is a good conductor of electricity and the electronics and aerospace industry use it. Other industries use gold too, such as to manufacture energy efficient reflective glass for skyscrapers and is used in the medical industry as well. Of course, gold also has value because of its beauty and malleability in creating jewelry.
As commodity money, gold has historically served its purpose as a medium of exchange, a store of value, and as a unit of account. Commodity-backed currencies are dollar bills or other currencies with values backed up by gold or other commodities held at a bank. During much of its history, gold and silver backed the money supply in the United States. Interestingly, antique dollars dated as late as 1957, have “Silver Certificate” printed over the portrait of George Washington, as Figure shows. This meant that the holder could take the bill to the appropriate bank and exchange it for a dollar’s worth of silver.
As economies grew and became more global in nature, the use of commodity monies became more cumbersome. Countries moved towards the use of fiat money. Fiat money has no intrinsic value, but is declared by a government to be a country's legal tender. The United States’ paper money, for example, carries the statement: “THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE.” In other words, by government decree, if you owe a debt, then legally speaking, you can pay that debt with the U.S. currency, even though it is not backed by a commodity. The only backing of our money is universal faith and trust that the currency has value, and nothing more.
Watch this video on the “History of Money.”
Key Concepts and Summary
Money is what people in a society regularly use when purchasing or selling goods and services. If money were not available, people would need to barter with each other, meaning that each person would need to identify others with whom they have a double coincidence of wants—that is, each party has a specific good or service that the other desires. Money serves several functions: a medium of exchange, a unit of account, a store of value, and a standard of deferred payment. There are two types of money: commodity money, which is an item used as money, but which also has value from its use as something other than money; and fiat money, which has no intrinsic value, but is declared by a government to be the country's legal tender.
Self-Check Questions
In many casinos, a person buys chips to use for gambling. Within the casino's walls, customers often can use these chips to buy food and drink or even a hotel room. Do chips in a gambling casino serve all three functions of money?
Hint:
As long as you remain within the walls of the casino, chips fit the definition of money; that is, they serve as a medium of exchange, a unit of account, and a store of value. Chips do not work very well as money once you leave the casino, but many kinds of money do not work well in other areas. For example, it is hard to spend money from Turkey or Brazil at your local supermarket or at the movie theater.
Can you name some item that is a store of value, but does not serve the other functions of money?
Hint:
Many physical items that a person buys at one time but may sell at another time can serve as an answer to this question. Examples include a house, land, art, rare coins or stamps, and so on.
Review Questions
What are the four functions that money serves?
How does the existence of money simplify the process of buying and selling?
What is the double-coincidence of wants?
Critical Thinking Questions
The Bring it Home Feature discusses the use of cowrie shells as money. Although we no longer use cowrie shells as money, do you think other forms of commodity monies are possible? What role might technology play in our definition of money?
Imagine that you are a barber in a world without money. Explain why it would be tricky to obtain groceries, clothing, and a place to live.
References
Hogendorn, Jan and Marion Johnson. The Shell Money of the Slave Trade. Cambridge University Press, 2003. 6.
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Measuring Money: Currency, M1, and M2
Overview
By the end of this section, you will be able to:
- Contrast M1 money supply and M2 money supply
- Classify monies as M1 money supply or M2 money supply
Cash in your pocket certainly serves as money; however, what about checks or credit cards? Are they money, too? Rather than trying to state a single way of measuring money, economists offer broader definitions of money based on liquidity. Liquidity refers to how quickly you can use a financial asset to buy a good or service. For example, cash is very liquid. You can use your $10 bill easily to buy a hamburger at lunchtime. However, $10 that you have in your savings account is not so easy to use. You must go to the bank or ATM machine and withdraw that cash to buy your lunch. Thus, $10 in your savings account is less liquid.
The Federal Reserve Bank, which is the central bank of the United States, is a bank regulator and is responsible for monetary policy and defines money according to its liquidity. There are two definitions of money: M1 and M2 money supply. M1 money supply includes those monies that are very liquid such as cash, checkable (demand) deposits, and traveler’s checks M2 money supply is less liquid in nature and includes M1 plus savings and time deposits, certificates of deposits, and money market funds.
M1 money supply includes coins and currency in circulation—the coins and bills that circulate in an economy that the U.S. Treasury does not hold at the Federal Reserve Bank, or in bank vaults. Closely related to currency are checkable deposits, also known as demand deposits. These are the amounts held in checking accounts. They are called demand deposits or checkable deposits because the banking institution must give the deposit holder his money “on demand” when the customer writes a check or uses a debit card. These items together—currency, and checking accounts in banks—comprise the definition of money known as M1, which the Federal Reserve System measures daily.
A broader definition of money, M2 includes everything in M1 but also adds other types of deposits. For example, M2 includes savings deposits in banks, which are bank accounts on which you cannot write a check directly, but from which you can easily withdraw the money at an automatic teller machine or bank. Many banks and other financial institutions also offer a chance to invest in money market funds, where they pool together the deposits of many individual investors and invest them in a safe way, such as short-term government bonds. Another ingredient of M2 are the relatively small (that is, less than about $100,000) certificates of deposit (CDs) or time deposits, which are accounts that the depositor has committed to leaving in the bank for a certain period of time, ranging from a few months to a few years, in exchange for a higher interest rate. In short, all these types of M2 are money that you can withdraw and spend, but which require a greater effort to do so than the items in M1. Figure should help in visualizing the relationship between M1 and M2. Note that M1 is included in the M2 calculation.
The Federal Reserve System is responsible for tracking the amounts of M1 and M2 and prepares a weekly release of information about the money supply. To provide an idea of what these amounts sound like, according to the Federal Reserve Bank’s measure of the U.S. money stock, at the end of February 2015, M1 in the United States was $3 trillion, while M2 was $11.8 trillion. Table provides a breakdown of the portion of each type of money that comprised M1 and M2 in February 2015, as provided by the Federal Reserve Bank.
| Components of M1 in the U.S. (February 2015, Seasonally Adjusted) | $ billions |
| Currency | $1,271.8 |
| Traveler’s checks | $2.9 |
| Demand deposits and other checking accounts | $1,713.5 |
| Total M1 | $2,988.2 (or $3 trillion) |
| Components of M2 in the U.S. (February 2015, Seasonally Adjusted) | $ billions |
| M1 money supply | $2,988.2 |
| Savings accounts | $7,712.1 |
| Time deposits | $509.2 |
| Individual money market mutual fund balances | $610.8 |
| Total M2 | $11,820.3 (or $11.8 trillion) |
The lines separating M1 and M2 can become a little blurry. Sometimes businesses do not treat elements of M1 alike. For example, some businesses will not accept personal checks for large amounts, but will accept traveler’s checks or cash. Changes in banking practices and technology have made the savings accounts in M2 more similar to the checking accounts in M1. For example, some savings accounts will allow depositors to write checks, use automatic teller machines, and pay bills over the internet, which has made it easier to access savings accounts. As with many other economic terms and statistics, the important point is to know the strengths and limitations of the various definitions of money, not to believe that such definitions are as clear-cut to economists as, say, the definition of nitrogen is to chemists.
Where does “plastic money” like debit cards, credit cards, and smart money fit into this picture? A debit card, like a check, is an instruction to the user’s bank to transfer money directly and immediately from your bank account to the seller. It is important to note that in our definition of money, it is checkable deposits that are money, not the paper check or the debit card. Although you can make a purchase with a credit card, the financial institution does not consider it money but rather a short term loan from the credit card company to you. When you make a credit card purchase, the credit card company immediately transfers money from its checking account to the seller, and at the end of the month, the credit card company sends you a bill for what you have charged that month. Until you pay the credit card bill, you have effectively borrowed money from the credit card company. With a smart card, you can store a certain value of money on the card and then use the card to make purchases. Some “smart cards” used for specific purposes, like long-distance phone calls or making purchases at a campus bookstore and cafeteria, are not really all that smart, because you can only use them for certain purchases or in certain places.
In short, credit cards, debit cards, and smart cards are different ways to move money when you make a purchase. However, having more credit cards or debit cards does not change the quantity of money in the economy, any more than printing more checks increases the amount of money in your checking account.
One key message underlying this discussion of M1 and M2 is that money in a modern economy is not just paper bills and coins. Instead, money is closely linked to bank accounts. The banking system largely conducts macroeconomic policies concerning money. The next section explains how banks function and how a nation’s banking system has the power to create money.
Read a brief article on the current monetary challenges in Sweden.
Key Concepts and Summary
We measure money with several definitions: M1 includes currency and money in checking accounts (demand deposits). Traveler’s checks are also a component of M1, but are declining in use. M2 includes all of M1, plus savings deposits, time deposits like certificates of deposit, and money market funds.
Self-Check Questions
If you are out shopping for clothes and books, what is easiest and most convenient for you to spend: M1 or M2? Explain your answer.
Hint:
The currency and checks in M1 are easiest to spend. It is harder to spend M2 directly, although if there is an automatic teller machine in the shopping mall, you can turn M2 from your savings account into an M1 of currency quite quickly. If your answer is about “credit cards,” then you are really talking about spending M1—although it is M1 from the account of the credit card company, which you will repay later when you credit card bill comes due.
For the following list of items, indicate if they are in M1, M2, or neither:
- Your $5,000 line of credit on your Bank of America card
- $50 dollars’ worth of traveler’s checks you have not used yet
- $1 in quarters in your pocket
- $1200 in your checking account
- $2000 you have in a money market account
Hint:
- Neither in M1 or M2
- That is part of M1, and because M2 includes M1 it is also part of M2
- Currency out in the public hands is part of M1 and M2
- Checking deposits are in M1 and M2
- Money market accounts are in M2
Review Questions
What components of money do we count as part of M1?
What components of money do we count in M2?
Critical Thinking Questions
Explain why you think the Federal Reserve Bank tracks M1 and M2.
The total amount of U.S. currency in circulation divided by the U.S. population comes out to about $3,500 per person. That is more than most of us carry. Where is all the cash?
If you take $100 out of your piggy bank and deposit it in your checking account, how did M1 change? Did M2 change?
References
Federal Reserve Statistical Release. November 23, 2013. http://www.federalreserve.gov/RELEASES/h6/current/default.htm#t2tg1link.
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The Role of Banks
Overview
By the end of this section, you will be able to:
- Explain how banks act as intermediaries between savers and borrowers
- Evaluate the relationship between banks, savings and loans, and credit unions
- Analyze the causes of bankruptcy and recessions
Somebody once asked the late bank robber named Willie Sutton why he robbed banks. He answered: “That’s where the money is.” While this may have been true at one time, from the perspective of modern economists, Sutton is both right and wrong. He is wrong because the overwhelming majority of money in the economy is not in the form of currency sitting in vaults or drawers at banks, waiting for a robber to appear. Most money is in the form of bank accounts, which exist only as electronic records on computers. From a broader perspective, however, the bank robber was more right than he may have known. Banking is intimately interconnected with money and consequently, with the broader economy.
Banks make it far easier for a complex economy to carry out the extraordinary range of transactions that occur in goods, labor, and financial capital markets. Imagine for a moment what the economy would be like if everybody had to make all payments in cash. When shopping for a large purchase or going on vacation you might need to carry hundreds of dollars in a pocket or purse. Even small businesses would need stockpiles of cash to pay workers and to purchase supplies. A bank allows people and businesses to store this money in either a checking account or savings account, for example, and then withdraw this money as needed through the use of a direct withdrawal, writing a check, or using a debit card.
Banks are a critical intermediary in what we call the payment system, which helps an economy exchange goods and services for money or other financial assets. Also, those with extra money that they would like to save can store their money in a bank rather than look for an individual who is willing to borrow it from them and then repay them at a later date. Those who want to borrow money can go directly to a bank rather than trying to find someone to lend them cash. Transaction costs are the costs associated with finding a lender or a borrower for this money. Thus, banks lower transactions costs and act as financial intermediaries—they bring savers and borrowers together. Along with making transactions much safer and easier, banks also play a key role in creating money.
Banks as Financial Intermediaries
An “intermediary” is one who stands between two other parties. Banks are a financial intermediary—that is, an institution that operates between a saver who deposits money in a bank and a borrower who receives a loan from that bank. Financial intermediaries include other institutions in the financial market such as insurance companies and pension funds, but we will not include them in this discussion because they are not depository institutions, which are institutions that accept money deposits and then use these to make loans. All the deposited funds mingle in one big pool, which the financial institution then lends. Figure illustrates the position of banks as financial intermediaries, with deposits flowing into a bank and loans flowing out. Of course, when banks make loans to firms, the banks will try to funnel financial capital to healthy businesses that have good prospects for repaying the loans, not to firms that are suffering losses and may be unable to repay.
How are banks, savings and loans, and credit unions related?
Banks have a couple of close cousins: savings institutions and credit unions. Banks, as we explained, receive deposits from individuals and businesses and make loans with the money. Savings institutions are also sometimes called “savings and loans” or “thrifts.” They also take loans and make deposits. However, from the 1930s until the 1980s, federal law limited how much interest savings institutions were allowed to pay to depositors. They were also required to make most of their loans in the form of housing-related loans, either to homebuyers or to real-estate developers and builders.
A credit union is a nonprofit financial institution that its members own and run. Members of each credit union decide who is eligible to be a member. Usually, potential members would be everyone in a certain community, or groups of employees, or members of a certain organization. The credit union accepts deposits from members and focuses on making loans back to its members. While there are more credit unions than banks and more banks than savings and loans, the total assets of credit unions are growing.
In 2008, there were 7,085 banks. Due to the bank failures of 2007–2009 and bank mergers, there were 5,571 banks in the United States at the end of the fourth quarter in 2014. According to the Credit Union National Association, as of December 2014 there were 6,535 credit unions with assets totaling $1.1 billion. A day of “Transfer Your Money” took place in 2009 out of general public disgust with big bank bailouts. People were encouraged to transfer their deposits to credit unions. This has grown into the ongoing Move Your Money Project. Consequently, some now hold deposits as large as $50 billion. However, as of 2013, the 12 largest banks (0.2%) controlled 69 percent of all banking assets, according to the Dallas Federal Reserve.
A Bank’s Balance Sheet
A balance sheet is an accounting tool that lists assets and liabilities. An asset is something of value that you own and you can use to produce something. For example, you can use the cash you own to pay your tuition. If you own a home, this is also an asset. A liability is a debt or something you owe. Many people borrow money to buy homes. In this case, a home is the asset, but the mortgage is the liability. The net worth is the asset value minus how much is owed (the liability). A bank’s balance sheet operates in much the same way. A bank’s net worth as bank capital. We also refer to a bank has assets such as cash held in its vaults, monies that the bank holds at the Federal Reserve bank (called “reserves”), loans that it makes to customers, and bonds.
Figure illustrates a hypothetical and simplified balance sheet for the Safe and Secure Bank. Because of the two-column format of the balance sheet, with the T-shape formed by the vertical line down the middle and the horizontal line under “Assets” and “Liabilities,” we sometimes call it a T-account.
The “T” in a T-account separates the assets of a firm, on the left, from its liabilities, on the right. All firms use T-accounts, though most are much more complex. For a bank, the assets are the financial instruments that either the bank is holding (its reserves) or those instruments where other parties owe money to the bank—like loans made by the bank and U.S. Government Securities, such as U.S. treasury bonds purchased by the bank. Liabilities are what the bank owes to others. Specifically, the bank owes any deposits made in the bank to those who have made them. The net worth of the bank is the total assets minus total liabilities. Net worth is included on the liabilities side to have the T account balance to zero. For a healthy business, net worth will be positive. For a bankrupt firm, net worth will be negative. In either case, on a bank’s T-account, assets will always equal liabilities plus net worth.
When bank customers deposit money into a checking account, savings account, or a certificate of deposit, the bank views these deposits as liabilities. After all, the bank owes these deposits to its customers, when the customers wish to withdraw their money. In the example in Figure, the Safe and Secure Bank holds $10 million in deposits.
Loans are the first category of bank assets in Figure. Say that a family takes out a 30-year mortgage loan to purchase a house, which means that the borrower will repay the loan over the next 30 years. This loan is clearly an asset from the bank’s perspective, because the borrower has a legal obligation to make payments to the bank over time. However, in practical terms, how can we measure the value of the mortgage loan that the borrower is paying over 30 years in the present? One way of measuring the value of something—whether a loan or anything else—is by estimating what another party in the market is willing to pay for it. Many banks issue home loans, and charge various handling and processing fees for doing so, but then sell the loans to other banks or financial institutions who collect the loan payments. We call the market where financial institutions make loans to borrowers the primary loan market, while the market in which financial institutions buy and sell these loans is the secondary loan market.
One key factor that affects what financial institutions are willing to pay for a loan, when they buy it in the secondary loan market, is the perceived riskiness of the loan: that is, given the borrower's characteristics, such as income level and whether the local economy is performing strongly, what proportion of loans of this type will the borrower repay? The greater the risk that a borrower will not repay loan, the less that any financial institution will pay to acquire the loan. Another key factor is to compare the interest rate the financial institution charged on the original loan with the current interest rate in the economy. If the original loan requires the borrower to pay a low interest rate, but current interest rates are relatively high, then a financial institution will pay less to acquire the loan. In contrast, if the original loan requires the borrower to pay a high interest rate, while current interest rates are relatively low, then a financial institution will pay more to acquire the loan. For the Safe and Secure Bank in this example, the total value of its loans if they sold them to other financial institutions in the secondary market is $5 million.
The second category of bank asset is bonds, which are a common mechanism for borrowing, used by the federal and local government, and also private companies, and nonprofit organizations. A bank takes some of the money it has received in deposits and uses the money to buy bonds—typically bonds issued that the U.S. government issues. Government bonds are low-risk because the government is virtually certain to pay off the bond, albeit at a low rate of interest. These bonds are an asset for banks in the same way that loans are an asset: The bank will receive a stream of payments in the future. In our example, the Safe and Secure Bank holds bonds worth a total value of $4 million.
The final entry under assets is reserves, which is money that the bank keeps on hand, and that it does not lend or invest in bonds—and thus does not lead to interest payments. The Federal Reserve requires that banks keep a certain percentage of depositors’ money on “reserve,” which means either in their vaults or at the Federal Reserve Bank. We call this a reserve requirement. (Monetary Policy and Bank Regulation will explain how the level of these required reserves are one policy tool that governments have to influence bank behavior.) Additionally, banks may also want to keep a certain amount of reserves on hand in excess of what is required. The Safe and Secure Bank is holding $2 million in reserves.
We define net worth of a bank as its total assets minus its total liabilities. For the Safe and Secure Bank in Figure, net worth is equal to $1 million; that is, $11 million in assets minus $10 million in liabilities. For a financially healthy bank, the net worth will be positive. If a bank has negative net worth and depositors tried to withdraw their money, the bank would not be able to give all depositors their money.
For some concrete examples of what banks do, watch this video from Paul Solman’s “Making Sense of Financial News.”
How Banks Go Bankrupt
A bank that is bankrupt will have a negative net worth, meaning its assets will be worth less than its liabilities. How can this happen? Again, looking at the balance sheet helps to explain.
A well-run bank will assume that a small percentage of borrowers will not repay their loans on time, or at all, and factor these missing payments into its planning. Remember, the calculations of the banks' expenses every year include a factor for loans that borrowers do not repay, and the value of a bank’s loans on its balance sheet assumes a certain level of riskiness because some customers will not repay loans. Even if a bank expects a certain number of loan defaults, it will suffer if the number of loan defaults is much greater than expected, as can happen during a recession. For example, if the Safe and Secure Bank in Figure experienced a wave of unexpected defaults, so that its loans declined in value from $5 million to $3 million, then the assets of the Safe and Secure Bank would decline so that the bank had negative net worth.
What led to the 2008–2009 financial crisis?
Many banks make mortgage loans so that people can buy a home, but then do not keep the loans on their books as an asset. Instead, the bank sells the loan. These loans are “securitized,” which means that they are bundled together into a financial security that a financial institution sells to investors. Investors in these mortgage-backed securities receive a rate of return based on the level of payments that people make on all the mortgages that stand behind the security.
Securitization offers certain advantages. If a bank makes most of its loans in a local area, then the bank may be financially vulnerable if the local economy declines, so that many people are unable to make their payments. However, if a bank sells its local loans, and then buys a mortgage-backed security based on home loans in many parts of the country, it can avoid exposure to local financial risks. (In the simple example in the text, banks just own “bonds.” In reality, banks can own a number of financial instruments, as long as these financial investments are safe enough to satisfy the government bank regulators.) From the standpoint of a local homebuyer, securitization offers the benefit that a local bank does not need to have significant extra funds to make a loan, because the bank is only planning to hold that loan for a short time, before selling the loan so that it can pool it into a financial security.
However, securitization also offers one potentially large disadvantage. If a bank plans to hold a mortgage loan as an asset, the bank has an incentive to scrutinize the borrower carefully to ensure that the customer is likely to repay the loan. However, a bank that plans to sell the loan may be less careful in making the loan in the first place. The bank will be more willing to make what we call “subprime loans,” which are loans that have characteristics like low or zero down-payment, little scrutiny of whether the borrower has a reliable income, and sometimes low payments for the first year or two that will be followed by much higher payments. Economists dubbed some financial institutions that made subprime loans in the mid-2000s NINJA loans: loans that financial institutions made even though the borrower had demonstrated No Income, No Job, or Assets.
Financial institutions typically sold these subprime loans and turned them into financial securities—but with a twist. The idea was that if losses occurred on these mortgage-backed securities, certain investors would agree to take the first, say, 5% of such losses. Other investors would agree to take, say, the next 5% of losses. By this approach, still other investors would not need to take any losses unless these mortgage-backed financial securities lost 25% or 30% or more of their total value. These complex securities, along with other economic factors, encouraged a large expansion of subprime loans in the mid-2000s.
The economic stage was now set for a banking crisis. Banks thought they were buying only ultra-safe securities, because even though the securities were ultimately backed by risky subprime mortgages, the banks only invested in the part of those securities where they were protected from small or moderate levels of losses. However, as housing prices fell after 2007, and the deepening recession made it harder for many people to make their mortgage payments, many banks found that their mortgage-backed financial assets could be worth much less than they had expected—and so the banks were faced with staring bankruptcy. In the 2008–2011 period, 318 banks failed in the United States.
The risk of an unexpectedly high level of loan defaults can be especially difficult for banks because a bank’s liabilities, namely it customers' deposits. Customers can withdraw funds quickly but many of the bank’s assets like loans and bonds will only be repaid over years or even decades. This asset-liability time mismatch—the ability for customers to withdraw bank’s liabilities in the short term while customers repay its assets in the long term—can cause severe problems for a bank. For example, imagine a bank that has loaned a substantial amount of money at a certain interest rate, but then sees interest rates rise substantially. The bank can find itself in a precarious situation. If it does not raise the interest rate it pays to depositors, then deposits will flow to other institutions that offer the higher interest rates that are now prevailing. However, if the bank raises the interest rates that it pays to depositors, it may end up in a situation where it is paying a higher interest rate to depositors than it is collecting from those past loans that it at lower interest rates. Clearly, the bank cannot survive in the long term if it is paying out more in interest to depositors than it is receiving from borrowers.
How can banks protect themselves against an unexpectedly high rate of loan defaults and against the risk of an asset-liability time mismatch? One strategy is for a bank to diversify its loans, which means lending to a variety of customers. For example, suppose a bank specialized in lending to a niche market—say, making a high proportion of its loans to construction companies that build offices in one downtown area. If that one area suffers an unexpected economic downturn, the bank will suffer large losses. However, if a bank loans both to consumers who are buying homes and cars and also to a wide range of firms in many industries and geographic areas, the bank is less exposed to risk. When a bank diversifies its loans, those categories of borrowers who have an unexpectedly large number of defaults will tend to be balanced out, according to random chance, by other borrowers who have an unexpectedly low number of defaults. Thus, diversification of loans can help banks to keep a positive net worth. However, if a widespread recession occurs that touches many industries and geographic areas, diversification will not help.
Along with diversifying their loans, banks have several other strategies to reduce the risk of an unexpectedly large number of loan defaults. For example, banks can sell some of the loans they make in the secondary loan market, as we described earlier, and instead hold a greater share of assets in the form of government bonds or reserves. Nevertheless, in a lengthy recession, most banks will see their net worth decline because customers will not repay a higher share of loans in tough economic times.
Key Concepts and Summary
Banks facilitate using money for transactions in the economy because people and firms can use bank accounts when selling or buying goods and services, when paying a worker or receiving payment, and when saving money or receiving a loan. In the financial capital market, banks are financial intermediaries; that is, they operate between savers who supply financial capital and borrowers who demand loans. A balance sheet (sometimes called a T-account) is an accounting tool which lists assets in one column and liabilities in another. The bank's liabilities are its deposits. The bank's assets include its loans, its ownership of bonds, and its reserves (which it does not loan out). We calculate a bank's net worth by subtracting its liabilities from its assets. Banks run a risk of negative net worth if the value of their assets declines. The value of assets can decline because of an unexpectedly high number of defaults on loans, or if interest rates rise and the bank suffers an asset-liability time mismatch in which the bank is receiving a low interest rate on its long-term loans but must pay the currently higher market interest rate to attract depositors. Banks can protect themselves against these risks by choosing to diversify their loans or to hold a greater proportion of their assets in bonds and reserves. If banks hold only a fraction of their deposits as reserves, then the process of banks’ lending money, re-depositing those loans in banks, and the banks making additional loans will create money in the economy.
Self-Check Questions
Explain why the money listed under assets on a bank balance sheet may not actually be in the bank?
Hint:
A bank’s assets include cash held in their vaults, but assets also include monies that the bank holds at the Federal Reserve Bank (called “reserves”), loans that are made to customers, and bonds.
Review Questions
Why do we call a bank a financial intermediary?
What does a balance sheet show?
What are a bank's assets? What are its liabilities?
How do you calculate a bank's net worth?
How can a bank end up with negative net worth?
What is the asset-liability time mismatch that all banks face?
What is the risk if a bank does not diversify its loans?
Critical Thinking Questions
Explain the difference between how you would characterize bank deposits and loans as assets and liabilities on your own personal balance sheet and how a bank would characterize deposits and loans as assets and liabilities on its balance sheet.
Problems
A bank has deposits of $400. It holds reserves of $50. It has purchased government bonds worth $70. It has made loans of $500. Set up a T-account balance sheet for the bank, with assets and liabilities, and calculate the bank’s net worth.
References
Credit Union National Association. 2014. "Monthly Credit Union Estimates." Last accessed March 4, 2015. http://www.cuna.org/Research-And-Strategy/Credit-Union-Data-And-Statistics/.
Dallas Federal Reserve. 2013. "Ending `Too Big To Fail': A Proposal for Reform Before It's Too Late". Accessed March 4, 2015. http://www.dallasfed.org/news/speeches/fisher/2013/fs130116.cfm.
Richard W. Fisher. “Ending 'Too Big to Fail': A Proposal for Reform Before It's Too Late (With Reference to Patrick Henry, Complexity and Reality) Remarks before the Committee for the Republic, Washington, D.C. Dallas Federal Reserve. January 16, 2013.
“Commercial Banks in the U.S.” Federal Reserve Bank of St. Louis. Accessed November 2013. http://research.stlouisfed.org/fred2/series/USNUM.
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https://oercommons.org/courseware/lesson/28845/overview
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How Banks Create Money
Overview
By the end of this section, you will be able to:
- Utilize the money multiplier formulate to determine how banks create money
- Analyze and create T-account balance sheets
- Evaluate the risks and benefits of money and banks
Banks and money are intertwined. It is not just that most money is in the form of bank accounts. The banking system can literally create money through the process of making loans. Let’s see how.
Money Creation by a Single Bank
Start with a hypothetical bank called Singleton Bank. The bank has $10 million in deposits. The T-account balance sheet for Singleton Bank, when it holds all of the deposits in its vaults, is in Figure. At this stage, Singleton Bank is simply storing money for depositors and is using these deposits to make loans. In this simplified example, Singleton Bank cannot earn any interest income from these loans and cannot pay its depositors an interest rate either.
The Federal Reserve requires Singleton Bank to keep $1 million on reserve (10% of total deposits). It will loan out the remaining $9 million. By loaning out the $9 million and charging interest, it will be able to make interest payments to depositors and earn interest income for Singleton Bank (for now, we will keep it simple and not put interest income on the balance sheet). Instead of becoming just a storage place for deposits, Singleton Bank can become a financial intermediary between savers and borrowers.
This change in business plan alters Singleton Bank’s balance sheet, as Figure shows. Singleton’s assets have changed. It now has $1 million in reserves and a loan to Hank’s Auto Supply of $9 million. The bank still has $10 million in deposits.
Singleton Bank lends $9 million to Hank’s Auto Supply. The bank records this loan by making an entry on the balance sheet to indicate that it has made a loan. This loan is an asset, because it will generate interest income for the bank. Of course, the loan officer will not allow let Hank to walk out of the bank with $9 million in cash. The bank issues Hank’s Auto Supply a cashier’s check for the $9 million. Hank deposits the loan in his regular checking account with First National. The deposits at First National rise by $9 million and its reserves also rise by $9 million, as Figure shows. First National must hold 10% of additional deposits as required reserves but is free to loan out the rest
Making loans that are deposited into a demand deposit account increases the M1 money supply. Remember the definition of M1 includes checkable (demand) deposits, which one can easily use as a medium of exchange to buy goods and services. Notice that the money supply is now $19 million: $10 million in deposits in Singleton bank and $9 million in deposits at First National. Obviously as Hank’s Auto Supply writes checks to pay its bills the deposits will draw down. However, the bigger picture is that a bank must hold enough money in reserves to meet its liabilities. The rest the bank loans out. In this example so far, bank lending has expanded the money supply by $9 million.
Now, First National must hold only 10% as required reserves ($900,000) but can lend out the other 90% ($8.1 million) in a loan to Jack’s Chevy Dealership as Figure shows.
If Jack’s deposits the loan in its checking account at Second National, the money supply just increased by an additional $8.1 million, as Figure shows.
How is this money creation possible? It is possible because there are multiple banks in the financial system, they are required to hold only a fraction of their deposits, and loans end up deposited in other banks, which increases deposits and, in essence, the money supply.
Watch this video to learn more about how banks create money.
The Money Multiplier and a Multi-Bank System
In a system with multiple banks, Singleton Bank deposited the initial excess reserve amount that it decided to lend to Hank’s Auto Supply into First National Bank, which is free to loan out $8.1 million. If all banks loan out their excess reserves, the money supply will expand. In a multi-bank system, institutions determine the amount of money that the system can create by using the money multiplier. This tells us by how many times a loan will be “multiplied” as it is spent in the economy and then re-deposited in other banks.
Fortunately, a formula exists for calculating the total of these many rounds of lending in a banking system. The money multiplier formula is:
We then multiply the money multiplier by the change in excess reserves to determine the total amount of M1 money supply created in the banking system. See the Work it Out feature to walk through the multiplier calculation.
Using the Money Multiplier Formula
Using the money multiplier for the example in this text:
Step 1. In the case of Singleton Bank, for whom the reserve requirement is 10% (or 0.10), the money multiplier is 1 divided by .10, which is equal to 10.
Step 2. We have identified that the excess reserves are $9 million, so, using the formula we can determine the total change in the M1 money supply:
Step 3. Thus, we can say that, in this example, the total quantity of money generated in this economy after all rounds of lending are completed will be $90 million.
Cautions about the Money Multiplier
The money multiplier will depend on the proportion of reserves that the Federal Reserve Band requires banks to hold. Additionally, a bank can also choose to hold extra reserves. Banks may decide to vary how much they hold in reserves for two reasons: macroeconomic conditions and government rules. When an economy is in recession, banks are likely to hold a higher proportion of reserves because they fear that customers are less likely to repay loans when the economy is slow. The Federal Reserve may also raise or lower the required reserves held by banks as a policy move to affect the quantity of money in an economy, as Monetary Policy and Bank Regulation will discuss.
The process of how banks create money shows how the quantity of money in an economy is closely linked to the quantity of lending or credit in the economy. All the money in the economy, except for the original reserves, is a result of bank loans that institutions repeatedly re-deposit and loan.
Finally, the money multiplier depends on people re-depositing the money that they receive in the banking system. If people instead store their cash in safe-deposit boxes or in shoeboxes hidden in their closets, then banks cannot recirculate the money in the form of loans. Central banks have an incentive to assure that bank deposits are safe because if people worry that they may lose their bank deposits, they may start holding more money in cash, instead of depositing it in banks, and the quantity of loans in an economy will decline. Low-income countries have what economists sometimes refer to as “mattress savings,” or money that people are hiding in their homes because they do not trust banks. When mattress savings in an economy are substantial, banks cannot lend out those funds and the money multiplier cannot operate as effectively. The overall quantity of money and loans in such an economy will decline.
Watch a video of Jem Bendell discussing “The Money Myth.”
Money and Banks—Benefits and Dangers
Money and banks are marvelous social inventions that help a modern economy to function. Compared with the alternative of barter, money makes market exchanges vastly easier in goods, labor, and financial markets. Banking makes money still more effective in facilitating exchanges in goods and labor markets. Moreover, the process of banks making loans in financial capital markets is intimately tied to the creation of money.
However, the extraordinary economic gains that are possible through money and banking also suggest some possible corresponding dangers. If banks are not working well, it sets off a decline in convenience and safety of transactions throughout the economy. If the banks are under financial stress, because of a widespread decline in the value of their assets, loans may become far less available, which can deal a crushing blow to sectors of the economy that depend on borrowed money like business investment, home construction, and car manufacturing. The 2008–2009 Great Recession illustrated this pattern.
The Many Disguises of Money: From Cowries to Bitcoins
The global economy has come a long way since it started using cowrie shells as currency. We have moved away from commodity and commodity-backed paper money to fiat currency. As technology and global integration increases, the need for paper currency is diminishing, too. Every day, we witness the increased use of debit and credit cards.
The latest creation and perhaps one of the purest forms of fiat money is the Bitcoin. Bitcoins are a digital currency that allows users to buy goods and services online. Customers can purchase products and services such as videos and books using Bitcoins. This currency is not backed by any commodity nor has any government decreed as legal tender, yet customers use it as a medium of exchange and can store its value (online at least). It is also unregulated by any central bank, but is created online through people solving very complicated mathematics problems and receiving payment afterward. Bitcoin.org is an information source if you are curious. Bitcoins are a relatively new type of money. At present, because it is not sanctioned as a legal currency by any country nor regulated by any central bank, it lends itself for use in illegal as well as legal trading activities. As technology increases and the need to reduce transactions costs associated with using traditional forms of money increases, Bitcoins or some sort of digital currency may replace our dollar bill, just as man replaced the cowrie shell.
Key Concepts and Summary
We define the money multiplier as the quantity of money that the banking system can generate from each $1 of bank reserves. The formula for calculating the multiplier is 1/reserve ratio, where the reserve ratio is the fraction of deposits that the bank wishes to hold as reserves. The quantity of money in an economy and the quantity of credit for loans are inextricably intertwined. The network of banks making loans, people making deposits, and banks making more loans creates much of the money in an economy.
Given the macroeconomic dangers of a malfunctioning banking system, Monetary Policy and Bank Regulation will discuss government policies for controlling the money supply and for keeping the banking system safe.
Self-Check Questions
Imagine that you are in the position of buying loans in the secondary market (that is, buying the right to collect the payments on loans) for a bank or other financial services company. Explain why you would be willing to pay more or less for a given loan if:
- The borrower has been late on a number of loan payments
- Interest rates in the economy as a whole have risen since the bank made the loan
- The borrower is a firm that has just declared a high level of profits
- Interest rates in the economy as a whole have fallen since the bank made the loan
Hint:
- A borrower who has been late on a number of loan payments looks perhaps less likely to repay the loan, or to repay it on time, and so you would want to pay less for that loan.
- If interest rates generally have risen, then this loan made at a time of relatively lower interest rates looks less attractive, and you would pay less for it.
- If the borrower is a firm with a record of high profits, then it is likely to be able to repay the loan, and you would be willing to pay more for the loan.
- If interest rates in the economy have fallen, then the loan is worth more.
Review Questions
How do banks create money?
What is the formula for the money multiplier?
Critical Thinking Questions
Should banks have to hold 100% of their deposits? Why or why not?
Explain what will happen to the money multiplier process if there is an increase in the reserve requirement?
What do you think the Federal Reserve Bank did to the reserve requirement during the 2008–2009 Great Recession?
Problems
Humongous Bank is the only bank in the economy. The people in this economy have $20 million in money, and they deposit all their money in Humongous Bank.
- Humongous Bank decides on a policy of holding 100% reserves. Draw a T-account for the bank.
- Humongous Bank is required to hold 5% of its existing $20 million as reserves, and to loan out the rest. Draw a T-account for the bank after it has made its first round of loans.
- Assume that Humongous bank is part of a multibank system. How much will money supply increase with that original $19 million loan?
References
Bitcoin. 2013. www.bitcoin.org.
National Public Radio. Lawmakers and Regulators Take Closer Look at Bitcoin. November 19, 2013. http://thedianerehmshow.org/shows/2013-11-19/lawmakers-and-regulators-take-closer-look-bitcoin.
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https://oercommons.org/courseware/lesson/28881/overview
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Introduction to Globalization and Protectionism
What’s the Downside of Protection?
Governments are motivated to limit and alter market outcomes for political or social ends. While governments can limit the rise in prices of some products, they cannot control how much people want to buy or how much firms are willing to sell. The laws of demand and supply still hold. Trade policy is an example where regulations can redirect economic forces, but it cannot stop them from manifesting themselves elsewhere.
Flat-panel displays, the displays for laptop computers, tablets, and flat screen televisions, are an example of such an enduring principle. In the early 1990s, the vast majority of flat-panel displays used in U.S.-manufactured laptops were imported, primarily from Japan. The small but politically powerful U.S. flat-panel-display industry filed a dumping complaint with the Commerce Department. They argued that Japanese firms were selling displays at “less than fair value,” which made it difficult for U.S. firms to compete. This argument for trade protection is referred to as anti-dumping. Other arguments for protection in this complaint included national security. After a preliminary determination by the Commerce Department that the Japanese firms were dumping, the U.S. International Trade Commission imposed a 63% dumping margin (or tax) on the import of flat-panel displays. Was this a successful exercise of U.S. trade policy? See what you think after reading the chapter.
Introduction to Globalism and Protectionism
In this chapter, you will learn about:
- Protectionism: An Indirect Subsidy from Consumers to Producers
- International Trade and Its Effects on Jobs, Wages, and Working Conditions
- Arguments in Support of Restricting Imports
- How Trade Policy Is Enacted: Globally, Regionally, and Nationally
- The Tradeoffs of Trade Policy
The world has become more connected on multiple levels, especially economically. In 1970, imports and exports made up 11% of U.S. GDP, while now they make up 32%. However, the United States, due to its size, is less internationally connected than most countries. For example, according to the World Bank, 97% of Botswana’s economic activity is connected to trade. This chapter explores trade policy—the laws and strategies a country uses to regulate international trade. This topic is not without controversy.
As the world has become more globally connected, firms and workers in high-income countries like the United States, Japan, or the nations of the European Union, perceive a competitive threat from firms in medium-income countries like Mexico, China, or South Africa, that have lower costs of living and therefore pay lower wages. Firms and workers in low-income countries fear that they will suffer if they must compete against more productive workers and advanced technology in high-income countries.
On a different tack, some environmentalists worry that multinational firms may evade environmental protection laws by moving their production to countries with loose or nonexistent pollution standards, trading a clean environment for jobs. Some politicians worry that their country may become overly dependent on key imported products, like oil, which in a time of war could threaten national security. All of these fears influence governments to reach the same basic policy conclusion: to protect national interests, whether businesses, jobs, or security, imports of foreign products should be restricted. This chapter analyzes such arguments. First, however, it is essential to learn a few key concepts and understand how the demand and supply model applies to international trade.
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https://oercommons.org/courseware/lesson/28882/overview
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Protectionism: An Indirect Subsidy from Consumers to Producers
Overview
By the end of this section, you will be able to:
- Explain protectionism and its three main forms
- Analyze protectionism through concepts of demand and supply, noting its effects on equilibrium
- Calculate the effects of trade barriers
When a government legislates policies to reduce or block international trade it is engaging in protectionism. Protectionist policies often seek to shield domestic producers and domestic workers from foreign competition. Protectionism takes three main forms: tariffs, import quotas, and nontariff barriers.
Recall from International Trade that tariffs are taxes that governments impose on imported goods and services. This makes imports more expensive for consumers, discouraging imports. For example, in recent years large, flat-screen televisions imported to the U.S. from China have faced a 5% tariff rate.
Another way to control trade is through import quotas, which are numerical limitations on the quantity of products that a country can import. For instance, during the early 1980s, the Reagan Administration imposed a quota on the import of Japanese automobiles. In the 1970s, many developed countries, including the United States, found themselves with declining textile industries. Textile production does not require highly skilled workers, so producers were able to set up lower-cost factories in developing countries. In order to “manage” this loss of jobs and income, the developed countries established an international Multifiber Agreement that essentially divided the market for textile exports between importers and the remaining domestic producers. The agreement, which ran from 1974 to 2004, specified the exact quota of textile imports that each developed country would accept from each low-income country. A similar story exists for sugar imports into the United States, which are still governed by quotas.
Nontariff barriers are all the other ways that a nation can draw up rules, regulations, inspections, and paperwork to make it more costly or difficult to import products. A rule requiring certain safety standards can limit imports just as effectively as high tariffs or low import quotas, for instance. There are also nontariff barriers in the form of “rules-of-origin” regulations; these rules describe the “Made in Country X” label as the one in which the last substantial change in the product took place. A manufacturer wishing to evade import restrictions may try to change the production process so that the last big change in the product happens in his or her own country. For example, certain textiles are made in the United States, shipped to other countries, combined with textiles made in those other countries to make apparel—and then re-exported back to the United States for a final assembly, to escape paying tariffs or to obtain a “Made in the USA” label.
Despite import quotas, tariffs, and nontariff barriers, the share of apparel sold in the United States that is imported rose from about half in 1999 to about three-quarters today. The U.S. Bureau of Labor Statistics (BLS), estimated the number of U.S. jobs in textiles and apparel fell from 666,360 in 2007 to 385,240 in 2012, a 42% decline. Even more U.S. textile industry jobs would have been lost without tariffs. However, domestic jobs that are saved by import quotas come at a cost. Because textile and apparel protectionism adds to the costs of imports, consumers end up paying billions of dollars more for clothing each year.
When the United States eliminates trade barriers in one area, consumers spend the money they save on that product elsewhere in the economy. Thus, while eliminating trade barriers in one sector of the economy will likely result in some job loss in that sector, consumers will spend the resulting savings in other sectors of the economy and hence increase the number of jobs in those other sectors. Of course, workers in some of the poorest countries of the world who would otherwise have jobs producing textiles, would gain considerably if the United States reduced its barriers to trade in textiles. That said, there are good reasons to be wary about reducing barriers to trade. The 2012 and 2013 Bangladeshi fires in textile factories, which resulted in a horrific loss of life, present complications that our simplified analysis in the chapter will not capture.
Realizing the compromises between nations that come about due to trade policy, many countries came together in 1947 to form the General Agreement on Tariffs and Trade (GATT). (We’ll cover the GATT in more detail later in the chapter.) This agreement has since been superseded by the World Trade Organization (WTO), whose membership includes about 150 nations and most of the world's economies. It is the primary international mechanism through which nations negotiate their trade rules—including rules about tariffs, quotas, and nontariff barriers. The next section examines the results of such protectionism and develops a simple model to show the impact of trade policy.
Demand and Supply Analysis of Protectionism
To the non-economist, restricting imports may appear to be nothing more than taking sales from foreign producers and giving them to domestic producers. Other factors are at work, however, because firms do not operate in a vacuum. Instead, firms sell their products either to consumers or to other firms (if they are business suppliers), who are also affected by the trade barriers. A demand and supply analysis of protectionism shows that it is not just a matter of domestic gains and foreign losses, but a policy that imposes substantial domestic costs as well.
Consider two countries, Brazil and the United States, who produce sugar. Each country has a domestic supply and demand for sugar, as Table details and Figure illustrates. In Brazil, without trade, the equilibrium price of sugar is 12 cents per pound and the equilibrium output is 30 tons. When there is no trade in the United States, the equilibrium price of sugar is 24 cents per pound and the equilibrium quantity is 80 tons. We label these equilibrium points as point E in each part of the figure.
| Price | Brazil: Quantity Supplied (tons) | Brazil: Quantity Demanded (tons) | U.S.: Quantity Supplied (tons) | U.S.: Quantity Demanded (tons) |
|---|---|---|---|---|
| 8 cents | 20 | 35 | 60 | 100 |
| 12 cents | 30 | 30 | 66 | 93 |
| 14 cents | 35 | 28 | 69 | 90 |
| 16 cents | 40 | 25 | 72 | 87 |
| 20 cents | 45 | 21 | 76 | 83 |
| 24 cents | 50 | 18 | 80 | 80 |
| 28 cents | 55 | 15 | 82 | 78 |
If international trade between Brazil and the United States now becomes possible, profit-seeking firms will spot an opportunity: buy sugar cheaply in Brazil, and sell it at a higher price in the United States. As sugar is shipped from Brazil to the United States, the quantity of sugar produced in Brazil will be greater than Brazilian consumption (with the extra production exported), and the amount produced in the United States will be less than the amount of U.S. consumption (with the extra consumption imported). Exports to the United States will reduce the sugar supply in Brazil, raising its price. Imports into the United States will increase the sugar supply, lowering its price. When the sugar price is the same in both countries, there is no incentive to trade further. As Figure shows, the equilibrium with trade occurs at a price of 16 cents per pound. At that price, the sugar farmers of Brazil supply a quantity of 40 tons, while the consumers of Brazil buy only 25 tons.
The extra 15 tons of sugar production, shown by the horizontal gap between the demand curve and the supply curve in Brazil, is exported to the United States. In the United States, at a price of 16 cents, the farmers produce a quantity of 72 tons and consumers demand a quantity of 87 tons. The excess demand of 15 tons by American consumers, shown by the horizontal gap between demand and domestic supply at the price of 16 cents, is supplied by imported sugar. Free trade typically results in income distribution effects, but the key is to recognize the overall gains from trade, as Figure shows. Building on the concepts that we outlined in Demand and Supply and Demand, Supply, and Efficiency in terms of consumer and producer surplus, Figure (a) shows that producers in Brazil gain by selling more sugar at a higher price, while Figure (b) shows consumers in the United States benefit from the lower price and greater availability of sugar. Consumers in Brazil are worse off (compare their no-trade consumer surplus with the free-trade consumer surplus) and U.S. producers of sugar are worse off. There are gains from trade—an increase in social surplus in each country. That is, both the United States and Brazil are better off than they would be without trade. The following Clear It Up feature explains how trade policy can influence low-income countries.
Visit this website to read more about the global sugar trade.
Why are there low-income countries?
Why are the poor countries of the world poor? There are a number of reasons, but one of them will surprise you: the trade policies of the high-income countries. Following is a stark review of social priorities which the international aid organization, Oxfam International has widely publicized.
High-income countries of the world—primarily the United States, Canada, countries of the European Union, and Japan—subsidize their domestic farmers collectively by about $360 billion per year. By contrast, the total amount of foreign aid from these same high-income countries to the poor countries of the world is about $70 billion per year, or less than 20% of the farm subsidies. Why does this matter?
It matters because the support of farmers in high-income countries is devastating to the livelihoods of farmers in low-income countries. Even when their climate and land are well-suited to products like cotton, rice, sugar, or milk, farmers in low-income countries find it difficult to compete. Farm subsidies in the high-income countries cause farmers in those countries to increase the amount they produce. This increase in supply drives down world prices of farm products below the costs of production. As Michael Gerson of the Washington Post describes it: “[T]he effects in the cotton-growing regions of West Africa are dramatic . . . keep[ing] millions of Africans on the edge of malnutrition. In some of the poorest countries on Earth, cotton farmers are some of the poorest people, earning about a dollar a day. . . . Who benefits from the current system of subsidies? About 20,000 American cotton producers, with an average annual income of more than $125,000.”
As if subsidies were not enough, often, the high-income countries block agricultural exports from low-income countries. In some cases, the situation gets even worse when the governments of high-income countries, having bought and paid for an excess supply of farm products, give away those products in poor countries and drive local farmers out of business altogether.
For example, shipments of excess milk from the European Union to Jamaica have caused great hardship for Jamaican dairy farmers. Shipments of excess rice from the United States to Haiti drove thousands of low-income rice farmers in Haiti out of business. The opportunity costs of protectionism are not paid just by domestic consumers, but also by foreign producers—and for many agricultural products, those foreign producers are the world’s poor.
Now, let’s look at what happens with protectionism. U.S. sugar farmers are likely to argue that, if only they could be protected from sugar imported from Brazil, the United States would have higher domestic sugar production, more jobs in the sugar industry, and American sugar farmers would receive a higher price. If the United States government sets a high-enough tariff on imported sugar, or sets an import quota at zero, the result will be that the quantity of sugar traded between countries could be reduced to zero, and the prices in each country will return to the levels before trade was allowed.
Blocking only some trade is also possible. Suppose that the United States passed a sugar import quota of seven tons. The United States will import no more than seven tons of sugar, which means that Brazil can export no more than seven tons of sugar to the United States. As a result, the price of sugar in the United States will be 20 cents, which is the price where the quantity demanded is seven tons greater than the domestic quantity supplied. Conversely, if Brazil can export only seven tons of sugar, then the price of sugar in Brazil will be 14 cents per pound, which is the price where the domestic quantity supplied in Brazil is seven tons greater than domestic demand.
In general, when a country sets a low or medium tariff or import quota, the equilibrium price and quantity will be somewhere between those that prevail with no trade and those with completely free trade. The following Work It Out explores the impact of these trade barriers.
Effects of Trade Barriers
Let’s look carefully at the effects of tariffs or quotas. If the U.S. government imposes a tariff or quota sufficient to eliminate trade with Brazil, two things occur: U.S. consumers pay a higher price and therefore buy a smaller quantity of sugar. U.S. producers obtain a higher price and they sell a larger quantity of sugar. We can measure the effects of a tariff on producers and consumers in the United States using two concepts that we developed in Demand, Supply, and Efficiency: consumer surplus and producer surplus.
Step 1. Look at Figure, which shows a hypothetical version of the demand and supply of sugar in the United States.
Step 2. Note that when there is free trade the sugar market is in equilibrium at point A where Domestic Quantity Demanded (Qd) = Quantity Supplied (Domestic Qs + Imports from Brazil) at a price of PTrade.
Step 3. Note, also, that imports are equal to the distance between points C and A.
Step 4. Recall that consumer surplus is the value that consumers get beyond what they paid for when they buy a product. Graphically, it is the area under a demand curve but above the price. In this case, the consumer surplus in the United States is the area of the triangle formed by the points PTrade, A, and B.
Step 5. Recall, also, that producer surplus is another name for profit—it is the income producers get above the cost of production, which is shown by the supply curve here. In this case, the producer surplus with trade is the area of the triangle formed by the points Ptrade, C, and D.
Step 6. Suppose that the barriers to trade are imposed, imports are excluded, and the price rises to PNoTrade. Look what happens to producer surplus and consumer surplus. At the higher price, the domestic quantity supplied increases from Qs to Q at point E. Because producers are selling more quantity at a higher price, the producer surplus increases to the area of the triangle PNoTrade, E, and D.
Step 7. Compare the areas of the two triangles and you will see the increase in the producer surplus.
Step 8. Examine the consumer surplus. Consumers are now paying a higher price to get a lower quantity (Q instead of Qd). Their consumer surplus shrinks to the area of the triangle PNoTrade, E, and B.
Step 9. Determine the net effect. The producer surplus increases by the area Ptrade, C, E, PNoTrade. The loss of consumer surplus, however, is larger. It is the area Ptrade, A, E, PNoTrade. In other words, consumers lose more than producers gain as a result of the trade barriers and the United States has a lower social surplus.
Who Benefits and Who Pays?
Using the demand and supply model, consider the impact of protectionism on producers and consumers in each of the two countries. For protected producers like U.S. sugar farmers, restricting imports is clearly positive. Without a need to face imported products, these producers are able to sell more, at a higher price. For consumers in the country with the protected good, in this case U.S. sugar consumers, restricting imports is clearly negative. They end up buying a lower quantity of the good and paying a higher price for what they do buy, compared to the equilibrium price and quantity with trade. The following Clear It Up feature considers why a country might outsource jobs even for a domestic product.
Why are Life Savers, an American product, not made in America?
In 1912, Clarence Crane invented Life Savers, the hard candy with the hole in the middle, in Cleveland, Ohio. Starting in the late 1960s and for 35 years afterward, a plant in Holland, Michigan produced 46 billion Life Savers a year, in 200 million rolls. However, in 2002, the Kraft Company announced that it would close the Michigan plant and move Life Saver production across the border to Montreal, Canada.
One reason is that Canadian workers are paid slightly less, especially in healthcare and insurance costs that are not linked to employment there. Another main reason is that the United States government keeps the sugar price high for the benefit of sugar farmers, with a combination of a government price floor program and strict quotas on imported sugar. According to the Coalition for Sugar Reform, from 2009 to 2012, the price of refined sugar in the United States ranged from 64% to 92% higher than the world price. Life Saver production uses over 100 tons of sugar each day, because the candies are 95% sugar.
A number of other candy companies have also reduced U.S. production and expanded foreign production. From 1997 to 2011, sugar-using industries eliminated some 127,000 jobs, or more than seven times the total employment in sugar production. While the candy industry is especially affected by the cost of sugar, the costs are spread more broadly. U.S. consumers pay roughly $1 billion per year in higher food prices because of elevated sugar costs. Meanwhile, sugar producers in low-income countries are driven out of business. Because of the sugar subsidies to domestic producers and the quotas on imports, they cannot sell their output profitably, or at all, in the United States market.
The fact that protectionism pushes up prices for consumers in the country enacting such protectionism is not always acknowledged openly, but it is not disputed. After all, if protectionism did not benefit domestic producers, there would not be much point in enacting such policies in the first place. Protectionism is simply a method of requiring consumers to subsidize producers. The subsidy is indirect, since consumers pay for it through higher prices, rather than a direct government subsidy paid with money collected from taxpayers. However, protectionism works like a subsidy, nonetheless. The American satirist Ambrose Bierce defined “tariff” this way in his 1911 book, The Devil’s Dictionary: “Tariff, n. A scale of taxes on imports, designed to protect the domestic producer against the greed of his consumer.”
The effect of protectionism on producers and consumers in the foreign country is complex. When a government uses an import quota to impose partial protectionism, Brazilian sugar producers receive a lower price for the sugar they sell in Brazil—but a higher price for the sugar they are allowed to export to the United States. Notice that some of the burden of protectionism, paid by domestic consumers, ends up in the hands of foreign producers in this case. Brazilian sugar consumers seem to benefit from U.S. protectionism, because it reduces the price of sugar that they pay (compared to the free-trade situation). On the other hand, at least some of these Brazilian sugar consumers also work as sugar farmers, so protectionism reduces their incomes and jobs. Moreover, if trade between the countries vanishes, Brazilian consumers would miss out on better prices for imported goods—which do not appear in our single-market example of sugar protectionism.
The effects of protectionism on foreign countries notwithstanding, protectionism requires domestic consumers of a product (consumers may include either households or other firms) to pay higher prices to benefit domestic producers of that product. In addition, when a country enacts protectionism, it loses the economic gains it would have been able to achieve through a combination of comparative advantage, specialized learning, and economies of scale, concepts that we discuss in International Trade.
Key Concepts and Summary
There are three tools for restricting the flow of trade: tariffs, import quotas, and nontariff barriers. When a country places limitations on imports from abroad, regardless of whether it uses tariffs, quotas, or nontariff barriers, it is said to be practicing protectionism. Protectionism will raise the price of the protected good in the domestic market, which causes domestic consumers to pay more, but domestic producers to earn more.
Self-Check Questions
Explain how a tariff reduction causes an increase in the equilibrium quantity of imports and a decrease in the equilibrium price. Hint: Consider the Work It Out "Effects of Trade Barriers."
Hint:
This is the opposite case of the Work It Out feature. A reduced tariff is like a decrease in the cost of production, which is shown by a downward (or rightward) shift in the supply curve.
Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign producers of imported sugar.
Hint:
A subsidy is like a reduction in cost. This shifts the supply curve down (or to the right), driving the price of sugar down. If the subsidy is large enough, the price of sugar can fall below the cost of production faced by foreign producers, which means they will lose money on any sugar they produce and sell.
Review Questions
Who does protectionism protect? From what does it protect them?
Name and define three policy tools for enacting protectionism.
How does protectionism affect the price of the protected good in the domestic market?
Critical Thinking Questions
Show graphically that for any tariff, there is an equivalent quota that would give the same result. What would be the difference, then, between the two types of trade barriers? Hint: It is not something you can see from the graph.
From the Work It Out "Effects of Trade Barriers," you can see that a tariff raises the price of imports. What is interesting is that the price rises by less than the amount of the tariff. Who pays the rest of the tariff amount? Can you show this graphically?
Problems
Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras in Thailand and Japan is described by the following functions:
P is the price measured in a common currency used in both countries, such as the Thai Baht.
- Compute the equilibrium price (P) and quantities (Q) in each country without trade.
- Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and imports cameras and in what quantities?
References
Bureau of Labor Statistics. “Industries at a Glance.” Accessed December 31, 2013. http://www.bls.gov/iag/.
Oxfam International. Accessed January 6, 2014. http://www.oxfam.org/.
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2025-03-18T00:37:23.871190
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https://oercommons.org/courseware/lesson/28883/overview
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International Trade and Its Effects on Jobs, Wages, and Working Conditions
Overview
By the end of this section, you will be able to:
- Discuss how international trade influences the job market
- Analyze the opportunity cost of protectionism
- Explain how international trade impacts wages, labor standards, and working conditions
In theory at least, imports might injure workers in several different ways: fewer jobs, lower wages, or poor working conditions. Let’s consider these in turn.
Fewer Jobs?
In the early 1990s, the United States was negotiating the North American Free Trade Agreement (NAFTA) with Mexico, an agreement that reduced tariffs, import quotas, and nontariff barriers to trade between the United States, Mexico, and Canada. H. Ross Perot, a 1992 candidate for U.S. president, claimed, in prominent campaign arguments, that if the United States expanded trade with Mexico, there would be a “giant sucking sound” as U.S. employers relocated to Mexico to take advantage of lower wages. After all, average wages in Mexico were, at that time, about one-eighth of those in the United States. NAFTA passed Congress, President Bill Clinton signed it into law, and it took effect in 1995. For the next six years, the United States economy had some of the most rapid job growth and low unemployment in its history. Those who feared that open trade with Mexico would lead to a dramatic decrease in jobs were proven wrong.
This result was no surprise to economists. After all, the trend toward globalization has been going on for decades, not just since NAFTA. If trade did reduce the number of available jobs, then the United States should have been seeing a steady loss of jobs for decades. While the United States economy does experience rises and falls in unemployment rates—according to the Bureau of Labor Statistics, from spring 2007 to late 2009, the unemployment rate rose from 4.4% to 10%. It has since fallen back to under 5% as of the end of 2016—the number of jobs is not falling over extended periods of time. The number of U.S. jobs rose from 71 million in 1970 to 145 million in 2014.
Protectionism certainly saves jobs in the specific industry being protected but, for two reasons, it costs jobs in other unprotected industries. First, if consumers are paying higher prices to the protected industry, they inevitably have less money to spend on goods from other industries, and so jobs are lost in those other industries. Second, if a firm sells the protected product to other firms, so that other firms must now pay a higher price for a key input, then those firms will lose sales to foreign producers who do not need to pay the higher price. Lost sales translate into lost jobs. The hidden opportunity cost of using protectionism to save jobs in one industry is jobs sacrificed in other industries. This is why the United States International Trade Commission, in its study of barriers to trade, predicts that reducing trade barriers would not lead to an overall loss of jobs. Protectionism reshuffles jobs from industries without import protections to industries that are protected from imports, but it does not create more jobs.
Moreover, the costs of saving jobs through protectionism can be very high. A number of different studies have attempted to estimate the cost to consumers in higher prices per job saved through protectionism. Table shows a sample of results, compiled by economists at the Federal Reserve Bank of Dallas. Saving a job through protectionism typically costs much more than the actual worker’s salary. For example, a study published in 2002 compiled evidence that using protectionism to save an average job in the textile and apparel industry would cost $199,000 per job saved. In other words, those workers could have been paid $100,000 per year to be unemployed and the cost would only be half of what it is to keep them working in the textile and apparel industry. This result is not unique to textiles and apparel.
| Industry Protected with Import Tariffs or Quotas | Annual Cost per Job Saved |
|---|---|
| Sugar | $826,000 |
| Polyethylene resins | $812,000 |
| Dairy products | $685,000 |
| Frozen concentrated orange juice | $635,000 |
| Ball bearings | $603,000 |
| Machine tools | $479,000 |
| Women’s handbags | $263,000 |
| Glassware | $247,000 |
| Apparel and textiles | $199,000 |
| Rubber footwear | $168,000 |
| Women’s nonathletic footwear | $139,000 |
Why does it cost so much to save jobs through protectionism? The basic reason is that not all of the extra money that consumers pay because of tariffs or quotas goes to save jobs. For example, if the government imposes tariffs on steel imports so that steel buyers pay a higher price, U.S. steel companies earn greater profits, buy more equipment, pay bigger bonuses to managers, give pay raises to existing employees—and also avoid firing some additional workers. Only part of the higher price of protected steel goes toward saving jobs. Also, when an industry is protected, the economy as a whole loses the benefits of playing to its comparative advantage—in other words, producing what it is best at. Therefore, part of the higher price that consumers pay for protected goods is lost economic efficiency, which we can measure as another deadweight loss, like what we discussed in Labor and Financial Markets.
There’s a bumper sticker that speaks to the threat some U.S. workers feel from imported products: “Buy American—Save U.S. Jobs.” If an economist were driving the car, the sticker might declare: “Block Imports—Save Jobs for Some Americans, Lose Jobs for Other Americans, and Also Pay High Prices.”
Trade and Wages
Even if trade does not reduce the number of jobs, it could affect wages. Here, it is important to separate issues about the average level of wages from issues about whether the wages of certain workers may be helped or hurt by trade.
Because trade raises the amount that an economy can produce by letting firms and workers play to their comparative advantage, trade will also cause the average level of wages in an economy to rise. Workers who can produce more will be more desirable to employers, which will shift the demand for their labor out to the right, and increase wages in the labor market. By contrast, barriers to trade will reduce the average level of wages in an economy.
However, even if trade increases the overall wage level, it will still benefit some workers and hurt others. Workers in industries that are confronted by competition from imported products may find that demand for their labor decreases and shifts back to the left, so that their wages decline with a rise in international trade. Conversely, workers in industries that benefit from selling in global markets may find that demand for their labor shifts out to the right, so that trade raises their wages.
View this website to read an article on the issues surrounding fair trade coffee.
One concern is that while globalization may be benefiting high-skilled, high-wage workers in the United States, it may also impose costs on low-skilled, low-wage workers. After all, high-skilled U.S. workers presumably benefit from increased sales of sophisticated products like computers, machinery, and pharmaceuticals in which the United States has a comparative advantage. Meanwhile, low-skilled U.S. workers must now compete against extremely low-wage workers worldwide for making simpler products like toys and clothing. As a result, the wages of low-skilled U.S. workers are likely to fall. There are, however, a number of reasons to believe that while globalization has helped some U.S. industries and hurt others, it has not focused its negative impact on the wages of low-skilled Americans. First, about half of U.S. trade is intra-industry trade. That means the U.S. trades similar goods with other high-wage economies like Canada, Japan, Germany, and the United Kingdom. For instance, in 2014 the U.S. exported over 2 million cars, from all the major automakers, and also imported several million cars from other countries.
Most U.S. workers in these industries have above-average skills and wages—and many of them do quite well in the world of globalization. Some evidence suggested that intra-industry trade between similar countries had a small impact on domestic workers but later evidence indicates that it all depends on how flexible the labor market is. In other words, the key is how flexible workers are in finding jobs in different industries. The effect of trade on low-wage workers depends considerably on the structure of labor markets and indirect effects felt in other parts of the economy. For example, in the United States and the United Kingdom, because labor market frictions are low, the impact of trade on low income workers is small.
Second, many low-skilled U.S. workers hold service jobs that imports from low-wage countries cannot replace. For example, we cannot import lawn care services or moving and hauling services or hotel maids from countries long distances away like China or Bangladesh. Competition from imported products is not the primary determinant of their wages.
Finally, while the focus of the discussion here is on wages, it is worth pointing out that low-wage U.S. workers suffer due to protectionism in all the industries—even those in which they do not work. For example, food and clothing are protected industries. These low-wage workers therefore pay higher prices for these basic necessities and as such their dollar stretches over fewer goods.
The benefits and costs of increased trade in terms of its effect on wages are not distributed evenly across the economy. However, the growth of international trade has helped to raise the productivity of U.S. workers as a whole—and thus helped to raise the average level of wages.
Labor Standards and Working Conditions
Workers in many low-income countries around the world labor under conditions that would be illegal for a worker in the United States. Workers in countries like China, Thailand, Brazil, South Africa, and Poland are often paid less than the United States minimum wage. For example, in the United States, the minimum wage is $7.25 per hour. A typical wage in many low-income countries might be more like $7.25 per day, or often much less. Moreover, working conditions in low-income countries may be extremely unpleasant, or even unsafe. In the worst cases, production may involve the child labor or even workers who are treated nearly like slaves. These concerns over foreign labor standards do not affect most of U.S. trade, which is intra-industry and carried out with other high-income countries that have labor standards similar to the United States, but it is, nonetheless, morally and economically important.
In thinking about labor standards in other countries, it is important to draw some distinctions between what is truly unacceptable and what is painful to think about. Most people, economists included, have little difficulty with the idea that production by six-year-olds confined in factories or by slave labor is morally unacceptable. They would support aggressive efforts to eliminate such practices—including shutting out imported products made with such labor. Many cases, however, are less clear-cut. An opinion article in the New York Times several years ago described the case of Ahmed Zia, a 14-year-old boy from Pakistan. He earned $2 per day working in a carpet factory. He dropped out of school in second grade. Should the United States and other countries refuse to purchase rugs made by Ahmed and his co-workers? If the carpet factories were to close, the likely alternative job for Ahmed is farm work, and as Ahmed says of his carpet-weaving job: “This makes much more money and is more comfortable.”
Other workers may have even less attractive alternative jobs, perhaps scavenging garbage or prostitution. The real problem for Ahmed and many others in low-income countries is not that globalization has made their lives worse, but rather that they have so few good life alternatives. The United States went through similar situations during the nineteenth and early twentieth centuries.
In closing, there is some irony when the United States government or U.S. citizens take issue with labor standards in low-income countries, because the United States is not a world leader in government laws to protect employees. According to a recent study by the Organization for Economic Cooperation and Development (OECD), the U.S. is the only one of 41 countries that does not provide mandated paid leave for new parents, and among the 40 countries that do mandate paid leave, the minimum duration is about two months. Many European workers receive six weeks or more of paid vacation per year. In the United States, vacations are often one to three weeks per year. If European countries accused the United States of using unfair labor standards to make U.S. products cheaply, and announced that they would shut out all U.S. imports until the United States adopted paid parental leave, added more national holidays, and doubled vacation time, Americans would be outraged. Yet when U.S. protectionists start talking about restricting imports from poor countries because of low wage levels and poor working conditions, they are making a very similar argument. This is not to say that labor conditions in low-income countries are not an important issue. They are. However, linking labor conditions in low-income countries to trade deflects the emphasis from the real question to ask: “What are acceptable and enforceable minimum labor standards and protections to have the world over?”
Key Concepts and Summary
As international trade increases, it contributes to a shift in jobs away from industries where that economy does not have a comparative advantage and toward industries where it does have a comparative advantage. The degree to which trade affects labor markets has much to do with the structure of the labor market in that country and the adjustment process in other industries. Global trade should raise the average level of wages by increasing productivity. However, this increase in average wages may include both gains to workers in certain jobs and industries and losses to others.
In thinking about labor practices in low-income countries, it is useful to draw a line between what is unpleasant to think about and what is morally objectionable. For example, low wages and long working hours in poor countries are unpleasant to think about, but for people in low-income parts of the world, it may well be the best option open to them. Practices like child labor and forced labor are morally objectionable and many countries refuse to import products made using these practices.
Self-Check Questions
Explain how trade barriers save jobs in protected industries, but only by costing jobs in other industries.
Hint:
Trade barriers raise the price of goods in protected industries. If those products are inputs in other industries, it raises their production costs and then prices, so sales fall in those other industries. Lower sales lead to lower employment. Additionally, if the protected industries are consumer goods, their customers pay higher prices, which reduce demand for other consumer products and thus employment in those industries.
Explain how trade barriers raise wages in protected industries by reducing average wages economy-wide.
Hint:
Trade based on comparative advantage raises the average wage rate economy-wide, though it can reduce the incomes of import-substituting industries. By moving away from a country’s comparative advantage, trade barriers do the opposite: they give workers in protected industries an advantage, while reducing the average wage economy-wide.
How does international trade affect working conditions of low-income countries?
Hint:
By raising incomes, trade tends to raise working conditions also, even though those conditions may not (yet) be equivalent to those in high-income countries.
Do the jobs for workers in low-income countries that involve making products for export to high-income countries typically pay these workers more or less than their next-best alternative?
Hint:
They typically pay more than the next-best alternative. If a Nike firm did not pay workers at least as much as they would earn, for example, in a subsistence rural lifestyle, they many never come to work for Nike.
How do trade barriers affect the average income level in an economy?
Hint:
Since trade barriers raise prices, real incomes fall. The average worker would also earn less.
How does the cost of “saving” jobs in protected industries compare to the workers’ wages and salaries?
Hint:
Workers working in other sectors and the protected sector see a decrease in their real wage.
Review Questions
Does international trade, taken as a whole, increase the total number of jobs, decrease the total number of jobs, or leave the total number of jobs about the same?
Is international trade likely to have roughly the same effect on the number of jobs in each individual industry?
How is international trade, taken as a whole, likely to affect the average level of wages?
Is international trade likely to have about the same effect on everyone’s wages?
Critical Thinking Questions
If trade barriers hurt the average worker in an economy (due to lower wages), why does government create trade barriers?
Why do you think labor standards and working conditions are lower in the low-income countries of the world than in countries like the United States?
References
Bureau of Labor Statistics. “Data Retrieval: Employment, Hours, and Earnings (CES).” Last modified February 1, 2013. http://www.bls.gov/webapps/legacy/cesbtab1.htm.
Dhillon, Kiran. 2015. “Why Are U.S. Oil Imports Falling?” Time.com. Accessed April 1, 2015. http://time.com/67163/why-are-u-s-oil-imports-falling/.
Kristof, Nicholas. “Let Them Sweat.” The New York Times, June 25, 2002. http://www.nytimes.com/2002/06/25/opinion/let-them-sweat.html.
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oercommons
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2025-03-18T00:37:23.906579
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https://oercommons.org/courseware/lesson/28884/overview
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Arguments in Support of Restricting Imports
Overview
By the end of this section, you will be able to:
- Explain and analyze various arguments that are in support of restricting imports, including the infant industry argument, the anti-dumping argument, the environmental protection argument, the unsafe consumer products argument, and the national interest argument
- Explain dumping and race to the bottom
- Evaluate the significance of countries’ perceptions on the benefits of growing trade
As we previously noted, protectionism requires domestic consumers of a product to pay higher prices to benefit domestic producers of that product. Countries that institute protectionist policies lose the economic gains achieved through a combination of comparative advantage, specialized learning, and economies of scale. With these overall costs in mind, let us now consider, one by one, a number of arguments that support restricting imports.
The Infant Industry Argument
Imagine Bhutan wants to start its own computer industry, but it has no computer firms that can produce at a low enough price and high enough quality to compete in world markets. However, Bhutanese politicians, business leaders, and workers hope that if the local industry had a chance to get established, before it needed to face international competition, then a domestic company or group of companies could develop the skills, management, technology, and economies of scale that it needs to become a successful profit-earning domestic industry. Thus, the infant industry argument for protectionism is to block imports for a limited time, to give the infant industry time to mature, before it starts competing on equal terms in the global economy. (Revisit Macroeconomic Policy Around the World for more information on the infant industry argument.)
The infant industry argument is theoretically possible, even sensible: give an industry a short-term indirect subsidy through protection, and then reap the long-term economic benefits of having a vibrant, healthy industry. Implementation, however, is tricky. In many countries, infant industries have gone from babyhood to senility and obsolescence without ever having reached the profitable maturity stage. Meanwhile, the protectionism that was supposed to be short-term often took a very long time to be repealed.
As one example, Brazil treated its computer industry as an infant industry from the late 1970s until about 1990. In an attempt to establish its computer industry in the global economy, Brazil largely barred imports of computer products for several decades. This policy guaranteed increased sales for Brazilian computers. However, by the mid-1980s, due to lack of international competition, Brazil had a backward and out-of-date industry, typically lagging behind world standards for price and performance by three to five years—a long time in this fast-moving industry. After more than a decade, during which Brazilian consumers and industries that would have benefited from up-to-date computers paid the costs and Brazil’s computer industry never competed effectively on world markets, Brazil phased out its infant industry policy for the computer industry.
Protectionism for infant industries always imposes costs on domestic users of the product, and typically has provided little benefit in the form of stronger, competitive industries. However, several countries in East Asia offer an exception. Japan, Korea, Thailand, and other countries in this region have sometimes provided a package of indirect and direct subsidies targeted at certain industries, including protection from foreign competition and government loans at interest rates below the market equilibrium. In Japan and Korea, for example, subsidies helped get their domestic steel and auto industries up and running.
Why did the infant industry policy of protectionism and other subsidies work fairly well in East Asia? An early 1990 World Bank study offered three guidelines to countries thinking about infant industry protection:
- Do not hand out protectionism and other subsidies to all industries, but focus on a few industries where your country has a realistic chance to be a world-class producer.
- Be very hesitant about using protectionism in areas like computers, where many other industries rely on having the best products available, because it is not useful to help one industry by imposing high costs on many other industries.
- Have clear guidelines for when the infant industry policy will end.
In Korea in the 1970s and 1980s, a common practice was to link protectionism and subsidies to export sales in global markets. If export sales rose, then the infant industry had succeeded and the government could phase out protectionism. If export sales did not rise, then the infant industry policy had failed and the government could phase out protectionism. Either way, the protectionism would be temporary.
Following these rules is easier said than done. Politics often intrudes, both in choosing which industries will receive the benefits of treatment as “infants” and when to phase out import restrictions and other subsidies. Also, if the country's government wishes to impose costs on its citizens so that it can provide subsidies to a few key industries, it has many tools for doing such as direct government payments, loans, targeted tax reductions, and government support of research and development of new technologies. In other words, protectionism is not the only or even the best way to support key industries.
Visit this website to view a presentation by Pankaj Ghemawat questioning how integrated the world really is.
The Anti-Dumping Argument
Dumping refers to selling goods below their cost of production. Anti-dumping laws block imports that are sold below the cost of production by imposing tariffs that increase the price of these imports to reflect their cost of production. Since dumping is not allowed under World Trade Organization (WTO) rules, nations that believe they are on the receiving end of dumped goods can file a complaint with the WTO. Anti-dumping complaints have risen in recent years, from about 100 cases per year in the late 1980s to about 200 new cases each year by the late 2000s. Note that dumping cases are countercyclical. During recessions, case filings increase. During economic booms, case filings go down. Individual countries have also frequently started their own anti-dumping investigations. The U.S. government has dozens of anti-dumping orders in place from past investigations. In 2009, for example, some U.S. imports that were under anti-dumping orders included pasta from Turkey, steel pipe fittings from Thailand, pressure-sensitive plastic tape from Italy, preserved mushrooms and lined paper products from India, and cut-to-length carbon steel and non-frozen apple juice concentrate from China.
Why Might Dumping Occur?
Why would foreign firms export a product at less than its cost of production—which presumably means taking a loss? This question has two possible answers, one innocent and one more sinister.
The innocent explanation is that demand and supply set market prices, not the cost of production. Perhaps demand for a product shifts back to the left or supply shifts out to the right, which drives the market price to low levels—even below the cost of production. When a local store has a going-out-of-business sale, for example, it may sell goods at below the cost of production. If international companies find that there is excess supply of steel or computer chips or machine tools that is driving the market price down below their cost of production—this may be the market in action.
The sinister explanation is that dumping is part of a long-term strategy. Foreign firms sell goods at prices below the cost of production for a short period of time, and when they have driven out the domestic U.S. competition, they then raise prices. Economists sometimes call this scenario predatory pricing, which we discuss in the Monopoly chapter.
Should Anti-Dumping Cases Be Limited?
Anti-dumping cases pose two questions. How much sense do they make in economic theory? How much sense do they make as practical policy?
In terms of economic theory, the case for anti-dumping laws is weak. In a market governed by demand and supply, the government does not guarantee that firms will be able to make a profit. After all, low prices are difficult for producers, but benefit consumers. Moreover, although there are plenty of cases in which foreign producers have driven out domestic firms, there are zero documented cases in which the foreign producers then jacked up prices. Instead, foreign producers typically continue competing hard against each other and providing low prices to consumers. In short, it is difficult to find evidence of predatory pricing by foreign firms exporting to the United States.
Even if one could make a case that the government should sometimes enact anti-dumping rules in the short term, and then allow free trade to resume shortly thereafter, there is a growing concern that anti-dumping investigations often involve more politics than careful analysis. The U.S. Commerce Department is charged with calculating the appropriate “cost of production,” which can be as much an art as a science.
For example, if a company built a new factory two years ago, should it count part of the factory’s cost in this year’s cost of production? When a company is in a country where the government controls prices, like China for example, how can one measure the true cost of production? When a domestic industry complains loudly enough, government regulators seem very likely to find that unfair dumping has occurred. A common pattern has arisen where a domestic industry files an anti-dumping complaint, the governments meet and negotiate a reduction in imports, and then the domestic producers drop the anti-dumping suit. In such cases, anti-dumping cases often appear to be little more than a cover story for imposing tariffs or import quotas.
In the 1980s, the United States, Canada, the European Union, Australia, and New Zealand implemented almost all the anti-dumping cases. By the 2000s, countries like Argentina, Brazil, South Korea, South Africa, Mexico, and India were filing the majority of the anti-dumping cases before the WTO. As the number of anti-dumping cases has increased, and as countries such as the United States and the European Union feel targeted by the anti-dumping actions of others, the WTO may well propose some additional guidelines to limit the reach of anti-dumping laws.
The Environmental Protection Argument
The potential for global trade to affect the environment has become controversial. A president of the Sierra Club, an environmental lobbying organization, once wrote: “The consequences of globalization for the environment are not good. … Globalization, if we are lucky, will raise average incomes enough to pay for cleaning up some of the mess that we have made. But before we get there, globalization could also destroy enough of the planet’s basic biological and physical systems that prospects for life itself will be radically compromised.”
If free trade meant the destruction of life itself, then even economists would convert to protectionism! While globalization—and economic activity of all kinds—can pose environmental dangers, it seems quite possible that, with the appropriate safeguards in place, we can minimize the environmental impacts of trade. In some cases, trade may even bring environmental benefits.
In general, high-income countries such as the United States, Canada, Japan, and the nations of the European Union have relatively strict environmental standards. In contrast, middle- and low-income countries like Brazil, Nigeria, India, and China have lower environmental standards. The general view of the governments of such countries is that environmental protection is a luxury: as soon as their people have enough to eat, decent healthcare, and longer life expectancies, then they will spend more money on items such as sewage treatment plants, scrubbers to reduce air pollution from factory smokestacks, and national parks to protect wildlife.
This gap in environmental standards between high-income and low-income countries raises two worrisome possibilities in a world of increasing global trade: the “race to the bottom” scenario and the question of how quickly environmental standards will improve in low-income countries.
The Race to the Bottom Scenario
The race to the bottom scenario of global environmental degradation runs like this. Profit-seeking multinational companies shift their production from countries with strong environmental standards to countries with weak standards, thus reducing their costs and increasing their profits. Faced with such behavior, countries reduce their environmental standards to attract multinational firms, which, after all, provide jobs and economic clout. As a result, global production becomes concentrated in countries where firms can pollute the most and environmental laws everywhere “race to the bottom.”
Although the race-to-the-bottom scenario sounds plausible, it does not appear to describe reality. In fact, the financial incentive for firms to shift production to poor countries to take advantage of their weaker environmental rules does not seem especially powerful. When firms decide where to locate a new factory, they look at many different factors: the costs of labor and financial capital; whether the location is close to a reliable suppliers of the inputs that they need; whether the location is close to customers; the quality of transportation, communications, and electrical power networks; the level of taxes; and the competence and honesty of the local government. The cost of environmental regulations is a factor, too, but typically environmental costs are no more than 1 to 2% of the costs that a large industrial plant faces. The other factors that determine location are much more important to these companies than trying to skimp on environmental protection costs.
When an international company does choose to build a plant in a low-income country with lax environmental laws, it typically builds a plant similar to those that it operates in high-income countries with stricter environmental standards. Part of the reason for this decision is that designing an industrial plant is a complex and costly task, and so if a plant works well in a high-income country, companies prefer to use the same design everywhere. Also, companies realize that if they create an environmental disaster in a low-income country, it is likely to cost them a substantial amount of money in paying for damages, lost trust, and reduced sales—by building up-to-date plants everywhere they minimize such risks. As a result of these factors, foreign-owned plants in low-income countries often have a better record of compliance with environmental laws than do locally-owned plants.
Pressuring Low-Income Countries for Higher Environmental Standards
In some cases, the issue is not so much whether globalization will pressure low-income countries to reduce their environmental standards, but instead whether the threat of blocking international trade can pressure these countries into adopting stronger standards. For example, restrictions on ivory imports in high-income countries, along with stronger government efforts to catch elephant poachers, have been credited with helping to reduce the illegal poaching of elephants in certain African countries.
However, it would be highly undemocratic for the well-fed citizens of high-income countries to attempt to dictate to the ill-fed citizens of low-income countries what domestic policies and priorities they must adopt, or how they should balance environmental goals against other priorities for their citizens. Furthermore, if high-income countries want stronger environmental standards in low-income countries, they have many options other than the threat of protectionism. For example, high-income countries could pay for anti-pollution equipment in low-income countries, or could help to pay for national parks. High-income countries could help pay for and carry out the scientific and economic studies that would help environmentalists in low-income countries to make a more persuasive case for the economic benefits of protecting the environment.
After all, environmental protection is vital to two industries of key importance in many low-income countries—agriculture and tourism. Environmental advocates can set up standards for labeling products, like “this tuna caught in a net that kept dolphins safe” or “this product made only with wood not taken from rainforests,” so that consumer pressure can reinforce environmentalist values. The United Nations also reinforces these values, by sponsoring treaties to address issues such as climate change and global warming, the preservation of biodiversity, the spread of deserts, and the environmental health of the seabed. Countries that share a national border or are within a region often sign environmental agreements about air and water rights, too. The WTO is also becoming more aware of environmental issues and more careful about ensuring that increases in trade do not inflict environmental damage.
Finally, note that these concerns about the race to the bottom or pressuring low-income countries for more strict environmental standards do not apply very well to the roughly half of all U.S. trade that occurs with other high-income countries. Many European countries have stricter environmental standards in certain industries than the United States.
The Unsafe Consumer Products Argument
One argument for shutting out certain imported products is that they are unsafe for consumers. Consumer rights groups have sometimes warned that the World Trade Organization would require nations to reduce their health and safety standards for imported products. However, the WTO explains its current agreement on the subject in this way: “It allows countries to set their own standards.” It also says “regulations must be based on science. . . . And they should not arbitrarily or unjustifiably discriminate between countries where identical or similar conditions prevail.” Thus, for example, under WTO rules it is perfectly legitimate for the United States to pass laws requiring that all food products or cars sold in the United States meet certain safety standards approved by the United States government, whether or not other countries choose to pass similar standards. However, such standards must have some scientific basis. It is improper to impose one set of health and safety standards for domestically produced goods but a different set of standards for imports, or one set of standards for imports from Europe and a different set of standards for imports from Latin America.
In 2007, Mattel recalled nearly two million toys imported from China due to concerns about high levels of lead in the paint, as well as some loose parts. It is unclear if other toys were subject to similar standards. More recently, in 2013, Japan blocked imports of U.S. wheat because of concerns that genetically modified (GMO) wheat might be included in the shipments. The science on the impact of GMOs on health is still developing.
The National Interest Argument
Some argue that a nation should not depend too heavily on other countries for supplies of certain key products, such as oil, or for special materials or technologies that might have national security applications. On closer consideration, this argument for protectionism proves rather weak.
As an example, in the United States, oil provides about 36% of all the energy and 25% of the oil used in the United States economy is imported. Several times in the last few decades, when disruptions in the Middle East have shifted the supply curve of oil back to the left and sharply raised the price, the effects have been felt across the United States economy. This is not, however, a very convincing argument for restricting oil imports. If the United States needs to be protected from a possible cutoff of foreign oil, then a more reasonable strategy would be to import 100% of the petroleum supply now, and save U.S. domestic oil resources for when or if the foreign supply is cut off. It might also be useful to import extra oil and put it into a stockpile for use in an emergency, as the United States government did by starting a Strategic Petroleum Reserve in 1977. Moreover, it may be necessary to discourage people from using oil, and to start a high-powered program to seek out alternatives to oil. A straightforward way to do this would be to raise taxes on oil. Additionally, it makes no sense to argue that because oil is highly important to the United States economy, then the United States should shut out oil imports and use up its domestic supplies more quickly. U.S. domestic oil production is increasing. Shale oil is adding to domestic supply using fracking extraction techniques.
Whether or not to limit certain kinds of imports of key technologies or materials that might be important to national security and weapons systems is a slightly different issue. If weapons’ builders are not confident that they can continue to obtain a key product in wartime, they might decide to avoid designing weapons that use this key product, or they can go ahead and design the weapons and stockpile enough of the key high-tech components or materials to last through an armed conflict. There is a U.S. Defense National Stockpile Center that has built up reserves of many materials, from aluminum oxides, antimony, and bauxite to tungsten, vegetable tannin extracts, and zinc (although many of these stockpiles have been reduced and sold in recent years). Think every country is pro-trade? How about the U.S.? The following Clear It Up might surprise you.
How does the United States really feel about expanding trade?
How do people around the world feel about expanding trade between nations? In summer 2007, the Pew Foundation surveyed 45,000 people in 47 countries. One of the questions asked about opinions on growing trade ties between countries. Table shows the percentages who answered either “very good” or “somewhat good” for some of countries surveyed.
For those who think of the United States as the world’s leading supporter of expanding trade, the survey results may be perplexing. When adding up the shares of those who say that growing trade ties between countries is “very good” or “somewhat good,” Americans had the least favorable attitude toward increasing globalization, while the Chinese and South Africans ranked highest. In fact, among the 47 countries surveyed, the United States ranked by far the lowest on this measure, followed by Egypt, Italy, and Argentina.
| Country | Very Good | Somewhat Good | Total |
|---|---|---|---|
| China | 38% | 53% | 91% |
| South Africa | 42% | 43% | 87% |
| South Korea | 24% | 62% | 86% |
| Germany | 30% | 55% | 85% |
| Canada | 29% | 53% | 82% |
| United Kingdom | 28% | 50% | 78% |
| Mexico | 22% | 55% | 77% |
| Brazil | 13% | 59% | 72% |
| Japan | 17% | 55% | 72% |
| United States | 14% | 45% | 59% |
One final reason why economists often treat the national interest argument skeptically is that lobbyists and politicians can tout almost any product as vital to national security. In 1954, the United States became worried that it was importing half of the wool required for military uniforms, so it declared wool and mohair to be “strategic materials” and began to give subsidies to wool and mohair farmers. Although the government removed wool from the official list of “strategic” materials in 1960, the subsidies for mohair continued for almost 40 years until the government repealed them in 1993, and then reinstated them in 2002. All too often, the national interest argument has become an excuse for handing out the indirect subsidy of protectionism to certain industries or companies. After all, politicians, not nonpartisan analysts make decisions about what constitutes a key strategic material.
Key Concepts and Summary
There are a number of arguments that support restricting imports. These arguments are based around industry and competition, environmental concerns, and issues of safety and security.
The infant industry argument for protectionism is that small domestic industries need to be temporarily nurtured and protected from foreign competition for a time so that they can grow into strong competitors. In some cases, notably in East Asia, this approach has worked. Often, however, the infant industries never grow up. On the other hand, arguments against dumping (which is setting prices below the cost of production to drive competitors out of the market), often simply seem to be a convenient excuse for imposing protectionism.
Low-income countries typically have lower environmental standards than high-income countries because they are more worried about immediate basics such as food, education, and healthcare. However, except for a small number of extreme cases, shutting off trade seems unlikely to be an effective method of pursuing a cleaner environment.
Finally, there are arguments involving safety and security. Under the rules of the World Trade Organization, countries are allowed to set whatever standards for product safety they wish, but the standards must be the same for domestic products as for imported products and there must be a scientific basis for the standard. The national interest argument for protectionism holds that it is unwise to import certain key products because if the nation becomes dependent on key imported supplies, it could be vulnerable to a cutoff. However, it is often wiser to stockpile resources and to use foreign supplies when available, rather than preemptively restricting foreign supplies so as not to become dependent on them.
Self-Check Questions
Explain how predatory pricing could be a motivation for dumping.
Hint:
If imports can be sold at extremely low prices, domestic firms would have to match those prices to be competitive. By definition, matching prices would imply selling under cost and, therefore, losing money. Firms cannot sustain losses forever. When they leave the industry, importers can “take over,” raising prices to monopoly levels to cover their short-term losses and earn long-term profits.
Why do low-income countries like Brazil, Egypt, or Vietnam have lower environmental standards than high-income countries like the Germany, Japan, or the United States?
Hint:
Because low-income countries need to provide necessities—food, clothing, and shelter—to their people. In other words, they consider environmental quality a luxury.
Explain the logic behind the “race to the bottom” argument and the likely reason it has not occurred.
Hint:
Low-income countries can compete for jobs by reducing their environmental standards to attract business to their countries. This could lead to a competitive reduction in regulations, which would lead to greater environmental damage. While pollution management is a cost for businesses, it is tiny relative to other costs, like labor and adequate infrastructure. It is also costly for firms to locate far away from their customers, which many low-income countries are.
What are the conditions under which a country may use the unsafe products argument to block imports?
Hint:
The decision should not be arbitrary or unnecessarily discriminatory. It should treat foreign companies the same way as domestic companies. It should be based on science.
Why is the national security argument not convincing?
Hint:
Restricting imports today does not solve the problem. If anything, it makes it worse since it implies using up domestic sources of the products faster than if they are imported. Also, the national security argument can be used to support protection of nearly any product, not just things critical to our national security.
Assume a perfectly competitive market and the exporting country is small. Using a demand and supply diagram, show the impact of increasing standards on a low-income exporter of toys. Show the tariff's impact. Is the effect on toy prices the same or different? Why is a standards policy preferred to tariffs?
Hint:
The effect of increasing standards may increase costs to the small exporting country. The supply curve of toys will shift to the left. Exports will decrease and toy prices will rise. Tariffs also raise prices. So the effect on the price of toys is the same. A tariff is a “second best” policy and also affects other sectors. However, a common standard across countries is a “first best” policy that attacks the problem at its root.
Review Questions
What are main reasons for protecting “infant industries”? Why is it difficult to stop protecting them?
What is dumping? Why does prohibiting it often work better in theory than in practice?
What is the “race to the bottom” scenario?
Do the rules of international trade require that all nations impose the same consumer safety standards?
What is the national interest argument for protectionism with regard to certain products?
Critical Thinking Questions
How would direct subsidies to key industries be preferable to tariffs or quotas?
How can governments identify good candidates for infant industry protection? Can you suggest some key characteristics of good candidates? Why are industries like computers not good candidates for infant industry protection?
Microeconomic theory argues that it is economically rationale (and profitable) to sell additional output as long as the price covers the variable costs of production. How is this relevant to the determination of whether dumping has occurred?
How do you think Americans would feel if other countries began to urge the United States to increase environmental standards?
Is it legitimate to impose higher safety standards on imported goods that exist in the foreign country where the goods were produced?
Why might the unsafe consumer products argument be a more effective strategy (from the perspective of the importing country) than using tariffs or quotas to restrict imports?
Why might a tax on domestic consumption of resources critical for national security be a more efficient approach than barriers to imports?
Problems
You have just been put in charge of trade policy for Malawi. Coffee is a recent crop that is growing well and the Malawian export market is developing. As such, Malawi coffee is an infant industry. Malawi coffee producers come to you and ask for tariff protection from cheap Tanzanian coffee. What sorts of policies will you enact? Explain.
The country of Pepperland exports steel to the Land of Submarines. Information for the quantity demanded (Qd) and quantity supplied (Qs) in each country, in a world without trade, are given in Table and Table.
| Price ($) | Qd | Qs |
|---|---|---|
| 60 | 230 | 180 |
| 70 | 200 | 200 |
| 80 | 170 | 220 |
| 90 | 150 | 240 |
| 100 | 140 | 250 |
| Price ($) | Qd | Qs |
|---|---|---|
| 60 | 430 | 310 |
| 70 | 420 | 330 |
| 80 | 410 | 360 |
| 90 | 400 | 400 |
| 100 | 390 | 440 |
- What would be the equilibrium price and quantity in each country in a world without trade? How can you tell?
- What would be the equilibrium price and quantity in each country if trade is allowed to occur? How can you tell?
- Sketch two supply and demand diagrams, one for each country, in the situation before trade.
- On those diagrams, show the equilibrium price and the levels of exports and imports in the world after trade.
- If the Land of Submarines imposes an anti-dumping import quota of 30, explain in general terms whether it will benefit or injure consumers and producers in each country.
- Does your general answer change if the Land of Submarines imposes an import quota of 70?
References
Kohut, Andrew, Richard Wike, and Juliana Horowitz. “The Pew Global Attitudes Project.” Pew Research Center. Last modified October 4, 2007. http://www.pewglobal.org/files/pdf/258.pdf.
Lutz, Hannah. 2015. “U.S. Auto Exports Hit Record in 2014.” Automotive News. Accessed April 1, 2015. http://www.autonews.com/article/20150206/OEM01/150209875/u.s.-auto-exports-hit-record-in-2014.
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2025-03-18T00:37:23.955371
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https://oercommons.org/courseware/lesson/28885/overview
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How Governments Enact Trade Policy: Globally, Regionally, and Nationally
Overview
By the end of this section, you will be able to:
- Explain the origin and role of the World Trade Organization (WTO) and General Agreement on Tariffs and Trade (GATT)
- Discuss the significance and provide examples of regional trading agreements
- Analyze trade policy at the national level
- Evaluate long-term trends in barriers to trade
These public policy arguments about how nations should react to globalization and trade are fought out at several levels: at the global level through the World Trade Organization and through regional trade agreements between pairs or groups of countries.
The World Trade Organization
The World Trade Organization (WTO) was officially born in 1995, but its history is much longer. In the years after the Great Depression and World War II, there was a worldwide push to build institutions that would tie the nations of the world together. The United Nations officially came into existence in 1945. The World Bank, which assists the poorest people in the world, and the International Monetary Fund, which addresses issues raised by international financial transactions, were both created in 1946. The third planned organization was to be an International Trade Organization, which would manage international trade. The United Nations was unable to agree to this. Instead, 27 nations signed the General Agreement on Tariffs and Trade (GATT) in Geneva, Switzerland on October 30, 1947 to provide a forum in which nations could come together to negotiate reductions in tariffs and other barriers to trade. In 1995, the GATT transformed into the WTO.
The GATT process was to negotiate an agreement to reduce barriers to trade, sign that agreement, pause for a while, and then start negotiating the next agreement. Table shows rounds of talks in the GATT, and now the WTO. Notice that the early rounds of GATT talks took a relatively short time, included a small number of countries, and focused almost entirely on reducing tariffs. Since the mid-1960s, however, rounds of trade talks have taken years, included a large number of countries, and have included an ever-broadening range of issues.
| Year | Place or Name of Round | Main Subjects | Number of Countries Involved |
|---|---|---|---|
| 1947 | Geneva | Tariff reduction | 23 |
| 1949 | Annecy | Tariff reduction | 13 |
| 1951 | Torquay | Tariff reduction | 38 |
| 1956 | Geneva | Tariff reduction | 26 |
| 1960–61 | Dillon round | Tariff reduction | 26 |
| 1964–67 | Kennedy round | Tariffs, anti-dumping measures | 62 |
| 1973–79 | Tokyo round | Tariffs, nontariff barriers | 102 |
| 1986–94 | Uruguay round | Tariffs, nontariff barriers, services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO | 123 |
| 2001– | Doha round | Agriculture, services, intellectual property, competition, investment, environment, dispute settlement | 147 |
The sluggish pace of GATT negotiations led to an old joke that GATT really stood for Gentleman’s Agreement to Talk and Talk. The slow pace of international trade talks, however, is understandable, even sensible. Having dozens of nations agree to any treaty is a lengthy process. GATT often set up separate trading rules for certain industries, like agriculture, and separate trading rules for certain countries, like the low-income countries. There were rules, exceptions to rules, opportunities to opt out of rules, and precise wording to be fought over in every case. Like the GATT before it, the WTO is not a world government, with power to impose its decisions on others. The total staff of the WTO in 2014 is 640 people and its annual budget (as of 2014) is $197 million, which makes it smaller in size than many large universities.
Regional Trading Agreements
There are different types of economic integration across the globe, ranging from free trade agreements, in which participants allow each other’s imports without tariffs or quotas, to common markets, in which participants have a common external trade policy as well as free trade within the group, to full economic unions, in which, in addition to a common market, monetary and fiscal policies are coordinated. Many nations belong both to the World Trade Organization and to regional trading agreements.
The best known of these regional trading agreements is the European Union. In the years after World War II, leaders of several European nations reasoned that if they could tie their economies together more closely, they might be more likely to avoid another devastating war. Their efforts began with a free trade association, evolved into a common market, and then transformed into what is now a full economic union, known as the European Union. The EU, as it is often called, has a number of goals. For example, in the early 2000s it introduced a common currency for Europe, the euro, and phased out most of the former national forms of money like the German mark and the French franc, though a few have retained their own currency. Another key element of the union is to eliminate barriers to the mobility of goods, labor, and capital across Europe.
For the United States, perhaps the best-known regional trading agreement is the North American Free Trade Agreement (NAFTA). The United States also participates in some less-prominent regional trading agreements, like the Caribbean Basin Initiative, which offers reduced tariffs for imports from these countries, and a free trade agreement with Israel.
The world has seen a flood of regional trading agreements in recent years. About 100 such agreements are now in place. Table lists a few of the more prominent ones. Some are just agreements to continue talking. Others set specific goals for reducing tariffs, import quotas, and nontariff barriers. One economist described the current trade treaties as a “spaghetti bowl,” which is what a map with lines connecting all the countries with trade treaties looks like.
There is concern among economists who favor free trade that some of these regional agreements may promise free trade, but actually act as a way for the countries within the regional agreement to try to limit trade from anywhere else. In some cases, the regional trade agreements may even conflict with the broader agreements of the World Trade Organization.
| Trade Agreements | Participating Countries |
|---|---|
| Asia Pacific Economic Cooperation (APEC) | Australia, Brunei, Canada, Chile, People’s Republic of China, Hong Kong, China, Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Chinese Taipei, Thailand, United States, Vietnam |
| European Union (EU) | Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom* |
| North America Free Trade Agreement (NAFTA) | Canada, Mexico, United States |
| Latin American Integration Association (LAIA) | Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela |
| Association of Southeast Asian Nations (ASEAN) | Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam |
| Southern African Development Community (SADC) | Angola, Botswana, Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe |
Trade Policy at the National Level
Yet another dimension of trade policy, along with international and regional trade agreements, happens at the national level. The United States, for example, imposes import quotas on sugar, because of a fear that such imports would drive down the price of sugar and thus injure domestic sugar producers. One of the jobs of the United States Department of Commerce is to determine if there is import dumping from other countries. The United States International Trade Commission—a government agency—determines whether the dumping has substantially injured domestic industries, and if so, the president can impose tariffs that are intended to offset the unfairly low price.
In the arena of trade policy, the battle often seems to be between national laws that increase protectionism and international agreements that try to reduce protectionism, like the WTO. Why would a country pass laws or negotiate agreements to shut out certain foreign products, like sugar or textiles, while simultaneously negotiating to reduce trade barriers in general? One plausible answer is that international trade agreements offer a method for countries to restrain their own special interests. A member of Congress can say to an industry lobbying for tariffs or quotas on imports: “Sure would like to help you, but that pesky WTO agreement just won’t let me.”
If consumers are the biggest losers from trade, why do they not fight back? The quick answer is because it is easier to organize a small group of people around a narrow interest (producers) versus a large group that has diffuse interests (consumers). This is a question about trade policy theory. Visit this website and read the article by Jonathan Rauch.
Long-Term Trends in Barriers to Trade
In newspaper headlines, trade policy appears mostly as disputes and acrimony. Countries are almost constantly threatening to challenge other nations' “unfair” trading practices. Cases are brought to the dispute settlement procedures of the WTO, the European Union, NAFTA, and other regional trading agreements. Politicians in national legislatures, goaded on by lobbyists, often threaten to pass bills that will “establish a fair playing field” or “prevent unfair trade”—although most such bills seek to accomplish these high-sounding goals by placing more restrictions on trade. Protesters in the streets may object to specific trade rules or to the entire practice of international trade.
Through all the controversy, the general trend in the last 60 years is clearly toward lower barriers to trade. The average level of tariffs on imported products charged by industrialized countries was 40% in 1946. By 1990, after decades of GATT negotiations, it was down to less than 5%. One of the reasons that GATT negotiations shifted from focusing on tariff reduction in the early rounds to a broader agenda was that tariffs had been reduced so dramatically there was not much more to do in that area. U.S. tariffs have followed this general pattern: After rising sharply during the Great Depression, tariffs dropped off to less than 2% by the end of the century. Although measures of import quotas and nontariff barriers are less exact than those for tariffs, they generally appear to be at lower levels than they had been previously, too.
Thus, the last half-century has seen both a dramatic reduction in government-created barriers to trade, such as tariffs, import quotas, and nontariff barriers, and also a number of technological developments that have made international trade easier, like advances in transportation, communication, and information management. The result has been the powerful surge of international trade.
Key Concepts and Summary
Governments determine trade policy at many different levels: administrative agencies within government, laws passed by the legislature, regional negotiations between a small group of nations (sometimes just two), and global negotiations through the World Trade Organization. During the second half of the twentieth century, trade barriers have, in general, declined quite substantially in the United States economy and in the global economy. One reason why countries sign international trade agreements to commit themselves to free trade is to give themselves protection against their own special interests. When an industry lobbies for protection from foreign producers, politicians can point out that, because of the trade treaty, their hands are tied.
Self-Check Questions
What is the difference between a free trade association, a common market, and an economic union?
Hint:
A free trade association offers free trade between its members, but each country can determine its own trade policy outside the association. A common market requires a common external trade policy in addition to free trade within the group. An economic union is a common market with coordinated fiscal and monetary policy.
Why would countries promote protectionist laws, while also negotiate for freer trade internationally?
Hint:
International agreements can serve as a political counterweight to domestic special interests, thereby preventing stronger protectionist measures.
What might account for the dramatic increase in international trade over the past 50 years?
Hint:
Reductions in tariffs, quotas, and other trade barriers, improved transportation, and communication media have made people more aware of what is available in the rest of the world.
Review Questions
Name several of the international treaties where countries negotiate with each other over trade policy.
What is the general trend of trade barriers over recent decades: higher, lower, or about the same?
If opening up to free trade would benefit a nation, then why do nations not just eliminate their trade barriers, and not bother with international trade negotiations?
Critical Thinking Questions
Why do you think that the GATT rounds and, more recently, WTO negotiations have become longer and more difficult to resolve?
An economic union requires giving up some political autonomy to succeed. What are some examples of political power countries must give up to be members of an economic union?
References
United States Department of Labor. Bureau of Labor Statistics. 2015. “Employment Situation Summary.” Accessed April 1, 2015. http://www.bls.gov/news.release/empsit.nr0.htm.
United States Department of Commerce. “About the Department of Commerce.” Accessed January 6, 2014. http://www.commerce.gov/about-department-commerce.
United States International Trade Commission. “About the USITC.” Accessed January 6, 2014. http://www.usitc.gov/press_room/about_usitc.htm.
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2025-03-18T00:37:23.988739
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https://oercommons.org/courseware/lesson/28886/overview
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The Tradeoffs of Trade Policy
Overview
By the end of this section, you will be able to:
- Asses the complexity of international trade
- Discuss why a market-oriented economy is so affected by international trade
- Explain disruptive market change
Economists readily acknowledge that international trade is not all sunshine, roses, and happy endings. Over time, the average person gains from international trade, both as a worker who has greater productivity and higher wages because of the benefits of specialization and comparative advantage, and as a consumer who can benefit from shopping all over the world for a greater variety of quality products at attractive prices. The “average person,” however, is hypothetical, not real—representing a mix of those who have done very well, those who have done all right, and those who have done poorly. It is a legitimate concern of public policy to focus not just on the average or on the success stories, but also on those who have not been so fortunate. Workers in other countries, the environment, and prospects for new industries and materials that might be of key importance to the national economy are also all legitimate issues.
The common belief among economists is that it is better to embrace the gains from trade, and then deal with the costs and tradeoffs with other policy tools, than it is to cut off trade to avoid the costs and tradeoffs.
To gain a better intuitive understanding for this argument, consider a hypothetical American company called Technotron. Technotron invents a new scientific technology that allows the firm to increase the output and quality of its goods with a smaller number of workers at a lower cost. As a result of this technology, other U.S. firms in this industry will lose money and will also have to lay off workers—and some of the competing firms will even go bankrupt. Should the United States government protect the existing firms and their employees by making it illegal for Technotron to use its new technology? Most people who live in market-oriented economies would oppose trying to block better products that lower the cost of services. Certainly, there is a case for society providing temporary support and assistance for those who find themselves without work. Many would argue for government support of programs that encourage retraining and acquiring additional skills. Government might also support research and development efforts, so that other firms may find ways of outdoing Technotron. Blocking the new technology altogether, however, seems like a mistake. After all, few people would advocate giving up electricity because it caused so much disruption to the kerosene and candle business. Few would suggest holding back on improvements in medical technology because they might cause companies selling leeches and snake oil to lose money. In short, most people view disruptions due to technological change as a necessary cost that is worth bearing.
Now, imagine that Technotron’s new “technology” is as simple as this: the company imports what it sells from another country. In other words, think of foreign trade as a type of innovative technology. The objective situation is now exactly the same as before. Because of Technotron’s new technology—which in this case is importing goods from another county—other firms in this industry will lose money and lay off workers. Just as it would have been inappropriate and ultimately foolish to respond to the disruptions of new scientific technology by trying to shut it down, it would be inappropriate and ultimately foolish to respond to the disruptions of international trade by trying to restrict trade.
Some workers and firms will suffer because of international trade. In a living, breathing market-oriented economy, some workers and firms will always be experiencing disruptions, for a wide variety of reasons. Corporate management can be better or worse. Workers for a certain firm can be more or less productive. Tough domestic competitors can create just as much disruption as tough foreign competitors. Sometimes a new product is a hit with consumers; sometimes it is a flop. Sometimes a company is blessed by a run of good luck or stricken with a run of bad luck. For some firms, international trade will offer great opportunities for expanding productivity and jobs; for other firms, trade will impose stress and pain. The disruption caused by international trade is not fundamentally different from all the other disruptions caused by the other workings of a market economy.
In other words, the economic analysis of free trade does not rely on a belief that foreign trade is not disruptive or does not pose tradeoffs; indeed, the story of Technotron begins with a particular disruptive market change—a new technology—that causes real tradeoffs. In thinking about the disruptions of foreign trade, or any of the other possible costs and tradeoffs of foreign trade discussed in this chapter, the best public policy solutions typically do not involve protectionism, but instead involve finding ways for public policy to address the particular issues resulting from these disruptions, costs, and tradeoffs, while still allowing the benefits of international trade to occur.
What’s the Downside of Protection?
The domestic flat-panel display industry employed many workers before the ITC imposed the dumping margin tax. Flat-panel displays make up a significant portion of the cost of producing laptop computers—as much as 50%. Therefore, the antidumping tax would substantially increase the cost, and thus the price, of U.S.-manufactured laptops. As a result of the ITC’s decision, Apple moved its domestic manufacturing plant for Macintosh computers to Ireland (where it had an existing plant). Toshiba shut down its U.S. manufacturing plant for laptops. And IBM cancelled plans to open a laptop manufacturing plant in North Carolina, instead deciding to expand production at its plant in Japan. In this case, rather than having the desired effect of protecting U.S. interests and giving domestic manufacturing an advantage over items manufactured elsewhere, it had the unintended effect of driving the manufacturing completely out of the country. Many people lost their jobs and most flat-panel display production now occurs in countries other than the United States.
Key Concepts and Summary
International trade certainly has income distribution effects. This is hardly surprising. All domestic or international competitive market forces are disruptive. They cause companies and industries to rise and fall. Government has a role to play in cushioning workers against the disruptions of the market. However, just as it would be unwise in the long term to clamp down on new technology and other causes of disruption in domestic markets, it would be unwise to clamp down on foreign trade. In both cases, the disruption brings with it economic benefits.
Self-Check Questions
How does competition, whether domestic or foreign, harm businesses?
Hint:
Competition from firms with better or cheaper products can reduce a business’s profits, and may drive it out of business. Workers would similarly lose income or even their jobs.
What are the gains from competition?
Hint:
Consumers get better or less expensive products. Businesses with the better or cheaper products increase their profits. Employees of those businesses earn more income. On balance, the gains outweigh the losses to a nation.
Review Questions
Who gains and who loses from trade?
Why is trade a good thing if some people lose?
What are some ways that governments can help people who lose from trade?
Critical Thinking Questions
What are some examples of innovative products that have disrupted their industries for the better?
In principle, the benefits of international trade to a country exceed the costs, no matter whether the country is importing or exporting. In practice, it is not always possible to compensate the losers in a country, for example, workers who lose their jobs due to foreign imports. In your opinion, does that mean that trade should be inhibited to prevent the losses?
Economists sometimes say that protectionism is the “second-best” choice for dealing with any particular problem. What they mean is that there is often a policy choice that is more direct or effective for dealing with the problem—a choice that would still allow the benefits of trade to occur. Explain why protectionism is a “second-best” choice for:
- helping workers as a group
- helping industries stay strong
- protecting the environment
- advancing national defense
Trade has income distribution effects. For example, suppose that because of a government-negotiated reduction in trade barriers, trade between Germany and the Czech Republic increases. Germany sells house paint to the Czech Republic. The Czech Republic sells alarm clocks to Germany. Would you expect this pattern of trade to increase or decrease jobs and wages in the paint industry in Germany? The alarm clock industry in Germany? The paint industry in Czech Republic? The alarm clock industry in Czech Republic? What has to happen for there to be no increase in total unemployment in both countries?
References
E. Helpman, and O. Itskhoki, “Labour Market Rigidities, Trade and Unemployment,” The Review of Economic Studies, 77. 3 (2010): 1100-1137.
M.J. Melitz, and D. Trefler. “Gains from Trade when Firms Matter.” The Journal of Economic Perspectives, 26.2 (2012): 91-118.
Rauch, J. “Was Mancur Olson Wrong?” The American, February 15, 2013. http://www.american.com/archive/2013/february/was-mancur-olson-wrong.
Office of the United States Trade Representative. “U.S. Trade Representative Froman Announces FY 2014 WTO Tariff-Rate Quota Allocations for Raw Cane Sugar, Refined and Specialty Sugar and Sugar-Containing Products.”Accessed January 6, 2014. http://www.ustr.gov/about-us/press-office/press-releases/2013/september/WTO-trq-for-sugar.
The World Bank. “Merchandise trade (% of GDP).” Accessed January 4, 2014. http://data.worldbank.org/indicator/TG.VAL.TOTL.GD.ZS.
World Trade Organization. 2014. “Annual Report 2014.” Accessed April 1, 2015. https://www.wto.org/english/res_e/booksp_e/anrep_e/anrep14_chap10_e.pdf.
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2025-03-18T00:37:24.013624
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https://oercommons.org/courseware/lesson/28807/overview
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Introduction to Unemployment
Unemployment and the Great Recession
Nearly eight million U.S. jobs were lost as a consequence of the Great Recession, which lasted from December 2007 to June 2009. At the outset of the recession, the unemployment rate was 5.0%. The rate began rising several months after the recession began, and it peaked at 10.0% in October 2009, several months after the recession ended, according to the Bureau of Labor Statistics (BLS). The job loss represented a huge number of positions gone. Subsequently, the recovery was tepid. Companies added some positions, but as of summer 2013, four years after the end of the recession, unemployment was about 7.5%, well above the pre-recession rate. Employment began increasing at the outset of 2010, and reached its pre-recession level in mid-2014. However, because of population and labor force growth, the unemployment rate at that point was still slightly above 6%. The economy only returned to an unemployment rate of 5.0% in September 2015, and it has remained at or slightly below that level since then, up through January 2017.
This brief overview of unemployment during and after the Great Recession highlights a few important points. First, unemployment is a lagging indicator of business activity. It didn’t begin to increase until a few months after the onset of the recession, and it didn’t begin to decline until several months after the recovery. Second, the decline in the unemployment rate was quite slow, with the pre-recession unemployment rate only reaching a higher level than six years after the recession ended. This reflects a combination of slow increase in the number of jobs and ongoing increases in the size of the population and the labor force.
It turns out that recent recessions, going back to the early 1990s, have been characterized by longer periods of recovery than their predecessors. We will return to this point at the end of the chapter. However, first we need to examine unemployment. What constitutes it, and how do we measure it?
Introduction to Unemployment
In this chapter, you will learn about:
- How Economists Define and Compute Unemployment Rate
- Patterns of Unemployment
- What Causes Changes in Unemployment over the Short Run
- What Causes Changes in Unemployment over the Long Run
Unemployment can be a terrible and wrenching life experience—like a serious automobile accident or a messy divorce—whose consequences only someone who has gone through it can fully understand. For unemployed individuals and their families, there is the day-to-day financial stress of not knowing from where the next paycheck is coming. There are painful adjustments, like watching your savings account dwindle, selling a car and buying a cheaper one, or moving to a less expensive place to live. Even when the unemployed person finds a new job, it may pay less than the previous one. For many people, their job is an important part of their self worth. When unemployment separates people from the workforce, it can affect family relationships as well as mental and physical health.
The human costs of unemployment alone would justify making a low level of unemployment an important public policy priority. However, unemployment also includes economic costs to the broader society. When millions of unemployed but willing workers cannot find jobs, economic resource are unused. An economy with high unemployment is like a company operating with a functional but unused factory. The opportunity cost of unemployment is the output that the unemployed workers could have produced.
This chapter will discuss how economists define and compute the unemployment rate. It will examine the patterns of unemployment over time, for the U.S. economy as a whole, for different demographic groups in the U.S. economy, and for other countries. It will then consider an economic explanation for unemployment, and how it explains the patterns of unemployment and suggests public policies for reducing it.
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oercommons
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2025-03-18T00:37:24.029982
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https://oercommons.org/courseware/lesson/28808/overview
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How Economists Define and Compute Unemployment Rate
Overview
By the end of this section, you will be able to:
- Calculate the labor force participation rate and the unemployment rate
- Explain hidden unemployment and what it means to be in or out of the labor force
- Evaluate the collection and interpretation of unemployment data
Newspaper or television reports typically describe unemployment as a percentage or a rate. A recent report might have said, for example, from August 2009 to November 2009, the U.S. unemployment rate rose from 9.7% to 10.0%, but by June 2010, it had fallen to 9.5%. At a glance, the changes between the percentages may seem small. However, remember that the U.S. economy has about 160 million adults (as of the beginning of 2017) who either have jobs or are looking for them. A rise or fall of just 0.1% in the unemployment rate of 160 million potential workers translates into 160,000 people, which is roughly the total population of a city like Syracuse, New York, Brownsville, Texas, or Pasadena, California. Large rises in the unemployment rate mean large numbers of job losses. In November 2009, at the peak of the recession, about 15 million people were out of work. Even with the unemployment rate now at 4.8% as of January 2017, about 7.6 million people who would like to have jobs are out of work.
The Bureau of Labor Statistics tracks and reports all data related to unemployment.
Who’s In or Out of the Labor Force?
Should we count everyone without a job as unemployed? Of course not. For example, we should not count children as unemployed. Surely, we should not count the retired as unemployed. Many full-time college students have only a part-time job, or no job at all, but it seems inappropriate to count them as suffering the pains of unemployment. Some people are not working because they are rearing children, ill, on vacation, or on parental leave.
The point is that we do not just divide the adult population into employed and unemployed. A third group exists: people who do not have a job, and for some reason—retirement, looking after children, taking a voluntary break before a new job—are not interested in having a job, either. It also includes those who do want a job but have quit looking, often due to discouragement due to their inability to find suitable employment. Economists refer to this third group of those who are not working and not looking for work as out of the labor force or not in the labor force.
The U.S. unemployment rate, which is based on a monthly survey carried out by the U.S. Bureau of the Census, asks a series of questions to divide the adult population into employed, unemployed, or not in the labor force. To be classified as unemployed, a person must be without a job, currently available to work, and actively looking for work in the previous four weeks. Thus, a person who does not have a job but who is not currently available to work or has not actively looked for work in the last four weeks is counted as out of the labor force.
Employed: currently working for pay
Unemployed: Out of work and actively looking for a job
Out of the labor force: Out of paid work and not actively looking for a job
Labor force: the number of employed plus the unemployed
Calculating the Unemployment Rate
Figure shows the three-way division of the 16-and-over population. In January 2017, about 62.9% of the adult population was "in the labor force"; that is, people are either employed or without a job but looking for work. We can divide those in the labor force into the employed and the unemployed. Table shows those values. The unemployment rate is not the percentage of the total adult population without jobs, but rather the percentage of adults who are in the labor force but who do not have jobs:
| Total adult population over the age of 16 | 254.082 million |
| In the labor force | 159.716 million (62.9%) |
| Employed | 152.081 million |
| Unemployed | 7.635 million |
| Out of the labor force | 94.366 million (37.1%) |
In this example, we can calculate the unemployment rate as 7.635 million unemployed people divided by 159.716 million people in the labor force, which works out to a 4.8% rate of unemployment. The following Work It Out feature will walk you through the steps of this calculation.
Calculating Labor Force Percentages
How do economists arrive at the percentages in and out of the labor force and the unemployment rate? We will use the values in Table to illustrate the steps.
To determine the percentage in the labor force:
Step 1. Divide the number of people in the labor force (159.716 million) by the total adult (working-age) population (254.082 million).
Step 2. Multiply by 100 to obtain the percentage.
To determine the percentage out of the labor force:
Step 1. Divide the number of people out the labor force (94.366 million) by the total adult (working-age) population (254.082 million).
Step 2. Multiply by 100 to obtain the percentage.
To determine the unemployment rate:
Step 1. Divide the number of unemployed people (7.635 million) by the total labor force (157 million).
Step 2. Multiply by 100 to obtain the rate.
Hidden Unemployment
Even with the “out of the labor force” category, there are still some people who are mislabeled in the categorization of employed, unemployed, or out of the labor force. There are some people who have only part time or temporary jobs, and they are looking for full time and permanent employment that are counted as employed, although they are not employed in the way they would like or need to be. Additionally, there are individuals who are underemployed. This includes those who are trained or skilled for one type or level of work but are working in a lower paying job or one that does not utilize their skills. For example, we would consider an individual with a college degree in finance who is working as a sales clerk underemployed. They are, however, also counted in the employed group. All of these individuals fall under the umbrella of the term “hidden unemployment.” Discouraged workers, those who have stopped looking for employment and, hence, are no longer counted in the unemployed also fall into this group
Labor Force Participation Rate
Another important statistic is the labor force participation rate. This is the percentage of adults in an economy who are either employed or who are unemployed and looking for a job. Using the data in Figure and Table, those included in this calculation would be the 159.716 million individuals in the labor force. We calculate the rate by taking the number of people in the labor force, that is, the number employed and the number unemployed, divided by the total adult population and multiplying by 100 to get the percentage. For the data from January 2017, the labor force participation rate is 62.9%. Historically, the civilian labor force participation rate in the United States climbed beginning in the 1960s as women increasingly entered the workforce, and it peaked at just over 67% in late 1999 to early 2000. Since then, the labor force participation rate has steadily declined, slowly to about 66% in 2008, early in the Great Recession, and then more rapidly during and after that recession, reaching its present level, where it has remained stable, near the end of 2013.
The Establishment Payroll Survey
When the unemployment report comes out each month, the Bureau of Labor Statistics (BLS) also reports on the number of jobs created—which comes from the establishment payroll survey. The payroll survey is based on a survey of about 147,000 businesses and government agencies throughout the United States. It generates payroll employment estimates by the following criteria: all employees, average weekly hours worked, and average hourly, weekly, and overtime earnings. One of the criticisms of this survey is that it does not count the self-employed. It also does not make a distinction between new, minimum wage, part time or temporary jobs and full time jobs with “decent” pay.
How Does the U.S. Bureau of Labor Statistics Collect the U.S. Unemployment Data?
The unemployment rate announced by the U.S. Bureau of Labor Statistics on the first Friday of each month for the previous month is based on the Current Population Survey (CPS), which the Bureau has carried out every month since 1940. The Bureau takes great care to make this survey representative of the country as a whole. The country is first divided into 3,137 areas. The U.S. Bureau of the Census then selects 729 of these areas to survey. It divides the 729 areas into districts of about 300 households each, and divides each district into clusters of about four dwelling units. Every month, Census Bureau employees call about 15,000 of the four-household clusters, for a total of 60,000 households. Employees interview households for four consecutive months, then rotate them out of the survey for eight months, and then interview them again for the same four months the following year, before leaving the sample permanently.
Based on this survey, state, industry, urban and rural areas, gender, age, race or ethnicity, and level of education statistics comprise components that contribute to unemployment rates. A wide variety of other information is available, too. For example, how long have people been unemployed? Did they become unemployed because they quit, or were laid off, or their employer went out of business? Is the unemployed person the only wage earner in the family? The Current Population Survey is a treasure trove of information about employment and unemployment. If you are wondering what the difference is between the CPS and EPS, read the following Clear it Up feature.
What is the difference between CPS and EPS?
The United States Census Bureau conducts the Current Population Survey (CPS), which measures the percentage of the labor force that is unemployed. The Bureau of Labor Statistics' establishment payroll survey (EPS) is a payroll survey that measures the net change in jobs created for the month.
Criticisms of Measuring Unemployment
There are always complications in measuring the number of unemployed. For example, what about people who do not have jobs and would be available to work, but are discouraged by the lack of available jobs in their area and stopped looking? Such people, and their families, may be suffering the pains of unemployment. However, the survey counts them as out of the labor force because they are not actively looking for work. Other people may tell the Census Bureau that they are ready to work and looking for a job but, truly, they are not that eager to work and are not looking very hard at all. They are counted as unemployed, although they might more accurately be classified as out of the labor force. Still other people may have a job, perhaps doing something like yard work, child care, or cleaning houses, but are not reporting the income earned to the tax authorities. They may report being unemployed, when they actually are working.
Although the unemployment rate gets most of the public and media attention, economic researchers at the Bureau of Labor Statistics publish a wide array of surveys and reports that try to measure these kinds of issues and to develop a more nuanced and complete view of the labor market. It is not exactly a hot news flash that economic statistics are imperfect. Even imperfect measures like the unemployment rate, however, can still be quite informative, when interpreted knowledgeably and sensibly.
Click here to learn more about the CPS and to read frequently asked questions about employment and labor.
Key Concepts and Summary
Unemployment imposes high costs. Unemployed individuals suffer from loss of income and from stress. An economy with high unemployment suffers an opportunity cost of unused resources. We can divide the adult population into those in the labor force and those out of the labor force. In turn, we divide those in the labor force into employed and unemployed. A person without a job must be willing and able to work and actively looking for work to be counted as unemployed; otherwise, a person without a job is counted as out of the labor force. Economists define the unemployment rate as the number of unemployed persons divided by the number of persons in the labor force (not the overall adult population). The Current Population Survey (CPS) conducted by the United States Census Bureau measures the percentage of the labor force that is unemployed. The establishment payroll survey by the Bureau of Labor Statistics measures the net change in jobs created for the month.
Self-Check Questions
Suppose the adult population over the age of 16 is 237.8 million and the labor force is 153.9 million (of whom 139.1 million are employed). How many people are “not in the labor force?” What are the proportions of employed, unemployed and not in the labor force in the population? Hint: Proportions are percentages.
Hint:
The population is divided into those “in the labor force” and those “not in the labor force.” Thus, the number of adults not in the labor force is 237.8 – 153.9 = 83.9 million. Since the labor force is divided into employed persons and unemployed persons, the number of unemployed persons is 153.9 – 139.1 = 14.8 million. Thus, the adult population has the following proportions:
- 139.1/237.8 = 58.5% employed persons
- 14.8/237.8 = 6.2% unemployed persons
- 83.9/237.8 = 35.3% persons out of the labor force
Using the above data, what is the unemployment rate? These data are U.S. statistics from 2010. How does it compare to the February 2015 unemployment rate computed earlier?
Hint:
The unemployment rate is defined as the number of unemployed persons as a percentage of the labor force or 14.8/153.9 = 9.6%. This is higher than the February 2015 unemployment rate, computed earlier, of 5.5%.
Review Questions
What is the difference between being unemployed and being out of the labor force?
How do you calculate the unemployment rate? How do you calculate the labor force participation rate?
Are all adults who do not hold jobs counted as unemployed?
If you are out of school but working part time, are you considered employed or unemployed in U.S. labor statistics? If you are a full time student and working 12 hours a week at the college cafeteria are you considered employed or not in the labor force? If you are a senior citizen who is collecting social security and a pension and working as a greeter at Wal-Mart are you considered employed or not in the labor force?
What happens to the unemployment rate when unemployed workers are reclassified as discouraged workers?
What happens to the labor force participation rate when employed individuals are reclassified as unemployed? What happens when they are reclassified as discouraged workers?
What are some of the problems with using the unemployment rate as an accurate measure of overall joblessness?
What criteria do the BLS use to count someone as employed? As unemployed?
Assess whether the following would be counted as “unemployed” in the Current Employment Statistics survey.
- A husband willingly stays home with children while his wife works.
- A manufacturing worker whose factory just closed down.
- A college student doing an unpaid summer internship.
- A retiree.
- Someone who has been out of work for two years but keeps looking for a job.
- Someone who has been out of work for two months but isn’t looking for a job.
- Someone who hates her present job and is actively looking for another one.
- Someone who decides to take a part time job because she could not find a full time position.
Critical Thinking Questions
Using the definition of the unemployment rate, is an increase in the unemployment rate necessarily a bad thing for a nation?
Is a decrease in the unemployment rate necessarily a good thing for a nation? Explain.
If many workers become discouraged from looking for jobs, explain how the number of jobs could decline but the unemployment rate could fall at the same time.
Would you expect hidden unemployment to be higher, lower, or about the same when the unemployment rate is high, say 10%, versus low, say 4%? Explain.
Problems
A country with a population of eight million adults has five million employed, 500,000 unemployed, and the rest of the adult population is out of the labor force. What’s the unemployment rate? What share of population is in the labor force? Sketch a pie chart that divides the adult population into these three groups.
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oercommons
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2025-03-18T00:37:24.066811
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https://oercommons.org/courseware/lesson/28809/overview
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Patterns of Unemployment
Overview
By the end of this section, you will be able to:
- Explain historical patterns of unemployment in the U.S.
- Identify trends of unemployment based on demographics
- Evaluate global unemployment rates
Let’s look at how unemployment rates have changed over time and how various groups of people are affected by unemployment differently.
The Historical U.S. Unemployment Rate
Figure shows the historical pattern of U.S. unemployment since 1955.
As we look at this data, several patterns stand out:
- Unemployment rates do fluctuate over time. During the deep recessions of the early 1980s and of 2007–2009, unemployment reached roughly 10%. For comparison, during the 1930s Great Depression, the unemployment rate reached almost 25% of the labor force.
- Unemployment rates in the late 1990s and into the mid-2000s were rather low by historical standards. The unemployment rate was below 5% from 1997 to 2000, and near 5% during almost all of 2006–2007, and 5% or slightly less from September 2015 through January 2017 (the latest date for which data are available as of this writing). The previous time unemployment had been less than 5% for three consecutive years was three decades earlier, from 1968 to 1970.
- The unemployment rate never falls all the way to zero. It almost never seems to get below 3%—and it stays that low only for very short periods. (We discuss reasons why this is the case later in this chapter.)
- The timing of rises and falls in unemployment matches fairly well with the timing of upswings and downswings in the overall economy, except that unemployment tends to lag changes in economic activity, and especially so during upswings of the economy following a recession. During periods of recession and depression, unemployment is high. During periods of economic growth, unemployment tends to be lower.
- No significant upward or downward trend in unemployment rates is apparent. This point is especially worth noting because the U.S. population more than quadrupled from 76 million in 1900 to over 324 million by 2017. Moreover, a higher proportion of U.S. adults are now in the paid workforce, because women have entered the paid labor force in significant numbers in recent decades. Women comprised 18% of the paid workforce in 1900 and nearly half of the paid workforce in 2017. However, despite the increased number of workers, as well as other economic events like globalization and the continuous invention of new technologies, the economy has provided jobs without causing any long-term upward or downward trend in unemployment rates.
Unemployment Rates by Group
Unemployment is not distributed evenly across the U.S. population. Figure shows unemployment rates broken down in various ways: by gender, age, and race/ethnicity.
The unemployment rate for women had historically tended to be higher than the unemployment rate for men, perhaps reflecting the historical pattern that women were seen as “secondary” earners. By about 1980, however, the unemployment rate for women was essentially the same as that for men, as Figure (a) shows. During the 2008-2009 recession and in the immediate aftermath, the unemployment rate for men exceeded the unemployment rate for women. Subsequently, however, the gap has narrowed.
Read this report for detailed information on the 2008–2009 recession. It also provides some very useful information on the statistics of unemployment.
Younger workers tend to have higher unemployment, while middle-aged workers tend to have lower unemployment, probably because the middle-aged workers feel the responsibility of needing to have a job more heavily. Younger workers move in and out of jobs more than middle-aged workers, as part of the process of matching of workers and jobs, and this contributes to their higher unemployment rates. In addition, middle-aged workers are more likely to feel the responsibility of needing to have a job more heavily. Elderly workers have extremely low rates of unemployment, because those who do not have jobs often exit the labor force by retiring, and thus are not counted in the unemployment statistics. Figure (b) shows unemployment rates for women divided by age. The pattern for men is similar.
The unemployment rate for African-Americans is substantially higher than the rate for other racial or ethnic groups, a fact that surely reflects, to some extent, a pattern of discrimination that has constrained blacks’ labor market opportunities. However, the gaps between unemployment rates for whites and for blacks and Hispanics diminished in the 1990s, as Figure (c) shows. In fact, unemployment rates for blacks and Hispanics were at the lowest levels for several decades in the mid-2000s before rising during the recent Great Recession.
Finally, those with less education typically suffer higher unemployment. In January 2017, for example, the unemployment rate for those with a college degree was 2.5%; for those with some college but not a four year degree, the unemployment rate was 3.8%; for high school graduates with no additional degree, the unemployment rate was 5.3%; and for those without a high school diploma, the unemployment rate was 7.7%. This pattern arises because additional education typically offers better connections to the labor market and higher demand. With less attractive labor market opportunities for low-skilled workers compared to the opportunities for the more highly-skilled, including lower pay, low-skilled workers may be less motivated to find jobs.
Breaking Down Unemployment in Other Ways
The Bureau of Labor Statistics also gives information about the reasons for unemployment, as well as the length of time individuals have been unemployed. Table, for example, shows the four reasons for unemployment and the percentages of the currently unemployed that fall into each category. Table shows the length of unemployment. For both of these, the data is from January 2017.(bls.gov)
| Reason | Percentage |
|---|---|
| New Entrants | 10.8% |
| Re-entrants | 28.7% |
| Job Leavers | 11.4% |
| Job Losers: Temporary | 14.0% |
| Job Losers: Non Temporary | 35.1% |
| Length of Time | Percentage |
|---|---|
| Under 5 weeks | 32.5% |
| 5 to 14 weeks | 27.5% |
| 15 to 26 weeks | 15.7% |
| Over 27 weeks | 27.4% |
Watch this speech on the impact of droids on the labor market.
International Unemployment Comparisons
From an international perspective, the U.S. unemployment rate typically has looked a little better than average. Table compares unemployment rates for 1991, 1996, 2001, 2006 (just before the recession), and 2012 (somewhat after the recession) from several other high-income countries.
| Country | 1991 | 1996 | 2001 | 2006 | 2012 |
|---|---|---|---|---|---|
| United States | 6.8% | 5.4% | 4.8% | 4.4% | 8.1% |
| Canada | 9.8% | 8.8% | 6.4% | 6.2% | 6.3% |
| Japan | 2.1% | 3.4% | 5.1% | 4.5% | 3.9% |
| France | 9.5% | 12.5% | 8.7% | 10.1% | 10.0% |
| Germany | 5.6% | 9.0% | 8.9% | 9.8% | 5.5% |
| Italy | 6.9% | 11.7% | 9.6% | 7.8% | 10.8% |
| Sweden | 3.1% | 9.9% | 5.0% | 5.2% | 7.9% |
| United Kingdom | 8.8% | 8.1% | 5.1% | 5.5% | 8.0% |
However, we need to treat cross-country comparisons of unemployment rates with care, because each country has slightly different definitions of unemployment, survey tools for measuring unemployment, and also different labor markets. For example, Japan’s unemployment rates appear quite low, but Japan’s economy has been mired in slow growth and recession since the late 1980s, and Japan’s unemployment rate probably paints too rosy a picture of its labor market. In Japan, workers who lose their jobs are often quick to exit the labor force and not look for a new job, in which case they are not counted as unemployed. In addition, Japanese firms are often quite reluctant to fire workers, and so firms have substantial numbers of workers who are on reduced hours or officially employed, but doing very little. We can view this Japanese pattern as an unusual method for society to provide support for the unemployed, rather than a sign of a healthy economy.
We hear about the Chinese economy in the news all the time. The value of the Chinese yuan in comparison to the U.S. dollar is likely to be part of the nightly business report, so why is the Chinese economy not included in this discussion of international unemployment? The lack of reliable statistics is the reason. This article explains why.
Comparing unemployment rates in the United States and other high-income economies with unemployment rates in Latin America, Africa, Eastern Europe, and Asia is very difficult. One reason is that the statistical agencies in many poorer countries lack the resources and technical capabilities of the U.S. Bureau of the Census. However, a more difficult problem with international comparisons is that in many low-income countries, most workers are not involved in the labor market through an employer who pays them regularly. Instead, workers in these countries are engaged in short-term work, subsistence activities, and barter. Moreover, the effect of unemployment is very different in high-income and low-income countries. Unemployed workers in the developed economies have access to various government programs like unemployment insurance, welfare, and food stamps. Such programs may barely exist in poorer countries. Although unemployment is a serious problem in many low-income countries, it manifests itself in a different way than in high-income countries.
Key Concepts and Summary
The U.S. unemployment rate rises during periods of recession and depression, but falls back to the range of 4% to 6% when the economy is strong. The unemployment rate never falls to zero. Despite enormous growth in the size of the U.S. population and labor force in the twentieth century, along with other major trends like globalization and new technology, the unemployment rate shows no long-term rising trend.
Unemployment rates differ by group: higher for African-Americans and Hispanics than for whites; higher for less educated than more educated; higher for the young than the middle-aged. Women’s unemployment rates used to be higher than men’s, but in recent years men’s and women’s unemployment rates have been very similar. In recent years, unemployment rates in the United States have compared favorably with unemployment rates in most other high-income economies.
Self-Check Questions
Over the long term, has the U.S. unemployment rate generally trended up, trended down, or remained at basically the same level?
Hint:
Over the long term, the U.S. unemployment rate has remained basically the same level.
Whose unemployment rates are commonly higher in the U.S. economy:
- Whites or nonwhites?
- The young or the middle-aged?
- College graduates or high school graduates?
Hint:
- Nonwhites
- The young
- High school graduates
Review Questions
Are U.S. unemployment rates typically higher, lower, or about the same as unemployment rates in other high-income countries?
Are U.S. unemployment rates distributed evenly across the population?
Critical Thinking Questions
Is the higher unemployment rates for minority workers necessarily an indication of discrimination? What could be some other reasons for the higher unemployment rate?
While unemployment is highly negatively correlated with the level of economic activity, in the real world it responds with a lag. In other words, firms do not immediately lay off workers in response to a sales decline. They wait a while before responding. Similarly, firms do not immediately hire workers when sales pick up. What do you think accounts for the lag in response time?
Why do you think that unemployment rates are lower for individuals with more education?
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oercommons
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https://oercommons.org/courseware/lesson/28810/overview
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What Causes Changes in Unemployment over the Short Run
Overview
By the end of this section, you will be able to:
- Analyze cyclical unemployment
- Explain the relationship between sticky wages and employment using various economic arguments
- Apply supply and demand models to unemployment and wages
We have seen that unemployment varies across times and places. What causes changes in unemployment? There are different answers in the short run and in the long run. Let's look at the short run first.
Cyclical Unemployment
Let’s make the plausible assumption that in the short run, from a few months to a few years, the quantity of hours that the average person is willing to work for a given wage does not change much, so the labor supply curve does not shift much. In addition, make the standard ceteris paribus assumption that there is no substantial short-term change in the age structure of the labor force, institutions and laws affecting the labor market, or other possibly relevant factors.
One primary determinant of the demand for labor from firms is how they perceive the state of the macro economy. If firms believe that business is expanding, then at any given wage they will desire to hire a greater quantity of labor, and the labor demand curve shifts to the right. Conversely, if firms perceive that the economy is slowing down or entering a recession, then they will wish to hire a lower quantity of labor at any given wage, and the labor demand curve will shift to the left. Economists call the variation in unemployment that the economy causes moving from expansion to recession or from recession to expansion (i.e. the business cycle) cyclical unemployment.
From the standpoint of the supply-and-demand model of competitive and flexible labor markets, unemployment represents something of a puzzle. In a supply-and-demand model of a labor market, as Figure illustrates, the labor market should move toward an equilibrium wage and quantity. At the equilibrium wage (We), the equilibrium quantity (Qe) of labor supplied by workers should be equal to the quantity of labor demanded by employers.
One possibility for unemployment is that people who are unemployed are those who are not willing to work at the current equilibrium wage, say $10 an hour, but would be willing to work at a higher wage, like $20 per hour. The monthly Current Population Survey would count these people as unemployed, because they say they are ready and looking for work (at $20 per hour). However, from an economist’s perspective, these people are choosing to be unemployed.
Probably a few people are unemployed because of unrealistic expectations about wages, but they do not represent the majority of the unemployed. Instead, unemployed people often have friends or acquaintances of similar skill levels who are employed, and the unemployed would be willing to work at the jobs and wages similar to what those people are receiving. However, the employers of their friends and acquaintances do not seem to be hiring. In other words, these people are involuntarily unemployed. What causes involuntary unemployment?
Why Wages Might Be Sticky Downward
If a labor market model with flexible wages does not describe unemployment very well—because it predicts that anyone willing to work at the going wage can always find a job—then it may prove useful to consider economic models in which wages are not flexible or adjust only very slowly. In particular, even though wage increases may occur with relative ease, wage decreases are few and far between.
One set of reasons why wages may be “sticky downward,” as economists put it, involves economic laws and institutions. For low-skilled workers receiving minimum wage, it is illegal to reduce their wages. For union workers operating under a multiyear contract with a company, wage cuts might violate the contract and create a labor dispute or a strike. However, minimum wages and union contracts are not a sufficient reason why wages would be sticky downward for the U.S. economy as a whole. After all, out of the 150 million or so employed workers in the U.S. economy, only about 2.6 million—less than 2% of the total—do not receive compensation above the minimum wage. Similarly, labor unions represent only about 11% of American wage and salary workers. In other high-income countries, more workers may have their wages determined by unions or the minimum wage may be set at a level that applies to a larger share of workers. However, for the United States, these two factors combined affect only about 15% or less of the labor force.
Economists looking for reasons why wages might be sticky downwards have focused on factors that may characterize most labor relationships in the economy, not just a few. Many have proposed a number of different theories, but they share a common tone.
One argument is that even employees who are not union members often work under an implicit contract, which is that the employer will try to keep wages from falling when the economy is weak or the business is having trouble, and the employee will not expect huge salary increases when the economy or the business is strong. This wage-setting behavior acts like a form of insurance: the employee has some protection against wage declines in bad times, but pays for that protection with lower wages in good times. Clearly, this sort of implicit contract means that firms will be hesitant to cut wages, lest workers feel betrayed and work less hard or even leave the firm.
Efficiency wage theory argues that workers' productivity depends on their pay, and so employers will often find it worthwhile to pay their employees somewhat more than market conditions might dictate. One reason is that employees who receive better pay than others will be more productive because they recognize that if they were to lose their current jobs, they would suffer a decline in salary. As a result, they are motivated to work harder and to stay with the current employer. In addition, employers know that it is costly and time-consuming to hire and train new employees, so they would prefer to pay workers a little extra now rather than to lose them and have to hire and train new workers. Thus, by avoiding wage cuts, the employer minimizes costs of training and hiring new workers, and reaps the benefits of well-motivated employees.
The adverse selection of wage cuts argument points out that if an employer reacts to poor business conditions by reducing wages for all workers, then the best workers, those with the best employment alternatives at other firms, are the most likely to leave. The least attractive workers, with fewer employment alternatives, are more likely to stay. Consequently, firms are more likely to choose which workers should depart, through layoffs and firings, rather than trimming wages across the board. Sometimes companies that are experiencing difficult times can persuade workers to take a pay cut for the short term, and still retain most of the firm’s workers. However, it is far more typical for companies to lay off some workers, rather than to cut wages for everyone.
The insider-outsider model of the labor force, in simple terms, argues that those already working for firms are “insiders,” while new employees, at least for a time, are “outsiders.” A firm depends on its insiders to keep the organization running smoothly, to be familiar with routine procedures, and to train new employees. However, cutting wages will alienate the insiders and damage the firm’s productivity and prospects.
Finally, the relative wage coordination argument points out that even if most workers were hypothetically willing to see a decline in their own wages in bad economic times as long as everyone else also experiences such a decline, there is no obvious way for a decentralized economy to implement such a plan. Instead, workers confronted with the possibility of a wage cut will worry that other workers will not have such a wage cut, and so a wage cut means being worse off both in absolute terms and relative to others. As a result, workers fight hard against wage cuts.
These theories of why wages tend not to move downward differ in their logic and their implications, and figuring out the strengths and weaknesses of each theory is an ongoing subject of research and controversy among economists. All tend to imply that wages will decline only very slowly, if at all, even when the economy or a business is having tough times. When wages are inflexible and unlikely to fall, then either short-run or long-run unemployment can result. Figure illustrates this.
Figure shows the interaction between shifts in labor demand and wages that are sticky downward. Figure (a) illustrates the situation in which the demand for labor shifts to the right from D0 to D1. In this case, the equilibrium wage rises from W0 to W1 and the equilibrium quantity of labor hired increases from Q0 to Q1. It does not hurt employee morale at all for wages to rise.
Figure (b) shows the situation in which the demand for labor shifts to the left, from D0 to D1, as it would tend to do in a recession. Because wages are sticky downward, they do not adjust toward what would have been the new equilibrium wage (W1), at least not in the short run. Instead, after the shift in the labor demand curve, the same quantity of workers is willing to work at that wage as before; however, the quantity of workers demanded at that wage has declined from the original equilibrium (Q0) to Q2. The gap between the original equilibrium quantity (Q0) and the new quantity demanded of labor (Q2) represents workers who would be willing to work at the going wage but cannot find jobs. The gap represents the economic meaning of unemployment.
This analysis helps to explain the connection that we noted earlier: that unemployment tends to rise in recessions and to decline during expansions. The overall state of the economy shifts the labor demand curve and, combined with wages that are sticky downwards, unemployment changes. The rise in unemployment that occurs because of a recession is cyclical unemployment.
The St. Louis Federal Reserve Bank is the best resource for macroeconomic time series data, known as the Federal Reserve Economic Data (FRED). FRED provides complete data sets on various measures of the unemployment rate as well as the monthly Bureau of Labor Statistics report on the results of the household and employment surveys.
Key Concepts and Summary
Cyclical unemployment rises and falls with the business cycle. In a labor market with flexible wages, wages will adjust in such a market so that quantity demanded of labor always equals the quantity supplied of labor at the equilibrium wage. Economists have proposed many theories for why wages might not be flexible, but instead may adjust only in a “sticky” way, especially when it comes to downward adjustments: implicit contracts, efficiency wage theory, adverse selection of wage cuts, insider-outsider model, and relative wage coordination.
Self-Check Questions
Beginning in the 1970s and continuing for three decades, women entered the U.S. labor force in a big way. If we assume that wages are sticky in a downward direction, but that around 1970 the demand for labor equaled the supply of labor at the current wage rate, what do you imagine happened to the wage rate, employment, and unemployment as a result of increased labor force participation?
Hint:
Because of the influx of women into the labor market, the supply of labor shifts to the right. Since wages are sticky downward, the increased supply of labor causes an increase in people looking for jobs (Qs), but no change in the number of jobs available (Qe). As a result, unemployment increases by the amount of the increase in the labor supply. This can be seen in the following figure.
Over time, as labor demand grows, the unemployment will decline and eventually wages will begin to increase again. But this increase in labor demand goes beyond the scope of this problem.
Review Questions
When would you expect cyclical unemployment to be rising? Falling?
Why is there unemployment in a labor market with flexible wages?
Name and explain some of the reasons why wages are likely to be sticky, especially in downward adjustments.
Critical Thinking Questions
Do you think it is rational for workers to prefer sticky wages to wage cuts, when the consequence of sticky wages is unemployment for some workers? Why or why not? How do the reasons for sticky wages explained in this section apply to your argument?
Problems
A government passes a family-friendly law that no companies can have evening, nighttime, or weekend hours, so that everyone can be home with their families during these times. Analyze the effect of this law using a demand and supply diagram for the labor market: first assuming that wages are flexible, and then assuming that wages are sticky downward.
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What Causes Changes in Unemployment over the Long Run
Overview
By the end of this section, you will be able to:
- Explain frictional and structural unemployment
- Assess relationships between the natural rate of employment and potential real GDP, productivity, and public policy
- Identify recent patterns in the natural rate of employment
- Propose ways to combat unemployment
Cyclical unemployment explains why unemployment rises during a recession and falls during an economic expansion, but what explains the remaining level of unemployment even in good economic times? Why is the unemployment rate never zero? Even when the U.S. economy is growing strongly, the unemployment rate only rarely dips as low as 4%. Moreover, the discussion earlier in this chapter pointed out that unemployment rates in many European countries like Italy, France, and Germany have often been remarkably high at various times in the last few decades. Why does some level of unemployment persist even when economies are growing strongly? Why are unemployment rates continually higher in certain economies, through good economic years and bad? Economists have a term to describe the remaining level of unemployment that occurs even when the economy is healthy: they call it the natural rate of unemployment.
The Long Run: The Natural Rate of Unemployment
The natural rate of unemployment is not “natural” in the sense that water freezes at 32 degrees Fahrenheit or boils at 212 degrees Fahrenheit. It is not a physical and unchanging law of nature. Instead, it is only the “natural” rate because it is the unemployment rate that would result from the combination of economic, social, and political factors that exist at a time—assuming the economy was neither booming nor in recession. These forces include the usual pattern of companies expanding and contracting their workforces in a dynamic economy, social and economic forces that affect the labor market, or public policies that affect either the eagerness of people to work or the willingness of businesses to hire. Let’s discuss these factors in more detail.
Frictional Unemployment
In a market economy, some companies are always going broke for a variety of reasons: old technology; poor management; good management that happened to make bad decisions; shifts in tastes of consumers so that less of the firm’s product is desired; a large customer who went broke; or tough domestic or foreign competitors. Conversely, other companies will be doing very well for just the opposite reasons and looking to hire more employees. In a perfect world, all of those who lost jobs would immediately find new ones. However, in the real world, even if the number of job seekers is equal to the number of job vacancies, it takes time to find out about new jobs, to interview and figure out if the new job is a good match, or perhaps to sell a house and buy another in proximity to a new job. Economists call the unemployment that occurs in the meantime, as workers move between jobs, frictional unemployment. Frictional unemployment is not inherently a bad thing. It takes time on part of both the employer and the individual to match those looking for employment with the correct job openings. For individuals and companies to be successful and productive, you want people to find the job for which they are best suited, not just the first job offered.
In the mid-2000s, before the 2008–2009 recession, it was true that about 7% of U.S. workers saw their jobs disappear in any three-month period. However, in periods of economic growth, these destroyed jobs are counterbalanced for the economy as a whole by a larger number of jobs created. In 2005, for example, there were typically about 7.5 million unemployed people at any given time in the U.S. economy. Even though about two-thirds of those unemployed people found a job in 14 weeks or fewer, the unemployment rate did not change much during the year, because those who found new jobs were largely offset by others who lost jobs.
Of course, it would be preferable if people who were losing jobs could immediately and easily move into newly created jobs, but in the real world, that is not possible. Someone who is laid off by a textile mill in South Carolina cannot turn around and immediately start working for a textile mill in California. Instead, the adjustment process happens in ripples. Some people find new jobs near their old ones, while others find that they must move to new locations. Some people can do a very similar job with a different company, while others must start new career paths. Some people may be near retirement and decide to look only for part-time work, while others want an employer that offers a long-term career path. The frictional unemployment that results from people moving between jobs in a dynamic economy may account for one to two percentage points of total unemployment.
The level of frictional unemployment will depend on how easy it is for workers to learn about alternative jobs, which may reflect the ease of communications about job prospects in the economy. The extent of frictional unemployment will also depend to some extent on how willing people are to move to new areas to find jobs—which in turn may depend on history and culture.
Frictional unemployment and the natural rate of unemployment also seem to depend on the age distribution of the population. (b) showed that unemployment rates are typically lower for people between 25–54 years of age or aged 55 and over than they are for those who are younger. “Prime-age workers,” as those in the 25–54 age bracket are sometimes called, are typically at a place in their lives when they want to have a job and income arriving at all times. In addition, older workers who lose jobs may prefer to opt for retirement. By contrast, it is likely that a relatively high proportion of those who are under 25 will be trying out jobs and life options, and this leads to greater job mobility and hence higher frictional unemployment. Thus, a society with a relatively high proportion of young workers, like the U.S. beginning in the mid-1960s when Baby Boomers began entering the labor market, will tend to have a higher unemployment rate than a society with a higher proportion of its workers in older ages.
Structural Unemployment
Another factor that influences the natural rate of unemployment is the amount of structural unemployment. The structurally unemployed are individuals who have no jobs because they lack skills valued by the labor market, either because demand has shifted away from the skills they do have, or because they never learned any skills. An example of the former would be the unemployment among aerospace engineers after the U.S. space program downsized in the 1970s. An example of the latter would be high school dropouts.
Some people worry that technology causes structural unemployment. In the past, new technologies have put lower skilled employees out of work, but at the same time they create demand for higher skilled workers to use the new technologies. Education seems to be the key in minimizing the amount of structural unemployment. Individuals who have degrees can be retrained if they become structurally unemployed. For people with no skills and little education, that option is more limited.
Natural Unemployment and Potential Real GDP
The natural unemployment rate is related to two other important concepts: full employment and potential real GDP. Economists consider the economy to be at full employment when the actual unemployment rate is equal to the natural unemployment rate. When the economy is at full employment, real GDP is equal to potential real GDP. By contrast, when the economy is below full employment, the unemployment rate is greater than the natural unemployment rate and real GDP is less than potential. Finally, when the economy is above full employment, then the unemployment rate is less than the natural unemployment rate and real GDP is greater than potential. Operating above potential is only possible for a short while, since it is analogous to all workers working overtime.
Productivity Shifts and the Natural Rate of Unemployment
Unexpected shifts in productivity can have a powerful effect on the natural rate of unemployment. Over time, workers' productivity determines the level of wages in an economy. After all, if a business paid workers more than could be justified by their productivity, the business will ultimately lose money and go bankrupt. Conversely, if a business tries to pay workers less than their productivity then, in a competitive labor market, other businesses will find it worthwhile to hire away those workers and pay them more.
However, adjustments of wages to productivity levels will not happen quickly or smoothly. Employers typically review wages only once or twice a year. In many modern jobs, it is difficult to measure productivity at the individual level. For example, how precisely would one measure the quantity produced by an accountant who is one of many people working in the tax department of a large corporation? Because productivity is difficult to observe, employers often determine wage increases based on recent experience with productivity. If productivity has been rising at, say, 2% per year, then wages rise at that level as well. However, when productivity changes unexpectedly, it can affect the natural rate of unemployment for a time.
The U.S. economy in the 1970s and 1990s provides two vivid examples of this process. In the 1970s, productivity growth slowed down unexpectedly (as we discussed in Economic Growth). For example, output per hour of U.S. workers in the business sector increased at an annual rate of 3.3% per year from 1960 to 1973, but only 0.8% from 1973 to 1982. Figure (a) illustrates the situation where the demand for labor—that is, the quantity of labor that business is willing to hire at any given wage—has been shifting out a little each year because of rising productivity, from D0 to D1 to D2. As a result, equilibrium wages have been rising each year from W0 to W1 to W2. However, when productivity unexpectedly slows down, the pattern of wage increases does not adjust right away. Wages keep rising each year from W2 to W3 to W4, but the demand for labor is no longer shifting up. A gap opens where the quantity of labor supplied at wage level W4 is greater than the quantity demanded. The natural rate of unemployment rises. In the aftermath of this unexpectedly low productivity in the 1970s, the national unemployment rate did not fall below 7% from May, 1980 until 1986. Over time, the rise in wages will adjust to match the slower gains in productivity, and the unemployment rate will ease back down, but this process may take years.
The late 1990s provide an opposite example: instead of the surprise decline in productivity that occurred in the 1970s, productivity unexpectedly rose in the mid-1990s. The annual growth rate of real output per hour of labor increased from 1.7% from 1980–1995, to an annual rate of 2.6% from 1995–2001. Let’s simplify the situation a bit, so that the economic lesson of the story is easier to see graphically, and say that productivity had not been increasing at all in earlier years, so the intersection of the labor market was at point E in Figure (b), where the demand curve for labor (D0) intersects the supply curve for labor. As a result, real wages were not increasing. Now, productivity jumps upward, which shifts the demand for labor out to the right, from D0 to D1. At least for a time, however, wages are still set according to the earlier expectations of no productivity growth, so wages do not rise. The result is that at the prevailing wage level (W), the quantity of labor demanded (Qd) will for a time exceed the quantity of labor supplied (Qs), and unemployment will be very low—actually below the natural level of unemployment for a time. This pattern of unexpectedly high productivity helps to explain why the unemployment rate stayed below 4.5%—quite a low level by historical standards—from 1998 until after the U.S. economy had entered a recession in 2001.
Levels of unemployment will tend to be somewhat higher on average when productivity is unexpectedly low, and conversely, will tend to be somewhat lower on average when productivity is unexpectedly high. However, over time, wages do eventually adjust to reflect productivity levels.
Public Policy and the Natural Rate of Unemployment
Public policy can also have a powerful effect on the natural rate of unemployment. On the supply side of the labor market, public policies to assist the unemployed can affect how eager people are to find work. For example, if a worker who loses a job is guaranteed a generous package of unemployment insurance, welfare benefits, food stamps, and government medical benefits, then the opportunity cost of unemployment is lower and that worker will be less eager to seek a new job.
What seems to matter most is not just the amount of these benefits, but how long they last. A society that provides generous help for the unemployed that cuts off after, say, six months, may provide less of an incentive for unemployment than a society that provides less generous help that lasts for several years. Conversely, government assistance for job search or retraining can in some cases encourage people back to work sooner. See the Clear it Up to learn how the U.S. handles unemployment insurance.
How does U.S. unemployment insurance work?
Unemployment insurance is a joint federal–state program that the federal government enacted in 1935. While the federal government sets minimum standards for the program, state governments conduct most of the administration.
The funding for the program is a federal tax collected from employers. The federal government requires tax collection on the first $7,000 in wages paid to each worker; however, states can choose to collect the tax on a higher amount if they wish, and 41 states have set a higher limit. States can choose the length of time that they pay benefits, although most states limit unemployment benefits to 26 weeks—with extensions possible in times of especially high unemployment. The states then use the fund to pay benefits to those who become unemployed. Average unemployment benefits are equal to about one-third of the wage that the person earned in his or her previous job, but the level of unemployment benefits varies considerably across states.
| Bottom 10 States That Pay the Lowest Benefit per Week | Top 10 States That Pay the Highest Benefit per Week | ||
|---|---|---|---|
| Delaware | $330 | Massachusetts | $672 |
| Georgia | $330 | Minnesota | $683 |
| South Carolina | $326 | Washington | $681 |
| Missouri | $320 | New Jersey | $657 |
| Florida | $275 | North Dakota | $633 |
| Tennessee | $275 | Connecticut | $598 |
| Alabama | $265 | Oregon | $590 |
| Louisiana | $247 | Pennsylvania | $573 |
| Arizona | $240 | Colorado | $568 |
| Mississippi | $235 | Rhode Island | $566 |
One other interesting thing to note about the classifications of unemployment—an individual does not have to collect unemployment benefits to be classified as unemployed. While there are statistics kept and studied relating to how many people are collecting unemployment insurance, this is not the source of unemployment rate information.
View this article for an explanation of exactly who is eligible for unemployment benefits.
On the demand side of the labor market, government rules, social institutions, and the presence of unions can affect the willingness of firms to hire. For example, if a government makes it hard for businesses to start up or to expand, by wrapping new businesses in bureaucratic red tape, then businesses will become more discouraged about hiring. Government regulations can make it harder to start a business by requiring that a new business obtain many permits and pay many fees, or by restricting the types and quality of products that a company can sell. Other government regulations, like zoning laws, may limit where companies can conduct business, or whether businesses are allowed to be open during evenings or on Sunday.
Whatever defenses may be offered for such laws in terms of social value—like the value some Christians place on not working on Sunday, or Orthodox Jews or highly observant Muslims on Saturday—these kinds of restrictions impose a barrier between some willing workers and other willing employers, and thus contribute to a higher natural rate of unemployment. Similarly, if government makes it difficult to fire or lay off workers, businesses may react by trying not to hire more workers than strictly necessary—since laying these workers off would be costly and difficult. High minimum wages may discourage businesses from hiring low-skill workers. Government rules may encourage and support powerful unions, which can then push up wages for union workers, but at a cost of discouraging businesses from hiring those workers.
The Natural Rate of Unemployment in Recent Years
The underlying economic, social, and political factors that determine the natural rate of unemployment can change over time, which means that the natural rate of unemployment can change over time, too.
Estimates by economists of the natural rate of unemployment in the U.S. economy in the early 2000s run at about 4.5 to 5.5%. This is a lower estimate than earlier. We outline three of the common reasons that economists propose for this change below.
- The internet has provided a remarkable new tool through which job seekers can find out about jobs at different companies and can make contact with relative ease. An internet search is far easier than trying to find a list of local employers and then hunting up phone numbers for all of their human resources departments, and requesting a list of jobs and application forms. Social networking sites such as LinkedIn have changed how people find work as well.
- The growth of the temporary worker industry has probably helped to reduce the natural rate of unemployment. In the early 1980s, only about 0.5% of all workers held jobs through temp agencies. By the early 2000s, the figure had risen above 2%. Temp agencies can provide jobs for workers while they are looking for permanent work. They can also serve as a clearinghouse, helping workers find out about jobs with certain employers and getting a tryout with the employer. For many workers, a temp job is a stepping-stone to a permanent job that they might not have heard about or obtained any other way, so the growth of temp jobs will also tend to reduce frictional unemployment.
- The aging of the “baby boom generation”—the especially large generation of Americans born between 1946 and 1964—meant that the proportion of young workers in the economy was relatively high in the 1970s, as the boomers entered the labor market, but is relatively low today. As we noted earlier, middle-aged and older workers are far more likely to experience low unemployment than younger workers, a factor that tends to reduce the natural rate of unemployment as the baby boomers age.
The combined result of these factors is that the natural rate of unemployment was on average lower in the 1990s and the early 2000s than in the 1980s. The 2008–2009 Great Recession pushed monthly unemployment rates up to 10% in late 2009. However, even at that time, the Congressional Budget Office was forecasting that by 2015, unemployment rates would fall back to about 5%. During the last four months of 2015 the unemployment rate held steady at 5.0%. Throughout 2016 and up through January 2017, the unemployment rate has remained at or slightly below 5%. As of the first quarter of 2017, the Congressional Budget Office estimates the natural rate to be 4.74%, and the measured unemployment rate for January 2017 is 4.8%.
The Natural Rate of Unemployment in Europe
By the standards of other high-income economies, the natural rate of unemployment in the U.S. economy appears relatively low. Through good economic years and bad, many European economies have had unemployment rates hovering near 10%, or even higher, since the 1970s. European rates of unemployment have been higher not because recessions in Europe have been deeper, but rather because the conditions underlying supply and demand for labor have been different in Europe, in a way that has created a much higher natural rate of unemployment.
Many European countries have a combination of generous welfare and unemployment benefits, together with nests of rules that impose additional costs on businesses when they hire. In addition, many countries have laws that require firms to give workers months of notice before laying them off and to provide substantial severance or retraining packages after laying them off. The legally required notice before laying off a worker can be more than three months in Spain, Germany, Denmark, and Belgium, and the legally required severance package can be as high as a year’s salary or more in Austria, Spain, Portugal, Italy, and Greece. Such laws will surely discourage laying off or firing current workers. However, when companies know that it will be difficult to fire or lay off workers, they also become hesitant about hiring in the first place.
We can attribute the typically higher levels of unemployment in many European countries in recent years, which have prevailed even when economies are growing at a solid pace, to the fact that the sorts of laws and regulations that lead to a high natural rate of unemployment are much more prevalent in Europe than in the United States.
A Preview of Policies to Fight Unemployment
The Government Budgets and Fiscal Policy and Macroeconomic Policy Around the World chapters provide a detailed discussion of how to fight unemployment, when we can discuss these policies in the context of the full array of macroeconomic goals and frameworks for analysis. However, even at this preliminary stage, it is useful to preview the main issues concerning policies to fight unemployment.
The remedy for unemployment will depend on the diagnosis. Cyclical unemployment is a short-term problem, caused because the economy is in a recession. Thus, the preferred solution will be to avoid or minimize recessions. As Government Budgets and Fiscal Policy discusses, governments can enact this policy by stimulating the overall buying power in the economy, so that firms perceive that sales and profits are possible, which makes them eager to hire.
Dealing with the natural rate of unemployment is trickier. In a market-oriented economy, firms will hire and fire workers. Governments cannot control this. Furthermore, the evolving age structure of the economy's population, or unexpected shifts in productivity are beyond a government's control and, will affect the natural rate of unemployment for a time. However, as the example of high ongoing unemployment rates for many European countries illustrates, government policy clearly can affect the natural rate of unemployment that will persist even when GDP is growing.
When a government enacts policies that will affect workers or employers, it must examine how these policies will affect the information and incentives employees and employers have to find one another. For example, the government may have a role to play in helping some of the unemployed with job searches. Governments may need to rethink the design of their programs that offer assistance to unemployed workers and protections to employed workers so that they will not unduly discourage the supply of labor. Similarly, governments may need to reassess rules that make it difficult for businesses to begin or to expand so that they will not unduly discourage the demand for labor. The message is not that governments should repeal all laws affecting labor markets, but only that when they enact such laws, a society that cares about unemployment will need to consider the tradeoffs involved.
Unemployment and the Great Recession
In the review of unemployment during and after the Great Recession at the outset of this chapter, we noted that unemployment tends to be a lagging indicator of business activity. This has historically been the case, and it is evident for all recessions that have taken place since the end of World War II. In brief, this results from the costs to employers of recruitment, hiring, and training workers. Those costs represent investments by firms in their work forces.
At the outset of a recession, when a firm realizes that demand for its product or service is not as strong as anticipated, it has an incentive to lay off workers. However, doing so runs the risk of losing those workers, and if the weak demand proves to be only temporary, the firm will be obliged to recruit, hire, and train new workers. Thus, firms tend to retain workers initially in a downturn. Similarly, as business begins to pick up when a recession is over, firms are not sure if the improvement will last. Rather than incur the costs of hiring and training new workers, they will wait, and perhaps resort to overtime work for existing workers, until they are confident that the recession is over.
Another point that we noted at the outset is that the duration of recoveries in employment following recessions has been longer following the last three recessions (going back to the early 1990s) than previously. Nir Jaimovich and Henry Siu have argued that these “jobless recoveries” are a consequence of job polarization – the disappearance of employment opportunities focused on “routine” tasks. Job polarization refers to the increasing concentration of employment in the highest- and lowest-wage occupations, as jobs in middle-skill occupations disappear. Job polarization is an outcome of technological progress in robotics, computing, and information and communication technology. The result of this progress is a decline in demand for labor in occupations that perform “routine” tasks – tasks that are limited in scope and can be performed by following a well-defined set of procedures – and hence a decline in the share of total employment that is composed of routine occupations. Jaimovich and Siu have shown that job polarization characterizes the aftermath of the last three recessions, and this appears to be responsible for the jobless recoveries.
Key Concepts and Summary
The natural rate of unemployment is the rate of unemployment that the economic, social, and political forces in the economy would cause even when the economy is not in a recession. These factors include the frictional unemployment that occurs when people either choose to change jobs or are put out of work for a time by the shifts of a dynamic and changing economy. They also include any laws concerning conditions of hiring and firing that have the undesired side effect of discouraging job formation. They also include structural unemployment, which occurs when demand shifts permanently away from a certain type of job skill.
Self-Check Questions
Is the increase in labor force participation rates among women better thought of as causing an increase in cyclical unemployment or an increase in the natural rate of unemployment? Why?
Hint:
The increase in labor supply was a social demographic trend—it was not caused by the economy falling into a recession. Therefore, the influx of women into the work force increased the natural rate of unemployment.
Many college students graduate from college before they have found a job. When graduates begin to look for a job, they are counted as what category of unemployed?
Hint:
New entrants to the labor force, whether from college or otherwise, are counted as frictionally unemployed until they find a job.
Review Questions
What term describes the remaining level of unemployment that occurs even when the economy is healthy?
What forces create the natural rate of unemployment for an economy?
Would you expect the natural rate of unemployment to be roughly the same in different countries?
Would you expect the natural rate of unemployment to remain the same within one country over the long run of several decades?
What is frictional unemployment? Give examples of frictional unemployment.
What is structural unemployment? Give examples of structural unemployment.
After several years of economic growth, would you expect the unemployment in an economy to be mainly cyclical or mainly due to the natural rate of unemployment? Why?
What type of unemployment (cyclical, frictional, or structural) applies to each of the following:
- landscapers laid off in response to a drop in new housing construction during a recession.
- coal miners laid off due to EPA regulations that shut down coal fired power
- a financial analyst who quits his/her job in Chicago and is pursing similar work in Arizona
- printers laid off due to drop in demand for printed catalogues and flyers as firms go the internet to promote an advertise their products.
- factory workers in the U.S. laid off as the plants shut down and move to Mexico and Ireland.
Critical Thinking Questions
Under what condition would a decrease in unemployment be bad for the economy?
Under what condition would an increase in the unemployment rate be a positive sign?
As the baby boom generation retires, the ratio of retirees to workers will increase noticeably. How will this affect the Social Security program? How will this affect the standard of living of the average American?
Unemployment rates have been higher in many European countries in recent decades than in the United States. Is the main reason for this long-term difference in unemployment rates more likely to be cyclical unemployment or the natural rate of unemployment? Explain briefly.
Is it desirable to pursue a goal of zero unemployment? Why or why not?
Is it desirable to eliminate natural unemployment? Why or why not? Hint: Think about what our economy would look like today and what assumptions would have to be met to have a zero rate of natural unemployment.
The U.S. unemployment rate increased from 4.6% in July 2001 to 5.9% by June 2002. Without studying the subject in any detail, would you expect that a change of this kind is more likely to be due to cyclical unemployment or a change in the natural rate of unemployment? Why?
Problems
As the baby boomer generation retires, what should happen to wages and employment? Can you show this graphically?
References
Bureau of Labor Statistics. Labor Force Statistics from the Current Population Survey. Accessed March 6, 2015 http://data.bls.gov/timeseries/LNS14000000.
Cappelli, P. (20 June 2012). “Why Good People Can’t Get Jobs: Chasing After the Purple Squirrel.” http://knowledge.wharton.upenn.edu/article.cfm?articleid=3027.
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2025-03-18T00:37:24.169951
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Introduction to Elasticity
That Will Be How Much?
Imagine going to your favorite coffee shop and having the waiter inform you the pricing has changed. Instead of $3 for a cup of coffee, you will now be charged $2 for coffee, $1 for creamer, and $1 for your choice of sweetener. If you pay your usual $3 for a cup of coffee, you must choose between creamer and sweetener. If you want both, you now face an extra charge of $1. Sound absurd? Well, that is similar to the situation Netflix customers found themselves in—they faced a 60% price hike to retain the same service in 2011.
In early 2011, Netflix consumers paid about $10 a month for a package consisting of streaming video and DVD rentals. In July 2011, the company announced a packaging change. Customers wishing to retain both streaming video and DVD rental would be charged $15.98 per month, a price increase of about 60%. In 2014, Netflix also raised its streaming video subscription price from $7.99 to $8.99 per month for new U.S. customers. The company also changed its policy of 4K streaming content from $9.00 to $12.00 per month that year.
How would customers of the 18-year-old firm react? Would they abandon Netflix? Would the ease of access to other venues make a difference in how consumers responded to the Netflix price change? We will explore the answers to those questions in this chapter, which focuses on the change in quantity with respect to a change in price, a concept economists call elasticity.
Introduction to Elasticity
In this chapter, you will learn about:
- Price Elasticity of Demand and Price Elasticity of Supply
- Polar Cases of Elasticity and Constant Elasticity
- Elasticity and Pricing
- Elasticity in Areas Other Than Price
Anyone who has studied economics knows the law of demand: a higher price will lead to a lower quantity demanded. What you may not know is how much lower the quantity demanded will be. Similarly, the law of supply states that a higher price will lead to a higher quantity supplied. The question is: How much higher? This chapter will explain how to answer these questions and why they are critically important in the real world.
To find answers to these questions, we need to understand the concept of elasticity. Elasticity is an economics concept that measures responsiveness of one variable to changes in another variable. Suppose you drop two items from a second-floor balcony. The first item is a tennis ball. The second item is a brick. Which will bounce higher? Obviously, the tennis ball. We would say that the tennis ball has greater elasticity.
Consider an economic example. Cigarette taxes are an example of a “sin tax,” a tax on something that is bad for you, like alcohol. Governments tax cigarettes at the state and national levels. State taxes range from a low of 17 cents per pack in Missouri to $4.35 per pack in New York. The average state cigarette tax is $1.69 per pack. The 2014 federal tax rate on cigarettes was $1.01 per pack, but in 2015 the Obama Administration proposed raising the federal tax nearly a dollar to $1.95 per pack. The key question is: How much would cigarette purchases decline?
Taxes on cigarettes serve two purposes: to raise tax revenue for government and to discourage cigarette consumption. However, if a higher cigarette tax discourages consumption considerably, meaning a greatly reduced quantity of cigarette sales, then the cigarette tax on each pack will not raise much revenue for the government. Alternatively, a higher cigarette tax that does not discourage consumption by much will actually raise more tax revenue for the government. Thus, when a government agency tries to calculate the effects of altering its cigarette tax, it must analyze how much the tax affects the quantity of cigarettes consumed. This issue reaches beyond governments and taxes. Every firm faces a similar issue. When a firm considers raising the sales price, it must consider how much a price increase will reduce the quantity demanded of what it sells. Conversely, when a firm puts its products on sale, it must expect (or hope) that the lower price will lead to a significantly higher quantity demanded.
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2025-03-18T00:37:24.188770
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https://oercommons.org/courseware/lesson/28792/overview
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Price Elasticity of Demand and Price Elasticity of Supply
Overview
- Calculate the price elasticity of demand
- Calculate the price elasticity of supply
Both the demand and supply curve show the relationship between price and the number of units demanded or supplied. Price elasticity is the ratio between the percentage change in the quantity demanded (Qd) or supplied (Qs) and the corresponding percent change in price. The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price. The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.
We can usefully divide elasticities into three broad categories: elastic, inelastic, and unitary. An elastic demand or elastic supply is one in which the elasticity is greater than one, indicating a high responsiveness to changes in price. Elasticities that are less than one indicate low responsiveness to price changes and correspond to inelastic demand or inelastic supply. Unitary elasticities indicate proportional responsiveness of either demand or supply, as Table summarizes.
| If . . . | Then . . . | And It Is Called . . . |
|---|---|---|
| Elastic | ||
| Unitary | ||
| Inelastic |
Before we delve into the details of elasticity, enjoy this article on elasticity and ticket prices at the Super Bowl.
To calculate elasticity along a demand or supply curve economists use the average percent change in both quantity and price. This is called the Midpoint Method for Elasticity, and is represented in the following equations:
The advantage of the Midpoint Method is that one obtains the same elasticity between two price points whether there is a price increase or decrease. This is because the formula uses the same base (average quantity and average price) for both cases.
Calculating Price Elasticity of Demand
Let’s calculate the elasticity between points A and B and between points G and H as Figure shows.
First, apply the formula to calculate the elasticity as price decreases from $70 at point B to $60 at point A:
Therefore, the elasticity of demand between these two points is which is 0.45, an amount smaller than one, showing that the demand is inelastic in this interval. Price elasticities of demand are always negative since price and quantity demanded always move in opposite directions (on the demand curve). By convention, we always talk about elasticities as positive numbers. Mathematically, we take the absolute value of the result. We will ignore this detail from now on, while remembering to interpret elasticities as positive numbers.
This means that, along the demand curve between point B and A, if the price changes by 1%, the quantity demanded will change by 0.45%. A change in the price will result in a smaller percentage change in the quantity demanded. For example, a 10% increase in the price will result in only a 4.5% decrease in quantity demanded. A 10% decrease in the price will result in only a 4.5% increase in the quantity demanded. Price elasticities of demand are negative numbers indicating that the demand curve is downward sloping, but we read them as absolute values. The following Work It Out feature will walk you through calculating the price elasticity of demand.
Finding the Price Elasticity of Demand
Calculate the price elasticity of demand using the data in Figure for an increase in price from G to H. Has the elasticity increased or decreased?
Step 1. We know that:
Step 2. From the Midpoint Formula we know that:
Step 3. So we can use the values provided in the figure in each equation:
Step 4. Then, we can use those values to determine the price elasticity of demand:
Therefore, the elasticity of demand from G to is H 1.47. The magnitude of the elasticity has increased (in absolute value) as we moved up along the demand curve from points A to B. Recall that the elasticity between these two points was 0.45. Demand was inelastic between points A and B and elastic between points G and H. This shows us that price elasticity of demand changes at different points along a straight-line demand curve.
Calculating the Price Elasticity of Supply
Assume that an apartment rents for $650 per month and at that price the landlord rents 10,000 units are rented as Figure shows. When the price increases to $700 per month, the landlord supplies 13,000 units into the market. By what percentage does apartment supply increase? What is the price sensitivity?
Using the Midpoint Method,
Again, as with the elasticity of demand, the elasticity of supply is not followed by any units. Elasticity is a ratio of one percentage change to another percentage change—nothing more—and we read it as an absolute value. In this case, a 1% rise in price causes an increase in quantity supplied of 3.5%. The greater than one elasticity of supply means that the percentage change in quantity supplied will be greater than a one percent price change. If you're starting to wonder if the concept of slope fits into this calculation, read the following Clear It Up box.
Is the elasticity the slope?
It is a common mistake to confuse the slope of either the supply or demand curve with its elasticity. The slope is the rate of change in units along the curve, or the rise/run (change in y over the change in x). For example, in Figure, at each point shown on the demand curve, price drops by $10 and the number of units demanded increases by 200 compared to the point to its left. The slope is –10/200 along the entire demand curve and does not change. The price elasticity, however, changes along the curve. Elasticity between points A and B was 0.45 and increased to 1.47 between points G and H. Elasticity is the percentage change, which is a different calculation from the slope and has a different meaning.
When we are at the upper end of a demand curve, where price is high and the quantity demanded is low, a small change in the quantity demanded, even in, say, one unit, is pretty big in percentage terms. A change in price of, say, a dollar, is going to be much less important in percentage terms than it would have been at the bottom of the demand curve. Likewise, at the bottom of the demand curve, that one unit change when the quantity demanded is high will be small as a percentage.
Thus, at one end of the demand curve, where we have a large percentage change in quantity demanded over a small percentage change in price, the elasticity value would be high, or demand would be relatively elastic. Even with the same change in the price and the same change in the quantity demanded, at the other end of the demand curve the quantity is much higher, and the price is much lower, so the percentage change in quantity demanded is smaller and the percentage change in price is much higher. That means at the bottom of the curve we'd have a small numerator over a large denominator, so the elasticity measure would be much lower, or inelastic.
As we move along the demand curve, the values for quantity and price go up or down, depending on which way we are moving, so the percentages for, say, a $1 difference in price or a one unit difference in quantity, will change as well, which means the ratios of those percentages and hence the elasticity will change.
Key Concepts and Summary
Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. We compute it as the percentage change in quantity demanded (or supplied) divided by the percentage change in price. We can describe elasticity as elastic (or very responsive), unit elastic, or inelastic (not very responsive). Elastic demand or supply curves indicate that quantity demanded or supplied respond to price changes in a greater than proportional manner. An inelastic demand or supply curve is one where a given percentage change in price will cause a smaller percentage change in quantity demanded or supplied. A unitary elasticity means that a given percentage change in price leads to an equal percentage change in quantity demanded or supplied.
Self-Check Questions
From the data in Table about demand for smart phones, calculate the price elasticity of demand from: point B to point C, point D to point E, and point G to point H. Classify the elasticity at each point as elastic, inelastic, or unit elastic.
| Points | P | Q |
|---|---|---|
| A | 60 | 3,000 |
| B | 70 | 2,800 |
| C | 80 | 2,600 |
| D | 90 | 2,400 |
| E | 100 | 2,200 |
| F | 110 | 2,000 |
| G | 120 | 1,800 |
| H | 130 | 1,600 |
Hint:
From point B to point C, price rises from $70 to $80, and Qd decreases from 2,800 to 2,600. So:
The demand curve is inelastic in this area; that is, its elasticity value is less than one.
Answer from Point D to point E:
The demand curve is inelastic in this area; that is, its elasticity value is less than one.
Answer from Point G to point H:
The demand curve is elastic in this interval.
From the data in Table about supply of alarm clocks, calculate the price elasticity of supply from: point J to point K, point L to point M, and point N to point P. Classify the elasticity at each point as elastic, inelastic, or unit elastic.
| Point | Price | Quantity Supplied |
|---|---|---|
| J | $8 | 50 |
| K | $9 | 70 |
| L | $10 | 80 |
| M | $11 | 88 |
| N | $12 | 95 |
| P | $13 | 100 |
Hint:
From point J to point K, price rises from $8 to $9, and quantity rises from 50 to 70. So:
The supply curve is elastic in this area; that is, its elasticity value is greater than one.
From point L to point M, the price rises from $10 to $11, while the Qs rises from 80 to 88:
The supply curve has unitary elasticity in this area.
From point N to point P, the price rises from $12 to $13, and Qs rises from 95 to 100:
The supply curve is inelastic in this region of the supply curve.
Review Questions
What is the formula for calculating elasticity?
What is the price elasticity of demand? Can you explain it in your own words?
What is the price elasticity of supply? Can you explain it in your own words?
Critical Thinking Questions
Transatlantic air travel in business class has an estimated elasticity of demand of 0.62, while transatlantic air travel in economy class has an estimated price elasticity of 0.12. Why do you think this is the case?
What is the relationship between price elasticity and position on the demand curve? For example, as you move up the demand curve to higher prices and lower quantities, what happens to the measured elasticity? How would you explain that?
Problems
The equation for a demand curve is P = 48 – 3Q. What is the elasticity in moving from a quantity of 5 to a quantity of 6?
The equation for a demand curve is P = 2/Q. What is the elasticity of demand as price falls from 5 to 4? What is the elasticity of demand as the price falls from 9 to 8? Would you expect these answers to be the same?
The equation for a supply curve is 4P = Q. What is the elasticity of supply as price rises from 3 to 4? What is the elasticity of supply as the price rises from 7 to 8? Would you expect these answers to be the same?
The equation for a supply curve is P = 3Q – 8. What is the elasticity in moving from a price of 4 to a price of 7?
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oercommons
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2025-03-18T00:37:24.225203
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"url": "https://oercommons.org/courseware/lesson/28792/overview",
"title": "Principles of Macroeconomics 2e, Elasticity",
"author": null
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https://oercommons.org/courseware/lesson/28793/overview
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Polar Cases of Elasticity and Constant Elasticity
Overview
By the end of this section, you will be able to:
- Differentiate between infinite and zero elasticity
- Analyze graphs in order to classify elasticity as constant unitary, infinite, or zero
There are two extreme cases of elasticity: when elasticity equals zero and when it is infinite. A third case is that of constant unitary elasticity. We will describe each case. Infinite elasticity or perfect elasticity refers to the extreme case where either the quantity demanded (Qd) or supplied (Qs) changes by an infinite amount in response to any change in price at all. In both cases, the supply and the demand curve are horizontal as Figure shows. While perfectly elastic supply curves are for the most part unrealistic, goods with readily available inputs and whose production can easily expand will feature highly elastic supply curves. Examples include pizza, bread, books, and pencils. Similarly, perfectly elastic demand is an extreme example. However, luxury goods, items that take a large share of individuals’ income, and goods with many substitutes are likely to have highly elastic demand curves. Examples of such goods are Caribbean cruises and sports vehicles.
Zero elasticity or perfect inelasticity, as Figure depicts, refers to the extreme case in which a percentage change in price, no matter how large, results in zero change in quantity. While a perfectly inelastic supply is an extreme example, goods with limited supply of inputs are likely to feature highly inelastic supply curves. Examples include diamond rings or housing in prime locations such as apartments facing Central Park in New York City. Similarly, while perfectly inelastic demand is an extreme case, necessities with no close substitutes are likely to have highly inelastic demand curves. This is the case of life-saving drugs and gasoline.
Constant unitary elasticity, in either a supply or demand curve, occurs when a price change of one percent results in a quantity change of one percent. Figure shows a demand curve with constant unit elasticity. Constant unitary elasticity, in either a supply or demand curve, occurs when a price change of one percent results in a quantity change of one percent. Figure 5.6 shows a demand curve with constant unit elasticity. Using the midpoint method, you can calculate that between points A and B on the demand curve, the price changes by 28.6% and quantity demanded also changes by 28.6%. Hence, the elasticity equals 1. Between points B and C, price again changes by 28.6% as does quantity, while between points C and D the corresponding percentage changes are 22.2% for both price and quantity. In each case, then, the percentage change in price equals the percentage change in quantity, and consequently elasticity equals 1. Notice that in absolute value, the declines in price, as you step down the demand curve, are not identical. Instead, the price falls by $2.00 from A to B, by a smaller amount of $1.50 from B to C, and by a still smaller amount of $0.90 from C to D. As a result, a demand curve with constant unitary elasticity moves from a steeper slope on the left and a flatter slope on the right—and a curved shape overall. Notice that in absolute value, the declines in price, as you step down the demand curve, are not identical. Instead, the price falls by $23 from A to B, by a smaller amount of $1.50 from B to C, and by a still smaller amount of $.90 from C to D. As a result, a demand curve with constant unitary elasticity has a steeper slope on the left and a flatter slope on the right—and a curved shape overall.
Unlike the demand curve with unitary elasticity, the supply curve with unitary elasticity is represented by a straight line, and that line goes through the origin. In each pair of points on the supply curve there is an equal difference in quantity of 30. However, in percentage value, using the midpoint method, the steps are decreasing as one moves from left to right, from 28.6% to 22.2% to 18.2%, because the quantity points in each percentage calculation are getting increasingly larger, which expands the denominator in the elasticity calculation of the percentage change in quantity.
Consider the price changes moving up the supply curve in Figure. From points D to E to F and to G on the supply curve, each step of $1.50 is the same in absolute value. However, if we measure the price changes in percentage change terms, using the midpoint method, they are also decreasing, from 28.6% to 22.2% to 18.2%, because the original price points in each percentage calculation are getting increasingly larger in value, increasing the denominator in the calculation of the percentage change in price. Along the constant unitary elasticity supply curve, the percentage quantity increases on the horizontal axis exactly match the percentage price increases on the vertical axis—so this supply curve has a constant unitary elasticity at all points.
Key Concepts and Summary
Infinite or perfect elasticity refers to the extreme case where either the quantity demanded or supplied changes by an infinite amount in response to any change in price at all. Zero elasticity refers to the extreme case in which a percentage change in price, no matter how large, results in zero change in quantity. Constant unitary elasticity in either a supply or demand curve refers to a situation where a price change of one percent results in a quantity change of one percent.
Self-Check Questions
Why is the demand curve with constant unitary elasticity concave?
Hint:
The demand curve with constant unitary elasticity is concave because the absolute value of declines in price are not identical. The left side of the curve starts with high prices, and then price falls by smaller amounts as it goes down toward the right side. This results in a slope of demand that is steeper on the left but flatter on the right, creating a curved, concave shape.
Why is the supply curve with constant unitary elasticity a straight line?
Hint:
The constant unitary elasticity is a straight line because the curve slopes upward and both price and quantity are increasing proportionally.
Review Questions
Describe the general appearance of a demand or a supply curve with zero elasticity.
Describe the general appearance of a demand or a supply curve with infinite elasticity.
Critical Thinking Question
Can you think of an industry (or product) with near infinite elasticity of supply in the short term? That is, what is an industry that could increase Qs almost without limit in response to an increase in the price?
Problems
The supply of paintings by Leonardo Da Vinci, who painted the Mona Lisa and The Last Supper and died in 1519, is highly inelastic. Sketch a supply and demand diagram, paying attention to the appropriate elasticities, to illustrate that demand for these paintings will determine the price.
Say that a certain stadium for professional football has 70,000 seats. What is the shape of the supply curve for tickets to football games at that stadium? Explain.
When someone’s kidneys fail, the person needs to have medical treatment with a dialysis machine (unless or until they receive a kidney transplant) or they will die. Sketch a supply and demand diagram, paying attention to the appropriate elasticities, to illustrate that the supply of such dialysis machines will primarily determine the price.
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oercommons
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2025-03-18T00:37:24.248242
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"title": "Principles of Macroeconomics 2e, Elasticity",
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https://oercommons.org/courseware/lesson/28794/overview
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Elasticity and Pricing
Overview
By the end of this section, you will be able to:
- Analyze how price elasticities impact revenue
- Evaluate how elasticity can cause shifts in demand and supply
- Predict how the long-run and short-run impacts of elasticity affect equilibrium
- Explain how the elasticity of demand and supply determine the incidence of a tax on buyers and sellers
Studying elasticities is useful for a number of reasons, pricing being most important. Let’s explore how elasticity relates to revenue and pricing, both in the long and short run. First, let’s look at the elasticities of some common goods and services.
Table shows a selection of demand elasticities for different goods and services drawn from a variety of different studies by economists, listed in order of increasing elasticity.
| Goods and Services | Elasticity of Price |
|---|---|
| Housing | 0.12 |
| Transatlantic air travel (economy class) | 0.12 |
| Rail transit (rush hour) | 0.15 |
| Electricity | 0.20 |
| Taxi cabs | 0.22 |
| Gasoline | 0.35 |
| Transatlantic air travel (first class) | 0.40 |
| Wine | 0.55 |
| Beef | 0.59 |
| Transatlantic air travel (business class) | 0.62 |
| Kitchen and household appliances | 0.63 |
| Cable TV (basic rural) | 0.69 |
| Chicken | 0.64 |
| Soft drinks | 0.70 |
| Beer | 0.80 |
| New vehicle | 0.87 |
| Rail transit (off-peak) | 1.00 |
| Computer | 1.44 |
| Cable TV (basic urban) | 1.51 |
| Cable TV (premium) | 1.77 |
| Restaurant meals | 2.27 |
Note that demand for necessities such as housing and electricity is inelastic, while items that are not necessities such as restaurant meals are more price-sensitive. If the price of a restaurant meal increases by 10%, the quantity demanded will decrease by 22.7%. A 10% increase in the price of housing will cause only a slight decrease of 1.2% in the quantity of housing demanded.
Read this article for an example of price elasticity that may have affected you.
Does Raising Price Bring in More Revenue?
Imagine that a band on tour is playing in an indoor arena with 15,000 seats. To keep this example simple, assume that the band keeps all the money from ticket sales. Assume further that the band pays the costs for its appearance, but that these costs, like travel, and setting up the stage, are the same regardless of how many people are in the audience. Finally, assume that all the tickets have the same price. (The same insights apply if ticket prices are more expensive for some seats than for others, but the calculations become more complicated.) The band knows that it faces a downward-sloping demand curve; that is, if the band raises the ticket price and, it will sell fewer seats. How should the band set the ticket price to generate the most total revenue, which in this example, because costs are fixed, will also mean the highest profits for the band? Should the band sell more tickets at a lower price or fewer tickets at a higher price?
The key concept in thinking about collecting the most revenue is the price elasticity of demand. Total revenue is price times the quantity of tickets sold. Imagine that the band starts off thinking about a certain price, which will result in the sale of a certain quantity of tickets. The three possibilities are in Table. If demand is elastic at that price level, then the band should cut the price, because the percentage drop in price will result in an even larger percentage increase in the quantity sold—thus raising total revenue. However, if demand is inelastic at that original quantity level, then the band should raise the ticket price, because a certain percentage increase in price will result in a smaller percentage decrease in the quantity sold—and total revenue will rise. If demand has a unitary elasticity at that quantity, then an equal percentage change in quantity will offset a moderate percentage change in the price—so the band will earn the same revenue whether it (moderately) increases or decreases the ticket price.
| If Demand Is . . . | Then . . . | Therefore . . . |
|---|---|---|
| Elastic | A given % rise in P will be more than offset by a larger % fall in Q so that total revenue (P × Q) falls. | |
| Unitary | A given % rise in P will be exactly offset by an equal % fall in Q so that total revenue (P × Q) is unchanged. | |
| Inelastic | A given % rise in P will cause a smaller % fall in Q so that total revenue (P × Q) rises. |
What if the band keeps cutting price, because demand is elastic, until it reaches a level where it sells all 15,000 seats in the available arena? If demand remains elastic at that quantity, the band might try to move to a bigger arena, so that it could slash ticket prices further and see a larger percentage increase in the quantity of tickets sold. However, if the 15,000-seat arena is all that is available or if a larger arena would add substantially to costs, then this option may not work.
Conversely, a few bands are so famous, or have such fanatical followings, that demand for tickets may be inelastic right up to the point where the arena is full. These bands can, if they wish, keep raising the ticket price. Ironically, some of the most popular bands could make more revenue by setting prices so high that the arena is not full—but those who buy the tickets would have to pay very high prices. However, bands sometimes choose to sell tickets for less than the absolute maximum they might be able to charge, often in the hope that fans will feel happier and spend more on recordings, T-shirts, and other paraphernalia.
Can Businesses Pass Costs on to Consumers?
Most businesses face a day-to-day struggle to figure out ways to produce at a lower cost, as one pathway to their goal of earning higher profits. However, in some cases, the price of a key input over which the firm has no control may rise. For example, many chemical companies use petroleum as a key input, but they have no control over the world market price for crude oil. Coffee shops use coffee as a key input, but they have no control over the world market price of coffee. If the cost of a key input rises, can the firm pass those higher costs along to consumers in the form of higher prices? Conversely, if new and less expensive ways of producing are invented, can the firm keep the benefits in the form of higher profits, or will the market pressure them to pass the gains along to consumers in the form of lower prices? The price elasticity of demand plays a key role in answering these questions.
Imagine that as a consumer of legal pharmaceutical products, you read a newspaper story that a technological breakthrough in the production of aspirin has occurred, so that every aspirin factory can now produce aspirin more cheaply. What does this discovery mean to you? Figure illustrates two possibilities. In Figure (a), the demand curve is highly inelastic. In this case, a technological breakthrough that shifts supply to the right, from S0 to S1, so that the equilibrium shifts from E0 to E1, creates a substantially lower price for the product with relatively little impact on the quantity sold. In Figure (b), the demand curve is highly elastic. In this case, the technological breakthrough leads to a much greater quantity sold in the market at very close to the original price. Consumers benefit more, in general, when the demand curve is more inelastic because the shift in the supply results in a much lower price for consumers.
Aspirin producers may find themselves in a nasty bind here. The situation in Figure, with extremely inelastic demand, means that a new invention may cause the price to drop dramatically while quantity changes little. As a result, the new production technology can lead to a drop in the revenue that firms earn from aspirin sales. However, if strong competition exists between aspirin producer, each producer may have little choice but to search for and implement any breakthrough that allows it to reduce production costs. After all, if one firm decides not to implement such a cost-saving technology, other firms that do can drive them out of business.
Since demand for food is generally inelastic, farmers may often face the situation in Figure (a). That is, a surge in production leads to a severe drop in price that can actually decrease the total revenue that farmers receive. Conversely, poor weather or other conditions that cause a terrible year for farm production can sharply raise prices so that the total revenue that the farmer receives increases. The Clear It Up box discusses how these issues relate to coffee.
How do coffee prices fluctuate?
Coffee is an international crop. The top five coffee-exporting nations are Brazil, Vietnam, Colombia, Indonesia, and Ethiopia. In these nations and others, 20 million families depend on selling coffee beans as their main source of income. These families are exposed to enormous risk, because the world price of coffee bounces up and down. For example, in 1993, the world price of coffee was about 50 cents per pound. In 1995 it was four times as high, at $2 per pound. By 1997 it had fallen by half to $1.00 per pound. In 1998 it leaped back up to $2 per pound. By 2001 it had fallen back to 46 cents a pound. By early 2011 it rose to about $2.31 per pound. By the end of 2012, the price had fallen back to about $1.31 per pound.
The reason for these price fluctuations lies in a combination of inelastic demand and shifts in supply. The elasticity of coffee demand is only about 0.3; that is, a 10% rise in the price of coffee leads to a decline of about 3% in the quantity of coffee consumed. When a major frost hit the Brazilian coffee crop in 1994, coffee supply shifted to the left with an inelastic demand curve, leading to much higher prices. Conversely, when Vietnam entered the world coffee market as a major producer in the late 1990s, the supply curve shifted out to the right. With a highly inelastic demand curve, coffee prices fell dramatically. Figure (a) illustrates this situation.
Elasticity also reveals whether firms can pass higher costs that they incur on to consumers. Addictive substances, for which demand is inelastic, are products for which producers can pass higher costs on to consumers. For example, the demand for cigarettes is relatively inelastic among regular smokers who are somewhat addicted. Economic research suggests that increasing cigarette prices by 10% leads to about a 3% reduction in the quantity of cigarettes that adults smoke, so the elasticity of demand for cigarettes is 0.3. If society increases taxes on companies that produce cigarettes, the result will be, as in Figure (a), that the supply curve shifts from S0 to S1. However, as the equilibrium moves from E0 to E1, governments mainly pass along these taxes to consumers in the form of higher prices. These higher taxes on cigarettes will raise tax revenue for the government, but they will not much affect the quantity of smoking.
If the goal is to reduce the quantity of cigarettes demanded, we must achieve it by shifting this inelastic demand back to the left, perhaps with public programs to discourage cigarette use or to help people to quit. For example, anti-smoking advertising campaigns have shown some ability to reduce smoking. However, if cigarette demand were more elastic, as in Figure (b), then an increase in taxes that shifts supply from S0 to S1 and equilibrium from E0 to E1 would reduce the quantity of cigarettes smoked substantially. Youth smoking seems to be more elastic than adult smoking—that is, the quantity of youth smoking will fall by a greater percentage than the quantity of adult smoking in response to a given percentage increase in price.
Elasticity and Tax Incidence
The example of cigarette taxes demonstrated that because demand is inelastic, taxes are not effective at reducing the equilibrium quantity of smoking, and they mainly pass along to consumers in the form of higher prices. The analysis, or manner, of how a tax burden is divided between consumers and producers is called tax incidence. Typically, the tax incidence, or burden, falls both on the consumers and producers of the taxed good. However, if one wants to predict which group will bear most of the burden, all one needs to do is examine the elasticity of demand and supply. In the tobacco example, the tax burden falls on the most inelastic side of the market.
If demand is more inelastic than supply, consumers bear most of the tax burden, and if supply is more inelastic than demand, sellers bear most of the tax burden.
The intuition for this is simple. When the demand is inelastic, consumers are not very responsive to price changes, and the quantity demanded reduces only modestly when the tax is introduced. In the case of smoking, the demand is inelastic because consumers are addicted to the product. The government can then pass the tax burden along to consumers in the form of higher prices, without much of a decline in the equilibrium quantity.
Similarly, when a government introduces a tax in a market with an inelastic supply, such as, for example, beachfront hotels, and sellers have no alternative than to accept lower prices for their business, taxes do not greatly affect the equilibrium quantity. The tax burden now passes on to the sellers. If the supply was elastic and sellers had the possibility of reorganizing their businesses to avoid supplying the taxed good, the tax burden on the sellers would be much smaller. The tax would result in a much lower quantity sold instead of lower prices received. Figure illustrates this relationship between the tax incidence and elasticity of demand and supply.
In Figure (a), the supply is inelastic and the demand is elastic, such as in the example of beachfront hotels. While consumers may have other vacation choices, sellers can’t easily move their businesses. By introducing a tax, the government essentially creates a wedge between the price paid by consumers Pc and the price received by producers Pp. In other words, of the total price paid by consumers, part is retained by the sellers and part is paid to the government in the form of a tax. The distance between Pc and Pp is the tax rate. The new market price is Pc, but sellers receive only Pp per unit sold, as they pay Pc-Pp to the government. Since we can view a tax as raising the costs of production, this could also be represented by a leftward shift of the supply curve, where the new supply curve would intercept the demand at the new quantity Qt. For simplicity, Figure omits the shift in the supply curve.
The tax revenue is given by the shaded area, which we obtain by multiplying the tax per unit by the total quantity sold Qt. The tax incidence on the consumers is given by the difference between the price paid Pc and the initial equilibrium price Pe. The tax incidence on the sellers is given by the difference between the initial equilibrium price Pe and the price they receive after the tax is introduced Pp. In Figure (a), the tax burden falls disproportionately on the sellers, and a larger proportion of the tax revenue (the shaded area) is due to the resulting lower price received by the sellers than by the resulting higher prices paid by the buyers. Figure (b) describes the example of the tobacco excise tax where the supply is more elastic than demand. The tax incidence now falls disproportionately on consumers, as shown by the large difference between the price they pay, Pc, and the initial equilibrium price, Pe. Sellers receive a lower price than before the tax, but this difference is much smaller than the change in consumers’ price. From this analysis one can also predict whether a tax is likely to create a large revenue or not. The more elastic the demand curve, the more likely that consumers will reduce quantity instead of paying higher prices. The more elastic the supply curve, the more likely that sellers will reduce the quantity sold, instead of taking lower prices. In a market where both the demand and supply are very elastic, the imposition of an excise tax generates low revenue.
Some believe that excise taxes hurt mainly the specific industries they target. For example, the medical device excise tax, in effect since 2013, has been controversial for it can delay industry profitability and therefore hamper start-ups and medical innovation. However, whether the tax burden falls mostly on the medical device industry or on the patients depends simply on the elasticity of demand and supply.
Long-Run vs. Short-Run Impact
Elasticities are often lower in the short run than in the long run. On the demand side of the market, it can sometimes be difficult to change Qd in the short run, but easier in the long run. Consumption of energy is a clear example. In the short run, it is not easy for a person to make substantial changes in energy consumption. Maybe you can carpool to work sometimes or adjust your home thermostat by a few degrees if the cost of energy rises, but that is about all. However, in the long run you can purchase a car that gets more miles to the gallon, choose a job that is closer to where you live, buy more energy-efficient home appliances, or install more insulation in your home. As a result, the elasticity of demand for energy is somewhat inelastic in the short run, but much more elastic in the long run.
Figure is an example, based roughly on historical experience, for the responsiveness of Qd to price changes. In 1973, the price of crude oil was $12 per barrel and total consumption in the U.S. economy was 17 million barrels per day. That year, the nations who were members of the Organization of Petroleum Exporting Countries (OPEC) cut off oil exports to the United States for six months because the Arab members of OPEC disagreed with the U.S. support for Israel. OPEC did not bring exports back to their earlier levels until 1975—a policy that we can interpret as a shift of the supply curve to the left in the U.S. petroleum market. Figure (a) and Figure (b) show the same original equilibrium point and the same identical shift of a supply curve to the left from S0 to S1.
Figure (a) shows inelastic demand for oil in the short run similar to that which existed for the United States in 1973. In Figure (a), the new equilibrium (E1) occurs at a price of $25 per barrel, roughly double the price before the OPEC shock, and an equilibrium quantity of 16 million barrels per day. Figure (b) shows what the outcome would have been if the U.S. demand for oil had been more elastic, a result more likely over the long term. This alternative equilibrium (E1) would have resulted in a smaller price increase to $14 per barrel and larger reduction in equilibrium quantity to 13 million barrels per day. In 1983, for example, U.S. petroleum consumption was 15.3 million barrels a day, which was lower than in 1973 or 1975. U.S. petroleum consumption was down even though the U.S. economy was about one-fourth larger in 1983 than it had been in 1973. The primary reason for the lower quantity was that higher energy prices spurred conservation efforts, and after a decade of home insulation, more fuel-efficient cars, more efficient appliances and machinery, and other fuel-conserving choices, the demand curve for energy had become more elastic.
On the supply side of markets, producers of goods and services typically find it easier to expand production in the long term of several years rather than in the short run of a few months. After all, in the short run it can be costly or difficult to build a new factory, hire many new workers, or open new stores. However, over a few years, all of these are possible.
In most markets for goods and services, prices bounce up and down more than quantities in the short run, but quantities often move more than prices in the long run. The underlying reason for this pattern is that supply and demand are often inelastic in the short run, so that shifts in either demand or supply can cause a relatively greater change in prices. However, since supply and demand are more elastic in the long run, the long-run movements in prices are more muted, while quantity adjusts more easily in the long run.
Key Concepts and Summary
In the market for goods and services, quantity supplied and quantity demanded are often relatively slow to react to changes in price in the short run, but react more substantially in the long run. As a result, demand and supply often (but not always) tend to be relatively inelastic in the short run and relatively elastic in the long run. A tax incidence depends on the relative price elasticity of supply and demand. When supply is more elastic than demand, buyers bear most of the tax burden, and when demand is more elastic than supply, producers bear most of the cost of the tax. Tax revenue is larger the more inelastic the demand and supply are.
Self-Check Questions
The federal government decides to require that automobile manufacturers install new anti-pollution equipment that costs $2,000 per car. Under what conditions can carmakers pass almost all of this cost along to car buyers? Under what conditions can carmakers pass very little of this cost along to car buyers?
Hint:
Carmakers can pass this cost along to consumers if the demand for these cars is inelastic. If the demand for these cars is elastic, then the manufacturer must pay for the equipment.
Suppose you are in charge of sales at a pharmaceutical company, and your firm has a new drug that causes bald men to grow hair. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your company’s product at the current price is 1.4, would you advise the company to raise the price, lower the price, or to keep the price the same? What if the elasticity were 0.6? What if it were 1? Explain your answer.
Hint:
If the elasticity is 1.4 at current prices, you would advise the company to lower its price on the product, since a decrease in price will be offset by the increase in the amount of the drug sold. If the elasticity were 0.6, then you would advise the company to increase its price. Increases in price will offset the decrease in number of units sold, but increase your total revenue. If elasticity is 1, the total revenue is already maximized, and you would advise that the company maintain its current price level.
Review Questions
If demand is elastic, will shifts in supply have a larger effect on equilibrium quantity or on price?
If demand is inelastic, will shifts in supply have a larger effect on equilibrium price or on quantity?
If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?
If supply is inelastic, will shifts in demand have a larger effect on equilibrium price or on quantity?
Would you usually expect elasticity of demand or supply to be higher in the short run or in the long run? Why?
Under which circumstances does the tax burden fall entirely on consumers?
Critical Thinking Questions
Would you expect supply to play a more significant role in determining the price of a basic necessity like food or a luxury like perfume? Explain. Hint: Think about how the price elasticity of demand will differ between necessities and luxuries.
A city has built a bridge over a river and it decides to charge a toll to everyone who crosses. For one year, the city charges a variety of different tolls and records information on how many drivers cross the bridge. The city thus gathers information about elasticity of demand. If the city wishes to raise as much revenue as possible from the tolls, where will the city decide to charge a toll: in the inelastic portion of the demand curve, the elastic portion of the demand curve, or the unit elastic portion? Explain.
In a market where the supply curve is perfectly inelastic, how does an excise tax affect the price paid by consumers and the quantity bought and sold?
Problems
Assume that the supply of low-skilled workers is fairly elastic, but the employers’ demand for such workers is fairly inelastic. If the policy goal is to expand employment for low-skilled workers, is it better to focus on policy tools to shift the supply of unskilled labor or on tools to shift the demand for unskilled labor? What if the policy goal is to raise wages for this group? Explain your answers with supply and demand diagrams.
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oercommons
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2025-03-18T00:37:24.286186
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"title": "Principles of Macroeconomics 2e, Elasticity",
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https://oercommons.org/courseware/lesson/28795/overview
|
Elasticity in Areas Other Than Price
Overview
By the end of this section, you will be able to:
- Calculate the income elasticity of demand and the cross-price elasticity of demand
- Calculate the elasticity in labor and financial capital markets through an understanding of the elasticity of labor supply and the elasticity of savings
- Apply concepts of price elasticity to real-world situations
The basic idea of elasticity—how a percentage change in one variable causes a percentage change in another variable—does not just apply to the responsiveness quantity supplied and quantity demanded to changes in the price of a product. Recall that quantity demanded (Qd) depends on income, tastes and preferences, the prices of related goods, and so on, as well as price. Similarly, quantity supplied (Qs) depends on factors such as the cost of production, as well as price. We can measure elasticity for any determinant of quantity supplied and quantity demanded, not just the price.
Income Elasticity of Demand
The income elasticity of demand is the percentage change in quantity demanded divided by the percentage change in income.
For most products, most of the time, the income elasticity of demand is positive: that is, a rise in income will cause an increase in the quantity demanded. This pattern is common enough that we refer to these goods as normal goods. However, for a few goods, an increase in income means that one might purchase less of the good. For example, those with a higher income might buy fewer hamburgers, because they are buying more steak instead, or those with a higher income might buy less cheap wine and more imported beer. When the income elasticity of demand is negative, we call the good an inferior good.
We introduced the concepts of normal and inferior goods in Demand and Supply. A higher level of income causes a demand curve to shift to the right for a normal good, which means that the income elasticity of demand is positive. How far the demand shifts depends on the income elasticity of demand. A higher income elasticity means a larger shift. However, for an inferior good, that is, when the income elasticity of demand is negative, a higher level of income would cause the demand curve for that good to shift to the left. Again, how much it shifts depends on how large the (negative) income elasticity is.
Cross-Price Elasticity of Demand
A change in the price of one good can shift the quantity demanded for another good. If the two goods are complements, like bread and peanut butter, then a drop in the price of one good will lead to an increase in the quantity demanded of the other good. However, if the two goods are substitutes, like plane tickets and train tickets, then a drop in the price of one good will cause people to substitute toward that good, and to reduce consumption of the other good. Cheaper plane tickets lead to fewer train tickets, and vice versa.
The cross-price elasticity of demand puts some meat on the bones of these ideas. The term “cross-price” refers to the idea that the price of one good is affecting the quantity demanded of a different good. Specifically, the cross-price elasticity of demand is the percentage change in the quantity of good A that is demanded as a result of a percentage change in the price of good B.
Substitute goods have positive cross-price elasticities of demand: if good A is a substitute for good B, like coffee and tea, then a higher price for B will mean a greater quantity consumed of A. Complement goods have negative cross-price elasticities: if good A is a complement for good B, like coffee and sugar, then a higher price for B will mean a lower quantity consumed of A.
Elasticity in Labor and Financial Capital Markets
The concept of elasticity applies to any market, not just markets for goods and services. In the labor market, for example, the wage elasticity of labor supply—that is, the percentage change in hours worked divided by the percentage change in wages—will reflect the shape of the labor supply curve. Specifically:
The wage elasticity of labor supply for teenage workers is generally fairly elastic: that is, a certain percentage change in wages will lead to a larger percentage change in the quantity of hours worked. Conversely, the wage elasticity of labor supply for adult workers in their thirties and forties is fairly inelastic. When wages move up or down by a certain percentage amount, the quantity of hours that adults in their prime earning years are willing to supply changes but by a lesser percentage amount.
In markets for financial capital, the elasticity of savings—that is, the percentage change in the quantity of savings divided by the percentage change in interest rates—will describe the shape of the supply curve for financial capital. That is:
Sometimes laws are proposed that seek to increase the quantity of savings by offering tax breaks so that the return on savings is higher. Such a policy will have a comparatively large impact on increasing the quantity saved if the supply curve for financial capital is elastic, because then a given percentage increase in the return to savings will cause a higher percentage increase in the quantity of savings. However, if the supply curve for financial capital is highly inelastic, then a percentage increase in the return to savings will cause only a small increase in the quantity of savings. The evidence on the supply curve of financial capital is controversial but, at least in the short run, the elasticity of savings with respect to the interest rate appears fairly inelastic.
Expanding the Concept of Elasticity
The elasticity concept does not even need to relate to a typical supply or demand curve at all. For example, imagine that you are studying whether the Internal Revenue Service should spend more money on auditing tax returns. We can frame the question in terms of the elasticity of tax collections with respect to spending on tax enforcement; that is, what is the percentage change in tax collections derived from a given percentage change in spending on tax enforcement?
With all of the elasticity concepts that we have just described, some of which are in Table, the possibility of confusion arises. When you hear the phrases “elasticity of demand” or “elasticity of supply,” they refer to the elasticity with respect to price. Sometimes, either to be extremely clear or because economists are discussing a wide variety of elasticities, we will call the elasticity of demand or the demand elasticity the price elasticity of demand or the “elasticity of demand with respect to price.” Similarly, economists sometimes use the term elasticity of supply or the supply elasticity, to avoid any possibility of confusion, the price elasticity of supply or “the elasticity of supply with respect to price.” However, in whatever context, the idea of elasticity always refers to percentage change in one variable, almost always a price or money variable, and how it causes a percentage change in another variable, typically a quantity variable of some kind.
That Will Be How Much?
How did the 60% price increase in 2011 end up for Netflix? It has been a very bumpy ride.
Before the price increase, there were about 24.6 million U.S. subscribers. After the price increase, 810,000 infuriated U.S. consumers canceled their Netflix subscriptions, dropping the total number of subscribers to 23.79 million. Fast forward to June 2013, when there were 36 million streaming Netflix subscribers in the United States. This was an increase of 11.4 million subscribers since the price increase—an average per quarter growth of about 1.6 million. This growth is less than the 2 million per quarter increases Netflix experienced in the fourth quarter of 2010 and the first quarter of 2011.
During the first year after the price increase, the firm’s stock price (a measure of future expectations for the firm) fell from about $33.60 per share per share to just under $7.80. By the end of 2016, however, the stock price was at $123 per share. Today, Netflix has more than 86 million subscribers million subscribers in fifty countries.
What happened? Obviously, Netflix company officials understood the law of demand. Company officials reported, when announcing the price increase, this could result in the loss of about 600,000 existing subscribers. Using the elasticity of demand formula, it is easy to see company officials expected an inelastic response:
In addition, Netflix officials had anticipated the price increase would have little impact on attracting new customers. Netflix anticipated adding up to 1.29 million new subscribers in the third quarter of 2011. It is true this was slower growth than the firm had experienced—about 2 million per quarter.
Why was the estimate of customers leaving so far off? In the more than two decades since Netflix had been founded, there was an increase in the number of close, but not perfect, substitutes. Consumers now had choices ranging from Vudu, Amazon Prime, Hulu, and Redbox, to retail stores. Jaime Weinman reported in Maclean’s that Redbox kiosks are “a five-minute drive for less from 68 percent of Americans, and it seems that many people still find a five-minute drive more convenient than loading up a movie online.” It seems that in 2012, many consumers still preferred a physical DVD disk over streaming video.
What missteps did the Netflix management make? In addition to misjudging the elasticity of demand, by failing to account for close substitutes, it seems they may have also misjudged customers’ preferences and tastes. Yet, as the population increases, the preference for streaming video may overtake physical DVD disks. Netflix, the source of numerous late night talk show laughs and jabs in 2011, may yet have the last laugh.
Key Concepts and Summary
Elasticity is a general term, that reflects responsiveness. It refers to the change of one variable divided by the percentage change of a related variable that we can apply to many economic connections. For instance, the income elasticity of demand is the percentage change in quantity demanded divided by the percentage change in income. The cross-price elasticity of demand is the percentage change in the quantity demanded of a good divided by the percentage change in the price of another good. Elasticity applies in labor markets and financial capital markets just as it does in markets for goods and services. The wage elasticity of labor supply is the percentage change in the quantity of hours supplied divided by the percentage change in the wage. The elasticity of savings with respect to interest rates is the percentage change in the quantity of savings divided by the percentage change in interest rates.
Self-Check Questions
What would the gasoline price elasticity of supply mean to UPS or FedEx?
Hint:
The percentage change in quantity supplied as a result of a given percentage change in the price of gasoline.
The average annual income rises from $25,000 to $38,000, and the quantity of bread consumed in a year by the average person falls from 30 loaves to 22 loaves. What is the income elasticity of bread consumption? Is bread a normal or an inferior good?
Hint:
In this example, bread is an inferior good because its consumption falls as income rises.
Suppose the cross-price elasticity of apples with respect to the price of oranges is 0.4, and the price of oranges falls by 3%. What will happen to the demand for apples?
Hint:
The formula for cross-price elasticity is % change in Qd for apples / % change in P of oranges. Multiplying both sides by % change in P of oranges yields:
% change in Qd for apples = cross-price elasticity X% change in P of oranges
= 0.4 × (–3%) = –1.2%, or a 1.2 % decrease in demand for apples.
Review Questions
What is the formula for the income elasticity of demand?
What is the formula for the cross-price elasticity of demand?
What is the formula for the wage elasticity of labor supply?
What is the formula for elasticity of savings with respect to interest rates?
Critical Thinking Questions
Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?
Suppose you could buy shoes one at a time, rather than in pairs. What do you predict the cross-price elasticity for left shoes and right shoes would be?
References
Abkowitz, A. “How Netflix got started: Netflix founder and CEO Reed Hastings tells Fortune how he got the idea for the DVD-by-mail service that now has more than eight million customers.” CNN Money. Last Modified January 28, 2009. http://archive.fortune.com/2009/01/27/news/newsmakers/hastings_netflix.fortune/index.htm.
Associated Press (a). ”Analyst: Coinstar gains from Netflix pricing moves.” Boston Globe Media Partners, LLC. Accessed June 24, 2013. http://www.boston.com/business/articles/2011/10/12/analyst_coinstar_gains_from_netflix_pricing_moves/.
Associated Press (b). “Netflix loses 800,000 US subscribers in tough 3Q.” ABC Inc. Accessed June 24, 2013. http://abclocal.go.com/wpvi/story?section=news/business&id=8403368
Baumgardner, James. 2014. “Presentation on Raising the Excise Tax on Cigarettes: Effects on Health and the Federal Budget.” Congressional Budget Office. Accessed March 27, 2015. http://www.cbo.gov/sites/default/files/45214-ICA_Presentation.pdf.
Funding Universe. 2015. “Netflix, Inc. History.” Accessed March 11, 2015. http://www.fundinguniverse.com/company-histories/netflix-inc-history/.
Laporte, Nicole. “A tale of two Netflix.” Fast Company 177 (July 2013) 31-32. Accessed December 3 2013. http://www.fastcompany-digital.com/fastcompany/20130708?pg=33#pg33
Liedtke, Michael, The Associated Press. “Investors bash Netflix stock after slower growth forecast - fee hikes expected to take toll on subscribers most likely to shun costly bundled Net, DVD service.” The Seattle Times. Accessed June 24, 2013 from NewsBank on-line database (Access World News).
Netflix, Inc. 2013. “A Quick Update On Our Streaming Plans And Prices.” Netflix (blog). Accessed March 11, 2015. http://blog.netflix.com/2014/05/a-quick-update-on-our-streaming-plans.html.
Organization for Economic Co-Operation and Development (OECC). n.d. “Average annual hours actually worked per worker.” Accessed March 11, 2015. https://stats.oecd.org/Index.aspx?DataSetCode=ANHRS.
Savitz, Eric. “Netflix Warns DVD Subs Eroding; Q4 View Weak; Losses Ahead; Shrs Plunge.” Forbes.com, 2011. Accessed December 3, 2013. http://www.forbes.com/sites/ericsavitz/2011/10/24/netflix-q3-top-ests-but-shares-hit-by-weak-q4-outlook/.
Statistica.com. 2014. “Coffee Export Volumes Worldwide in November 2014, by Leading Countries (in 60-kilo sacks).” Accessed March 27, 2015. http://www.statista.com/statistics/268135/ranking-of-coffee-exporting-countries/.
Stone, Marcie. “Netflix responds to customers angry with price hike; Netflix stock falls 9%.” News & Politics Examiner, 2011. Clarity Digital Group. Accessed June 24, 2013. http://www.examiner.com/article/netflix-responds-to-customers-angry-with-price-hike-netflix-stock-falls-9.
Weinman, J. (2012). Die hard, hardly dying. Maclean's, 125(18), 44.
The World Bank Group. 2015. “Gross Savings (% of GDP).” Accessed March 11, 2015. http://data.worldbank.org/indicator/NY.GNS.ICTR.ZS.
Yahoo Finance. Retrieved from http://finance.yahoo.com/q?s=NFLX
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2025-03-18T00:37:24.319938
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"title": "Principles of Macroeconomics 2e, Elasticity",
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https://oercommons.org/courseware/lesson/15568/overview
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The Constitution of the United States
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
Article. I.
Section. 1.
All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.
Section. 2.
The House of Representatives shall be composed of Members chosen every second Year by the People of the several States, and the Electors in each State shall have the Qualifications requisite for Electors of the most numerous Branch of the State Legislature.
No Person shall be a Representative who shall not have attained to the Age of twenty five Years, and been seven Years a Citizen of the United States, and who shall not, when elected, be an Inhabitant of that State in which he shall be chosen.
Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons. The actual Enumeration shall be made within three Years after the first Meeting of the Congress of the United States, and within every subsequent Term of ten Years, in such Manner as they shall by Law direct. The Number of Representatives shall not exceed one for every thirty Thousand, but each State shall have at Least one Representative; and until such enumeration shall be made, the State of New Hampshire shall be entitled to chuse three, Massachusetts eight, Rhode-Island and Providence Plantations one, Connecticut five, New-York six, New Jersey four, Pennsylvania eight, Delaware one, Maryland six, Virginia ten, North Carolina five, South Carolina five, and Georgia three.
When vacancies happen in the Representation from any State, the Executive Authority thereof shall issue Writs of Election to fill such Vacancies.
The House of Representatives shall chuse their Speaker and other Officers; and shall have the sole Power of Impeachment.
Section. 3.
The Senate of the United States shall be composed of two Senators from each State, chosen by the Legislature thereof, for six Years; and each Senator shall have one Vote.
Immediately after they shall be assembled in Consequence of the first Election, they shall be divided as equally as may be into three Classes. The Seats of the Senators of the first Class shall be vacated at the Expiration of the second Year, of the second Class at the Expiration of the fourth Year, and of the third Class at the Expiration of the sixth Year, so that one third may be chosen every second Year; and if Vacancies happen by Resignation, or otherwise, during the Recess of the Legislature of any State, the Executive thereof may make temporary Appointments until the next Meeting of the Legislature, which shall then fill such Vacancies.
No Person shall be a Senator who shall not have attained to the Age of thirty Years, and been nine Years a Citizen of the United States, and who shall not, when elected, be an Inhabitant of that State for which he shall be chosen.
The Vice President of the United States shall be President of the Senate, but shall have no Vote, unless they be equally divided.
The Senate shall chuse their other Officers, and also a President pro tempore, in the Absence of the Vice President, or when he shall exercise the Office of President of the United States.
The Senate shall have the sole Power to try all Impeachments. When sitting for that Purpose, they shall be on Oath or Affirmation. When the President of the United States is tried, the Chief Justice shall preside: And no Person shall be convicted without the Concurrence of two thirds of the Members present.
Judgment in Cases of Impeachment shall not extend further than to removal from Office, and disqualification to hold and enjoy any Office of honor, Trust or Profit under the United States: but the Party convicted shall nevertheless be liable and subject to Indictment, Trial, Judgment and Punishment, according to Law.
Section. 4.
The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations, except as to the Places of chusing Senators.
The Congress shall assemble at least once in every Year, and such Meeting shall be on the first Monday in December, unless they shall by Law appoint a different Day.
Section. 5.
Each House shall be the Judge of the Elections, Returns and Qualifications of its own Members, and a Majority of each shall constitute a Quorum to do Business; but a smaller Number may adjourn from day to day, and may be authorized to compel the Attendance of absent Members, in such Manner, and under such Penalties as each House may provide.
Each House may determine the Rules of its Proceedings, punish its Members for disorderly Behaviour, and, with the Concurrence of two thirds, expel a Member.
Each House shall keep a Journal of its Proceedings, and from time to time publish the same, excepting such Parts as may in their Judgment require Secrecy; and the Yeas and Nays of the Members of either House on any question shall, at the Desire of one fifth of those Present, be entered on the Journal.
Neither House, during the Session of Congress, shall, without the Consent of the other, adjourn for more than three days, nor to any other Place than that in which the two Houses shall be sitting.
Section. 6.
The Senators and Representatives shall receive a Compensation for their Services, to be ascertained by Law, and paid out of the Treasury of the United States. They shall in all Cases, except Treason, Felony and Breach of the Peace, be privileged from Arrest during their Attendance at the Session of their respective Houses, and in going to and returning from the same; and for any Speech or Debate in either House, they shall not be questioned in any other Place.
No Senator or Representative shall, during the Time for which he was elected, be appointed to any civil Office under the Authority of the United States, which shall have been created, or the Emoluments whereof shall have been encreased during such time; and no Person holding any Office under the United States, shall be a Member of either House during his Continuance in Office.
Section. 7.
All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.
Every Bill which shall have passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the President of the United States; If he approve he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated, who shall enter the Objections at large on their Journal, and proceed to reconsider it. If after such Reconsideration two thirds of that House shall agree to pass the Bill, it shall be sent, together with the Objections, to the other House, by which it shall likewise be reconsidered, and if approved by two thirds of that House, it shall become a Law. But in all such Cases the Votes of both Houses shall be determined by yeas and Nays, and the Names of the Persons voting for and against the Bill shall be entered on the Journal of each House respectively. If any Bill shall not be returned by the President within ten Days (Sundays excepted) after it shall have been presented to him, the Same shall be a Law, in like Manner as if he had signed it, unless the Congress by their Adjournment prevent its Return, in which Case it shall not be a Law.
Every Order, Resolution, or Vote to which the Concurrence of the Senate and House of Representatives may be necessary (except on a question of Adjournment) shall be presented to the President of the United States; and before the Same shall take Effect, shall be approved by him, or being disapproved by him, shall be repassed by two thirds of the Senate and House of Representatives, according to the Rules and Limitations prescribed in the Case of a Bill.
Section. 8.
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow Money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
To establish Post Offices and post Roads;
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
To constitute Tribunals inferior to the supreme Court;
To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;
To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;
To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;
To provide and maintain a Navy;
To make Rules for the Government and Regulation of the land and naval Forces;
To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;
To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;
To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;—And
To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
Section. 9.
The Migration or Importation of such Persons as any of the States now existing shall think proper to admit, shall not be prohibited by the Congress prior to the Year one thousand eight hundred and eight, but a Tax or duty may be imposed on such Importation, not exceeding ten dollars for each Person.
The Privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it.
No Bill of Attainder or ex post facto Law shall be passed.
No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.
No Tax or Duty shall be laid on Articles exported from any State.
No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.
No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.
No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.
Section. 10.
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.
No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.
Article. II.
Section. 1.
The executive Power shall be vested in a President of the United States of America. He shall hold his Office during the Term of four Years, and, together with the Vice President, chosen for the same Term, be elected, as follows
Each State shall appoint, in such Manner as the Legislature thereof may direct, a Number of Electors, equal to the whole Number of Senators and Representatives to which the State may be entitled in the Congress: but no Senator or Representative, or Person holding an Office of Trust or Profit under the United States, shall be appointed an Elector.
The Electors shall meet in their respective States, and vote by Ballot for two Persons, of whom one at least shall not be an Inhabitant of the same State with themselves. And they shall make a List of all the Persons voted for, and of the Number of Votes for each; which List they shall sign and certify, and transmit sealed to the Seat of the Government of the United States, directed to the President of the Senate. The President of the Senate shall, in the Presence of the Senate and House of Representatives, open all the Certificates, and the Votes shall then be counted. The Person having the greatest Number of Votes shall be the President, if such Number be a Majority of the whole Number of Electors appointed; and if there be more than one who have such Majority, and have an equal Number of Votes, then the House of Representatives shall immediately chuse by Ballot one of them for President; and if no Person have a Majority, then from the five highest on the List the said House shall in like Manner chuse the President. But in chusing the President, the Votes shall be taken by States, the Representation from each State having one Vote; A quorum for this Purpose shall consist of a Member or Members from two thirds of the States, and a Majority of all the States shall be necessary to a Choice. In every Case, after the Choice of the President, the Person having the greatest Number of Votes of the Electors shall be the Vice President. But if there should remain two or more who have equal Votes, the Senate shall chuse from them by Ballot the Vice President.
The Congress may determine the Time of chusing the Electors, and the Day on which they shall give their Votes; which Day shall be the same throughout the United States.
No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty five Years, and been fourteen Years a Resident within the United States.
In Case of the Removal of the President from Office, or of his Death, Resignation, or Inability to discharge the Powers and Duties of the said Office, the Same shall devolve on the Vice President, and the Congress may by Law provide for the Case of Removal, Death, Resignation or Inability, both of the President and Vice President, declaring what Officer shall then act as President, and such Officer shall act accordingly, until the Disability be removed, or a President shall be elected.
The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be encreased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.
Before he enter on the Execution of his Office, he shall take the following Oath or Affirmation:—"I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States."
Section. 2.
The President shall be Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual Service of the United States; he may require the Opinion, in writing, of the principal Officer in each of the executive Departments, upon any Subject relating to the Duties of their respective Offices, and he shall have Power to grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachment.
He shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.
The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.
Section. 3.
He shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient; he may, on extraordinary Occasions, convene both Houses, or either of them, and in Case of Disagreement between them, with Respect to the Time of Adjournment, he may adjourn them to such Time as he shall think proper; he shall receive Ambassadors and other public Ministers; he shall take Care that the Laws be faithfully executed, and shall Commission all the Officers of the United States.
Section. 4.
The President, Vice President and all civil Officers of the United States, shall be removed from Office on Impeachment for, and Conviction of, Treason, Bribery, or other high Crimes and Misdemeanors.
Article III.
Section. 1.
The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office.
Section. 2.
The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;—to all Cases affecting Ambassadors, other public Ministers and Consuls;—to all Cases of admiralty and maritime Jurisdiction;—to Controversies to which the United States shall be a Party;—to Controversies between two or more States;— between a State and Citizens of another State,—between Citizens of different States,—between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.
In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party, the supreme Court shall have original Jurisdiction. In all the other Cases before mentioned, the supreme Court shall have appellate Jurisdiction, both as to Law and Fact, with such Exceptions, and under such Regulations as the Congress shall make.
The Trial of all Crimes, except in Cases of Impeachment, shall be by Jury; and such Trial shall be held in the State where the said Crimes shall have been committed; but when not committed within any State, the Trial shall be at such Place or Places as the Congress may by Law have directed.
Section. 3.
Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort. No Person shall be convicted of Treason unless on the Testimony of two Witnesses to the same overt Act, or on Confession in open Court.
The Congress shall have Power to declare the Punishment of Treason, but no Attainder of Treason shall work Corruption of Blood, or Forfeiture except during the Life of the Person attainted.
Article. IV.
Section. 1.
Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.
Section. 2.
The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.
A Person charged in any State with Treason, Felony, or other Crime, who shall flee from Justice, and be found in another State, shall on Demand of the executive Authority of the State from which he fled, be delivered up, to be removed to the State having Jurisdiction of the Crime.
No Person held to Service or Labour in one State, under the Laws thereof, escaping into another, shall, in Consequence of any Law or Regulation therein, be discharged from such Service or Labour, but shall be delivered up on Claim of the Party to whom such Service or Labour may be due.
Section. 3.
New States may be admitted by the Congress into this Union; but no new State shall be formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or Parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress.
The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.
Section. 4.
The United States shall guarantee to every State in this Union a Republican Form of Government, and shall protect each of them against Invasion; and on Application of the Legislature, or of the Executive (when the Legislature cannot be convened), against domestic Violence.
Article. V.
The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate.
Article. VI.
All Debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation.
This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.
The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial Officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this Constitution; but no religious Test shall ever be required as a Qualification to any Office or public Trust under the United States.
Article. VII.
The Ratification of the Conventions of nine States, shall be sufficient for the Establishment of this Constitution between the States so ratifying the Same.
Done in Convention by the Unanimous Consent of the States present the Seventeenth Day of September in the Year of our Lord one thousand seven hundred and Eighty seven and of the Independance of the United States of America the Twelfth In witness whereof We have hereunto subscribed our Names,
G. Washington
Presidt and deputy from Virginia
Delaware
Geo: Read
Gunning Bedford jun
John Dickinson
Richard Bassett
Jaco: Broom
Maryland
James McHenry
Dan of St Thos. Jenifer
Danl. Carroll
Virginia
John Blair
James Madison Jr.
North Carolina
Wm. Blount
Richd. Dobbs Spaight
Hu Williamson
South Carolina
J. Rutledge
Charles Cotesworth Pinckney
Charles Pinckney
Pierce Butler
Georgia
William Few
Abr Baldwin
New Hampshire
John Langdon
Nicholas Gilman
Massachusetts
Nathaniel Gorham
Rufus King
Connecticut
Wm. Saml. Johnson
Roger Sherman
New York
Alexander Hamilton
New Jersey
Wil: Livingston
David Brearley
Wm. Paterson
Jona: Dayton
Pensylvania
B Franklin
Thomas Mifflin
Robt. Morris
Geo. Clymer
Thos. FitzSimons
Jared Ingersoll
James Wilson
Gouv Morris
Constitutional Amendments
The U.S. Bill of Rights (Amendments 1–10)
The Preamble to The Bill of Rights
Congress of the United States begun and held at the City of New-York, on Wednesday the fourth of March, one thousand seven hundred and eighty nine.
The Conventions of a number of the States, having at the time of their adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best ensure the beneficent ends of its institution.
Resolved by the Senate and House of Representatives of the United States of America, in Congress assembled, two thirds of both Houses concurring, that the following Articles be proposed to the Legislatures of the several States, as amendments to the Constitution of the United States, all, or any of which Articles, when ratified by three fourths of the said Legislatures, to be valid to all intents and purposes, as part of the said Constitution; viz.
Articles in addition to, and Amendment of the Constitution of the United States of America, proposed by Congress, and ratified by the Legislatures of the several States, pursuant to the fifth Article of the original Constitution.
Note: The following text is a transcription of the first ten amendments to the Constitution in their original form. These amendments were ratified December 15, 1791, and form what is known as the "Bill of Rights."
Amendment I
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
Amendment II
A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.
Amendment III
No Soldier shall, in time of peace be quartered in any house, without the consent of the Owner, nor in time of war, but in a manner to be prescribed by law.
Amendment IV
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
Amendment V
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
Amendment VI
In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence.
Amendment VII
In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.
Amendment VIII
Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.
Amendment IX
The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.
Amendment X
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
Amendment XI
The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.
Amendment XII
The Electors shall meet in their respective states and vote by ballot for President and Vice-President, one of whom, at least, shall not be an inhabitant of the same state with themselves; they shall name in their ballots the person voted for as President, and in distinct ballots the person voted for as Vice-President, and they shall make distinct lists of all persons voted for as President, and of all persons voted for as Vice-President, and of the number of votes for each, which lists they shall sign and certify, and transmit sealed to the seat of the government of the United States, directed to the President of the Senate; — the President of the Senate shall, in the presence of the Senate and House of Representatives, open all the certificates and the votes shall then be counted; — The person having the greatest number of votes for President, shall be the President, if such number be a majority of the whole number of Electors appointed; and if no person have such majority, then from the persons having the highest numbers not exceeding three on the list of those voted for as President, the House of Representatives shall choose immediately, by ballot, the President. But in choosing the President, the votes shall be taken by states, the representation from each state having one vote; a quorum for this purpose shall consist of a member or members from two-thirds of the states, and a majority of all the states shall be necessary to a choice. [And if the House of Representatives shall not choose a President whenever the right of choice shall devolve upon them, before the fourth day of March next following, then the Vice-President shall act as President, as in case of the death or other constitutional disability of the President. —]* The person having the greatest number of votes as Vice-President, shall be the Vice-President, if such number be a majority of the whole number of Electors appointed, and if no person have a majority, then from the two highest numbers on the list, the Senate shall choose the Vice-President; a quorum for the purpose shall consist of two-thirds of the whole number of Senators, and a majority of the whole number shall be necessary to a choice. But no person constitutionally ineligible to the office of President shall be eligible to that of Vice-President of the United States.
*Superseded by Section 3 of the 20th amendment.
Amendment XIII
Section 1.
Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Section 2.
Congress shall have power to enforce this article by appropriate legislation.
Amendment XIV
Section 1.
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
Section 2.
Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State, excluding Indians not taxed. But when the right to vote at any election for the choice of electors for President and Vice-President of the United States, Representatives in Congress, the Executive and Judicial officers of a State, or the members of the Legislature thereof, is denied to any of the male inhabitants of such State, being twenty-one years of age,* and citizens of the United States, or in any way abridged, except for participation in rebellion, or other crime, the basis of representation therein shall be reduced in the proportion which the number of such male citizens shall bear to the whole number of male citizens twenty-one years of age in such State.
Section 3.
No person shall be a Senator or Representative in Congress, or elector of President and Vice-President, or hold any office, civil or military, under the United States, or under any State, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof. But Congress may by a vote of two-thirds of each House, remove such disability.
Section 4.
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
Section 5.
The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.
*Changed by Section 1 of the 26th amendment.
Amendment XV
Section 1.
The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude—
Section 2.
The Congress shall have the power to enforce this article by appropriate legislation.
Amendment XVI
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
Amendment XVII
The Senate of the United States shall be composed of two Senators from each State, elected by the people thereof, for six years; and each Senator shall have one vote. The electors in each State shall have the qualifications requisite for electors of the most numerous branch of the State legislatures.
When vacancies happen in the representation of any State in the Senate, the executive authority of such State shall issue writs of election to fill such vacancies: Provided, That the legislature of any State may empower the executive thereof to make temporary appointments until the people fill the vacancies by election as the legislature may direct.
This amendment shall not be so construed as to affect the election or term of any Senator chosen before it becomes valid as part of the Constitution.
Amendment XVIII
Section 1.
After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.
Section 2.
The Congress and the several States shall have concurrent power to enforce this article by appropriate legislation.
Section 3.
This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by the legislatures of the several States, as provided in the Constitution, within seven years from the date of the submission hereof to the States by the Congress.
Amendment XIX
The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of sex.
Congress shall have power to enforce this article by appropriate legislation.
Amendment XX
Section 1.
The terms of the President and the Vice President shall end at noon on the 20th day of January, and the terms of Senators and Representatives at noon on the 3d day of January, of the years in which such terms would have ended if this article had not been ratified; and the terms of their successors shall then begin.
Section 2.
The Congress shall assemble at least once in every year, and such meeting shall begin at noon on the 3d day of January, unless they shall by law appoint a different day.
Section 3.
If, at the time fixed for the beginning of the term of the President, the President elect shall have died, the Vice President elect shall become President. If a President shall not have been chosen before the time fixed for the beginning of his term, or if the President elect shall have failed to qualify, then the Vice President elect shall act as President until a President shall have qualified; and the Congress may by law provide for the case wherein neither a President elect nor a Vice President elect shall have qualified, declaring who shall then act as President, or the manner in which one who is to act shall be selected, and such person shall act accordingly until a President or Vice President shall have qualified.
Section 4.
The Congress may by law provide for the case of the death of any of the persons from whom the House of Representatives may choose a President whenever the right of choice shall have devolved upon them, and for the case of the death of any of the persons from whom the Senate may choose a Vice President whenever the right of choice shall have devolved upon them.
Section 5.
Sections 1 and 2 shall take effect on the 15th day of October following the ratification of this article.
Section 6.
This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by the legislatures of three-fourths of the several States within seven years from the date of its submission.
Amendment XXI
Section 1.
The eighteenth article of amendment to the Constitution of the United States is hereby repealed.
Section 2.
The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.
Section 3.
This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by conventions in the several States, as provided in the Constitution, within seven years from the date of the submission hereof to the States by the Congress.
Amendment XXII
Section 1.
No person shall be elected to the office of the President more than twice, and no person who has held the office of President, or acted as President, for more than two years of a term to which some other person was elected President shall be elected to the office of the President more than once. But this Article shall not apply to any person holding the office of President when this Article was proposed by the Congress, and shall not prevent any person who may be holding the office of President, or acting as President, during the term within which this Article becomes operative from holding the office of President or acting as President during the remainder of such term.
Section 2.
This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by the legislatures of three-fourths of the several States within seven years from the date of its submission to the States by the Congress.
Amendment XXIII
Section 1.
The District constituting the seat of Government of the United States shall appoint in such manner as the Congress may direct:
A number of electors of President and Vice President equal to the whole number of Senators and Representatives in Congress to which the District would be entitled if it were a State, but in no event more than the least populous State; they shall be in addition to those appointed by the States, but they shall be considered, for the purposes of the election of President and Vice President, to be electors appointed by a State; and they shall meet in the District and perform such duties as provided by the twelfth article of amendment.
Section 2.
The Congress shall have power to enforce this article by appropriate legislation.
Amendment XXIV
Section 1.
The right of citizens of the United States to vote in any primary or other election for President or Vice President, for electors for President or Vice President, or for Senator or Representative in Congress, shall not be denied or abridged by the United States or any State by reason of failure to pay any poll tax or other tax.
Section 2.
The Congress shall have power to enforce this article by appropriate legislation.
Amendment XXV
Section 1.
In case of the removal of the President from office or of his death or resignation, the Vice President shall become President.
Section 2.
Whenever there is a vacancy in the office of the Vice President, the President shall nominate a Vice President who shall take office upon confirmation by a majority vote of both Houses of Congress.
Section 3.
Whenever the President transmits to the President pro tempore of the Senate and the Speaker of the House of Representatives his written declaration that he is unable to discharge the powers and duties of his office, and until he transmits to them a written declaration to the contrary, such powers and duties shall be discharged by the Vice President as Acting President.
Section 4.
Whenever the Vice President and a majority of either the principal officers of the executive departments or of such other body as Congress may by law provide, transmit to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and duties of his office, the Vice President shall immediately assume the powers and duties of the office as Acting President.
Thereafter, when the President transmits to the President pro tempore of the Senate and the Speaker of the House of Representatives his written declaration that no inability exists, he shall resume the powers and duties of his office unless the Vice President and a majority of either the principal officers of the executive department or of such other body as Congress may by law provide, transmit within four days to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and duties of his office. Thereupon Congress shall decide the issue, assembling within forty-eight hours for that purpose if not in session. If the Congress, within twenty-one days after receipt of the latter written declaration, or, if Congress is not in session, within twenty-one days after Congress is required to assemble, determines by two-thirds vote of both Houses that the President is unable to discharge the powers and duties of his office, the Vice President shall continue to discharge the same as Acting President; otherwise, the President shall resume the powers and duties of his office.
Amendment XXVI
Section 1.
The right of citizens of the United States, who are eighteen years of age or older, to vote shall not be denied or abridged by the United States or by any State on account of age.
Section 2.
The Congress shall have power to enforce this article by appropriate legislation.
Amendment XXVII
No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.
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oercommons
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2025-03-18T00:37:24.367168
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"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/15568/overview",
"title": "U.S. History, The Constitution of the United States",
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https://oercommons.org/courseware/lesson/102392/overview
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Using Decision-Making Skills to Enhance Health
Overview
This educational resource is all about how to make good choices to improve your health. It talks about how important it is to make responsible decisions and gives tips for making good choices that are both ethical and successful. It also explains how to look at situations carefully before making a decision that matches your own goals and values. The assignment emphasizes that it's really important to focus on your own health and to be true to yourself when making choices.
HOW DO YOU MAKE RESPONSIBLE DECISIONS?
LEARNING OBJECTIVES
- Make decisions by considering options, consequences, and values.
- Improve decision-making skills by reflecting on outcomes and evaluating the advantages and disadvantages of options.
- Understand how decisions impact emotional and physical health and self-esteem.
- Identify positive and negative consequences of decisions.
- Practice making decisions aligned with values and goals without breaking the law or betraying trust.
Throughout your life, you'll have to make many decisions. While most of them won't make a big difference, a few will be really important. Sometimes, you might think you're making the right choice to solve a problem, but that decision could lead to unexpected outcomes. So, it's crucial to learn how to make better choices - this is a skill that can change your life.
HOW TO IMPROVE YOUR HEALTH HABITS BY REFLECTING ON YOUR ACTIONS
Explore students’ prior knowledge.
Responsible decision-making means making choices about how you behave and interact with others based on what's right, safe, and what other people expect. The decisions you make can have a big impact on your life, so it's important to make good choices. To make responsible decisions, think about what's right, what's safe, and what other people expect from you, and think about what could happen as a result of your choice. It's okay to take your time to make a decision, and to ask for help from your parents or other adults who can give you advice and help you make a good choice.
Just knowing what makes you healthy isn't enough to actually be healthy. You have to actually do those things to see results. By reading this and doing the work assigned, you're committing to making changes to your habits. The goal is to make sure that what we're doing in this assignment is actually making a difference. You'll need to reflect on your habits and work hard to make positive changes to see real results.
VOCABULARY
List key terms from the lesson with definitions to get them thinking about the concept/skill.
| alternative | something you can choose to do or use instead of something else |
| consequence | something that happens as a result of a particular action or set of conditions |
| decision | a choice or judgment that you make after a period of discussion or thought |
HOW DO YOU MAKE RESPONSIBLE DECISIONS?
Responsible decision-making is the ability to make good choices about your personal behavior and interactions with others based on ethical standards, safety concerns, and social norms. It's important because the decisions you make guide your life in a positive or negative direction. For example, deciding whether to date someone, go to a party, start a business, or become friends with someone can all have positive or negative consequences. Making the right decisions can help you build the right friendships and relationships, which can have a positive impact on your life. On the other hand, making the wrong decisions, such as connecting with the wrong person, can lead you down a negative path and introduce you to a lifestyle that you don’t want. It's important to take your time with decision-making and to process your options carefully. You don't have to rush your decisions, and it's okay to ask for advice from people who have more life experience, like your parents or older relatives, who can offer guidance and wisdom. Remember, the decisions you make today can have a lasting impact on your life, so it's important to make responsible choices.
STRATEGIES FOR MAKING ETHICAL AND SUCCESSFUL DECISIONS
In simple terms, making decisions that are good for others is crucial for our success and ethical behavior in the future. Before deciding, we should learn as much as possible about the situation to understand the problem better. Practicing decision-making can help build confidence, and we can do this by balancing the risks and potential impacts of each choice. We need to take responsibility for our decisions, learn from our mistakes, and think about how our choices might affect others. It's helpful to have trusted people around us who can offer different perspectives to help us make the best decisions. In life, we should strive to grow and be the best version of ourselves. By making wise decisions and working hard, we can achieve happiness and success.
THINKING CAREFULLY
Walk through the thinking process for understanding decision-making skills.
Analyzing situations is important because it helps individuals make informed decisions that align with their goals and values. In the tech startup space, for instance, one of the things that is important is the build-measure-learn feedback loop. This process involves testing a product, gathering feedback from customers, and making changes and adjustments based on that feedback. It is important to be open to feedback from others, as it can make decisions better and help individuals grow as people. To analyze a situation, individuals can make sure that their decisions align with their goals and values. For example, individuals can develop a personal mission statement and make sure their decisions align with it. It is also important to make sure that goals align with decisions being made, such as when choosing a college. It is essential to be authentic to oneself when making decisions. Analyzing situations helps individuals make the best decisions possible by considering all available information and aligning those decisions with their goals and values.
In simpler terms, it's important to know what you want and have a plan to achieve it. Being optimistic and purposeful can help you make better decisions. You should also prioritize your personal health and well-being because true happiness comes from within, not from material possessions or pleasing others. If you're doing something just to make others happy but it's making you unhappy, it's important to reevaluate and find your own happiness. Taking care of yourself first is important so that you can be in a good position to help others. Remember, it's not just about you; you can only give what you have. So make sure to prioritize your own health and happiness to be able to help others in the best way possible.
To make good decisions in the future, you need to first understand what problems you may have in your life. This means being honest with yourself and recognizing your strengths and weaknesses. You can start by thinking about what's happening in your life and identifying any issues you may have. Writing things down and talking to family or friends can also help. Remember that adults may not have all the answers, and it's up to you to make the final decision. When you have to make a choice, think about the consequences and choose what's best for you, not just what other people want. Planning ahead can also help you make better decisions. People who succeed in life are the ones who take the time to identify and work through their problems and make thoughtful decisions.
NOW IT’S YOUR TURN
Reinforcement with independent practice
What does responsible decision-making entail?
Making choices based on what's right, safe, and what others expect from you.
Use what you have learned to answer the question.
What does responsible decision-making entail?
- Making choices based on personal goals and values.
- Making decisions that align with what others expect from you.
- Making choices based on what's right, safe, and what others expect from you.
- Making choices based on personal gain and material possessions.
CHOOSE THE RIGHT ANSWER
Present a typical multiple-choice problem related to the concept/skill for students to solve.
Then, explain the correct answer and analyze the incorrect answers by pointing out common errors or misconceptions.
Answer the question below. Then read why each answer is correct or incorrect.
What are the three factors that one should consider when making responsible decisions?
- The weather, your favorite color, and what your friends are doing
- Ethical standards, safety concerns, and social norms
- Your favorite food, what your parents expect, and the consequences of your choices
- What your friends expect, your personal interests, and how others will perceive your choices
Check to see if you chose the right answer.
Responsible decision-making means making choices about personal behavior and interactions with others based on ethical standards, safety concerns, and social norms. To make responsible decisions, one should think about what's right, what's safe, and what other people expect from them. One should also consider the potential consequences of their choices. It is advisable to take time and process options carefully, and it's okay to ask for advice from people who have more life experience. The decisions we make today can have a lasting impact on our lives, so it's important to make responsible choices.
So, Choice 2 is the correct answer! But why are the other answer choices incorrect?! If you're trying to make a responsible decision, there are some factors you should consider. Choices 1, 3, and 4 don't take these factors into account. In choice A, things like the weather, your favorite color, and what your friends are doing don't matter when it comes to making responsible decisions. The same goes for choice 3 - things like your favorite food and what your parents expect may not be important. And in choice 4, what your friends want and what you're interested in may not be the best things to think about. You should instead think about ethical standards, safety concerns, and what's expected in your community.
NOW IT’S YOUR TURN
What is the definition of responsible decision-making?
The ability to make good choices about personal behavior and interactions based on ethical standards, safety concerns, and social norms
Why is it important to take your time with decision-making?
Because it allows you to consider all available information and make the best decision possible
How can trusted people around us help us make better decisions?
By offering different perspectives and helping us see the situation from different angles
What is the build-measure-learn feedback loop?
A process that involves testing a product, gathering feedback from customers, and making changes and adjustments based on that feedback
Answer the questions below. Use the following hints to avoid mistakes.
Be a detective. Look for clues in the text, title, date, and author background
Be an active reader. Ask questions and clarify unclear passages by rereading them.
When you take a test or answer questions for an assignment, go with your gut feeling or first answer but double-check by looking back at the text to find the evidence that supports your answer before handing in your paper.
Read passages carefully and consider the author's points, arguments, and supporting details.
Look for parts of the reading that connect to your question and give examples to support your answer.
What is the definition of responsible decision-making?
- The ability to make quick decisions based on intuition
- The ability to make good choices about personal behavior and interactions based on ethical standards, safety concerns, and social norms
- The ability to make decisions without considering the consequences
- The ability to make decisions based on what other people want.
Why is it important to take your time with decision-making?
- Because it allows you to avoid making any decision at all
- Because it allows you to make quick decisions based on intuition
- Because it allows you to please other people by making a decision quickly.
- Because it allows you to consider all available information and make the best decision possible
How can trusted people around us help us make better decisions?
- By telling us what to do
- By making the decision for us
- By offering different perspectives and helping us see the situation from different angles
- By pressuring us to make a decision.
What is the build-measure-learn feedback loop?
- A process that involves testing a product, gathering feedback from customers, and making changes and adjustments based on that feedback
- A process that involves making decisions quickly based on intuition
- A process that involves making decisions without considering the consequences
- A process that involves making decisions based on what other people want.
WRITING THE BEST ANSWER POSSIBLE
Study the model below. It’s a good example of a written answer.
How can responsible decision-making impact an individual's life positively or negatively?
Good decision-making is crucial for a happy and fulfilling life as your choices impact your life greatly. To make good choices, consider options, and consequences, and align them with your values and goals. Every choice has consequences, so think about potential outcomes before deciding. Seek advice from trusted sources and avoid choices that violate laws or betray trust. Responsible choices lead to positive outcomes for emotional and physical health and self-esteem, while irresponsible choices have negative effects. Prioritize personal health and well-being, take time to think, be authentic to yourself, and seek trusted advice to improve decision-making skills.
This answer is a great response to the prompt. The student accurately explains how responsible decision-making can impact an individual's life positively or negatively by emphasizing the importance of considering options and consequences, aligning choices with values and goals, seeking advice from trusted sources, and prioritizing personal health and well-being. The student also explains how responsible choices can lead to positive outcomes for emotional and physical health and self-esteem, while irresponsible choices can have negative effects.
NOW IT’S YOUR TURN
Analyzing situations means looking at different choices to make sure you pick the best one for you. To do this, you have to think about what you care about, what might happen with each option, and any good or bad things that could come from each choice. It's also important to think about decisions you made before and learn from them to make better choices in the future. By analyzing situations, you can make choices that match what you want and feel more sure about your decisions. This helps you make choices that fit with your goals and values.
Answer the question. Use what you have learned from the model.
How can analyzing situations help individuals make informed decisions that align with their goals and values?
GET READY FOR YOUR FUTURE
Present hints for answering questions related to using decision-making skills to enhance health that students are likely to encounter on tests or in life.
Build familiarity with 6 multiple-choice questions, 1 short-response question, and 1 extended-response question commonly found on state and national tests.
Which of the following is NOT a step in the decision-making process for enhancing health?
Ignoring the consequences
Which decision-making style involves making a quick decision without much consideration?
Impulsive
What is the best approach to making a decision when faced with a health-related problem?
Considering the consequences of each option
Which of the following is an example of a decision made to enhance physical health?
Regularly exercising
Which of the following is NOT a factor to consider when making responsible decisions?
Social media popularity
Why is it important to analyze a situation before making a decision?
To align decisions with personal goals and values
Define responsible decision-making in your own words.
Responsible decision-making means making choices about how you behave and interact with others based on what's right, safe, and what other people expect. It involves considering ethical standards, safety concerns, and social norms to guide personal behavior.
Explain the importance of reflecting on outcomes and evaluating the advantages and disadvantages of options when making decisions. Provide an example of a time when you had to reflect on your decision-making process and how it impacted the outcome.
It's really important to think about what might happen when you make choices and to look at the good and bad things that could come from each option. This will help you make choices that are smart and match what you want. For example, when I was deciding which college to go to, I looked at all the different things about each school, like where it was, what they taught, what the campus was like, and how much money they could give me. I also thought about what I wanted for my future and how each school could help me get there. After thinking about all of these things, I picked the college that was the best fit for me, and I'm really happy with how things turned out.
As you answer the questions below, remember to:
Read each question carefully and consider your answer options.
Take as much time as you need to complete these questions.
When you finish, check your answers.
Which of the following is NOT a step in the decision-making process for enhancing health?
- Identifying the problem
- Gathering information
- Ignoring the consequences
- Considering alternatives
Which decision-making style involves making a quick decision without much consideration?
- Impulsive
- Intuitive
- Procrastinating
- Analytical
What is the best approach to making a decision when faced with a health-related problem?
- Relying on intuition alone
- Considering the consequences of each option
- Choosing the first option that comes to mind
- Following the advice of friends or family
Which of the following is an example of a decision made to enhance physical health?
- Spending money on expensive clothes
- Eating fast food every day
- Regularly exercising
- Smoking cigarettes
Which of the following is NOT a factor to consider when making responsible decisions?
- Ethical standards
- Safety concerns
- Social media popularity
- Social norms
Why is it important to analyze a situation before making a decision?
- To gather feedback from customers
- To align decisions with personal goals and values
- To please others
- To prioritize material possessions
Define responsible decision-making in your own words.
Explain the importance of reflecting on outcomes and evaluating the advantages and disadvantages of options when making decisions. Provide an example of a time when you had to reflect on your decision-making process and how it impacted the outcome.
|
oercommons
|
2025-03-18T00:37:24.407569
|
Psychology
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/102392/overview",
"title": "Using Decision-Making Skills to Enhance Health",
"author": "Philosophy"
}
|
https://oercommons.org/courseware/lesson/124454/overview
|
Worksheet Idea
Archaeology in a Box - Elementary School - Remixed
Overview
Lesson plan supporting elementary-school aged students.
Background Information
Objective
Students will learn to identify and explain what each 3D printed manipulative is and its historical function and the human connection in a 40–45-minute period.
Standards
Career Readiness Standards:
13.1.1-5.E Using school resources to learn about various jobs.
12.1.6-8.E meeting and talking to community members to learn about jobs.
History Standards:
8.2.7.B Identify the role of local community as related to significant historical documents, artifacts, and places critical to Pennsylvania history.
8.3.7.B Examine the importance of significant historical documents, artifacts, and places critical to United States History.
Process
- Ask students,
- What is an Artifact?
- What is an archaeologist?
- What do archaeologist look for? (Size shape material)
- Split students into 5-6 groups.
- Give each group 1 artifact.
- Provide students with questions worksheet.
- Student answer questions on worksheet.
- Pass artifacts clockwise.
- Repeat 5 –6 for all artifacts.
- Explain artifacts and what we know about the articles.
- Explain were archologist able to figure out about the artifact and the people who used them.
- Student are expected to follow along filling out their worksheet.
- Ask students if they remember Otzi the Icemen? What was he found with? If you remember Otzi the Iceman and the artifacts that were found with him now it is your turn to create a story about the person who once owned the artifact in front of you.
- Then share with the group around you.
- If wanted; share with the class.
|
oercommons
|
2025-03-18T00:37:24.433991
|
Thomas McClain
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/124454/overview",
"title": "Archaeology in a Box - Elementary School - Remixed",
"author": "Lesson Plan"
}
|
https://oercommons.org/courseware/lesson/76062/overview
|
A Transition Brief-Why It Matters_FINAL
Building Bridges Transition Workbook 2020
CDP PATH Goal Planning - fillable
CDP PATH Goal Planning - print
CDP PATH Process
CDP Presentation-Effective Transition Practices
CDP-Successful Strategies from the Field
CDP Table of Contents
CDP Team Charter
CDP Team Charter-fillable
CDP Team Workplan Example
CDP Work Plan
CDP Work Plan - fillable
Collaborations, Connections, Six Steps to Success
Connected Learning
DTL-CDP-Meeting-Agenda
DTL-CDP-Meeting-Agenda
DTL-CDP-Meeting-Agenda
Framework-in-Action_Learning-Environments
Kindergarten-Transition-Best-Practices
Kindergarten-Transition-Planning-Guide
Kindergarten-Transition-Planning-Guide
Kindergarten-Transition-Planning-Guide-WY
Kindergarten-Transition-Summit-Activity-Guide
Planning Calendar for Ed Managers
Policy Connections At A GlanceAMD
PreK-3rd-At-Home_23Mar2020_FINAL
Self-Assessment-Tool-for-Effective-Transition-from-Prekindergarten-to-Kindergarten
Supporting Children Who Are DLLs
Supporting Children with IEPs
Supporting-transitions-brief-four-Partnership
Supporting-transitions-brief-one_Child-Family
Supporting-transitions-brief-three_Program-Leader
Supporting-transitions-brief-two_Program-Educator
Transition Plan Example Form_FINAL
Transition Plan Form_FINAL
Transition_Practice_Self-Assessment February 2020 Colorado Summit
Transition Resources for Leaders and Educators_FINAL
Early Learning Transition Resources
Overview
OSPI and DCYF collaborated to compile resources useful to the Preschool Development Grant Transitions initiatives including:
- 100 Schools Reach Initiative: local community early learning- elementary school partnerships pursuing Wildly Important Goals in strengthened transitions for children birth through kindergarten.
- Transitional Kindergarten (TK) Partners in Transition: Scaffolding for districts to implement all five pillars of TK in collaboration with community-based early learning programs to support an array of options for four-year-olds to best meet individual needs.
- PreK to 3rd Grade Outdoor Learning and Since Time Immemorial: Early learning collaboration to support high-quality outdoor environmental and tribal cultural learning.
Research on Best Transition Practices
Washington Preschool Development Planning Grant Transitions Initiative | DCYF ECEAP and HSCO | OSPI Early Learning | Special Education | Title Programs | 2019 to 2020
Full report | Successes and Challenges of Early Learning Transitions in Washington
Data Brief |
Seeds of Promising Practice |
Case Study: Toppenish
Case Study: Edmonds
Case Study: North Mason
Case Study: Wellpinit SD
Case Study: West Valley SD
Wyoming Department of Education Prekindergarten to Kindergarten Transitions Summit
Kindergarten Transitions Best Practices
Kindergarten Summit Activity Guide
Kindergarten Transition Planning Guide
Washington P-3 Institute
Connected Learning: Guidance for Effective Transitions | Caitlin and Harmon
National P-3 Center
Framework in Action: Learning Environments
PreK to 3rd Grade At Home: March 2020
National Center for Early Childhood Development Teaching and Learning: Gathering Information
A Transition Brief: Why It Matters
Collaborations, Connections, and Six Steps to Success
Policies At A Glance: Supporting Transitions and Meeting Federal and State Standards
Supporting Transitions Brief One: Child and Family Transitions
Supporting Transitions Brief Two: Program Educator
Supporting Transitions Brief Three: Program Leader
Supporting Transitions Brief Four: Partnership
National Center for Early Childhood Development Teaching and Learning: Applying Information to Practice
Activity Calendar for Educators
Planning Calendar for Head Start Education Managers
Supporting Children Who Are Dual-Language Learners
Supporting Children with Individual Education Plans
Transition Plan Form
Transition Resources for Leaders and Educators
Self-Assessment Tools
Self-Assessment Tools
In this section, OSPI and DCYF curate resources to support teams of early educators, specialists, administators, and families to create smooth transitions for children from birth through kindergarten.
Self-Assessment Tool for Effective Transition from PreK to K | Wyoming Department of Education, Division of Special Education
Transition Practices Self-Assessment Tool | Beth Rous, Ed.D and Rena Hallam | Colorado Department of Education 100 Schools Transition Summit | February 2020
Building Bridges: Supporting Effective Transition Practices Through Community Collaborations | Beth Rous, Ed.D | Colorado Department of Education 100 Schools Transition Summit | February 2020
Collaboration Demonstration Project: Office of Head Start | Head Start Collaboration Office | NCECDTL
Following the Collaboration Demonstration Project, Office of Head Start initiated 100 Schools Reach to extend these community-school partnerships to 100 schools in 46 states. The National Center of Early Childhood Development Teaching & Learning sent the top-requested resources to each state Head Start Collaboration Office. Washington DCYF HSCO and OSPI posted them here for the Washington 100 Schools Reach teams and other local transitions collaborations.
Family Leadership and Advocacy in Transitions
In this section, Washington OSPI and DCYF curate resources to help local early learning- school partnerships and state collaborations plan successful summits to foster improved transitions for children birth through kindergarten.
National Center for Early Childhood Development Teaching & Learning
1- Agenda and Tips for Success
Early childhood inclusion resources for children with disabiilities
- ECTA Guidance: Transition from Preschool Services to Kindergarten
- SERVE Regional Educational Laboratory Partnerships training package: Planning for Terrific Transitions: A Guide for Transitions- to-School Teams
- Harvard Family Research Project: Ready for Success: Creating Collaborative and Thoughtful Transitions into Kindergarten
- Harvard Family Research Project: A New Approach to Transitions: Welcoming Families and Their Ideas into Kindergarten Classrooms
- UPCOMING WEBINAR RESOURCE: March 26th, 2021: First National Forum: Linking Ready Kids to Ready Schools hosted by the W.K. Kellogg Foundation.
|
oercommons
|
2025-03-18T00:37:24.494207
|
Social Science
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/76062/overview",
"title": "Early Learning Transition Resources",
"author": "Environmental Science"
}
|
https://oercommons.org/courseware/lesson/104816/overview
|
IHE Accessibility in OER Implementation Guide
Overview
This is the Implementation Guide developed by faculty at York Technical College.
May 11 - Section One: Landscape Analysis for Accessibility in OER in Local Context (Work on during May 11th implementation)
In this section, you and your team will engage in a Landscape Analysis to uncover key structures and supports that can guide your work to support Accessibility in OER. We exnourage to explore some of the questions from each category. You may or may not answer all of these questions, but this is an offering. We ask that you complete Parts One, Two and Six.
Part One: Initial Thoughts
What is your team's initial goal for this series?
Our main goal is to investigate methods of selecting and implementing OER on a wider scale. We would also like strategies to incorporate more levels of multiple means of action and expression into course assignments and assessments across various divisions.
Part Two: Introductory probing questions:
What does accessibility look like in our organization? How do we measure accessibility?
Accessibility includes course navigation, an accessible and inclusive environment, access to resources and materials, and ADA/WCAG compliance. We measure accessibility through a variety of tools, such as Ally, as well as manual accessibility reviews. Departments set accessibility goals, and individual faculty members set accessibility goals for the courses they teach.What does OER look like in our organization? How do we measure access to OER?
- Some departments/courses at the college use OER materials (i.e. textbooks, lab resources, supplemental materials), but the process of selection and implementation is inconsistent. Some departments have no experience with OER. In some courses, OER is embedded into our LMS through HTML, and in some cases it is linked in, so navigation also differs. For the courses that implement it within the LMS, it is more accessible and able to be read through screen readers. However, cases in which it is linked in may be less accessible to learners.
Part Three: Clarifying questions for accessibility:
What is the organizational structure that supports accessibility?
The ITE (Institute for Teaching Excellence) has been the driving force for most of our Accessibility Efforts.
Who generates most of the accessibility structures/conversation in our organization?
While faculty are responsibile for ensuring the accessibility of their learning resources, Tthe ITE (Institute for Teaching Excellence) has been the driving force for most of our Accessibility Efforts.
Where do most educators get support with accessibility?
There are plentiful resources and live help through the ITE.
What content areas might have the largest gaps in access to accessibility?
This is an area that we will need to investigate, although I suspect our technical programs have the biggest gaps.
Part Four: Clarifying questions for OER:
What is our organizational structure that supports curricular resources?
This occurs at the departmental level, often in collaboration with the ITE.
What is our organizational structure that supports OER?
There is no existing structure. This is part of our goal.
Who generates most of the curricular resources in our organization?
Faculy generate their own curricular resources, often in collaboration with the ITE or publisher partners.
Where do most educators get support with curricular resources?
This comes from publishers, the ITE, and a rich Professional Development program.
What content areas might have the largest gaps in access to curricular resources/OER?
This is an area that we will need to investigate, although I suspect our technical programs have the biggest gaps.
Part Five: Clarifying questions for Faculty learning and engagement:
What Professional Learning (PL) structures have the best participation rates for our educators?
We've seen mixed success in participation with face to face workshops, on-demand resources, and drop-in help sessions. It may vary more with the time that it is offered than the format itself.
What PL structures have the best "production" rates for our educators?
Workshops that focus on creating a deliverable are the best production value.
What incentive do we have to offer people for participating in learning and engagement?
There is currently no incentive structure for participating in learning and engagement, although we do have a minimum number of professional development hours that must be met each year.
Who are the educators that would be most creative with accessibility and OER?
This is something that we will need to investigate - certainly this team, as champions of Accessibility and OER, would be on the list, but we have creative and talented people across the campus.
Who are the educators that would benefit the most from accessibility and OER?
We think all educators could benefit, but the benefit to students is the driving force.
Part Six: Final Probing questions:
What is our current goal for Accessibility in OER and why is that our goal?
- Our main goal is to investigate methods of selecting and implementing OER on a wider scale. We would also like strategies to incorporate more levels of multiple means of action and expression into course assignments and assessments across various divisions. These are our goals because we lack consistency in OER implementation and wide-scale adoption of multiple means of action and expression.
Who have we not yet included while thinking about this work?
- We had not thought about including students in our conversation about OER and accessibility and getting their feedback and input during the process as well as after implementation.
What barriers remain when considering this work?
- One barrier we face is buy-in from all areas of the College. Some areas are reliant upon third-party courseware that performs auto-grading. Also, all areas need to be focused on improving the accessibility of courses and course materials for students, and even though many strides have been made in this area, there are still some departments less open than others. Some faculty members still question the qulaity of OER. Time constraints are also an issue for faculty across the College.
What would genuine change look like for our organization for this work?
- Implementation of a formal course materials review and adoption process. Consistent administrative support for accessible alternatives, content, resources, and environments. Enforcement of foundational accessibility standards in all courses. Facilitation of faculty inquiry groups to create and utilize multiple means of action and expression on key assignments and assessments in courses from various departments.
Section Two: Team Focus (Finish before May 25th to share during Implementation Session Two)
Identifying and Describing a Problem of Practice
The following questions should help your team ensure that you are focusing your collaboration.
What is your Team’s specific goal for this series? You may consider using AEM Quality Indicators for Creating Accessible Materials to help add to or narrow your work.
Our main goal is to investigate methods of selecting and implementing OER on a wider scale. We would also like strategies to incorporate more levels of multiple means of action and expression into course assignments and assessments across various divisions.
- What other partners might support this work?
- We believe that this would work be supported by the Institute for Teaching Excellence (ITE), the Special Resource Office, academic leadership, and individual department units.
What is your desired timeframe for this work?
We would like to spend the next year gathering feedback from the students, faculty and leadership of the college about what this kind of structure should look like and develop a plan from there.
How will you include diverse voices and experiences in this work?
We will ensure that we include students and faculty from all areas of the college to provide feedback and contribute to the vision.
Please create a Focus Question that explains your goal and provides specific topics that you would like feedback on. This is what you will share in your breakout groups for feedback.
How do we gain buy in for college-wide implementation of such an initiative?
(Save for during May 25th's session.) What feedback did you receive from another team during the May 25th Implementation Session?
We received the following feeback:
We need to more clearly define what "college wide implementation" means
We should use the cost savings benefit for students to promote buy in
Identify champions of the initiative and have them drum up support in different areas
Get impact statements from students that have used OER
In the plan we should require that a department has made a good faith effort at identifying OER resources before allowing them to require a more costly textbook.
Section Three: Team Work Time and Next Steps (Complete by the end of Implementation Session Three)
Sharing and Next Steps
What was your redefined goal for this series?
Our main goal is to develop a structure for selecting and implementing OER across more disciplines at our college. We would also like strategies to incorporate more levels of multiple means of action and expression into course assignments and assessments across various divisions.
What does your team want to celebrate?
We've learned some great new tools and resources to help our teams further their individual work, and we hope to be able to make a wider impact at a later date.
What did your team accomplish? If you have links to resources, please include them here.
We've generated great ideas and started working on an action plan. However our goal involves many additional stakeholders and will need to be vetted by some levels of administration before we can begin implementation.
What are your team’s next steps?
We'll involve academic leadership in discussions about our ideas.
|
oercommons
|
2025-03-18T00:37:24.526388
|
06/07/2023
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/104816/overview",
"title": "IHE Accessibility in OER Implementation Guide",
"author": "Jennifer Morgan"
}
|
https://oercommons.org/courseware/lesson/82353/overview
|
Learning Guide for "We Move Together" by Kelly Fritsch, Anne McGuire and Eduardo Trejos
Overview
This learning guide offers educators context, vocabulary, discussion questions, learning activities, printable games and templates, and other resources to support conversations about disability, accessibility, social justice, and community building.
We Move Together is a bold and colourful exploration of all the ways that people navigate through the spaces around them and a celebration of the relationships we build along the way. We Move Together follows a mixed-ability group of kids as they creatively negotiate everyday barriers and find joy and connection in disability culture and community.
Learning Guide
This learning guide offers educators context, vocabulary, discussion questions, learning activities, printable games and templates, and other resources to support conversations about disability, accessibility, social justice, and community building.
We Move Together is a bold and colourful exploration of all the ways that people navigate through the spaces around them and a celebration of the relationships we build along the way. We Move Together follows a mixed-ability group of kids as they creatively negotiate everyday barriers and find joy and connection in disability culture and community.
|
oercommons
|
2025-03-18T00:37:24.545411
|
Special Education
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/82353/overview",
"title": "Learning Guide for \"We Move Together\" by Kelly Fritsch, Anne McGuire and Eduardo Trejos",
"author": "Literature"
}
|
https://oercommons.org/courseware/lesson/63767/overview
|
ISKME Accessibility Checklist
Overview
Checklist of best practices for creating accessible resources.
The Accessibility Checklist is adapted from BC Open Textbook Accessibility Toolkit, CC-BY 4.0 International License.
Curating OER - Accessibility Checklist
Organizing Content
- Content is organized under headings and subheadings
- Headings and subheadings are used sequentially (e.g. Heading 1, heading 2, etc.)
Images
- Images that convey information include Alternative Text (alt-text) descriptions of the image’s content.
- Graphs, Charts, and Maps include supporting details in the text surrounding the image.
- Images do not rely on color to convey information.
- Images that are purely decorative contain empty alternative text descriptions. (Descriptive text is unnecessary if the image doesn’t convey contextual content information).
Tables
- Tables include row and column headers.
- Table includes title or caption.
- Table does not have merged or split cells.
- Table has adequate cell padding.
Weblinks
- The weblink is meaningful in context, does not use generic text such as “click here” or “read more”.
- Weblinks do not open new windows or tabs.
- If the weblink must open in a new window, a textual reference is included in the link information (for example, “Link Opens in a New Window”
Multimedia
- A transcript has been made available for the resource that includes audio narration or instruction.
- Captions of all speech content and relevant non-speech content are included in the resource, that includes audio synchronized with a video presentation.
- Audio descriptions of contextual visuals (graphs, charts, etc) are included in the multimedia resource.
Formulas and Equations
- Formulas have been created using MathML.
- Formulas are images with alternative text descriptions, if MathML is not an option.
Font
- Font type is either Verdana or Arial
- Font size is 12 point or higher for body text.
- Font size is 9 point for footnotes or end notes.
- Font size can be zoomed to 200%.
- Body text font color brightness compared to the background color must be at minimum a color contrast ratio of 4.5:1
- Large text must have a minimum color contrast ratio of 3:1
Additional Accessibility Resources
- Web Content Accessibility Guidelines (WCAG) 2.0 - Covers recommendations for making Web content more accessible to a wider range of people with disabilities, including blindness and low vision, deafness and hearing loss, learning disabilities, cognitive limitations, limited movement, speech disabilities, photosensitivity and combinations of these.
- BC Open Textbook Accessibility Toolkit - Seeks to provide the resources needed to support content creators, instructional designers, educators, and librarians in creating open and accessible textbooks.
The Accessibility Checklist is adapted from BC Open Textbook Accessibility Toolkit, CC-BY 4.0 International License.
|
oercommons
|
2025-03-18T00:37:24.566009
|
Megan Simmons
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/63767/overview",
"title": "ISKME Accessibility Checklist",
"author": "Melinda Newfarmer"
}
|
https://oercommons.org/courseware/lesson/60958/overview
|
Top 10 Tips for Creating Accessible Documents
Overview
Tips and lessons learned from creating accessible documents. This is not an exhaustive list so please add your own guidance.
Top 10 Hints for Accessible Document Creation
Note: This is using document creation with Microsoft products
Use styles! (Home tab>Styles group).
Use the heading styles in numerical order. (e.g.) Don’t choose heading style 4 for your main heading and heading style 1 for your subheading. Modify the style if you don’t like the look.
- DO NOT use the “enter” key to add blank lines or the “space bar” to add blank spaces.
Instead, alter the spacing before or after the paragraph.
(Home tab>Paragraph>Indents and Spacing)
- Avoid using tables for formatting graphics- tables are better for data display.
Instead, try to use columns to “wrap” words around image.
- Make sure tables, images, and charts all have alt text.
Right click on the image>Format Picture>Layout & Properties>Alt Text.
Do not use URLs in footer or in alt text for images
- Make sure tables include a header row.
(Table Tools>Design tab>Table Style Options>Header).
Make sure the table header row is repeated across pages. (Table Tools group>Layout>Data>Repeat Header Rows)
- DO NOT merge table columns.
- Use descriptive text for hyperlinks – do not write out URL. Avoid “Click here.”
- View the navigation pane periodically to see structure of document.
(View tab>Show group>Check Navigation Pane)
- Toggle on show/hide ¶ (Home tab>Paragraph group) to identify any blank lines and spaces. These will come up as issues in an ADA check.
- Run the built in accessibility checker to identify problem spots File>Check for Issues>Check Accessibility
Helpful Resources
Using styles in Word (video) | Microsoft
Alternative Text | WebAIM
- Microsoft Accessibility Video Training
- University of Washington: Creating Accessible Documents
- WebAIM: PDF Accessibility
Image by Gerd Altmann from Pixabay
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oercommons
|
2025-03-18T00:37:24.591744
|
Washington OSPI OER Project
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/60958/overview",
"title": "Top 10 Tips for Creating Accessible Documents",
"author": "Barbara Soots"
}
|
https://oercommons.org/courseware/lesson/104907/overview
|
Problem Set 2
Problem Set 3
Problem Set 4
Problem Set 5
Problem Set 6
Problem Set 7
Problem Set 8
Problem Set 9
Problem Set 10
Homework 1
Homework 2
Homework 3
Homework 4
Homework 5
Remix for Accessibility Practice - Introductory Statistics
Overview
Introductory Statistics is a non-calculus based, descriptive statistics course with applications. Topics include methods of collecting, organizing, and interpreting data; measures of central tendency, position, and variability for grouped and ungrouped data; frequency distributions and their graphical representations; introduction to probability theory, standard normal distribution, and areas under the curve. Course materials created by Fahmil Shah, content added to OER Commons by Victoria Vidal.
OER Course Information_Remix
Fahmil Shah
Summer 2019
MAT 120 OER
Level 1 – Adopt
This OER course has been designed to be implemented in Summer II 2019. The materials will be adapted following the end of the course in order to be improved for subsequent semesters. I am willing to share any updated versions of the materials as they are created and refined.
1.) Course Description
Introductory Statistics is a non-calculus based, descriptive statistics course with applications. Topics include methods of collecting, organizing, and interpreting data; measures of central tendency, position, and variability for grouped and ungrouped data; frequency distributions and their graphical representations; introduction to probability theory, standard normal distribution, and areas under the curve.
2.) Instructional Objectives
(a) Calculate measures of central tendency and variation for sets of grouped and ungrouped data
(b) Create a table of the frequency distribution for a set of grouped or ungrouped data
(c) Design an opinion survey, choose a random unbiased sample, and conduct the survey
(d) Use the graphing calculator for statistical analysis
(e) Calculate the probabilities of simple events.
3.) Link to Open Textbook
Introductory Statistics by Illowsky and Dean
Link: https://openstax.org/details/books/introductory-statistics
4.) Alignment of Open Textbook with Instructional Objectives
From above, the objectives are:
(a) Calculate measures of central tendency and variation for sets of grouped and ungrouped data
(b) Create a table of the frequency distribution for a set of grouped or ungrouped data
(c) Design an opinion survey, choose a random unbiased sample, and conduct the survey
(d) Use the graphing calculator for statistical analysis
(e) Calculate the probabilities of simple events.
This course utilizes content from the following sections of Introductory Statistics and assignments have been created using the book. Homeworks assign problems from the textbook to be done at home, and problem sets adapt problems from the book to create sets that are to be completed during class. These assignments have been submitted in a summary document, as well as in separate word documents (as they will be distributed). The tentative timeline corresponds to a 5-week Summer session course.
| Chapter and Sections | Tentative Timeline | Corresponding Assignments for Summer 2019 |
| Chapter 1 – Sampling and Data Sections 1.1 – 1.4 | Week 1 | Homework Assignment 1 Problem Set 1 |
| Chapter 2 – Descriptive Statistics Sections 2.1 – 2.7 | Week 1 | Homework Assignment 1 Problem Set 2 |
| Chapter 3 – Probability Topics Sections 3.1 – 3.5 | Week 2 | Homework Assignment 2 Problem Set 3 |
| Chapter 4 – Discrete Random Variables Section 4.1 – 4.2 | Week 2 | Homework Assignment 2 Problem Set 4 |
| Chapter 5 – Continuous Random Variables Sections 5.1 – 5.2 | Week 3 | Homework Assignment 3 Problem Set 5 |
| Chapter 6 – The Normal Distribution Sections 6.1 – 6.2 | Week 3 | Homework Assignment 3 Problem Set 6 |
| Chapter 7 – The Central Limit Theorem Section 7.1, 7.3 | Week 4 | Homework Assignment 4 Problem Set 7 |
| Chapter 8 – Confidence Intervals Section 8.1 – 8.3 | Week 4 | Homework Assignment 4 Problem Set 8 |
| Chapter 9 – Hypothesis Testing with One Sample - Section 9.1 – 9.6 | Week 5 | Homework Assignment 5 Problem Set 9 |
| Chapter 10 – Hypothesis Testing with Two Samples - Sections 10.1 – 10.4 | Week 5 | Homework Assignment 5 Problem Set 10 |
The table below presents the alignment between the course objectives and the Introductory Statistics textbook.
| Objective | Corresponding Introductory Statistics Chapters |
| Calculate measures of central tendency and variation for sets of grouped and ungrouped data | Chapter 2 |
| Create a table of the frequency distribution for a set of grouped or ungrouped data | Chapter 1 |
| Design an opinion survey, choose a random unbiased sample, and conduct the survey | Chapter 1 |
| Use the graphing calculator for statistical analysis | Chapters 2, 7, 8, 9, 10 |
| Calculate the probabilities of simple events. | Chapters 3, 4, 5, 6 |
5.) Corresponding Problem Sets and Homework Assignments from Introductory Statistics can be found below. An overview document is also included, which has the assignments consolidated into a single document. Assignments may be modified in subsequent implementations of the course
This work is licensed under a Creative Commons Attribution 4.0 International License.
Course Syllabus
Roxbury Community College Course Syllabus |
INTRODUCTION TO STATISTICS
MAT 120 2A - 3 credits
Monday/Wednesday/Thursday, 9:00 AM – 11:30 AM, Room 3-105
Classes begin 7/8/19 and end 8/8/19
Academic Calendar Link: http://www.rcc.mass.edu/current-students/academic-calendar-students
You are advised to retain a copy of this syllabus in your personal files for use when applying for future degrees, certifications, or transfer of credit.
Instructor Information
Instructor: Fahmil Shah
Email: fshah@rcc.mass.edu
Phone: 617-331-3206 (cell)
Office Hours: Upon Request
Communication:
Throughout the semester, I will communicate with you via your RCC email account. Please review the following link for assistance on using your email account:
http://www.rcc.mass.edu/current-students/electronic-tool-box/email
You may email me at the address above (or call me on the phone) with any questions you have regarding the course or material. You should also email me ahead of time if you are aware of any classes you may be missing in the future, or if you have to miss class for any reason.
General Course Description
Course Description: Introductory Statistics is a non-calculus-based, descriptive statistics course with applications. Topics include methods of collecting, organizing, and interpreting data; measures of central tendency, position, and variability for grouped and ungrouped data; frequency distributions and their graphical representations; introduction to probability theory, standard normal distribution, and areas under the curve.
Prerequisites: Students must have passed Introductory Algebra (MAT 088) at RCC or another college or must have placed out of Introductory Algebra on the RCC Mathematics Placement Test. If you have not met these prerequisites, please see me for placement into the proper mathematics course for you. If you do not satisfy these pre-requisites, you will be withdrawn from the course.
Materials
Required Texts: Illowsky & Dean, Introductory Statistics. This OER text will be made available on MyRCC, and can be downloaded directly at the following link:
https://openstax.org/details/books/introductory-statistics
Technology Requirements: It is very useful to have a working knowledge of a spreadsheet application (e.g. Excel, OpenOffice, or Google Sheets) in order to create some of the tables/charts/graphs on the computer. I will go over relevant functions throughout the course. We will also be using graphing/statistics software (e.g. Desmos or Geogebra), which can be accessed on a computer or mobile phone through apps and online. These free online applications can be accessed online using the following links:
If you need help learning how to use the software, please speak with me.
Instructional Objectives
By fully participating in this course, you should be able to:
(a) Calculate measures of central tendency and variation for sets of grouped and ungrouped data
(b) Create a table of the frequency distribution for a set of grouped or ungrouped data
(c) Design an opinion survey, choose a random unbiased sample, and conduct the survey
(d) Use the graphing calculator for statistical analysis
(e) Calculate the probabilities of simple events.
Methods of Instruction
Teaching Philosophy:
My goal in this class is to not only to help you develop a set of tools that can help you understand what statistics is and how to use it, but also to understand the important of statistics as a field, and see how it can help us understand the information that we see in the newspaper, on television, and on the internet. We are bombarded with data in the 21st century, and the material in this course is intended to help us make sense of the data we see, read, and hear all around us.
I believe that learning material with understanding is developed not through lecture and copying down of information, but through collaboration and problem solving. For this reason, a goal of mine in this course is to use engaging problems and group work as a vehicle for us to understand the material at a deep level.
Instructor Responsibilities:
My role in the classroom is not to give you the answers, or to tell you what to do. My intent is for me to guide you through the semester as we discuss and learn about key ideas in Statistics. Much of the responsibility of learning will fall upon you, as you read the chapters, work on the assignments, and discuss the material with myself and your peers. My goal is to come prepared with the problems and information that will help you understand Statistics on a theoretical level and as a practical tool, and to answer any questions and give any assistance necessary as you learn the subject.
Course Completion Requirements
Your success in this course depends on the following:
- There will be problem sets given throughout the semester, which will go over the material covered in class. This will account for 15% of your grade.
- There will be homework assigned throughout the semester, which will be drawn from the textbook. This will be due after we go over the corresponding course material. This will be worth 25% of your grade.
- There will be three exams throughout the semester, which will assess your understanding of the material covered in each of the modules. Problems will generally be a combination of computational problems, word problems, and open response problems. You must show your work for all problems, and partial credit will be given as appropriate. The lowest score of the three exams will be dropped. The two remaining scores will account for 20% of your final grade each.
- There will be a final project, which will count for 20% of your grade. Details will be given during the semester.
Grading
Percentages for Final Course Grade:
| Activity | Grade % |
| Problem Sets | 15 |
| Homework | 25 |
| Exams (Top 2) | 40 |
| Final Project | 20 |
| Total | 100 |
The final grade (rounded to the nearest whole number) will be computed as follows:
| Grade Range | Letter Grade |
| 93 – 100 | A |
| 90 – 92 | A- |
| 87 – 89 | B+ |
| 83 – 86 | B |
| 80 – 82 | B- |
| 77 – 79 | C+ |
| 73 – 76 | C |
| 70 – 72 | C- |
| 67 – 69 | D+ |
| 60 – 66 | D |
| 0 – 59 | F |
Please go to the Roxbury Community College Catalog for detailed information on the college’s grading policy:
http://www.rcc.mass.edu/images/pdf/academics/catalog_Revised100213.pdf
Academic Policies and Procedures
Attendance Policy:
Attendance is expected for all class sessions, as it is critical to the understanding of the course material. Due to the emphasis on work done in class (though problems and discussion), it is also influential in your final grade. Attendance will be taken towards the beginning of each class. Let me know if you will need to miss class for any reason and email me when possible in the case of an emergency or illness. Note that if you miss 3 consecutive classes without an excuse, you will be given a Withdrawn Administratively (WA) at the instructor’s discretion, which cannot be changed. You must contact the instructor regarding absences in order to avoid this.
Electronics Policy:
Cellular phones should not be used during class, unless required in an emergency, being used as a calculator, or for another approved usage in class. Otherwise, it should remain out of sight until the end of class, or during breaks. Violation of this policy may result is confiscation of the device, or a report to the appropriate authorities. Except for the event of an emergency, calls and texts should take place OUTSIDE of class whenever possible. You should not be texting during class.
Late Work:
You should speak with me, or contact me via email if you have any issue completing assignments on time. Make up exams will be given only with an appropriate excuse, and will be given only at the instructor’s discretion. Please contact me if you have any issues that would create the need for a makeup exam. Because one of the exams will be dropped, a makeup will only be granted in extreme circumstances.
Coursework Difficulties:
Please discuss any issues that you are having in completing the coursework on time with me. I am available to talk this over with you by appointment, during breaks, or after class. It is recommended that you go for tutoring at the Learning Center (room 3-207) for one on one tutoring appointments, or to the Math Clinic (room 3-206) for drop-in tutoring if you are having any difficulties understanding the material.
Incomplete Policy:
If you are unable to complete the coursework during the semester due to some catastrophic issue, you must contact me immediately to discuss your alternatives.
Student code of conduct
Students are required to adhere to the Student Code of Conduct delineated in the Roxbury Community College website and Student Handbook.
http://www.rcc.mass.edu/images/stories/policies/Code_of_Conduct_and_Disciplinary_Procedures.pdf
Accommodations
Roxbury Community College is committed to providing all qualified college students equal access to all programs and facilities. Students who have a documented physical, psychological, or learning disability and need academic accommodations must register with the Coordinator of Disability Services, Linda O’Connor. Please contact her in Room 207C in the Academic Building; email loconnor@rcc.mass.edu; or phone 617-708-3562.
Disability Services will provide you with an Accommodation Letter to provide to faculty. You need to present and discuss these recommendations with me within a reasonable period, prior to the end of the Drop/Add period.
Student Support Services
RCC offers a range of student support services including Advising, Tutoring, Math Clinic, Health Services, Library, Writing Center and Language Lab.
Topic Schedule (TENTATIVE)
| Week | Topic |
Week 1 (7/8 – 7/12) | Syllabus/Introductions Chapter 1: Sampling and Data Chapter 2: Descriptive Statistics |
Week 2 (7/15 – 7/19) | Chapter 3: Probability Topics Exam 1 Chapter 4: Discrete Random Variables |
Week 3 (7/22 – 7/26) | Chapter 5: Continuous Random Variables Chapter 6: The Normal Distribution |
Week 4 (7/29 – 8/2) | Exam 2 Chapter 7: The Central Limit Theorem Chapter 8: Confidence Intervals |
Week 5 (8/5 – 8/9) | Chapter 9: Hypothesis Testing With One Sample Chapter 10: Hypothesis Testing With Two Samples Exam 3 Final Presentations |
This work is licensed under a Creative Commons Attribution 4.0 International License.
Problem Sets
Fahmil Shah
Summer 2019
MAT 120 OER
Level 1 – Adopt
This course has 10 problem sets, each corresponding to one chapter from the Introductory Statistics OER course.
Problem Set 1
Chapter 1 – Sampling and Data
Sections 1.1 – 1.4
Problem Set 2
Chapter 2 – Descriptive Statistics
Sections 2.1 – 2.7
Problem Set 3
Chapter 3 – Probability Topics
Sections 3.1 – 3.5
Problem Set 4
Chapter 4 – Discrete Random Variables
Section 4.1 – 4.2
Problem Set 5
Chapter 5 – Continuous Random Variables
Sections 5.1 – 5.2
Problem Set 6
Chapter 6 – The Normal Distribution
Sections 6.1 – 6.2
Problem Set 7
Chapter 7 – The Central Limit Theorem
Section 7.1, 7.3
Problem Set 8
Chapter 8 – Confidence Intervals
Section 8.1 – 8.3
Problem Set 9
Chapter 9 – Hypothesis Testing with One Sample
Section 9.1 – 9.6
Problem Set 10
Chapter 10 – Hypothesis Testing with Two Samples
Sections 10.1 – 10.4
This work is licensed under a Creative Commons Attribution 4.0 International License.
Untitled Section
Fahmil Shah
Summer 2019
MAT 120 OER
Level 1 – Adopt
Below is a summary of the homework assignments for the MAT 120 OER. Page numbers refers to numbers of the PDF pages.
Homework 1
Chapter 1 (pp. 60-69) #42, 43, 51, 52, 53, 54, 55, 74, 80, 82, 88, 89
Chapter 2 (pp. 147-168) #74, 78, 79, 80, 89, 90, 105, 109
Homework 2
Chapter 3 (pp. 228-240) #66, 80, 85, 90, 98, 109, 110, 111, 114, 115
Chapter 4 (pp. 296-300) #69
Homework 3
Chapter 5 (pp. 360-363) #72, 74, 79, 81, 85
Chapter 6 (pp. 397-402) #60, 61, 65, 68, 69, 71, 72, 78
Homework 4
Chapter 7 (pp. 438-446) #62, 68, 71, 78, 79, 80
Chapter 8 (pp. 491-500) #95, 98, 106, 115, 116, 123
Homework 5
Chapter 9 (pp. 548-563) #63, 65, 68, 69, 73, 80, 85
Chapter 10 (pp. 608-619) #78, 81, 89, 95, 102, 118, 119
This work is licensed under a Creative Commons Attribution 4.0 International License.
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oercommons
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2025-03-18T00:37:24.649813
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Nadine Martinkus
|
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"title": "Remix for Accessibility Practice - Introductory Statistics",
"author": "Syllabus"
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https://oercommons.org/courseware/lesson/75462/overview
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Independent Living Skills Assessment
Overview
This is a transition plan resource to help students visually see things that they may need to know to become independent after High School.
Independent Living Skills Survey
This resource helps my middle schoolers see some skills our state feels are important to know in order to live independently. Having them drop and drag things they know and don't know helps them to see things they can be working on, and where they are in the process of being independent. This is a great resource to use to help guide sections of the IEP transition plan and goals.
Independent Living Skills
| Step 1: Skills You Can Do |
| Double-click on the image below. This will bring up the image in an editable page. Drag the skills from the green box and drop them into the correct pink boxes. When you are finished, click “Save and Close” in the top right and the image will be saved here with your answers. |
| Step 2: Learn a New Skill | ||
| Pick one skill to learn from the “I NEED TO LEARN THIS SKILL” box and learn how to do this new skill.What skill did you choose to learn? |
|
oercommons
|
2025-03-18T00:37:24.708546
|
12/07/2020
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/75462/overview",
"title": "Independent Living Skills Assessment",
"author": "Lacie Jensen"
}
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https://oercommons.org/courseware/lesson/82878/overview
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Module 1: Inclusionary Practices Handbook Introduction Interactive Agenda (doc)
Module 1: Inclusionary Practices Handbook Introduction Interactive Agenda (pdf)
Module 1: Inclusionary Practices Handbook Introduction Slide Deck (link)
Module 1: Inclusionary Practices Handbook Introduction Slide Deck (ppt)
Module 2: Schoolwide Collaborative Practices Interactive Agenda (doc)
Module 2: Schoolwide Collaborative Practices Interactive Agenda (pdf)
Module 2: Schoolwide Collaborative Practices Slide Deck Link
Module 2: Schoolwide Collaborative Practices Slide Deck (ppt)
Module 3: IEP Teaming and Academic Standards Interactive Agenda (doc)
Module 3: IEP Teaming and Academic Standards Interactive Agenda (pdf)
Module 3: IEP Teaming and Academic Standards Slide Deck Link
Module 3: IEP Teaming and Academic Standards Slide Deck (ppt)
Module 4: Collaborative Teaming, Skills and Strategies in Schools Interactive Agenda (doc)
Module 4: Collaborative Teaming, Skills and Strategies in Schools Interactive Agenda (pdf)
Module 4: Collaborative Teaming, Skills and Strategies in Schools Slide Deck Link
Module 4: Collaborative Teaming, Skills and Strategies in Schools Slide Deck (ppt)
Module 5: Communication for Inclusion Interactive Agenda (doc)
Module 5: Communication for Inclusion Interactive Agenda (pdf)
Module 5: Communication for Inclusion Slide Deck (ppt)
Module 6: Classroom Action Steps Interactive Agenda (doc)
Module 6: Classroom Action Steps Interactive Agenda (pdf)
Module 6: Classroom Action Steps Slide Deck Link
Module 6: Classroom Action Steps Slide Deck (ppt)
Module 7: Building Capacity for Collaboration
Module 7: Building Capacity for Collaboration Interactive Agenda (doc)
Module 7: Building Capacity for Collaboration Interactive Agenda (pdf)
Module 7: Building Capacity for Collaboration Slide Deck (ppt)
Module 8: Collaboration Across Grade Levels and Learning Environments Interactive Agenda (doc)
Module 8: Collaboration Across Grade Levels and Learning Environments Interactive Agenda (pdf)
Module 8: Collaboration Across Grade Levels and Learning Environments Slide Deck Link
Module 8: Collaboration Across Grade Levels and Learning Environments Slide Deck (ppt)
Module 9:Team Building: Operational Goal Writing and Summary Interactive Agenda (doc)
Module 9: Team Building: Operational Goal Writing and Summary Interactive Agenda (pdf)
Module 9: Team Building: Operational Goal Writing and Summary Slide Deck Link
Module 9: Team Building: Operational Goal Writing and Summary Slide Deck (ppt)
Chapter 1: Inclusionary Practices Handbook Synchronous Modules
Overview
This is a nine-module synchronous training for teachers created using the Washinton State Office of Superintendent of Public Instruction’s Inclusionary Practices Handbook, Section One, Chapter One; Collaborative Practices that Support Inclusion. These modules offer participants opportunities to engage and collaborate around practices to support making their classrooms more inclusive for all students.
Module 1: Inclusionary Practices Handbook Introduction
This is the Interactive Agenda for Module 1: Inclusionary Practices Handbook Introduction.
| |
Description of Module Participants will get a glimpse into the past and current experiences of students with disabilities as they learn about how student placement has evolved over the past 40 years. Legal and ethical considerations for student placement will be reviewed along with the research on the power and potential of increased inclusion for all students in our public schools. Participants will get an opportunity to discuss their own experiences and reflect on how they can support moving inclusion forward. Module Objectives Participants will:
Module Steps Inclusion as a priority Individuals with Disabilities Act (IDEA) Benefits of Inclusion Shelley More Video - Benefits of Inclusion https://youtu.be/PQgXBhPh5Zo CHAT ALERT: Who else might you invite to the next training to make this happen? Inclusion defined Breakout Room: Discussion (10 minute) Large Group Share (2 minutes) Take 10 minutes to discuss as a group these three questions
Rights based perspectives Special Education and LRE Breakout Room: Discussion (10 minutes) Large Group Share (5 minutes) Take 10 minutes to discuss as a group these three questions
Deconstructing Disability and Shifting Mindsets Components of Disability Awareness Comparing Mindsets about Inclusion CHAT ALERT: Which one of these resonated with you the most? Breakout Room: LRE Self Assessment Tool Jigsaw (17 minutes) Inclusionary Practices Handbook page 12 Each person in the Breakout Room gets one of the 6 sections to review and share with their Breakout group. (5 minutes to read and analyze the tool) (12 minutes to share = 2 minutes each) CHAT ALERT: Send the link for the LRE self-assessment tool to one person in your district right now. Who did you send it to? Why? What’s Next--9 Module Share Out |
Module 2: Schoolwide Collaborative Practices
This is an interactive agenda for Module 2: Schoolwide Collaborative Practices.
2. Schoolwide Collaborative Practices | |
Mindsets & Beliefs That Support Collaboration Inclusive Language Culturally Responsive Collaboration Description of ModuleIn this module, you will reflect on your mindsets and beliefs as they relate to students with disabilities in inclusive settings and how a schoolwide culture of collaboration can be fostered. To support this work, you will view examples and explore practical solutions to begin using inclusive language and reflect on what cultural responsiveness looks like in a team setting. The module will conclude with a reflective assignment that will help you apply what you have learned in your school.Module ObjectivesParticipants will:
Module StepsThis module cover pages 16-21 from the Inclusionary Practices Handbook Mindsets & Beliefs that Support Collaboration
Inclusionary Language
Culturally Responsive Collaboration
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Module 3: IEP Teaming and Academic Standards
3. IEP Teaming and Academic Standards | |
Roles and Responsibilities Breaking down the standards Description of ModuleThis module will examine and delineate the different roles each Individualized Education Program (IEP) team member holds within the group, and show why each member is an integral part of the team. We will examine the importance of developing goals connected to the Common Core Standards during the IEP process. We need to consider that students with disabilities are general education students first and that special education services supplement the grade level, general education curriculum, and standards. This module will explore how to unpack the Common Core standards and focus on the present levels and needs of each student, using accommodations and modifications, to support the student’s learning and access to the general education curriculum, as is mandated by law. Module ObjectivesParticipants will learn:
Module Steps
Additional Resources Inclusionary Practices Handbook Roles and Responsibilities Section pg 21-23 Inclusionary Practices
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Module 4: Collaborative Teaming, Skills and Strategies in Schools
This is an interactive agenda for Module 4: Collaborative Teaming, Skills and Strategies in Schools.
4. Collaborative Teaming, Skills and Strategies in Schools | |
Collaborative Teaming in Schools Collaborative Skills and Strategies Description of ModuleA collaborative team is defined as two or more people working together to accomplish a common goal that is directly related to student outcomes in an inclusive environment. In this module you will explore the importance of building a team structure, communication skills, teamwork strategies, and coordinating time and actions for teaming success. Module Objectives Participants will learn:
Module Steps Step 1: A case study about Billy. OSPI Inclusionary Practices Handbook, page 17 Step 2: What does it mean to have collaboration across all system levels? OSPI Inclusionary Practices Handbook, page 18 Step 3: Write Just a Minute- take one minute and complete this sentence. Be ready to share. “I believe collaborative teaming is…” Step 4: Watch Short Video on The Importance of Collaborative Teaming from the National Center for Learning Disabilities. Step 5: Think & Share Activity
Step 6: Read Collaborative Teaming Matrix from the OSPI Inclusionary Practices Handbook, page 28 Step 7: Barriers & Solutions Table Adapted from the article: Eight Things Teams Do to Sabotage their Work, ASCD publication Step 8: Metaphors for Collaboration Activity Reflection:
Activity: Think about a situation in which you have participated in where collaboration was supposed to occur. How did it go?
Step 9: Self Collaboration Activity OSPI Inclusionary Practices Handbook, APPENDIX 1-B: COLLABORATION SELF-ASSESSMENT TOOL, pg.40-41
Step 10 Chat Alert
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Module 5: Communication for Inclusion
This is an interactive agenda for Module 5: Communication for Inclusion.
5. Communication for Inclusion | |
Communication skills for collaboration Communication with families Description of ModuleEffective communication is key for the engagement of all team members when collaborating around inclusion. In this module we will be focusing on: Successful team communication skills, including:
Module Objectives Participants will learn:
Module StepsStep 1: Consider the different areas of teaching from When Special and General Educators Collaborate, Everybody Wins that benefit from open communication between the general education and special education teacher to make inclusion successful. Step 2: Collectively review the chart from the OSPI Inclusionary Practices Handbook (p. 25) of Communications Skills and Barriers, Step 3: In Breakout Rooms utilizing the IPH chart and the list from Elena Aguliar: Behaviors That Foster and Undermine Effective Conversations, follow the P-Q-P Protocol, choosing at least one area to share. Step 4: Reflect on the importance of communicating successfully with families Step 5: Article Share- Read 1 of 2 articles (Listening to Parents of Children with Disabilities, IEP: Students Benefit When We Collaborate) and share your biggest takeaways from the article you read. Some things to think about are:
Step 6: Activity: think of 2-3 words or phrases that are commonly used in education or special education that non-education people would not understand, and come up with definitions or descriptions of the words to use with families to better help them understand the situations and processes related to inclusion. |
Module 6: Classroom Action Steps
This is an interactive agenda for Module 6: Classroom Action Steps.
6. Classroom Action Steps | |
Collaborative lesson planning Co-Teaching Collaboration with para’s Description of ModuleIn this module, you will consider steps that you can take in the classroom to create a more effective inclusive learning environment. You will be exposed to some key components of effective collaborative lesson planning, co-teaching and backwards design lesson planning. You will also be given strategies to improve your collaborative relationship with paraprofessionals. We will be covering p. 27-31 of the Inclusionary Practices Handbook. Module ObjectivesParticipants will:
Module Steps
Additional Resources Other Resources About Co-Teaching Other Resources About Collaborating with Paraeducators
Other Resources About Collaborating Around Lesson Planning For more information about ensuring your collaboration time is a success, click on one of the resource links below:
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Module 7: Building Capacity for Collaboration
This is an interactive agenda for Module 7: Building Capacity for Collaboration.
7. Building Capacity for Collaboration | |
Description of ModuleIn this module, participants will learn about the importance of reflective practice and Professional Learning Communities as they relate to building capacity for teachers and teams to implement inclusionary practices. Module ObjectivesIn part 1, participants will learn:
In part 2, participants will learn:
Module Steps
Part 2: PLC
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Module 8: Collaboration Across Grade Levels and Learning Environments
This is an interactive agenda for Module 8: Collaboration Across Grade Levels and Learning Environments.
8. Collaboration Across Grade Levels and Learning Environments | |
Collaboration: Early Childhood, Elementary school, Secondary school, Transition age Description of Module Collaboration, in regards to inclusion, looks different across grade levels and learning environments. Every district, school, and individual teacher’s structures, priorities, and needs must be considered when designing a culture that values collaboration. This module is designed so you choose the learning pathway that is perfect for you and the role you play in your school/district. Module Objectives
Module Steps The Handbook
While reading, think about:
Article Read: Choose one age level to read
While reading, think about: One Takeaway that you could share with other participants. Videos: While watching, think about: Of the 5 teacher collaboration and co-teaching models, which one might you find valuable incorporating into your current teaching position? While watching, think about: What are things that you, your school, or district do that help to build relationships with families? What are some ideas you would like to try? Reflection Into Action
Two-Part Assessment
Additional Resources TED Talk: Podcasts: Elementary Secondary Videos
Planning Tools
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Module 9: Team Building: Operational Goal Writing and Summary
This is an interactive agenda for Module 9: Team Building: Operational Goal Writing.
9. Team Building: Operational Goal Writing and Summary | |
Module Description
Module Objectives Participants will:
Module Steps Writing the Team Goal
Leveraging Your Strengths Read pg. 36 (Summary) - Reflect/Discuss
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oercommons
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2025-03-18T00:37:24.819463
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Student Guide
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https://oercommons.org/courseware/lesson/94336/overview
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Module 10: Inclusive Learning Environment Application Interactive Agenda (word doc)
Module 10: Inclusive Learning Environment Application Slides (link)
Module 10: Inclusive Learning Environment Application Slides (ppt)
Module 1: Inclusionary Practices Chapter 2 Introduction Interactive Agenda (pdf)
Module 1: Inclusionary Practices Handbook Chapter 2 Introduction Interactive Agenda (word doc)
Module 1: Inclusionary Practices Handbook Chapter 2 Introduction Slides (link)
Module 1: Inclusionary Practices Handbook Chapter 2 Introduction Slides (ppt)
Module 2: Universal Design for Environments Interactive Agenda (pdf)
Module 2: Universal Design for Environments Interactive Agenda (word doc)
Module 2: Universal Design for Environments Slides (link)
Module 2: Universal Design for Environments Slides (ppt)
Module 3: Learning Environments as Ecosystems Interactive Agenda (pdf)
Module 3: Learning Environments as Ecosystems Slides (link)
Module 3: Learning Environments as Ecosystems Slides (ppt)
Module 3: Learning Systems as Ecosystems Interactive Agenda (word doc)
Module 4: Learner Centered Environments Interactive Agenda (pdf)
Module 4: Learner Centered Environments Interactive Agenda (word doc)
Module 4: Learner Centered Environments Slides (link)
Module 4: Learner Centered Environments Slides (ppt)
Module 5: Social-Emotional Learning and MTSS Behavior Supports Slides(ppt)
Module 5: Social-Emotional Learning and Multi-Tiered Systems of Support Interactive Agenda (pdf)
Module 5: Social-Emotional Learning and Multi-Tiered Systems of Support Interactive Agenda (word doc)
Module 5: Social-Emotional Learning and Multi-Tiered Systems of Support Slides (link)
Module 6: Standards and Assessment Alignment Interactive Agenda (pdf)
Module 6: Standards and Assessment Alignment Interactive Agenda (word doc)
Module 6: Standards and Assessment Alignment Slides (link)
Module 6: Standards and Assessment Alignment Slides (ppt)
Module 7: Adaptations: Accommodations and Modifications Interactive Agenda (pdf)
Module 7: Adaptations: Accommodations and Modifications Interactive Agenda (word doc)
Module 7: Adaptations: Accommodations and Modifications Slides (link)
Module 7 Adaptations: Accommodations and Modifications Slides (ppt)
Module 8: Technology Enhanced Environments Interactive Agenda (pdf)
Module 8: Technology Enhanced Environments Interactive Agenda (word doc)
Module 8: Technology Enhanced Environments Slides (link)
Module 8: Technology Enhanced Environments Slides (ppt)
Module 9: Online Learning Environments Interactive Agenda (pdf)
Module 9: Online Learning Environments Interactive Agenda (word doc)
Module 9: Online Learning Environments Slides (link)
Module 9: Online Learning Environments Slides (ppt)
Chapter 2: Inclusionary Practices Handbook Synchronous Modules
Overview
This is a ten-module synchronous training for teachers created using the Washinton State Office of Superintendent of Public Instruction’s Inclusionary Practices Handbook, Section One, Chapter Two; Inclusive Learning Environments. These modules offer participants opportunities to engage and collaborate around practices making their classrooms more inclusive for all students.
Module 1: Inclusionary Practices Handbook Chapter 2 Introduction
This is the Interactive Agenda for the Inclusionary Practices Handbook "Chapter 2" Module 1: Chapter 2 Introduction.
Module 1: Inclusionary Practices Handbook Chapter 2 Introduction | |||||||
Description of Module In this chapter, participants will review critical attributes of an inclusive general education setting and practices that facilitate participation and belonging for students with disabilities. In addition, participants will review the legal obligations for educating students with disabilities in public schools, the barriers they face, and consider ways to shift the system to ensure students have access to their least restrictive environment and education. Module Objectives
Module Steps Inclusionary Practices Handbook Link
Estimated completion time: 30 minutes.
Federal Mandates since 1975 and IDEA
Consider (and discuss, if possible) the following statements and how they connect to your educational environment:
Estimated completion time: 10 minutes.
Estimated completion time: 10 minutes.
Estimated completion time: 10 minutes.
Estimated completion time: 20 minutes. *All page numbers refer to actual numbers listed on the document. These do not match the pdf page numbers. Other Resources
References Washington Office of Superintendent of Public Instruction. (2021, March). Inclusionary practices handbook draft - k12.wa.us. OSPI - Special Education - IPP Handbook. Retrieved June 14, 2022, from https://www.k12.wa.us/sites/default/files/public/specialed/inclusion/Inclusionary-Practices-Handbook-DRAFT.pdf Assignment/Assessment None |
Module 2: Universal Design for Environments
This is the Interactive Agenda for the Inclusionary Practice Handbook "Chapter 2" Module 2: Universal Design for Environments.
Module 2: Universal Design for Environments | |
Description of Module In this module, participants will learn about how incorporating Universal Design in the classroom can increase the fidelity of inclusive practices by giving all learners greater opportunity to access instruction. Participants will learn about the seven principles of universal design, how it looks in the community, and what it can look like in the classroom. This module will also allow participants to explore the differences between Traditional Instruction and Universal Design for Learning (UDL), and reflect on their own experiences with both. Furthermore, participants will think about how principles of UDL are and can be used in the school environment. Module Objectives Participants will:
Module Steps
Other Resources
References UDL on Campus. (2015, October 6). Accessibility and UDL. YouTube. Retrieved June 14, 2022, from https://www.youtube.com/watch?v=-i9aGm0TBu0 Washington Office of Superintendent of Public Instruction. (2021, March). Inclusionary practices handbook draft - k12.wa.us. OSPI - Special Education - IPP Handbook. Retrieved June 14, 2022, from https://www.k12.wa.us/sites/default/files/public/specialed/inclusion/Inclusionary-Practices-Handbook-DRAFT.pdf Assignment/Assessment None |
Module 3: Learning Environments as Ecosystems
This is the Interactive Agenda for the Inclusionary Practices Handbook "Chapter 2" Module 3: Learning Environments as Ecosystems.
Module 3: Learning Environments as Ecosystems | |
Description of Module In this module, participants will learn how students with disabilities have historically not been included in general education. It will explore how these separate settings have resulted in social, cultural, and academic exclusion. Participants will learn how community centered learning can further support inclusivity and reflect on their own practices. In addition, this module looks at the barriers students with disabilities encounter and how to remove those barriers. Module Objectives Participants will:
Module Steps
Other Resources
References Five Moore Minutes. (2021, March 1). The Role of Place. YouTube. Retrieved June 14, 2022, from https://www.youtube.com/watch?v=VZeWXeadqmw Washington Office of Superintendent of Public Instruction. (2021, March). Inclusionary practices handbook draft - k12.wa.us. OSPI - Special Education - IPP Handbook. Retrieved June 14, 2022, from https://www.k12.wa.us/sites/default/files/public/specialed/inclusion/Inclusionary-Practices-Handbook-DRAFT.pdf Assignment/Assessment None |
Module 4: Learner Centered Environments
This is the Interactive Agenda for the Inclusionary Practices Handbook "Chapter 2" Module 4: Learner Centered Environments.
Module 4: Learner Centered Environments | |
Description of Module In this module, participants will learn about creating learner centered environments and how they can further support inclusive learning by reflecting on their own practices. Participants will learn about the four key elements: learner variability, flexibility, student profiles, and transitions. When these four key elements are implemented successfully within the general education classroom, you can create an inclusive environment for all learners. We will explore each of these elements and how they can support students with and without disabilities. In addition, this module will explore the barriers students with disabilities face and how to support the removal of those barriers. Module Objectives Participants will:
Module Steps
*All page numbers refer to actual numbers listed on the document. These do not match the pdf page numbers. Other Resources
References Moore, S. (2021, October 7). Removing the barriers: Planning for all! YouTube. Retrieved June 17, 2022, from https://www.youtube.com/watch?v=MzL8yMBKM7k Washington Office of Superintendent of Public Instruction. (2021, March). Inclusionary practices handbook draft - k12.wa.us. OSPI - Special Education - IPP Handbook. Retrieved June 14, 2022, from https://www.k12.wa.us/sites/default/files/public/specialed/inclusion/Inclusionary-Practices-Handbook-DRAFT.pdf Assignment/Assessment None |
Module 5: Social-Emotional Learning and Multi-Tiered Systems of Support
This is the Interactive Agenda for the Inclusionary Practices Handbook "Chapter 2" Module 5: Social-Emotional Learning and Multi-Tiered Systems of Support.
Module 5: Social-Emotional Learning and Multi-Tiered Systems of Support | |
Description of Module For this module, participants will develop an understanding of how self-awareness, self-management, social awareness, relationship skills, and responsible decision-making contribute to a positive learning environment that fosters positive emotions. Participants will also examine how the Multi-Tiered Systems of Supports (MTSS) model benefits and supports all students inside a classroom and throughout the school. Module Objectives Participants will:
Module Steps Inclusionary Practices Handbook Link
Other Resources
References Committee for Children. (2016, August 1). Social-emotional learning: What is SEL and why Sel Matters. YouTube. Retrieved June 17, 2022, from https://www.youtube.com/watch?v=ikehX9o1JbI Thurlow, M. L., Ghere, G., Lazarus, S. S., & Liu, K. K. (2020, January). MTSS for all: Including students with the most significant cognitive disabilities. Minneapolis, MN: University of Minnesota, National Center on Educational Outcomes/TIES Center. Washington Office of Superintendent of Public Instruction. (2021, March). Inclusionary practices handbook draft - k12.wa.us. OSPI - Special Education - IPP Handbook. Retrieved June 14, 2022, from https://www.k12.wa.us/sites/default/files/public/specialed/inclusion/Inclusionary-Practices-Handbook-DRAFT.pdf Washington Office of Superintendent of Public Instruction. (2020). SEL standards and benchmarks one-pager - k12.wa.us. Social Emotional Learning (SEL). Retrieved June 23, 2022, from https://www.k12.wa.us/sites/default/files/public/studentsupport/sel/pubdocs/SELStandardsandBenchmarksOnePager.pdf Assignment/Assessment Based on your learning from this module, please answer the following questions for reflection:
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Module 6: Standards and Assessment Alignment
This is an Interactive Agenda for the Inclusionary Practices Handbook "Chapter 2" Module 6: Standards and Assessment Alignment.
Module 6: Standards and Assessment Alignment | |
Description of Module This module addresses the essential link between learning and assessment. You must have equitable access to ensure students with disabilities are part of what is taught and assessed in the general education setting. Assessments must be closely aligned with the General Education curriculum that is standards-based and designed with UDL principles. Module Objectives Participants will:
Module Steps
Other Resources
References CAST (2020). UDL Tips for Assessment. Wakefield, MA: Author. Retrieved from https://www.cast.org/products-services/resources/2020/udl-tips-assessments Common Core State Standards Initiative. (2010). English language arts standards. English Language Arts Standards. Retrieved June 20, 2022, from http://www.corestandards.org/ELA-Literacy/ Common Core State Standards Initiative. (2010). Mathematics standards. Mathematics Standards. Retrieved June 20, 2022, from http://www.corestandards.org/Math/ John Cline. (2012, November 17). Creating learning objectives. YouTube. Retrieved June 20, 2022, from https://www.youtube.com/watch?v=_woMKwBxhwU NextGenScience. (2020, April). Next generation science standards. Next Generation Science Standards for States, By States. Retrieved June 20, 2022, from https://www.nextgenscience.org/ Washington Office of Superintendent of Public Instruction. (2020). Resources by Subject Area. Student Success. Retrieved June 20, 2022, from https://www.k12.wa.us/student-success/resources-subject-area Washington Office of Superintendent of Public Instruction. (2021, March). Inclusionary practices handbook draft - k12.wa.us. OSPI - Special Education - IPP Handbook. Retrieved June 14, 2022, from https://www.k12.wa.us/sites/default/files/public/specialed/inclusion/Inclusionary-Practices-Handbook-DRAFT.pdf Assignment/Assessment Answer the following questions using a sample unit of learning:
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Module 7: Adaptations: Accommodations and Modifications
This is the Interactive Agenda for the Inclusionary Practices Handbook "Chapter 2" Module 7: Adaptations: Accommodations and Modifications.
Module 7: Adaptations: Accommodations and Modifications | |
Description of Module In this module, the learner will understand the importance of accommodations and modifications within the inclusion model by identifying the differences and recognizing how to utilize them through practice and case study within the classroom. Module Objectives Participants will:
Module Steps Inclusionary Practices Handbook Link Learner Variability
Definition Accommodation
Chat Alert: In the chat, list other accommodations that you know, use on a regular basis, or would like to use. Definition Modification
Inclusion
Chat Alert: In the chat, list other accommodations that can be utilized for this assignment. Next, In the chat, list other modifications that can be utilized for this assignment. Accommodations and Modifications in the IEP
Video: Understanding the difference between accommodations and modifications. https://www.youtube.com/watch?v=4HNas4hfD3w
Break Out Room In your Break Out Room, read each support and determine if they are an accommodation or a modification.
Go To Visual Support Kit https://www.communicationaactualized.com/uploads/9/9/8/5/9985658/go-to_visual_kit.pdf Video: Understanding Universal Design for Learning https://www.youtube.com/watch?v=gmGgplQkrVw Classroom Observations
Case Study for Billy Break Out Room: In the breakout room, answer the following question in the areas of Social, Self-regulation, Cognitive, and Physical abilities about Billy that is listed in the case study:
Wrap Up Chat Alert: What are questions that you still have around accommodations and modifications? Think of a student: What is one adaptation that you thought about/ or was introduced to during this course that you can use with that student tomorrow, next unit, or next test. Other Resources
References Derry, D. (2016, November 5). Accommodations vs modifications. YouTube. Retrieved June 10, 2022, from https://youtu.be/4HNas4hfD3w Jones-Wohleber, T. (n.d.). Go-to visual support kit - communication actualized. Communication AACtualized. Retrieved June 11, 2022, from https://www.communicationaactualized.com/uploads/9/9/8/5/9985658/go-to_visual_kit.pdf Teachings in UDL. (2019, December 18). Universal Design for Learning: UDL. YouTube. Retrieved June 10, 2022, from https://youtu.be/gmGgplQkrVw Washington Office of Superintendent of Public Instruction. (2021, March). Inclusionary practices handbook draft - k12.wa.us. OSPI - Special Education - IPP Handbook. Retrieved June 14, 2022, from https://www.k12.wa.us/sites/default/files/public/specialed/inclusion/Inclusionary-Practices-Handbook-DRAFT.pdf Assignment/Assessment
Estimated completion time: 10 minutes. |
Module 8: Technology Enhanced Environments
This is the Interactive Agenda for the Inclusionary Practices Handbook "Chapter 2" Module 8: Technology Enhanced Environments.
Module 8: Technology Enhanced Learning Environments | |
Description of Module In this module, participants will learn about technology enhanced environments, focusing on digital and assistive technology tools to support all students in the general education setting. Participants will learn about universal technology tools; accommodations and modifications with technology; and assistive technology, including augmentative and alternative communication (AAC). Module Objectives Participants will:
Module Steps Technology Enhanced Classroom (TEC) A classroom that uses technology to:
BREAK OUT ROOM (6 minutes) How does technology enhance your classroom instruction? Chat Alert: How does technology enhance your classroom instruction? Student and Educator Benefits Table TECs improve communication access: Technology enhanced classrooms are well positioned for streamlining communication with students and families, and online learning options. Considerations for choosing technology When determining technology tools for instruction and student engagement, it is important to consider learner variability and accessibility. Universal Tools Chat Alert: How could this tool help everyone? Technology is an essential feature of Universal Design for Learning (UDL). Examples of Universal Tech Tools Break Out Room (6 minutes) Choose one question to discuss:
Accommodations and Modifications Accommodations change how the student is taught but not the learning objective. Modifications change what is taught, and the learning objective is different from the grade level expectation Grading with Modifications When the modifications fundamentally change the standards being taught, then [student] can be graded according to completion of alternative assignments, demonstration of modified standards, and/or demonstration of mastery of key concepts. Modified grading will need to be noted on the comment codes for the report card. Accommodations with Technology Video: Bringing support TO the students. Just let them eat cake! Shelley Moore https://youtu.be/9WuygB4j55U Chat Alert: How would you describe your school’s support services, cupcakes or layered cake? AT integration activity examples:
Break Out Room (6 minutes) Choose 1 question to discuss:
Assistive Technology AT can be low-tech, such as a cane, specialized pen grips, or printed picture communication system. More advanced AT can include a hearing aid, or wheelchair. High-tech assistive technology can include computers, tablets, switches, and software for reading, writing, math, and communication. Augmentative and Alternative Communication (AAC) AAC means all of the ways that someone communicates besides talking. AT in General Education Setting allows students to:
Chat Alert: Who could you talk to if you think one of your students could benefit from assistive technology? What I Need (WIN) Time (5 Minutes) Review Module 8 Resources and consider your personal action plan. Other Resources
References Adapted from Jung, L. A., & Guskey, T. R. (2007). Standards-based grading and reporting: A model for special education. Teaching Exceptional Children, 40(2), 48–53. Copyright 2007 by the Council for Exceptional Children American Speech-Language-Hearing Association. (2022). Augmentative and alternative communication (AAC). Augmentative and Alternative Communication (AAC). Retrieved May 8, 2022, from https://www.asha.org/public/speech/disorders/aac/ Jessica Urbanovsky. (2020, March 1). Brainpop westward expansion. YouTube. Retrieved May 9, 2022, from https://www.youtube.com/watch?v=5MhkB8mecsw Moore, S. (2020, February 20). Bringing support to the students just let them eat cake! Retrieved May 9, 2022, from https://www.youtube.com/watch?v=9WuygB4j55U The Off Duty Teacher. (n.d.). Properties of matter digital activities (google slides, PowerPoint). Teachers Pay Teachers. Retrieved May 8, 2022, from https://www.teacherspayteachers.com/Product/Properties-of-Matter-Digi tal-Activities-Google-Slides-PowerPoint-5870142 Washington Office of Superintendent of Public Instruction. (2021, March). Inclusionary practices handbook draft - k12.wa.us. OSPI - Special Education - IPP Handbook. Retrieved June 14, 2022, from https://www.k12.wa.us/sites/default/files/public/specialed/inclusion/Inclusionary-Practices-Handbook-DRAFT.pdf Assignment/Assessment None |
Module 9: Online Learning Environments
This is the Interactive Agenda for the Inclusionary Practices Handbook "Chapter 2" Module 9: Online Learning Environments
Module 9: Online Learning Environments | |
Description of Module In this module, participants will recognize the benefits of online learning environments for all learners. Participants will also identify the barriers of online learning environments to student engagement and be able to discuss ways to ensure equity and inclusion in the online learning environment. Module Objectives Participants will:
Module Steps Mood Meter Chat Alert:
Chat Alert: What words or general thoughts come to mind when you think of online learning? A New Paradigm of Teaching and Learning
Benefits of Online Learning Dangers of Traditional School Learning Variability and the Jagged Learning Profile Chat Alert: How can you reimagine the online learning environment to meet the “jaggedness” of ALL your learners? Video: The Myth of Average by Todd Rose https://youtu.be/PTpQYDTgq7E Break Out Room (17 minutes) After watching on the TED Talk video by Todd Rose, in your Breakout Room reflect on the following questions:
What I Need Time (5 Minutes)
Learner Variability and Universal Design for Learning (UDL) Video: https://youtu.be/v8IHA6gaWCY Chat Alert: Share in the chat one(1) key takeaway from the video. Read the information on Table 2-6 of the IP Handbook page 70. https://www.k12.wa.us/sites/default/files/public/specialed/inclusion/Inclusionary-Practices-Handbook-DRAFT.pdf Chat Alert: What possible barriers to online learning hinder effective student participation and engagement? Equitable Access and Engagement Online Learning Barriers Barrier #1: Poor Time Management Barrier #2: Lack of Motivation Barrier #3: Administrative Issues Barrier #4: Technical Issues Family Role in Online Learning Environment Chat Alert: 1. How do you involve the parents of your students in online learning? 2. How do you provide support to families of students with significant cognitive and/or behavioral needs in an online learning environment? Equity and Inclusion in the Online Learning Environment
Break Out Room (15 minutes) Jigsaw Activity Discuss: https://www.celt.iastate.edu/teaching/creating-an-inclusive-classroom/inclusion-online/ Chat Alert: What do you need to: START or STOP or CONTINUE in ensuring equity and inclusion in an online learning environment? Other Resources
References Barriers to online learning (and how to overcome them!). The Hub. (2019, August 22). Retrieved June 10, 2022, from https://news.athabascau.ca/learners/barriers-to-online-learning-and-how-to-overcome-them/ CAST (2018). Universal Design for Learning Guidelines version 2.2. Retrieved from http: //udlguidelines.cast.org Gibbons, D. (2022, April 30). Tech tools and tips for teaching coding to students with learning disabilities. Master's in Data Science. Retrieved June 21, 2022, from https://www.mastersindatascience.org/resources/how-to-teach-coding-to-students-with-learning-disabilities/ Horras, A. (2017, January 9). Edited: The myth of average. YouTube. Retrieved June 10, 2022, from https://youtu.be/PTpQYDTgq7E Hough, L. (n.d.). Beyond average. Harvard Graduate School of Education. Retrieved June 10, 2022, from https://www.gse.harvard.edu/news/ed/15/08/beyond-average Iowa State University. (2022, May 9). Equity and inclusion in the Online Learning Environment. Center for Excellence in Learning and Teaching. Retrieved June 10, 2022, from https://www.celt.iastate.edu/teaching/creating-an-inclusive-classroom/inclusion-online/ Reale, L. (2017, December 10). Learner Variability & UDL. YouTube. Retrieved June 10, 2022, from https://youtu.be/v8IHA6gaWCY Stem, J. (n.d.). Intro to online teaching and learning v.05 - west los angeles college. West LA College. Retrieved June 11, 2022, from https://www.wlac.edu/online/documents/otl.pdf Vernon, J. (2012, November 1). Sage on the stage or guide on the side? where is e-learning taking us? somewhere or nowhere new? Mind Bursts. Retrieved May 9, 2022, from https://mindbursts.com/2011/08/02/sage-on-the-stage-or-guide-on-the-side-where-is-e-learning-taking-us-somewhere-or-nowhere-new/ Washington Office of Superintendent of Public Instruction. (2021, March). Inclusionary practices handbook draft - k12.wa.us. OSPI - Special Education - IPP Handbook. Retrieved June 14, 2022, from https://www.k12.wa.us/sites/default/files/public/specialed/inclusion/Inclusionary-Practices-Handbook-DRAFT.pdf Assignment/Assessment
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Module 10: Inclusive Learning Environment Application
This is the Interactive Agenda for the Inclusionary Practices Handbook "Chapter 2" Module 10: Inclusive Learning Environment Application.
Module 10: Inclusive Learning Environment Application | |
Description of Module This module summarizes the content of Chapter 2 on inclusive learning environments, which highlights the general education setting as the primary setting for all students, including students with disabilities, to receive curriculum and instruction. Additional considerations are discussed for ensuring meaningful participation and a sense of belonging for students with disabilities in the general education setting. Module Objectives Participants will:
Module Steps
*All page numbers refer to actual numbers listed on the document. These do not match the pdf page numbers. Other Resources
References Washington Office of Superintendent of Public Instruction. (2021, March). Inclusionary practices handbook draft - k12.wa.us. OSPI - Special Education - IPP Handbook. Retrieved June 14, 2022, from https://www.k12.wa.us/sites/default/files/public/specialed/inclusion/Inclusionary-Practices-Handbook-DRAFT.pdf Assignment/Assessment If a Team Operational Goal is not yet developed, see pgs 34-35* of the Inclusionary Practices Handbook to do this now! |
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oercommons
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2025-03-18T00:37:24.986054
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Student Guide
|
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https://oercommons.org/courseware/lesson/65264/overview
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RTI
Special Education: RTI and MTSS
Overview
This resource is for pre-service teachers who are learning about special education and the Response to Intervention (RTI) and the Multi-tiered System of Supports (MTSS).
How are MTSS and RTI alike and different?
Interventions and Progress Monitoring Toolkit. Panorama Education. Retrieved on 04.15.20 from https://go.panoramaed.com/hubfs/Marketing%20Content/Interventions-Progress-Monitoring-Toolkit.pdf?hsCtaTracking=850d5ad5-fb48-4058-85a9-3d6ced71dfe2%7Cb661e603-39fb-4b64-992b-b393bb70a8b6
Response to intervention (RTI) is a framework that many schools use to help students who are struggling with academics. There are three levels of intervention in RTI. We typically see a model like the one attached in the resources. Tier one includes interventions for the entire class. Tier two interventions are for students who need more help than they are receiving in Tier one. This can include small groups or other interventions. This is not just a strategy, but it is an evidence-based practice -- one that research shows that it works. Tier three also uses intensive interventions (evidance-based) and the special education identification process is started. Some great sites for evidence based interventions are:
An example of the RTI process might look like this.
Susie is having a difficult time with reading. The classroom teacher uses some strategies and interventions that typically work for all students to help Susie, like additonal time spent in small group learning, providing vocabulary integrated into the content and prior to lessons, and retelling exercises with partner reading. Susie continues to struggle and grades are dropping. A team of professionals meet and decide to move Susie to Tier 2. The teacher then uses the evidence-based practices from one of the sites above, such as a particular reading series, Duet Reading, Echo Reading, Partner Retell, and Repeated Reading with Oral or Written Retell. These interventions are used for about 6 weeks with data collected on progress.The team meets again. If Susie is progressing, she may remain in Tier 2 for another extended period, or she can be moved back into Tier 1. However, if Susie continues to struggle, she may be moved into Tier 3, where interventions are more intense and the special education testing procedures begin. If she is found to have a disability and shows a need, she will be placed into special education.
A multi-tier system of supports (MTSS) is more comprehensive. It may include the three levels of RTI. But MTSS goes beyond just academics. It also covers social and emotional supports. That means it can include behavioral support and intervention plans. The MTSS does not just cover students, it also covers the professionals by providing professional development for the faculty.
See the resource attached for Interventions and Progress Monitoring Toolkit.
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oercommons
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2025-03-18T00:37:25.007581
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Jeanne Burth
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https://oercommons.org/courseware/lesson/115174/overview
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Pikes Peak State College IHE Accessibility in OER Implementation Guide for ISKME/CAST OER and Accessibility Cohort 2024 OER COMMONS
Overview
The PPSC team's goal for this Landscape Analysis series is to improve our accessibility and UDL knowledge by using SLIDE and POUR. We will then educate faculty and staff on the importance of accessibility and introduce SLIDE and POUR as tools they can use to improve their accessibility skills.We have been on our OER journey since 2018 but there is always more to learn.
Please note that the Pikes Peak State College logo is copywritten. Please contact Jacqueline Tomrdle at Jacqueline.tomrdle@pikespeak.edu for more information on use.
Section One: Landscape Analysis for Accessibility in OER
Landscape Analysis
Part One: Initial Thoughts
What is your team's initial goal for this series?
The PPSC team's goal for this series is to improve our accessibility knowledge by using SLIDE and POUR. We will then educate faculty and staff on the importance of accessibility and introduce SLIDE and POUR as tools they can use to improve their accessibility skills. The eLearning team consists of Jacqueline Tomrdle:Team Lead, Rob Fredrickson, Christine Gaccetta-Sharp, and Hannah Tooley.
Part Two: Introductory probing questions:
What does accessibility look like in our organization? How do we measure accessibility?
A digital accessibility plan has been approved and is in place by the leadership at Pikes Peak State College.
Accessibility is measured by division and department. Divisions have administrative staff check instructor syllabi for accessibility and division chairs check course shells for accessibility each semester.
The PPSC Dean of Online Learning assigns selected courses to the PPSC Learning Designers for review of accessibility and Quality Matters standards each semester.
The PPSC eLearning department created accessibility training courses for Word, PowerPoint, and Excel that faculty and staff can self-enroll in.
Unlocking Inclusion with Digital Accessibility Training was released at the end of March to all employees at Pikes Peak State College. PPSC and the Colorado Community College System are committed to providing an inclusive and accessible digital environment that enables all users to participate fully in online activities and access the information they need to succeed. Digital accessibility is a requirement for all digital media, including external-facing media, internal email, forms, etc.
What does OER look like in our organization? How do we measure access to OER?
PPSC has eighty-one OER texts and resource materials. Thirty are in the PPSC Pressbooks catalog that have been adapted or created by faculty and instructors.
PPSC has received Colorado Department of Higher Education OER grant funds since 2018. The funds are used for faculty compensation for creating and adapting OER materials.
PPSC measures success by the number of students enrolled in OER courses and the cost savings they experience.
When choosing courses to create OER materials, PPSC selects courses that have high enrollment and/or high textbook costs.
PPSC bookstore vendor publicizes courses that use OER.
All OER materials created by faculty are reviewed by the PPSC OER Coordinator to ensure accessibility guidelines are met.
Part Three: Clarifying questions for accessibility:
What are the organizational structures that supports accessibility?
Accessibility is supported by executive leadership, division deans, associate deans, department chairs, the eLearning department, and the Center for Excellence in Teaching and Learning team, and the PPSC Accessibility Services Department.
Who generates most of the accessibility structures/conversation in our organization?
Most of the accessibility questions come from faculty. eLearning initiates and facilitates workshops and training. eLearning receives support from our Center for Excellence in Teaching and Learning team and the PPSC Accessibility Services Department.
Where do most educators get support with accessibility?
We have several support systems in place. Faculty members ask their associate deans or department chairs. They are directed to eLearning and the PPSC Accessibility Services department.
What content areas might have the largest gaps in access to accessibility?
That is a good question. We do not have any data to support it, but our best guess would be the Science and CTE (Career and Technical Education) programs.
Part Four: Clarifying questions for OER:
What is our organizational structure that supports curricular resources?
In most instances, faculty get to choose their resources. Some courses are required to use supplied materials. It varies by discipline and division.
What is our organizational structure that supports OER?
OER is supported by our executive leadership team down to the faculty members.
Who generates most of the curricular resources in our organization?
The Division of Business, Technology, and Public Services and the Division of Arts, Humanities, and Social Sciences create the most OER resources.
Where do most educators get support with curricular resources?
Our faculty do get support from the department chairs but most frequently by attending CETL workshops or contacting and working with the OER coordinator and Learning Designers in eLearning.
What content areas might have the largest gaps in access to curricular resources/OER?
Math and Science have the largest gaps.
Part Five: Clarifying questions for Faculty learning and engagement:
What Professional Learning (PL) structures have the best participation rates for our educators?
Our professional development week (PDW) workshops saw the most participation. The PPSC Center for Excellence in Teaching and Learning (CETL) hosts PDW. PDW occurs the week before classes start in the spring and fall semesters.
Keynote speakers kick off a theme for the year. Starting in August 2024, our keynote was Dr. Gina Garcia, author of Becoming Hispanic-Serving Institutions: Opportunities for Colleges and Universities as we forge ahead with creating an inclusive and welcoming college environment.
Dr. Rajiv Jhangiani was our keynote in Spring 2018 to highlight his work on Open Educational Resource practices as we move forward with our own.
What PL structures have the best "production" rates for our educators?
Good question. We do not have data that provides this information.
What incentive do we have to offer people for participating in learning and engagement?
We offer professional development badges for most professional development.
The badges can then be used by adjunct instructors who join the CETL Promoting Advancement and Growth for Educators (PAGE) program. There are 4 Tiers to complete. With each Tier, there is a pay increase once you have completed the PAGE institute for that Tier. Once Tier 4 PAGE Institute is completed, you can apply for funds to attend a teaching conference.
Faculty can use the professional development badges in part with their yearly evaluation.
Who are the educators that would be most creative with accessibility and OER?
The Humanities, Early Childhood Education, and Archeology departments are the most creative with their OER development.
Who are the educators that would benefit the most from accessibility and OER?
Everyone can benefit from accessibility and OER.
Part Six: Final Probing questions:
What is our current goal for Accessibility in OER and why is that our goal?
Educating faculty and staff on the facts:
Many students do not self-disclose disabilities, so accessibility should be incorporated as standard practice.
High textbook costs negatively impact students.
OER offsets costs by providing an equitable and inclusive education.
Who have we not yet included while thinking about this work?
We have not included the student voice for how OER and accessibility affect them.
We want faculty and staff to understand how the lack of accessibility impacts our students.
What barriers remain when considering this work?
Faculty do not acknowledge that students have accessibility needs in their discipline.
Faculty are not considering textbook costs when choosing course materials.
Overall college buy-in and resistance to change.
What would genuine change look like for our organization for this work?
Genuine change would involve the elimination of negative connotations and preconceptions associated with disabilities.
Accessibility should be standardized so that everyone has equal access to resources regardless of ability.
Full-degree programs that rely solely on OER will result in zero textbook expenses for students.
More resources are shared across the Colorado Community College System to ensure that we are using OER and accessible materials at whatever college teaches our students when they take a course through Colorado Online.
Section Two: Team Focus (Finish before May 25th to share during Implementation Session Two)
Identifying and Describing a Problem of Practice
The following questions should help your team ensure that you are focusing your collaboration.
What is your Team’s specific goal for this series? You may consider using AEM Quality Indicators for Creating Accessible Materials to help add to or narrow your work.
What other partners might support this work?
What is your desired timeframe for this work?
How will you include diverse voices and experiences in this work?
Please create a Focus Question that explains your goal and provides specific topics that you would like feedback on. This is what you will share in your breakout groups for feedback.
(Save for during March 14th's session.) What feedback did you receive from another team during the March 14th Implementation Session?
Section Three: Team Work Time and Next Steps (Complete by the end of the series)
Sharing and Next Steps
What was your redefined goal for this series?
What does your team want to celebrate?
What did your team accomplish? Please link to or attach at least one resource you have created/adapted.
What are your team’s next steps?
|
oercommons
|
2025-03-18T00:37:25.048616
|
Assessment
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/115174/overview",
"title": "Pikes Peak State College IHE Accessibility in OER Implementation Guide for ISKME/CAST OER and Accessibility Cohort 2024 OER COMMONS",
"author": "Higher Education"
}
|
https://oercommons.org/courseware/lesson/87108/overview
|
Modified OpenStax Management Video Guides
Modified OpenStax Management PowerPoints & Video Guide (Accessibility Updates)
Overview
Modified Lecture Slides and Video Guide for the OpenStax Principles of Management Textbook - Changes focus on accessibility improvements.
The following PowerPoint and Video Guides for OpenStax Principles of Management have been modified by faculty members Mike Matar and Erin Thomas at Coastline Community College to improve the accessibility of the materials provided by OpenStax.
The chapter PowerPoints contain learning outcomes, concept check questions, links to videos, and lecture notes. The accompanying video documents detail the changes that have been made between this modified PowerPoint deck and the original PowerPoint deck provided by OpenStax on the book's Instructor Resources page: https://openstax.org/details/books/principles-management?Instructor%20resources
|
oercommons
|
2025-03-18T00:37:25.068287
|
10/26/2021
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/87108/overview",
"title": "Modified OpenStax Management PowerPoints & Video Guide (Accessibility Updates)",
"author": "OER Contributor"
}
|
https://oercommons.org/courseware/lesson/91473/overview
|
Self-regulation
Overview
This is a parenting tool to be sent for support with reducing impulsive speech at home.
Impulsive Speech
1. Consistency is key, both in reward and the lack thereof.
2. Set your child’s expectations from the beginning.
3. Agree on the reward beforehand.
Self-regulation is the ability to be more self-aware, conscious of social situations, and mindful of your input.
Home practices:
- Helping your child self-regulate by using the “no interrupting” method with repetition. It will help the child learn the social cues to talk, and act accordingly.
Implementation:
- Set explicit rules and timeframe for the child. For example, ask him/her to not interrupt, while you are sitting on your computer finishing a task for work.
- Do take a break for a few minutes to check in with them and praise them for following the rules.
- Use an abacus or a visual count as a reward system, to count each time they followed the rules, and offer the reward for a specific number of beads (e.g. 5) within the same day.
- If they interrupted you can take away one bead at a time.
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oercommons
|
2025-03-18T00:37:25.082325
|
Activity/Lab
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/91473/overview",
"title": "Self-regulation",
"author": "Special Education"
}
|
https://oercommons.org/courseware/lesson/94149/overview
|
Coloring In!
Overview
ACTIVITY OBJECTIVE: Improve the ability to concentrate and enhance fine motor skills.
Fine Motor Skills
Assure the child to concentrate and color in lines
ACTIVITY OBJECTIVE: Improve the ability to concentrate and enhance fine motor skills.
ACTIVITY DESCRIPTION:
We might not always realize it, but the simple activity of coloring within the lines is actually a fantastic way for kids to develop their ability to focus. Not only does it help hand strength and accuracy, but taking the time to make sure they color between the lines requires attention to detail, which in turn leads to an improved ability to concentrate!
FOR PRINTABLES
ACTIVITY MATERIALS
based on the time of activity | Printed out ready-to-color pictures |
24 | Coloring Pens/Pencils |
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oercommons
|
2025-03-18T00:37:25.095679
|
Activity/Lab
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/94149/overview",
"title": "Coloring In!",
"author": "Special Education"
}
|
https://oercommons.org/courseware/lesson/95188/overview
|
G1M2U1_ModuleLessons_OverviewforFamilies-0519 - Accessibility
Overview
This is a REMIX of a resource from EL Learning that is part of a module where students build their literacy and science skills as they engage in a study of the sun, moon, and stars. The full Module can be found here - https://curriculum.eleducation.org/curriculum/ela/grade-1/module-2
The intent of this REMIX is to allow participants to make a copy and make edits to increase accessibility.
Letter to Families
This is a REMIX of a resource from EL Learning that is part of a module where students build their literacy and science skills as they engage in a study of the sun, moon, and stars. The full Module can be found here - https://curriculum.eleducation.org/curriculum/ela/grade-1/module-2
The intent of this REMIX is to allow participants to make a copy and make edits to increase accessibility.
Notes to Teacher:
Making connections between home and school is vitally important in supporting students’ learning. The following suggestions and materials represent some of the ways you can support these connections during this unit.
Suggestions:
- Copy the attached family letter and send it home with students after teaching Lesson 1 (this letter can be used as is or as a model). Consider having the letter translated for families whose first language is not English.
- Encourage students to share any at-home learning with the class. They can do this orally or by sharing writing, pictures, or artifacts. Example: Consider providing time for students to share experiences they have with the sun and moon during times when they are not at school. Students can document by writing and drawing pictures.
- Create a display board featuring pictures of the sun, moon, and stars. Provide a label for each picture written in several different languages.
- Take pictures of the sun, moon, and stars during various times of the day and throughout the month and post them in the room or hallway.
- Depending on the needs of your students and the expectations of your school community, consider assigning additional homework. Examples: open-ended activities that help students read, think, talk, write, and ask questions about the topic instead of those that simply test students on their content knowledge (see suggested activities in the family letter).
- If using EL Education’s K–2 Reading Foundations Skills Block, consider sending home a copy of the Decodable Student Reader used each week and encourage families to have students read these texts aloud to them.
Dear Family,
During Unit 1 of this module, your student will generate questions about the sun, moon, and stars and begin to consider how the sun and moon have inspired storytellers. Students examine and read various narrative stories about the sun, moon, and stars, and build skills of retelling role-playing and writing in response to text. By the end of the unit, students will be able to participate in a discussion about the unit guiding question: “Why do authors write about the sun, moon, and stars?” I am writing today to explain what your student will be learning, describe the activities that will support this learning, and suggest how to support this learning at home. I hope that you will plan to join us at the end of our deep study to celebrate all of your student’s learning!
What will your student be learning?
Students will begin to study the topic by reading various narrative stories about the sun, moon, and stars and considering how they inspire each story. As students read, they gather and record descriptive language used to describe the appearance and position of the sun and moon, and work to retell key events from each story. The learning will be focused on these ideas:
- The sun, moon, and stars are always there and affect our lives in different ways.
- The sun, moon, and stars inspire us and make us imagine.
Students will also practice these reading literature skills:
- Retelling stories, including key details and demonstrating an understanding of their central message or lesson
- Describing characters, setting, and major events in a story, using key details
- Identifying words in stories that suggest feelings or appeal to the senses
How will your student be learning?
Throughout the unit, your student will read, think, listen, talk, write, and ask questions about the topic of how the sun, moon, and stars inspire storytellers. Students will participate in these activities, among others, to build their literacy skills:
- Listening to read-alouds of a variety of texts about the sun, moon, and stars
- Closely observing and examining pictures of the sun, moon, and stars to generate notices and wonderings
- Singing songs and engaging in movement routines about the sun and moon
- Engaging in role-play with peers to act out and retell various parts of stories read aloud
- Responding to text through writing and drawing
What can you do to support your student’s learning at home?
Here are a few activities that you can do at home with your student to support his or her learning:
- Ask your student to talk with you about this question: Why do authors write about the sun, moon, and stars?
- Read books and sing songs about the sun, moon, and stars from home or at the library.
- Observe the sun, moon, and stars at different times of the day and discuss their appearance and position in the sky.
- Encourage your student to read the weekly Decodable Student Reader or a letter book to you every night.
Please let me know if you have any questions or would like to discuss your student’s learning.
Sincerely,
|
oercommons
|
2025-03-18T00:37:25.112971
|
07/14/2022
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/95188/overview",
"title": "G1M2U1_ModuleLessons_OverviewforFamilies-0519 - Accessibility",
"author": "Joanna Schimizzi"
}
|
https://oercommons.org/courseware/lesson/113025/overview
|
AI for Learning and Work
Overview
World Education's AI for Learning and Work initiative is dedicated to exploring the intersection of artificial intelligence and education, and how it can shape the future of the way we live and work. On this page, you can access open resources, professional development offerings and opportunities to get involved.
Introduction
World Education is committed to advancing digital equity and is leading efforts to build capacity in all areas of the digital equity ecosystem. The world is rapidly changing due to advances in AI and digital technologies, and we believe that education must keep pace to prepare learners for the challenges and opportunities ahead. As a continuation of that work, this initiative provides educators, learners and other stakeholders with valuable insights, resources, and guidance on leveraging AI in the education and training landscape.
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oercommons
|
2025-03-18T00:37:25.126283
|
Rebecca Henderson
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/113025/overview",
"title": "AI for Learning and Work",
"author": "Reading"
}
|
https://oercommons.org/courseware/lesson/113028/overview
|
Master Class: Generative AI for Open Education
Overview
World Education's AI for Learning and Work initiative is dedicated to exploring the intersection of artificial intelligence and education, and how it can shape the future of the way we live and work. In this webinar, Jeff Goumas and Rachel Riggs share their insights.
Introduction
In partnership with UNESCO’s Global Learning House, Jeff Goumas and Rachel Riggs present a Generative AI for Open Education Master Class. They share what they’ve learned and accomplished through the CrowdED Learning model and where they see Generative AI can be leveraged to support the adaptation, creation, and curation of open educational resources (OER). How can this emerging technology support educators? How can we continue moving toward “open”? What does keeping our values in focus look like?
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oercommons
|
2025-03-18T00:37:25.138658
|
02/18/2024
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/113028/overview",
"title": "Master Class: Generative AI for Open Education",
"author": "Rebecca Henderson"
}
|
https://oercommons.org/courseware/lesson/115235/overview
|
National Guidelines for Teaching AI in K-12
Overview
The Artificial Intelligence (AI) for K-12 initiative (AI4K12) is jointly sponsored by AAAI and CSTA.
The initiative is developing (1) national guidelines for AI education for K-12, (2) an online, curated resource Directory to facilitate AI instruction, and (3) a community of practitioners, researchers, resource and tool developers focused on the AI for K-12 audience.
Introduction
Since 2018 the AI4K12 Initiative has been developing national guidelines for teaching AI in K-12. The AI for K-12 guidelines are organized around the 5 Big Ideas in AI. The guidelines define what every student should know about AI and what they should be able to do with it. The guidelines will serve as a framework to assist standards writers and curriculum developers on AI concepts, essential knowledge, and skills by grade band.
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oercommons
|
2025-03-18T00:37:25.151120
|
04/14/2024
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/115235/overview",
"title": "National Guidelines for Teaching AI in K-12",
"author": "Rebecca Henderson"
}
|
https://oercommons.org/courseware/lesson/107625/overview
|
Education Standards
1b. ACA: Homelessness-Elementary (pdf)
2. Jared's Story (Elementary) | OSPI
3. Homelessness-What do you see? (pdf)
4. Note Taking-Jared's Story (pdf)
5. Think-Pair-Share: Jared's Story (pdf)
6. Unsheltered Lives (video) | Klem Daniels Production
7a. Homeless in Vermont (audio) | Vermont Public Radio
7b. Homeless-Reporter Response Chart (pdf)
7c. Claim-Evidence-Reasons-Sources worksheet (pdf)
8. Civic Action Ideas (pdf)
Animating Civic Action: Elementary Lesson - Homelessness
Overview
In this Animating Civic Action lesson, from the Washington Office of Superintendent of Public Instruction and Washington State Governor's Office of the Education Ombuds, students listen to the story of Jared, a student experiencing homelessness. Students are asked to examine what it means to be homeless, to identify how homelessness affects people and to and to consider ways they can act to take action against homelessness in their school community.
About Animating Civic Action
Animating Civic Action lessons are created to support civic engagement K-12. These lessons introduce real stories of individuals in our Washington community who have experienced challenges to civic participation. These lessons incorporate multimedia approaches and provide opportunities to connect civic education with social-emotional learning. These lessons are standards aligned and grade level appropriate.
Lesson Overview
Enduring Understanding
According to the US Department of Housing and Urban Development, a person is “homeless” if his or her usual nighttime residence is:
- in public or private emergency shelters, which take a variety of rooms- armories, schools, church basements, government buildings, former firehouse and where temporary voucher are provided by private and public agencies, even hotels, apartments, or boarding homes,
- in the streets, parks, subways, bus terminals, railroad stations, airports, under bridges or aqueducts, abandoned buildings without utilities, cars, trucks, or public private space that is not designed for shelter.
People experience homelessness for various reasons such as affordable housing, escaping violence, racial disparities, and/or health problems. Experiencing homelessness is not an ideal option for shelter, and when people experience homelessness, they are unfairly judged by others for their housing situation.
Supporting Questions
Students consider these questions - finding and using evidence to support the Enduring Understanding
- What is homelessness?
- What homelessness did Jared experience?
- What homelessness have my classmates and I experienced?
- How can I support people experiencing homelessness?
Learning Targets
Students will be able to…
- define homelessness.
- identify how homelessness affects people.
- produce a civic action project that promotes taking action against homelessness in the school community.
Student Launch
Homelessness
Hooking students into the content of the inquiry.
Homelessness: What do you see?
Distribute the Homelessness: What do you see? task.
- Ask students to draw an image that comes to mind when they hear the word “homeless.”
- Have them write a reflection (for example, a drawing, paragraph, poem, etc., on notebook paper describing homelessness in America.
- Invite students to share their reflections.
- Discuss the similarities and differences between the drawings. Some possible points of observation:
- How many people thought of men? Women? Children?
- Older or younger people?
- Well-dressed or with ragged clothes? Dirty or clean?
- Discuss whether all people without homes fit this description. It is important to realize that how people experience homelessness varies.
Jerad's Story
- Explain to students that they will watch and listen to the Jared's Story video about a student from Washington state named Jared.
- Show the video while students just listen.
- Show and explain the Note Taking: Characteristics of Jared document with students. Students will document the following: Things Jared Did, Things Jared Shared, and How Jared Appeared.
- Show the video one more time for students to take notes.
- Distribute the Think-Pair-Share document. In pairs,
- Students take 3 minutes to write or draw their own thoughts about what they observed about Jared’s experience.
- Students take 4 minutes to share what they each thought and document their peer’s thoughts on their Think-Pair-Share document.
- Students discuss what they would like to share as a partner team with the class. Students write down what they will share with the class.
Focused Inquiry
A focused inquiry is a one-to-two-day lesson that will have students engaging in the C3 Framework’s Inquiry Arc.
In this focused inquiry, students identify and discuss what causes homelessness in the United States. Students utilize their new learning about homelessness to redraw and rewrite about homelessness in the United States.
Compelling Question
Why do People Experience Homelessness?
Standards
- SSS3.4.1 Draw on disciplinary concepts to explain the challenges people have faced and opportunities they have created in addressing local, regional, and global problems at various times and places.
- C4.4.1 Recognize that civic participation involves being informed about public issues, taking action, and voting in elections.
- C4.5.4 Describe ways in which people benefit from and are challenged by working together, including through government, workplaces, voluntary organizations, and families.
Learning Goals
- I can identify causes and concerns of homelessness.
- I can identify how others have experienced homelessness.
- I can support people experiencing homelessness.
Staging the Question
Part 1
Notes to teacher: Pre-watch the video in preparation for appropriate stopping points for your class.
- Play the video about homelessness called Unsheltered Lives.
- When the screen goes black, the teacher may pause the video to define the unfamiliar words in the narration. Or the teacher may prompt a discussion about the content.
- After the video: Have students discuss their new learning and shifting views on homelessness.
- Ask: What causes homelessness?
- Ask: How has your view of homelessness changed?
- Students redraw their picture of a person experiencing homelessness using their new acquired knowledge about homelessness.
Part 2 (Jigsaw Activity)
Note to teacher: Pre-listen the Homless in Vermont audio file from Vermont Public Radio in preparation for Who, What, Where, When, Why, and How responses on the Reporter Response Chart.
Begin and end times for each of the four sections are provided on the chart.
- Homeless in Vermont has four main sections. After placing students into four groups, assign them one of the four sections presented in the podcast. As the students are listening, have them complete the Homeless in Vermont Reporter Response Chart
- After individually filling the Reporter Notes per team, each student shares notes with group members to ensure they have accurate information.
- Each group selects a reporter to share the information with the whole class. As the students are reporting, students are taking notes on each section of the chart. The teacher records notes for a class Reporter Notes document.
- The teacher leads the class in a debrief of the new learning by asking: What did you learn about homelessness?
Supporting Questions
- What is homelessness?
- What homelessness did Jared experience?
- How can I support people experiencing homelessness?
- This supporting question may need to be treated sensitively and scaffolding may need to happen to discuss this question.
Formative Performance Task
Students recreate their drawing and paragraph about homelessness using newly acquired knowledge.
Argument
After students analyze various sources to answer the supporting questions and discuss their thinking with the class, Why do People Experience Homelessness? Students construct a claim, supporting evidence, and a conclusion to answer the Compelling Question.
Taking Informed Action
Students create a product that communicates a solution to the compelling question, Why do People Experience Homelessness? In the student-created product, students view the Civic Action Ideas document and select a civic action to help support people experiencing homelessness.
Attribution and License
Attribution
This lesson for Animating Civic Action lesson was developed by Barbara Bromley, Edmonds School District and Katharine Smith, Medical Lake School District.
Jared’s Story animation developed by Peter Rand, Good Point Creative for the Washington Office of Superintendent of Public Instruction.
Animating Civic Action lessons support civic engagement K–12. These lessons introduce real stories of individuals in our Washington community who have experienced challenges to civic participation.
The Animating Civic Action Project was conceived and developed by:
- Danielle Eidenberg, Senior Education Ombuds, Governor’s Office of the Education Ombuds
- Zac Murphy, Director of Multimedia and Information Strategy, Communications and Digital Media, Office of Superintendent of Public Instruction (OSPI)
- Jerry Price, Associate Director, Social Studies Content, OSPI
Support for the Animating Civic Action project was provided by:
- Content media creation, filming, and editing: Zac Murphy, Director of Multimedia and Information Strategy, Communications and Digital Media, OSPI
- Media editing: Stephanie Rexus Video Media Strategist, Communication and Digital Media. OSPI
- Lesson formatting and publishing: Barbara Soots, Open Educational Resources and Instructional Materials Program Manager, OSPI
We express our sincere gratitude to all the story contributors to the Animating Civic Action effort. Without their support and willingness to share their experiences, this resource would not be possible.
Animating Civics Action is a partnership between the Washington Office of Superintendent of Public Instruction and the Washington State Governor's Office of the Education Ombuds.
License
Except where otherwise noted, this Animating Civic Action Lesson, copyright Washington Office of Superintendent of Public Instruction, is available under a Creative Commons Attribution License
Jared's Story video, copyright Washington Office of Superintendent of Public Instruction, is availble under a Creative Commons Attribution-NonCommercial-NoDerivatives License
All logos and trademarks are property of their respective owners. Sections used under fair use doctrine (17 U.S.C. § 107) are marked.
This resource may contain links to websites operated by third parties. These links are provided for your convenience only and do not constitute or imply any endorsement or monitoring by OSPI.
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oercommons
|
2025-03-18T00:37:25.314358
|
Lesson Plan
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/107625/overview",
"title": "Animating Civic Action: Elementary Lesson - Homelessness",
"author": "Lesson"
}
|
https://oercommons.org/courseware/lesson/96959/overview
|
Documentary Film Review Assignment
Overview
I use this assignment to get my students thinking, writing, and talking about disability, the disability rights movement, and disability policy. I ask students to watch and review several documentary films about people with disabilities and to post their reviews on the clinic's online discussion board.
Documentary Film Review Assignment
I use this assignment to get my students thinking, writing, and talking about disability, the disability rights movement, and disability policy. I ask students to watch and review several documentary films about people with disabilities and to post their reviews on the clinic's online discussion board.
|
oercommons
|
2025-03-18T00:37:25.331646
|
09/04/2022
|
{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/96959/overview",
"title": "Documentary Film Review Assignment",
"author": "David Moss"
}
|
https://oercommons.org/courseware/lesson/91769/overview
|
Character makeup design
Dramatic elements
Film techniques: Lighting
Movement - drama medium - GCSE drama revision
Props Department: Properties
Scenic Design
The importance of props in the film
VFX Guide: Understanding 4 types of visual effects in film
What is stage combat
Key Aspects of Film Analysis : Dramatic Aspect
Overview
Second module in the Key Aspects of Film Analysis
Expectation
Camera Rolling!
Congratulations students, you are now in the second aspect of film analysis!
For your second module, you will learn and understand the key aspect of film analysis which is the Dramatic Aspect. Lessons and activities will be provided to give you an idea of what dramatic aspects and questions that you should consider in analyzing films. Activities will determine your understanding and learning of the lesson in this module.
Learning Outcome:
At the end of the lesson, students should be able to:
- Identify the dramatic aspect of the film.
- Learn the importance of analyzing the dramatic aspects of a film.
Pre-Test
Direction: Fill in the blanks. Choose the correct answer on the word bank below.
___________1. It is also called VFX
___________2. The actions of characters in the story express themselves through facial expressions, dialogues, and body movements.
___________3. Also known as the scenic design.
___________4. Essential features of every performance.
___________5. Part of the visual composition of each frame of film.
___________6. It makes actors look beautiful or ragged, younger or older, or like monsters.
___________7. Dramatization of both armed and unarmed fights.
___________8. The path where the light source comes from and where it lands.
___________9. Neutral lighting that diffuces shadows on the face.
___________10. These are objects that add to the look of the setting, with which the actor interacts.
Set Props Acting Light Direction Dramatic Aspect Make-up and Hairdo Visual Effects Costume Stage Combat Stage Design Frontal Lighting |
Dramatic Aspects
Dramatic elements are essential features of every performance. Actors manipulate dramatic elements to shape and enhance meaning. Some of the dramatic elements of a film are the Visualization of action and setting, acting, costumes and props, make-up and hairdo, Lighting, Visual effects, Use of sound effects and music.
VISUALIZATION OF ACTION AND SETTING
Visualization of action and setting of a film includes the movements of the characters, stage combat and the stage design.
- Movements of characters - where the actors move on the stage, what this communicates to the audience, and the effect this has on the drama.
- Stage Combat - dramatization of both armed and unarmed fights for theater or film productions. It gives an impression of violence to the scene without anyone really getting hurt.
- Stage Design - stage design or also known as scenic design is the creation of theatrical, as well as film or television scenery. The people working with the stage design are stage designers, they work with the director and other designers to establish an overall visual concept for the production and design the stage environment.
ACTING
Acting is an action of characetrs in the story where they express themselves through facial expressions, body movements, and speeches or dialogues. Here are some points that can help you with an excellent analysis of the acting performance of the characters in a film.
- Describe the physical characteristics of the actor such as their age, ethnicity, nationality, speaking style, or whatever you can observe on their natural person behind the acting performance that can help you to assess the quality of their performance.
- Define what the actor has done to develop his own physical, facial, vocal, and characteristics for his or her performance.
- Describe the actor's acting style if it os relevant and note the film genre whether it's romantic, tragic, or historical.
- Identify the traits and functions of the characters that the actors portrayed in the film, as well as their relationship with other characters.
- Define the key scene in which the actor plays an important role and tell what idea or feelings is communicated by the scene.
COSTUMES AND PROPS
Costumes are a storytelling tool, communicating subtle details of each character's personality and history quickly and economically to the audience. They help actors leave their own personalities behind and become new and belieavable people on screen. Costumes are part of the visual composition of each frame of film. Just as the elements of a painting work together to create a harmonious image, costumes must work with the lighting and sets.
Costume example from Alice in Wonderland 2010
Props are crucial in the story-telling; they complement and motivate the character, helping the actor feel more "the part", setting the scene, identifying a particular time and place and cultural setting, sometimes even becoming a huge focus of the film.
Types of Props
- Hand props are anything handled or carried by an actor (e.g. staffs, food, weapons, lanterns and candles, canes, parasols, and practically anything else an actor could or might pick up)
- Personal props are props worn and carried by a particular actor and issued to him rather than stored on the prop table.
- Set props include most obviously furniture. These are objects that add to the look of the setting, with which the actor interacts.
- The set dressing consists of similar items, but which the actor doesn't usually handle. Some set dressings are "practicals", props like lamps or chandeliers that perform on stage as they do in real life.
- Trim props are a type of set dressing that hang on the walls, such as pictures, window dressing and curtains, and so on.
- Greens are any plant, live or artificial.
- Mechanical special effects are part of the prop department. That basically means any special effects that is not plugged in to operate. If a pull pin or a string operates a trick, it is a prop, but if an electric solenoid trips, it is under electrics, Mechanical noise makers are props, but taped sound effects are electrics, and so on.
- Atmospherics includes fogs, snow, etc.
MAKE-UP AND HAIRDO
Like costume designers, make-up artists are storytellers. Whether the script requires actors to look beautiful or ragged, younger or older, or like monsters or other fantastic beings, make-up artists and hairstylists help audiences believe that they see on the movie screen is real.
LIGHTING
Lighting in a film refers to the direction, quality, source and/or color of light that was used in these scenes of the film. Light's direction in a film is the path where the light source comes from and where the light lands whether it's on top light or in backlight. Quality of light, on the other hand, refers to the intensity of light (e.g. hard or soft light). Source refers to the role of the lighting in a particular scene in the film, for example, is key light or fill light. Lastly, is the Color of lighting in a film, the color of lights can be light or warm light depending on the mood that has to emphasize in the scene or the story.
TYPES OF LIGHTING
- Frontal Lighting - it is neutral lighting that diffuses shadows on the face. You will find it is mostly used for portraits or the emphasize an object or subject.
- Side Light - It creates a shadow on one half of the subject and sculpts the subject's features. The contrast between light and shadow creates a sense of mystery.
- Backlighting - It creates silhouttes and a glowing effect on the subject. This is used to create a dramatic effect and emphasize the subject in a mysterious way.
- Underlighting - It can either be used as monumental lighting (light up a statue) or distort the subject's feature (ghost stories around the campfire).
- Top lighting - Top lighting tends to glamourize the subject. It places the subject in a divine light. As such, we usually feel awe, and pride in dominance.
VISUAL EFFECTS
Visual effects, also called VFX, enable filmmakers to enhance a story by bringing to life believable characters, worlds, and stunts. FX allows filmmakers to create environments, objects, creatures, and even people that would otherwise be impractical or impossible to film in the context of a live-action shot.
THREE TYPES OF VISUAL EFFECTS
- Computer-generated imagery (CGI) - is the blanket term used to describe digitally-created VFX in film and television. These computer grahics can be 2D or 3D, but CGI is generally referenced when talking about 3D VFX.
- Composting - Also called "chroma-keying", composting is when VFX artists combine visual elements from separate origins to make it appear as though they are in the same place.
- Motion Capture - often shorthanded as "mocap", motion capture is the process of digitally recording an actor's movements, then transferring those movements to a computer-generated 3D model.
USE OF SOUND EFFECTS AND MUSIC
Sound is important because it engages audiences: it helps deliver information, it increases the production value, it evokes emotional responses, it emphasizes what's on the screen and is used to indicate mood. When put to good use, language, sound effects, music, and even silence, can elevate your video dramatically.
Sounds in film can be classified into two categories:
- Diegetic sounds refers to the actual sounds from what is happening in the film.
They include:
- the voices of characters
- sounds made by objects or actions in the story
- music represented as coming from instruments in the story space
- Non-diegetic sounds refer to sounds coming from a source outside the story space.
It includes:
- the narrator's commentary or voice-over
- sound effects added for dramatic effects
- mood music (e.g. film scores and soundtracks)
Generally, here are some questions that will help you in examining or analyzing the dramatic aspects of a film with regards to its elements such as visualization of action and setting, acting, costumes and props, make-up and hairdo, lighting, visual effects, use of sound effects and music.
- Do the actors perform so well that you think the story is real?
- How important are the costumes and make-up to the success of the film?
- Are there any scenes particularly difficult to act in?
- How do the actors use their voice, speech/dialogue, body movement, and face expression to achieve the desired effects?
- Do the actors establish their characters more through speech/dialogue or through body movement and facial expression?
- Is there anything about the acting, set, or costumes that you particularly like or dislike?
- Do you recognize any particular style of the director?
- How does the film compare to other films by the same director or other films of the same genre?
Activity 1
ACTIVITIES AHEAD! Make sure you have studied and understand the dramatic aspect of film and its elements.
Direction: Observe the picture from the behind the scenes video of the film "Heneral Luna" below and answer the following questions.
- Describe the costumes and apperances of the characters in the picture. What do you think is the significance of how they dressed in the movie?
- List the props that you can observe in the picture and define the significance of each prop in the scene.
- What do you think the characters are doing in this scene? why do you think so?
- What do the characters' facial expressions tell you about their personality and the tension of the scene?
Activity 2
Excellent! You are now on your second activity. Now, let us test furthermore your knowledge from our previous lesson.
Direction: Study the pictures below and identify its type of props. Draw the shape that corresponds to your answer.
1. _________________
2. _________________
3. _________________
4. _________________
5. _________________
6. _________________
7. _________________
8. _________________
9. _________________
10. _________________
Activity 3
Direction: Write TRUE if the statement is correct but if FALSE, change the underlined word/s to make the statement correct.
___________1. Acting is when characters express themselves through facial expressions.
___________2. Costumes must work with lights and sets.
___________3. Some set dressings are "particulars".
___________4. Greens include fogs, smoke, and snow effects.
___________5. as costume designers, make-up artists are storytellers too.
___________6. Lighting in a film refers to the direction, quality, source and color of light.
___________7. The meaning of CGI in visual effects is computer-generated imaginary.
___________8. Diegetic sound refers to sounds coming from a source outside the story space.
___________9. Visual effects is also called VFX.
___________10. Examples of Hand Props are candles, canes, and staffs.
Remember
- DRAMATIC ASPECT - these are essential features of every performance where actors manipulate dramatic elements to shape and enhance meaning.
- VISUALIZATION OF ACTION AND SETTING - includes movements of the characters, stage combat, and the stage design. (Movements of characters, stage combat, and the stage design)
- ACTING - is an action of characters in the story where they express themselves through facial expressions, body movements, and speeches or dialogues.
- COSTUMES AND PROPS - costumes are a storytelling tool, communicating subtle details of each character's personality and history quickly and economically to the audience, while props complement and motivate the character. (hand props, personal props, set props, the set dressing, trim props, greens, mechanical special effects, atmospherics)
- MAKE-UP AND HAIRDO - like costume designers, make-up artists are storytellers. Whether the script requires actors to look beautiful or ragged, younger or older, or like monsters.
- LIGHTING - refers to the direction, quality, source, and/or color of light that was used in these scenes of the film. (Frontal lighting, side light, backlighting, underlighting, and top lighting)
Check Your Understanding and Post Test
DIRECTION: Read the statement and choose the correct answer that corresponds to your answer.
1. It must work with the lighting and sets to create a harmonious image.
A. Props B. Costume C. Make-up D. Hairdo
2. Characteristics of lighting refers to the intensity of light.
A. Source B. Color C. Quality D. Direction
3. Often shorthanded as "mocap"
A. Motion Capture B. Composting C. CGI D. VFX
4. It includes the narrator's commentary or voice-over.
A. Non-diegetic B. Diegetic C. Sounds D. Music
5. This helps in increasing the production value and evokes emotional responses.
A. Non-diegetic B. Diegetic C. Sounds D. Music
DIRECTION: Study the words below and identify what dramatic elements it belongs to. Write VSA if it is Visualization of acting and setting, A if it refers to Acting, CP if it is Costumes and Props, MH if it corresponds to Make-up and hairdo, L if it is Lighting, VE if Visual Effects, and USEM if it is Use of Sound Effects and Music.
________ 1. High-necked blouses and sensible skirts
________ 2. Stage Combat
________ 3. Underlighting
________ 4. Frontal Lighting
________ 5. Contour
________ 6. Facial expression
________ 7. VFX
________ 8. Composting
________ 9. Diegetic
________ 10. Soundtracks
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oercommons
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2025-03-18T00:37:25.378952
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Lecture Notes
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"title": "Key Aspects of Film Analysis : Dramatic Aspect",
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https://oercommons.org/courseware/lesson/15405/overview
|
Challenges to Spain’s Supremacy
Overview
By the end of this section, you will be able to:
- Identify regions where the English, French, and Dutch explored and established settlements
- Describe the differences among the early colonies
- Explain the role of the American colonies in European nations’ struggles for domination
For Europeans, the discovery of an Atlantic World meant newfound wealth in the form of gold and silver as well as valuable furs. The Americas also provided a new arena for intense imperial rivalry as different European nations jockeyed for preeminence in the New World. The religious motives for colonization spurred European expansion as well, and as the Protestant Reformation gained ground beginning in the 1520s, rivalries between Catholic and Protestant Christians spilled over into the Americas.
ENGLISH EXPLORATION
Disruptions during the Tudor monarchy—especially the creation of the Protestant Church of England by Henry VIII in the 1530s, the return of the nation to Catholicism under Queen Mary in the 1550s, and the restoration of Protestantism under Queen Elizabeth—left England with little energy for overseas projects. More important, England lacked the financial resources for such endeavors. Nonetheless, English monarchs carefully monitored developments in the new Atlantic World and took steps to assert England’s claim to the Americas. As early as 1497, Henry VII of England had commissioned John Cabot, an Italian mariner, to explore new lands. Cabot sailed from England that year and made landfall somewhere along the North American coastline. For the next century, English fishermen routinely crossed the Atlantic to fish the rich waters off the North American coast. However, English colonization efforts in the 1500s were closer to home, as England devoted its energy to the colonization of Ireland.
Queen Elizabeth favored England’s advance into the Atlantic World, though her main concern was blocking Spain’s effort to eliminate Protestantism. Indeed, England could not commit to large-scale colonization in the Americas as long as Spain appeared ready to invade Ireland or Scotland. Nonetheless, Elizabeth approved of English privateers, sea captains to whom the home government had given permission to raid the enemy at will. These skilled mariners cruised the Caribbean, plundering Spanish ships whenever they could. Each year the English took more than £100,000 from Spain in this way; English privateer Francis Drake first made a name for himself when, in 1573, he looted silver, gold, and pearls worth £40,000.
Elizabeth did sanction an early attempt at colonization in 1584, when Sir Walter Raleigh, a favorite of the queen’s, attempted to establish a colony at Roanoke, an island off the coast of present-day North Carolina. The colony was small, consisting of only 117 people, who suffered a poor relationship with the local Indians, the Croatans, and struggled to survive in their new land (Figure). Their governor, John White, returned to England in late 1587 to secure more people and supplies, but events conspired to keep him away from Roanoke for three years. By the time he returned in 1590, the entire colony had vanished. The only trace the colonists left behind was the word Croatoan carved into a fence surrounding the village. Governor White never knew whether the colonists had decamped for nearby Croatoan Island (now Hatteras) or whether some disaster had befallen them all. Roanoke is still called “the lost colony.”
English promoters of colonization pushed its commercial advantages and the religious justification that English colonies would allow the establishment of Protestantism in the Americas. Both arguments struck a chord. In the early 1600s, wealthy English merchants and the landed elite began to pool their resources to form joint stock companies. In this novel business arrangement, which was in many ways the precursor to the modern corporation, investors provided the capital for and assumed the risk of a venture in order to reap significant returns. The companies gained the approval of the English crown to establish colonies, and their investors dreamed of reaping great profits from the money they put into overseas colonization.
The first permanent English settlement was established by a joint stock company, the Virginia Company. Named for Elizabeth, the “virgin queen,” the company gained royal approval to establish a colony on the east coast of North America, and in 1606, it sent 144 men and boys to the New World. In early 1607, this group sailed up Chesapeake Bay. Finding a river they called the James in honor of their new king, James I, they established a ramshackle settlement and named it Jamestown. Despite serious struggles, the colony survived.
Many of Jamestown’s settlers were desperate men; although they came from elite families, they were younger sons who would not inherit their father’s estates. The Jamestown adventurers believed they would find instant wealth in the New World and did not actually expect to have to perform work. Henry Percy, the eighth son of the Earl of Northumberland, was among them. His account, excerpted below, illustrates the hardships the English confronted in Virginia in 1607.
George Percy and the First Months at Jamestown
The 144 men and boys who started the Jamestown colony faced many hardships; by the end of the first winter, only 38 had survived. Disease, hunger, and poor relationships with local natives all contributed to the colony’s high death toll. George Percy, who served twice as governor of Jamestown, kept records of the colonists’ first months in the colony. These records were later published in London in 1608. This excerpt is from his account of August and September of 1607.
The fourth day of September died Thomas Jacob Sergeant. The fifth day, there died Benjamin Beast. Our men were destroyed with cruel diseases, as Swellings, Fluxes, Burning Fevers, and by wars, and some departed suddenly, but for the most part they died of mere famine. There were never Englishmen left in a foreign Country in such misery as we were in this new discovered Virginia. . . . Our food was but a small Can of Barley sod* in water, to five men a day, our drink cold water taken out of the River, which was at a flood very salty, at a low tide full of slime and filth, which was the destruction of many of our men. Thus we lived for the space of five months in this miserable distress, not having five able men to man our Bulwarks upon any occasion. If it had not pleased God to have put a terror in the Savages’ hearts, we had all perished by those wild and cruel Pagans, being in that weak estate as we were; our men night and day groaning in every corner of the Fort most pitiful to hear. If there were any conscience in men, it would make their hearts to bleed to hear the pitiful murmurings and outcries of our sick men without relief, every night and day, for the space of six weeks, some departing out of the World, many times three or four in a night; in the morning, their bodies trailed out of their Cabins like Dogs to be buried. In this sort did I see the mortality of diverse of our people.
*soaked
According to George Percy’s account, what were the major problems the Jamestown settlers encountered? What kept the colony from complete destruction?
By any measure, England came late to the race to colonize. As Jamestown limped along in the 1610s, the Spanish Empire extended around the globe and grew rich from its global colonial project. Yet the English persisted, and for this reason the Jamestown settlement has a special place in history as the first permanent colony in what later became the United States.
After Jamestown’s founding, English colonization of the New World accelerated. In 1609, a ship bound for Jamestown foundered in a storm and landed on Bermuda. (Some believe this incident helped inspire Shakespeare’s 1611 play The Tempest.) The admiral of the ship, George Somers, claimed the island for the English crown. The English also began to colonize small islands in the Caribbean, an incursion into the Spanish American empire. They established themselves on small islands such as St. Christopher (1624), Barbados (1627), Nevis (1628), Montserrat (1632), and Antigua (1632).
From the start, the English West Indies had a commercial orientation, for these islands produced cash crops: first tobacco and then sugar. Very quickly, by the mid-1600s, Barbados had become one of the most important English colonies because of the sugar produced there. Barbados was the first English colony dependent on slaves, and it became a model for other English slave societies on the American mainland. These differed radically from England itself, where slavery was not practiced.
English Puritans also began to colonize the Americas in the 1620s and 1630s. These intensely religious migrants dreamed of creating communities of reformed Protestantism where the corruption of England would be eliminated. One of the first groups of Puritans to remove to North America, known as Pilgrims and led by William Bradford, had originally left England to live in the Netherlands. Fearing their children were losing their English identity among the Dutch, however, they sailed for North America in 1620 to settle at Plymouth, the first English settlement in New England. The Pilgrims differed from other Puritans in their insistence on separating from what they saw as the corrupt Church of England. For this reason, Pilgrims are known as Separatists.
Like Jamestown, Plymouth occupies an iconic place in American national memory. The tale of the 102 migrants who crossed the Atlantic aboard the Mayflower and their struggle for survival is a well-known narrative of the founding of the country. Their story includes the signing of the Mayflower Compact, a written agreement whereby the English voluntarily agreed to help each other. Some interpret this 1620 document as an expression of democratic spirit because of the cooperative and inclusive nature of the agreement to live and work together. In 1630, a much larger contingent of Puritans left England to escape conformity to the Church of England and founded the Massachusetts Bay Colony. In the following years, thousands more arrived to create a new life in the rocky soils and cold climates of New England.
In comparison to Catholic Spain, however, Protestant England remained a very weak imperial player in the early seventeenth century, with only a few infant colonies in the Americas in the early 1600s. The English never found treasure equal to that of the Aztec city of Tenochtitlán, and England did not quickly grow rich from its small American outposts. The English colonies also differed from each other; Barbados and Virginia had a decidedly commercial orientation from the start, while the Puritan colonies of New England were intensely religious at their inception. All English settlements in America, however, marked the increasingly important role of England in the Atlantic World.
FRENCH EXPLORATION
Spanish exploits in the New World whetted the appetite of other would-be imperial powers, including France. Like Spain, France was a Catholic nation and committed to expanding Catholicism around the globe. In the early sixteenth century, it joined the race to explore the New World and exploit the resources of the Western Hemisphere. Navigator Jacques Cartier claimed northern North America for France, naming the area New France. From 1534 to 1541, he made three voyages of discovery on the Gulf of St. Lawrence and the St. Lawrence River. Like other explorers, Cartier made exaggerated claims of mineral wealth in America, but he was unable to send great riches back to France. Due to resistance from the native peoples as well as his own lack of planning, he could not establish a permanent settlement in North America.
Explorer Samuel de Champlain occupies a special place in the history of the Atlantic World for his role in establishing the French presence in the New World. Champlain explored the Caribbean in 1601 and then the coast of New England in 1603 before traveling farther north. In 1608 he founded Quebec, and he made numerous Atlantic crossings as he worked tirelessly to promote New France. Unlike other imperial powers, France—through Champlain’s efforts—fostered especially good relationships with native peoples, paving the way for French exploration further into the continent: around the Great Lakes, around Hudson Bay, and eventually to the Mississippi. Champlain made an alliance with the Huron confederacy and the Algonquins and agreed to fight with them against their enemy, the Iroquois (Figure).
The French were primarily interested in establishing commercially viable colonial outposts, and to that end, they created extensive trading networks in New France. These networks relied on native hunters to harvest furs, especially beaver pelts, and to exchange these items for French glass beads and other trade goods. (French fashion at the time favored broad-brimmed hats trimmed in beaver fur, so French traders had a ready market for their North American goods.) The French also dreamed of replicating the wealth of Spain by colonizing the tropical zones. After Spanish control of the Caribbean began to weaken, the French turned their attention to small islands in the West Indies, and by 1635 they had colonized two, Guadeloupe and Martinique. Though it lagged far behind Spain, France now boasted its own West Indian colonies. Both islands became lucrative sugar plantation sites that turned a profit for French planters by relying on African slave labor.
To see how cartographers throughout history documented the exploration of the Atlantic World, browse the hundreds of digitized historical maps that make up the collection American Shores: Maps of the Middle Atlantic Region to 1850 at the New York Public Library.
DUTCH COLONIZATION
Dutch entrance into the Atlantic World is part of the larger story of religious and imperial conflict in the early modern era. In the 1500s, Calvinism, one of the major Protestant reform movements, had found adherents in the northern provinces of the Spanish Netherlands. During the sixteenth century, these provinces began a long struggle to achieve independence from Catholic Spain. Established in 1581 but not recognized as independent by Spain until 1648, the Dutch Republic, or Holland, quickly made itself a powerful force in the race for Atlantic colonies and wealth. The Dutch distinguished themselves as commercial leaders in the seventeenth century (Figure), and their mode of colonization relied on powerful corporations: the Dutch East India Company, chartered in 1602 to trade in Asia, and the Dutch West India Company, established in 1621 to colonize and trade in the Americas.
While employed by the Dutch East India Company in 1609, the English sea captain Henry Hudson explored New York Harbor and the river that now bears his name. Like many explorers of the time, Hudson was actually seeking a northwest passage to Asia and its wealth, but the ample furs harvested from the region he explored, especially the coveted beaver pelts, provided a reason to claim it for the Netherlands. The Dutch named their colony New Netherlands, and it served as a fur-trading outpost for the expanding and powerful Dutch West India Company. With headquarters in New Amsterdam on the island of Manhattan, the Dutch set up several regional trading posts, including one at Fort Orange—named for the royal Dutch House of Orange-Nassau—in present-day Albany. (The color orange remains significant to the Dutch, having become particularly associated with William of Orange, Protestantism, and the Glorious Revolution of 1688.) A brisk trade in furs with local Algonquian and Iroquois peoples brought the Dutch and native peoples together in a commercial network that extended throughout the Hudson River Valley and beyond.
The Dutch West India Company in turn established colonies on Aruba, Bonaire, and Curaçao, St. Martin, St. Eustatius, and Saba. With their outposts in New Netherlands and the Caribbean, the Dutch had established themselves in the seventeenth century as a commercially powerful rival to Spain. Amsterdam became a trade hub for all the Atlantic World.
Section Summary
By the beginning of the seventeenth century, Spain’s rivals—England, France, and the Dutch Republic—had each established an Atlantic presence, with greater or lesser success, in the race for imperial power. None of the new colonies, all in the eastern part of North America, could match the Spanish possessions for gold and silver resources. Nonetheless, their presence in the New World helped these nations establish claims that they hoped could halt the runaway growth of Spain’s Catholic empire. English colonists in Virginia suffered greatly, expecting riches to fall into their hands and finding reality a harsh blow. However, the colony at Jamestown survived, and the output of England’s islands in the West Indies soon grew to be an important source of income for the country. New France and New Netherlands were modest colonial holdings in the northeast of the continent, but these colonies’ thriving fur trade with native peoples, and their alliances with those peoples, helped to create the foundation for later shifts in the global balance of power.
Review Questions
Why didn’t England make stronger attempts to colonize the New World before the late sixteenth to early seventeenth century?
- English attention was turned to internal struggles and the encroaching Catholic menace to Scotland and Ireland.
- The English monarchy did not want to declare direct war on Spain by attempting to colonize the Americas.
- The English military was occupied in battling for control of New Netherlands.
- The English crown refused to fund colonial expeditions.
Hint:
A
What was the main goal of the French in colonizing the Americas?
- establishing a colony with French subjects
- trading, especially for furs
- gaining control of shipping lanes
- spreading Catholicism among native peoples
Hint:
B
What were some of the main differences among the non-Spanish colonies?
Hint:
Many English colonists in Virginia were aristocrats who had never worked and didn’t expect to start. They hoped to find gold and silver and were unprepared for the realities of colonial life. Farther north, the English Puritan colonies were largely founded not for profit but for religious reasons. The French and Dutch colonies were primarily trading posts. Their colonists enjoyed good relationships with many native groups because they made alliances with and traded with them.
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oercommons
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2025-03-18T00:37:25.408850
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07/10/2017
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"title": "U.S. History, Early Globalization: The Atlantic World, 1492–1650, Challenges to Spain’s Supremacy",
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https://oercommons.org/courseware/lesson/15437/overview
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Partisan Politics
Overview
By the end of this section, you will be able to:
- Identify key examples of partisan wrangling between the Federalists and Democratic-Republicans
- Describe how foreign relations affected American politics
- Assess the importance of the Louisiana Purchase
George Washington, who had been reelected in 1792 by an overwhelming majority, refused to run for a third term, thus setting a precedent for future presidents. In the presidential election of 1796, the two parties—Federalist and Democratic-Republican—competed for the first time. Partisan rancor over the French Revolution and the Whiskey Rebellion fueled the divide between them, and Federalist John Adams defeated his Democratic-Republican rival Thomas Jefferson by a narrow margin of only three electoral votes. In 1800, another close election swung the other way, and Jefferson began a long period of Democratic-Republican government.
THE PRESIDENCY OF JOHN ADAMS
The war between Great Britain and France in the 1790s shaped U.S. foreign policy. As a new and, in comparison to the European powers, extremely weak nation, the American republic had no control over European events, and no real leverage to obtain its goals of trading freely in the Atlantic. To Federalist president John Adams, relations with France posed the biggest problem. After the Terror, the French Directory ruled France from 1795 to 1799. During this time, Napoleon rose to power.
The Art of Ralph Earl
Ralph Earl was an eighteenth-century American artist, born in Massachusetts, who remained loyal to the British during the Revolutionary War. He fled to England in 1778, but he returned to New England in the mid-1780s and began painting portraits of leading Federalists.
His portrait of Connecticut Federalist Oliver Ellsworth and his wife Abigail conveys the world as Federalists liked to view it: an orderly landscape administered by men of property and learning. His portrait of dry goods merchant Elijah Boardman shows Boardman as well-to-do and highly cultivated; his books include the works of Shakespeare and Milton (Figure).
What similarities do you see in the two portraits by Ralph Earl? What do the details of each portrait reveal about the sitters? About the artist and the 1790s?
Because France and Great Britain were at war, the French Directory issued decrees stating that any ship carrying British goods could be seized on the high seas. In practice, this meant the French would target American ships, especially those in the West Indies, where the United States conducted a brisk trade with the British. France declared its 1778 treaty with the United States null and void, and as a result, France and the United States waged an undeclared war—or what historians refer to as the Quasi-War—from 1796 to 1800. Between 1797 and 1799, the French seized 834 American ships, and Adams urged the buildup of the U.S. Navy, which consisted of only a single vessel at the time of his election in 1796 (Figure).
In 1797, Adams sought a diplomatic solution to the conflict with France and dispatched envoys to negotiate terms. The French foreign minister, Charles-Maurice de Talleyrand, sent emissaries who told the American envoys that the United States must repay all outstanding debts owed to France, lend France 32 million guilders (Dutch currency), and pay a £50,000 bribe before any negotiations could take place. News of the attempt to extract a bribe, known as the XYZ affair because the French emissaries were referred to as X, Y, and Z in letters that President Adams released to Congress, outraged the American public and turned public opinion decidedly against France (Figure). In the court of public opinion, Federalists appeared to have been correct in their interpretation of France, while the pro-French Democratic-Republicans had been misled.
Read the “transcript” of the above cartoon in the America in Caricature, 1765–1865 collection at Indiana University’s Lilly Library.
The complicated situation in Haiti, which remained a French colony in the late 1790s, also came to the attention of President Adams. The president, with the support of Congress, had created a U.S. Navy that now included scores of vessels. Most of the American ships cruised the Caribbean, giving the United States the edge over France in the region. In Haiti, the rebellion leader Toussaint, who had to contend with various domestic rivals seeking to displace him, looked to end an U.S. embargo on France and its colonies, put in place in 1798, so that his forces would receive help to deal with the civil unrest. In early 1799, in order to capitalize upon trade in the lucrative West Indies and undermine France’s hold on the island, Congress ended the ban on trade with Haiti—a move that acknowledged Toussaint’s leadership, to the horror of American slaveholders. Toussaint was able to secure an independent black republic in Haiti by 1804.
THE ALIEN AND SEDITION ACTS
The surge of animosity against France during the Quasi-War led Congress to pass several measures that in time undermined Federalist power. These 1798 war measures, known as the Alien and Sedition Acts, aimed to increase national security against what most had come to regard as the French menace. The Alien Act and the Alien Enemies Act took particular aim at French immigrants fleeing the West Indies by giving the president the power to deport new arrivals who appeared to be a threat to national security. The act expired in 1800 with no immigrants having been deported. The Sedition Act imposed harsh penalties—up to five years’ imprisonment and a massive fine of $5,000 in 1790 dollars—on those convicted of speaking or writing “in a scandalous or malicious” manner against the government of the United States. Twenty-five men, all Democratic-Republicans, were indicted under the act, and ten were convicted. One of these was Congressman Matthew Lyon (Figure), representative from Vermont, who had launched his own newspaper, The Scourge Of Aristocracy and Repository of Important Political Truth.
The Alien and Sedition Acts raised constitutional questions about the freedom of the press provided under the First Amendment. Democratic-Republicans argued that the acts were evidence of the Federalists’ intent to squash individual liberties and, by enlarging the powers of the national government, crush states’ rights. Jefferson and Madison mobilized the response to the acts in the form of statements known as the Virginia and Kentucky Resolutions, which argued that the acts were illegal and unconstitutional. The resolutions introduced the idea of nullification, the right of states to nullify acts of Congress, and advanced the argument of states’ rights. The resolutions failed to rally support in other states, however. Indeed, most other states rejected them, citing the necessity of a strong national government.
The Quasi-War with France came to an end in 1800, when President Adams was able to secure the Treaty of Mortefontaine. His willingness to open talks with France divided the Federalist Party, but the treaty reopened trade between the two countries and ended the French practice of taking American ships on the high seas.
THE REVOLUTION OF 1800 AND THE PRESIDENCY OF THOMAS JEFFERSON
The Revolution of 1800 refers to the first transfer of power from one party to another in American history, when the presidency passed to Democratic-Republican Thomas Jefferson (Figure) in the 1800 election. The peaceful transition calmed contemporary fears about possible violent reactions to a new party’s taking the reins of government. The passing of political power from one political party to another without bloodshed also set an important precedent.
The election did prove even more divisive than the 1796 election, however, as both the Federalist and Democratic-Republican Parties waged a mudslinging campaign unlike any seen before. Because the Federalists were badly divided, the Democratic-Republicans gained political ground. Alexander Hamilton, who disagreed with President Adams’s approach to France, wrote a lengthy letter, meant for people within his party, attacking his fellow Federalist’s character and judgment and ridiculing his handling of foreign affairs. Democratic-Republicans got hold of and happily reprinted the letter.
Jefferson viewed participatory democracy as a positive force for the republic, a direct departure from Federalist views. His version of participatory democracy only extended, however, to the white yeoman farmers in whom Jefferson placed great trust. While Federalist statesmen, like the architects of the 1787 federal constitution, feared a pure democracy, Jefferson was far more optimistic that the common American farmer could be trusted to make good decisions. He believed in majority rule, that is, that the majority of yeoman should have the power to make decisions binding upon the whole. Jefferson had cheered the French Revolution, even when the French republic instituted the Terror to ensure the monarchy would not return. By 1799, however, he had rejected the cause of France because of his opposition to Napoleon’s seizure of power and creation of a dictatorship.
Over the course of his two terms as president—he was reelected in 1804—Jefferson reversed the policies of the Federalist Party by turning away from urban commercial development. Instead, he promoted agriculture through the sale of western public lands in small and affordable lots. Perhaps Jefferson’s most lasting legacy is his vision of an “empire of liberty.” He distrusted cities and instead envisioned a rural republic of land-owning white men, or yeoman republican farmers. He wanted the United States to be the breadbasket of the world, exporting its agricultural commodities without suffering the ills of urbanization and industrialization. Since American yeomen would own their own land, they could stand up against those who might try to buy their votes with promises of property. Jefferson championed the rights of states and insisted on limited federal government as well as limited taxes. This stood in stark contrast to the Federalists’ insistence on a strong, active federal government. Jefferson also believed in fiscal austerity. He pushed for—and Congress approved—the end of all internal taxes, such as those on whiskey and rum. The most significant trimming of the federal budget came at the expense of the military; Jefferson did not believe in maintaining a costly military, and he slashed the size of the navy Adams had worked to build up. Nonetheless, Jefferson responded to the capture of American ships and sailors by pirates off the coast of North Africa by leading the United States into war against the Muslim Barbary States in 1801, the first conflict fought by Americans overseas.
The slow decline of the Federalists, which began under Jefferson, led to a period of one-party rule in national politics. Historians call the years between 1815 and 1828 the “Era of Good Feelings” and highlight the “Virginia dynasty” of the time, since the two presidents who followed Jefferson—James Madison and James Monroe—both hailed from his home state. Like him, they owned slaves and represented the Democratic-Republican Party. Though Federalists continued to enjoy popularity, especially in the Northeast, their days of prominence in setting foreign and domestic policy had ended.
PARTISAN ACRIMONY
The earliest years of the nineteenth century were hardly free of problems between the two political parties. Early in Jefferson’s term, controversy swirled over President Adams’s judicial appointments of many Federalists during his final days in office. When Jefferson took the oath of office, he refused to have the commissions for these Federalist justices delivered to the appointed officials.
One of Adams’s appointees, William Marbury, had been selected to be a justice of the peace in the District of Columbia, and when his commission did not arrive, he petitioned the Supreme Court for an explanation from Jefferson’s secretary of state, James Madison. In deciding the case, Marbury v. Madison, in 1803, Chief Justice John Marshall agreed that Marbury had the right to a legal remedy, establishing that individuals had rights even the president of the United States could not abridge. However, Marshall also found that Congress’s Judicial Act of 1789, which would have given the Supreme Court the power to grant Marbury remedy, was unconstitutional because the Constitution did not allow for cases like Marbury’s to come directly before the Supreme Court. Thus, Marshall established the principle of judicial review, which strengthened the court by asserting its power to review (and possibly nullify) the actions of Congress and the president. Jefferson was not pleased, but neither did Marbury get his commission.
The animosity between the political parties exploded into open violence in 1804, when Aaron Burr, Jefferson’s first vice president, and Alexander Hamilton engaged in a duel. When Democratic-Republican Burr lost his bid for the office of governor of New York, he was quick to blame Hamilton, who had long hated him and had done everything in his power to discredit him. On July 11, the two antagonists met in Weehawken, New Jersey, to exchange bullets in a duel in which Burr shot and mortally wounded Hamilton.
THE LOUISIANA PURCHASE
Jefferson, who wanted to expand the United States to bring about his “empire of liberty,” realized his greatest triumph in 1803 when the United States bought the Louisiana territory from France. For $15 million—a bargain price, considering the amount of land involved—the United States doubled in size. Perhaps the greatest real estate deal in American history, the Louisiana Purchase greatly enhanced the Jeffersonian vision of the United States as an agrarian republic in which yeomen farmers worked the land. Jefferson also wanted to bolster trade in the West, seeing the port of New Orleans and the Mississippi River (then the western boundary of the United States) as crucial to American agricultural commerce. In his mind, farmers would send their produce down the Mississippi River to New Orleans, where it would be sold to European traders.
The purchase of Louisiana came about largely because of circumstances beyond Jefferson’s control, though he certainly recognized the implications of the transaction. Until 1801, Spain had controlled New Orleans and had given the United States the right to traffic goods in the port without paying customs duties. That year, however, the Spanish had ceded Louisiana (and New Orleans) to France. In 1802, the United States lost its right to deposit goods free in the port, causing outrage among many, some of whom called for war with France.
Jefferson instructed Robert Livingston, the American envoy to France, to secure access to New Orleans, sending James Monroe to France to add additional pressure. The timing proved advantageous. Because black slaves in the French colony of Haiti had successfully overthrown the brutal plantation regime, Napoleon could no longer hope to restore the empire lost with France’s defeat in the French and Indian War (1754–1763). His vision of Louisiana and the Mississippi Valley as the source for food for Haiti, the most profitable sugar island in the world, had failed. The emperor therefore agreed to the sale in early 1803.
Explore the collected maps and documents relating to the Louisiana Purchase and its history at the Library of Congress site.
The true extent of the United States’ new territory remained unknown (Figure). Would it provide the long-sought quick access to Asian markets? Geographical knowledge was limited; indeed, no one knew precisely what lay to the west or how long it took to travel from the Mississippi to the Pacific. Jefferson selected two fellow Virginians, Meriwether Lewis and William Clark, to lead an expedition to the new western lands. Their purpose was to discover the commercial possibilities of the new land and, most importantly, potential trade routes. From 1804 to 1806, Lewis and Clark traversed the West.
The Louisiana Purchase helped Jefferson win reelection in 1804 by a landslide. Of 176 electoral votes cast, all but 14 were in his favor. The great expansion of the United States did have its critics, however, especially northerners who feared the addition of more slave states and a corresponding lack of representation of their interests in the North. And under a strict interpretation of the Constitution, it remained unclear whether the president had the power to add territory in this fashion. But the vast majority of citizens cheered the increase in the size of the republic. For slaveholders, new western lands would be a boon; for slaves, the Louisiana Purchase threatened to entrench their suffering further.
Section Summary
Partisan politics dominated the American political scene at the close of the eighteenth century. The Federalists’ and Democratic-Republicans’ views of the role of government were in direct opposition to each other, and the close elections of 1796 and 1801 show how the nation grappled with these opposing visions. The high tide of the Federalist Party came after the election of 1796, when the United States engaged in the Quasi-War with France. The issues arising from the Quasi-War gave Adams and the Federalists license to expand the powers of the federal government. However, the tide turned with the close election of 1800, when Jefferson began an administration based on Democratic-Republican ideals. A major success of Jefferson’s administration was the Louisiana Purchase of 1803, which helped to fulfill his vision of the United States as an agrarian republic.
Review Questions
What was the primary issue of Adams’s presidency?
- war with Spain
- relations with the native population
- infighting within the Federalist Party
- relations with France
Hint:
D
Which of the following events is not an example of partisan acrimony?
- the jailing of Matthew Lyon
- the XYZ affair
- the Marbury v. Madison case
- the Hamilton-Burr duel
Hint:
B
What was the importance of the Louisiana Purchase?
- It gave the United States control of the port of New Orleans for trade.
- It opened up the possibility of quick trade routes to Asia.
- It gave the United States political leverage against the Spanish.
- It provided Napoleon with an impetus to restore France’s empire.
Hint:
A
How did U.S. relations with France influence events at the end of the eighteenth century?
Hint:
Relations with France were strongly tied to political events in the United States. Whereas the Federalists had roundly condemned the French revolutionaries for their excesses, the Democratic-Republicans applauded the rallying cries of liberty and equality. Relations with the French also led the Federalists to pass the Alien and Sedition Acts during the Adams administration, which many saw as a violation of the First Amendment.
Why do historians refer to the election of Thomas Jefferson as the Revolution of 1800?
Hint:
The election was considered a revolution because, for the first time in American history, political power passed from one party to another. Jefferson’s presidency was a departure from the Federalist administrations of Washington and Adams, who had favored the commercial class and urban centers of the country. The Democratic-Republican vision increased states’ rights and limited the power of the federal government, lowering taxes and slashing the military, which Adams had built up.
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oercommons
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2025-03-18T00:37:25.442691
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07/10/2017
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"url": "https://oercommons.org/courseware/lesson/15437/overview",
"title": "U.S. History, Growing Pains: The New Republic, 1790–1820, Partisan Politics",
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https://oercommons.org/courseware/lesson/15440/overview
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Early Industrialization in the Northeast
Overview
By the end of this section, you will be able to:
- Explain the role of the putting-out system in the rise of industrialization
- Understand industrialization’s impact on the nature of production and work
- Describe the effect of industrialization on consumption
- Identify the goals of workers’ organizations like the Working Men’s Party
Northern industrialization expanded rapidly following the War of 1812. Industrialized manufacturing began in New England, where wealthy merchants built water-powered textile mills (and mill towns to support them) along the rivers of the Northeast. These mills introduced new modes of production centralized within the confines of the mill itself. As never before, production relied on mechanized sources with water power, and later steam, to provide the force necessary to drive machines. In addition to the mechanization and centralization of work in the mills, specialized, repetitive tasks assigned to wage laborers replaced earlier modes of handicraft production done by artisans at home. The operations of these mills irrevocably changed the nature of work by deskilling tasks, breaking down the process of production to its most basic, elemental parts. In return for their labor, the workers, who at first were young women from rural New England farming families, received wages. From its origin in New England, manufacturing soon spread to other regions of the United States.
FROM ARTISANS TO WAGE WORKERS
During the seventeenth and eighteenth centuries, artisans—skilled, experienced craft workers—produced goods by hand. The production of shoes provides a good example. In colonial times, people bought their shoes from master shoemakers, who achieved their status by living and working as apprentices under the rule of an older master artisan. An apprenticeship would be followed by work as a journeyman (a skilled worker without his own shop). After sufficient time as a journeyman, a shoemaker could at last set up his own shop as a master artisan. People came to the shop, usually attached to the back of the master artisan’s house, and there the shoemaker measured their feet in order to cut and stitch together an individualized product for each customer.
In the late eighteenth and early nineteenth century, merchants in the Northeast and elsewhere turned their attention as never before to the benefits of using unskilled wage labor to make a greater profit by reducing labor costs. They used the putting-out system, which the British had employed at the beginning of their own Industrial Revolution, whereby they hired farming families to perform specific tasks in the production process for a set wage. In the case of shoes, for instance, American merchants hired one group of workers to cut soles into standardized sizes. A different group of families cut pieces of leather for the uppers, while still another was employed to stitch the standardized parts together.
This process proved attractive because it whittled production costs. The families who participated in the putting-out system were not skilled artisans. They had not spent years learning and perfecting their craft and did not have ambitious journeymen to pay. Therefore, they could not demand—and did not receive—high wages. Most of the year they tended fields and orchards, ate the food that they produced, and sold the surplus. Putting-out work proved a welcome source of extra income for New England farm families who saw their profits dwindle from new competition from midwestern farms with higher-yield lands.
Much of this part-time production was done under contract to merchants. Some farming families engaged in shoemaking (or shoe assemblage), as noted above. Many made brooms, plaited hats from straw or palm leaves (which merchants imported from Cuba and the West Indies), crafted furniture, made pottery, or wove baskets. Some, especially those who lived in Connecticut, made parts for clocks. The most common part-time occupation, however, was the manufacture of textiles. Farm women spun woolen thread and wove fabric. They also wove blankets, made rugs, and knit stockings. All this manufacturing took place on the farm, giving farmers and their wives control over the timing and pace of their labor. Their domestic productivity increased the quantity of goods available for sale in country towns and nearby cities.
THE RISE OF MANUFACTURING
In the late 1790s and early 1800s, Great Britain boasted the most advanced textile mills and machines in the world, and the United States continued to rely on Great Britain for finished goods. Great Britain hoped to maintain its economic advantage over its former colonies in North America. So, in an effort to prevent the knowledge of advanced manufacturing from leaving the Empire, the British banned the emigration of mechanics, skilled workers who knew how to build and repair the latest textile machines.
Some skilled British mechanics, including Samuel Slater, managed to travel to the United States in the hopes of profiting from their knowledge and experience with advanced textile manufacturing. Slater (Figure) understood the workings of the latest water-powered textile mills, which British industrialist Richard Arkwright had pioneered. In the 1790s in Pawtucket, Rhode Island, Slater convinced several American merchants, including the wealthy Providence industrialist Moses Brown, to finance and build a water-powered cotton mill based on the British models. Slater’s knowledge of both technology and mill organization made him the founder of the first truly successful cotton mill in the United States.
The success of Slater and his partners Smith Brown and William Almy, relatives of Moses Brown, inspired others to build additional mills in Rhode Island and Massachusetts. By 1807, thirteen more mills had been established. President Jefferson’s embargo on British manufactured goods from late 1807 to early 1809 (discussed in a previous chapter) spurred more New England merchants to invest in industrial enterprises. By 1812, seventy-eight new textile mills had been built in rural New England towns. More than half turned out woolen goods, while the rest produced cotton cloth.
Slater’s mills and those built in imitation of his were fairly small, employing only seventy people on average. Workers were organized the way that they had been in English factories, in family units. Under the “Rhode Island system,” families were hired. The father was placed in charge of the family unit, and he directed the labor of his wife and children. Instead of being paid in cash, the father was given “credit” equal to the extent of his family’s labor that could be redeemed in the form of rent (of company-owned housing) or goods from the company-owned store.
The Embargo of 1807 and the War of 1812 played a pivotal role in spurring industrial development in the United States. Jefferson’s embargo prevented American merchants from engaging in the Atlantic trade, severely cutting into their profits. The War of 1812 further compounded the financial woes of American merchants. The acute economic problems led some New England merchants, including Francis Cabot Lowell, to cast their gaze on manufacturing. Lowell had toured English mills during a stay in Great Britain. He returned to Massachusetts having memorized the designs for the advanced textile machines he had seen in his travels, especially the power loom, which replaced individual hand weavers. Lowell convinced other wealthy merchant families to invest in the creation of new mill towns. In 1813, Lowell and these wealthy investors, known as the Boston Associates, created the Boston Manufacturing Company. Together they raised $400,000 and, in 1814, established a textile mill in Waltham and a second one in the same town shortly thereafter (Figure).
At Waltham, cotton was carded and drawn into coarse strands of cotton fibers called rovings. The rovings were then spun into yarn, and the yarn woven into cotton cloth. Yarn no longer had to be put out to farm families for further processing. All the work was now performed at a central location—the factory.
The work in Lowell’s mills was both mechanized and specialized. Specialization meant the work was broken down into specific tasks, and workers repeatedly did the one task assigned to them in the course of a day. As machines took over labor from humans and people increasingly found themselves confined to the same repetitive step, the process of deskilling began.
The Boston Associates’ mills, which each employed hundreds of workers, were located in company towns, where the factories and worker housing were owned by a single company. This gave the owners and their agents control over their workers. The most famous of these company towns was Lowell, Massachusetts. The new town was built on land the Boston Associates purchased in 1821 from the village of East Chelmsford at the falls of the Merrimack River, north of Boston. The mill buildings themselves were constructed of red brick with large windows to let in light. Company-owned boarding houses to shelter employees were constructed near the mills. The mill owners planted flowers and trees to maintain the appearance of a rural New England town and to forestall arguments, made by many, that factory work was unnatural and unwholesome.
In contrast to many smaller mills, the Boston Associates’ enterprises avoided the Rhode Island system, preferring individual workers to families. These employees were not difficult to find. The competition New England farmers faced from farmers now settling in the West, and the growing scarcity of land in population-dense New England, had important implications for farmers’ children. Realizing their chances of inheriting a large farm or receiving a substantial dowry were remote, these teenagers sought other employment opportunities, often at the urging of their parents. While young men could work at a variety of occupations, young women had more limited options. The textile mills provided suitable employment for the daughters of Yankee farm families.
Needing to reassure anxious parents that their daughters’ virtue would be protected and hoping to avoid what they viewed as the problems of industrialization—filth and vice—the Boston Associates established strict rules governing the lives of these young workers. The women lived in company-owned boarding houses to which they paid a portion of their wages. They woke early at the sound of a bell and worked a twelve-hour day during which talking was forbidden. They could not swear or drink alcohol, and they were required to attend church on Sunday. Overseers at the mills and boarding-house keepers kept a close eye on the young women’s behavior; workers who associated with people of questionable reputation or acted in ways that called their virtue into question lost their jobs and were evicted.
Michel Chevalier on Mill Worker Rules and Wages
In the 1830s, the French government sent engineer and economist Michel Chevalier to study industrial and financial affairs in Mexico and the United States. In 1839, he published Society, Manners, and Politics in the United States, in which he recorded his impressions of the Lowell textile mills. In the excerpt below, Chevalier describes the rules and wages of the Lawrence Company in 1833.
All persons employed by the Company must devote themselves assiduously to their duty during working-hours. They must be capable of doing the work which they undertake, or use all their efforts to this effect. They must on all occasions, both in their words and in their actions, show that they are penetrated by a laudable love of temperance and virtue, and animated by a sense of their moral and social obligations. The Agent of the Company shall endeavour to set to all a good example in this respect. Every individual who shall be notoriously dissolute, idle, dishonest, or intemperate, who shall be in the practice of absenting himself from divine service, or shall violate the Sabbath, or shall be addicted to gaming, shall be dismissed from the service of the Company. . . . All ardent spirits are banished from the Company’s grounds, except when prescribed by a physician. All games of hazard and cards are prohibited within their limits and in the boarding-houses.
Weekly wages were as follows:
For picking and carding, $2.78 to $3.10
For spinning, $3.00
For weaving, $3.10 to $3.12
For warping and sizing, $3.45 to $4.00
For measuring and folding, $3.12
What kind of world were the factory owners trying to create with these rules? How do you think those who believed all white people were born free and equal would react to them?
Visit the Textile Industry History site to explore the mills of New England through its collection of history, images, and ephemera.
The mechanization of formerly handcrafted goods, and the removal of production from the home to the factory, dramatically increased output of goods. For example, in one nine-month period, the numerous Rhode Island women who spun yarn into cloth on hand looms in their homes produced a total of thirty-four thousand yards of fabrics of different types. In 1855, the women working in just one of Lowell’s mechanized mills produced more than forty-three thousand yards.
The Boston Associates’ cotton mills quickly gained a competitive edge over the smaller mills established by Samuel Slater and those who had imitated him. Their success prompted the Boston Associates to expand. In Massachusetts, in addition to Lowell, they built new mill towns in Chicopee, Lawrence, and Holyoke. In New Hampshire, they built them in Manchester, Dover, and Nashua. And in Maine, they built a large mill in Saco on the Saco River. Other entrepreneurs copied them. By the time of the Civil War, 878 textile factories had been built in New England. All together, these factories employed more than 100,000 people and produced more than 940 million yards of cloth.
Success in New England was repeated elsewhere. Small mills, more like those in Rhode Island than those in northern Massachusetts, New Hampshire, and Maine, were built in New York, Delaware, and Pennsylvania. By midcentury, three hundred textile mills were located in and near Philadelphia. Many produced specialty goods, such as silks and printed fabrics, and employed skilled workers, including people working in their own homes. Even in the South, the region that otherwise relied on slave labor to produce the very cotton that fed the northern factory movement, more than two hundred textile mills were built. Most textiles, however, continued to be produced in New England before the Civil War.
Alongside the production of cotton and woolen cloth, which formed the backbone of the Industrial Revolution in the United States as in Britain, other crafts increasingly became mechanized and centralized in factories in the first half of the nineteenth century. Shoe making, leather tanning, papermaking, hat making, clock making, and gun making had all become mechanized to one degree or another by the time of the Civil War. Flour milling, because of the inventions of Oliver Evans (Figure), had become almost completely automated and centralized by the early decades of the nineteenth century. So efficient were Evans-style mills that two employees were able to do work that had originally required five, and mills using Evans’s system spread throughout the mid-Atlantic states.
THE RISE OF CONSUMERISM
At the end of the eighteenth century, most American families lived in candlelit homes with bare floors and unadorned walls, cooked and warmed themselves over fireplaces, and owned few changes of clothing. All manufactured goods were made by hand and, as a result, were usually scarce and fairly expensive.
The automation of the manufacturing process changed that, making consumer goods that had once been thought of as luxury items widely available for the first time. Now all but the very poor could afford the necessities and some of the small luxuries of life. Rooms were lit by oil lamps, which gave brighter light than candles. Homes were heated by parlor stoves, which allowed for more privacy; people no longer needed to huddle together around the hearth. Iron cookstoves with multiple burners made it possible for housewives to prepare more elaborate meals. Many people could afford carpets and upholstered furniture, and even farmers could decorate their homes with curtains and wallpaper. Clocks, which had once been quite expensive, were now within the reach of most ordinary people.
THE WORK EXPERIENCE TRANSFORMED
As production became mechanized and relocated to factories, the experience of workers underwent significant changes. Farmers and artisans had controlled the pace of their labor and the order in which things were done. If an artisan wanted to take the afternoon off, he could. If a farmer wished to rebuild his fence on Thursday instead of on Wednesday, he could. They conversed and often drank during the workday. Indeed, journeymen were often promised alcohol as part of their wages. One member of the group might be asked to read a book or a newspaper aloud to the others. In the warm weather, doors and windows might be opened to the outside, and work stopped when it was too dark to see.
Work in factories proved to be quite different. Employees were expected to report at a certain time, usually early in the morning, and to work all day. They could not leave when they were tired or take breaks other than at designated times. Those who arrived late found their pay docked; five minutes’ tardiness could result in several hours’ worth of lost pay, and repeated tardiness could result in dismissal. The monotony of repetitive tasks made days particularly long. Hours varied according to the factory, but most factory employees toiled ten to twelve hours a day, six days a week. In the winter, when the sun set early, oil lamps were used to light the factory floor, and employees strained their eyes to see their work and coughed as the rooms filled with smoke from the lamps. In the spring, as the days began to grow longer, factories held “blowing-out” celebrations to mark the extinguishing of the oil lamps. These “blow-outs” often featured processions and dancing.
Freedom within factories was limited. Drinking was prohibited. Some factories did not allow employees to sit down. Doors and windows were kept closed, especially in textile factories where fibers could be easily disturbed by incoming breezes, and mills were often unbearably hot and humid in the summer. In the winter, workers often shivered in the cold. In such environments, workers’ health suffered.
The workplace posed other dangers as well. The presence of cotton bales alongside the oil used to lubricate machines made fire a common problem in textile factories. Workplace injuries were also common. Workers’ hands and fingers were maimed or severed when they were caught in machines; in some cases, their limbs or entire bodies were crushed. Workers who didn’t die from such injuries almost certainly lost their jobs, and with them, their income. Corporal punishment of both children and adults was common in factories; where abuse was most extreme, children sometimes died as a result of injuries suffered at the hands of an overseer.
As the decades passed, working conditions deteriorated in many mills. Workers were assigned more machines to tend, and the owners increased the speed at which the machines operated. Wages were cut in many factories, and employees who had once labored for an hourly wage now found themselves reduced to piecework, paid for the amount they produced and not for the hours they toiled. Owners also reduced compensation for piecework. Low wages combined with regular periods of unemployment to make the lives of workers difficult, especially for those with families to support. In New York City in 1850, for example, the average male worker earned $300 a year; it cost approximately $600 a year to support a family of five.
WORKERS AND THE LABOR MOVEMENT
Many workers undoubtedly enjoyed some of the new wage opportunities factory work presented. For many of the young New England women who ran the machines in Waltham, Lowell, and elsewhere, the experience of being away from the family was exhilarating and provided a sense of solidarity among them. Though most sent a large portion of their wages home, having even a small amount of money of their own was a liberating experience, and many used their earnings to purchase clothes, ribbons, and other consumer goods for themselves.
The long hours, strict discipline, and low wages, however, soon led workers to organize to protest their working conditions and pay. In 1821, the young women employed by the Boston Manufacturing Company in Waltham went on strike for two days when their wages were cut. In 1824, workers in Pawtucket struck to protest reduced pay rates and longer hours, the latter of which had been achieved by cutting back the amount of time allowed for meals. Similar strikes occurred at Lowell and in other mill towns like Dover, New Hampshire, where the women employed by the Cocheco Manufacturing Company ceased working in December 1828 after their wages were reduced. In the 1830s, female mill operatives in Lowell formed the Lowell Factory Girls Association to organize strike activities in the face of wage cuts (Figure) and, later, established the Lowell Female Labor Reform Association to protest the twelve-hour workday. Even though strikes were rarely successful and workers usually were forced to accept reduced wages and increased hours, work stoppages as a form of labor protest represented the beginnings of the labor movement in the United States.
Critics of industrialization blamed it for the increased concentration of wealth in the hands of the few: the factory owners made vast profits while the workers received only a small fraction of the revenue from what they produced. Under the labor theory of value, said critics, the value of a product should accurately reflect the labor needed to produce it. Profits from the sale of goods produced by workers should be distributed so laborers recovered in the form of wages the value their effort had added to the finished product. While factory owners, who contributed the workspace, the machinery, and the raw materials needed to create a product, should receive a share of the profits, their share should not be greater than the value of their contribution. Workers should thus receive a much larger portion of the profits than they currently did, and factory owners should receive less.
In Philadelphia, New York, and Boston—all cities that experienced dizzying industrial growth during the nineteenth century—workers united to form political parties. Thomas Skidmore, from Connecticut, was the outspoken organizer of the Working Men’s Party, which lodged a radical protest against the exploitation of workers that accompanied industrialization. Skidmore took his cue from Thomas Paine and the American Revolution to challenge the growing inequity in the United States. He argued that inequality originated in the unequal distribution of property through inheritance laws. In his 1829 treatise, The Rights of Man to Property, Skidmore called for the abolition of inheritance and the redistribution of property. The Working Men’s Party also advocated the end of imprisonment for debt, a common practice whereby the debtor who could not pay was put in jail and his tools and property, if any, were confiscated. Skidmore’s vision of radical equality extended to all; women and men, no matter their race, should be allowed to vote and receive property, he believed. Skidmore died in 1832 when a cholera epidemic swept New York City, but the state of New York did away with imprisonment for debt in the same year.
Worker activism became less common in the late 1840s and 1850s. As German and Irish immigrants poured into the United States in the decades preceding the Civil War, native-born laborers found themselves competing for jobs with new arrivals who were willing to work longer hours for less pay. In Lowell, Massachusetts, for example, the daughters of New England farmers encountered competition from the daughters of Irish farmers suffering the effects of the potato famine; these immigrant women were willing to work for far less and endure worse conditions than native-born women. Many of these native-born “daughters of freemen,” as they referred to themselves, left the factories and returned to their families. Not all wage workers had this luxury, however. Widows with children to support and girls from destitute families had no choice but to stay and accept the faster pace and lower pay. Male German and Irish immigrants competed with native-born men. Germans, many of whom were skilled workers, took jobs in furniture making. The Irish provided a ready source of unskilled labor needed to lay railroad track and dig canals. American men with families to support grudgingly accepted low wages in order to keep their jobs. As work became increasingly deskilled, no worker was irreplaceable, and no one’s job was safe.
Section Summary
Industrialization led to radical changes in American life. New industrial towns, like Waltham, Lowell, and countless others, dotted the landscape of the Northeast. The mills provided many young women an opportunity to experience a new and liberating life, and these workers relished their new freedom. Workers also gained a greater appreciation of the value of their work and, in some instances, began to question the basic fairness of the new industrial order. The world of work had been fundamentally reorganized.
Review Questions
How were the New England textile mills planned and built?
- Experienced British builders traveled to the United States to advise American merchants.
- New England merchants paid French and German mechanics to design factories for them.
- New England merchants and British migrants memorized plans from British mills.
- Textile mills were a purely American creation, invented by Francis Cabot Lowell in 1813.
Hint:
C
Which is the best characterization of textile mill workers in the early nineteenth century?
- male and female indentured servants from Great Britain who worked hard to win their freedom
- young men who found freedom in the rowdy lifestyle of mill work
- experienced artisans who shared their knowledge in exchange for part ownership in the company
- young farm women whose behavior was closely monitored
Hint:
D
What effect did industrialization have on consumers?
Hint:
Industrialization made manufactured goods more abundant and more widely available. All but the poorest Americans were able to equip their homes with cookstoves, parlor stoves, upholstered furniture, and decorations such as wallpaper and window curtains. Even such formerly expensive goods as clocks were now affordable for most.
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oercommons
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2025-03-18T00:37:25.476880
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07/10/2017
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{
"license": "Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/",
"url": "https://oercommons.org/courseware/lesson/15440/overview",
"title": "U.S. History, Industrial Transformation in the North, 1800–1850, Early Industrialization in the Northeast",
"author": null
}
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