The industrial revolution took place from the 18th to the 19th century. It started in Britain. Before the revolution, manufacturing was done in people’s homes, using basic machines and handmade tools. When industrialization kicked in, everything became powered. Factories arose and manufacturing was shifted to factories. Most of the people in turn shifted from the rural areas to the urban areas where they could get employment from the factories. Incomes were meager before the industrialization. The British factories during the industrial revolution experienced slow productivity, rising labor input and stagnant living standards for the workers.
Discontinuity models view the industrial revolution as identical to the rapid growth in incomes and per capita output. This is true if based on the shift to a modern sector from a backward. Evidence suggests that from the period 1750-1850, there was slow growth in per capita. In addition, the argument that the per capita incomes stagnated before the revolution is true only if viewed from a present day angle. In 1780, England was richer than it was in 1066. There was a growth in output in this period. However, the increasing population absorbed most of it. Most of the increase in productivity was driven by labor inputs and higher capital. With increase population, the total factor-productivity (TFP) was very small. As Voth (2003) put it, TFP growth and actual output, growth was very disappointing by the standards of economic performance. Labor and capital being major factors of production were the cause of slow growth. The population was increasing but the required capital was also increasing. Most of the people were inexperienced lowering their productivity. Low labor productivity combined with high capital yielded slow growth.
Rising labor inputs
Generally, Europeans started to work much longer during the industrial revolution. Adults could work up to 3200 hrs per year. By the standards of human history, these working hours were long. Research suggests that these working hours are the sole cause of the English economy transformation. Though hours were not short by 1750, they increased by 35% of the century. Leisure time declined though material consumption did not increase. Workers in the factories had no time to relax. There was reduced leisure time as the marginal utility of income rose and labor was reallocated from the production of consumption goods to the production of marketed goods. Factories were concentrating with increasing productivity by trying to make the workers work for more hours. Increasing the working hours lowers productivity and efficiency.
Living standards for the workers
Household surveys such as the human development index suggest that living standards increased at a slow rate in the revolution period. Real wages rose by less than 20% in the period between 1780 and 1830. As Voth (2003) argues, the turning point in aggregate living standards was reached in the period after 1830. Though real wages were increasing, the consumer-spending index was also increasing. Prices of goods and services were rising. In addition, workers had to work for more hours giving them little time to rest and take care of their families. The living standards were very poor mainly due to the population increase, which increased availability of cheap labor.
In the industrial revolution period, many factories were built. This increased the demand for labor but labor was readily available. Most of the people had shifted to the urban areas in search of employment. The urban areas flocked with unemployed people. This made labor to be cheap. Employers could set wages as low as 10 cents an hour. In addition, most of these people were unskilled and thus lacked a bargaining ground. Women would receive a third of what men received and children even received less.
Working for long hour with little pay can be attributed to low productivity. The workers had no motivation lowering their productivity. In addition, most of the workers were unskilled. With the revolution, the economy also revolutionized. Starting and running factories become expensive in terms of capital. With high capital and high unskilled and underpaid labor, the yield was low productivity. Low productivity translated to low profits. Instead of solving the labor problem, the factories increased the working hours. This from a utilities argument will lower the productivity.
The managements of the factories were the sole cause of the problems they faced. They underpaid the workers leading to low marginal productivity of labor. Instead of improving the working standards of the employees, the management would increase the working hours, which would lower the productivity more. The problems of poor living and working standards for workers, slow growth in productivity and increased labor input rotated in the factories. Poor living standards reduced the productivity, which in turn lead to increased working hours.
Borjas, George J. Labor economics. Vol. 6. New York:: McGraw-Hill, 2005.
De Vries, Jan. “The industrial revolution and the industrious revolution.” The Journal of Economic History 54, no. 02 (1994): 249-270.
Voth, Hans-Joachim. “Living standards during the industrial revolution: An economist’s guide.” The American Economic Review 93, no. 2 (2003): 221-226.
. Voth, Hans-Joachim. “Living standards during the industrial revolution: An economist’s guide.” The American Economic Review 93, no. 2 (2003): 221.
 De Vries, Jan. “The industrial revolution and the industrious revolution.” The Journal of Economic History 54, no. 02 (1994): 257.
. Voth, Hans-Joachim. “Living standards during the industrial revolution: An economist’s guide.” The American Economic Review 93, no. 2 (2003): 224.
. De Vries, Jan. “The industrial revolution and the industrious revolution.” The Journal of Economic History 54, no. 02 (1994): 259.
. Borjas, George J. Labor economics. Vol. 6. New York:: McGraw-Hill, 2005.
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