How Industrialization Shaped Our Concepts of Work and Employment – Part I

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You may have noticed that Team JTC is really interested in history this year, and today’s newsletter is the first of a two-part series looking at how modern concepts of work and employment developed. At Team JTC, we recently researched this topic and we would like to share the results of those efforts with you now.

In essence, modern ideas surrounding employment originated with the Industrial Revolution and the massive changes that accompanied it, but there is much more to the story than that. In particular, we will see that many events of the late 19th and early 20th centuries were profoundly influential in shaping how we view work (and recruitment) today.

We would like to introduce this history by looking at it from four distinct but interrelated viewpoints, starting with the first two in this article. We begin with a brief reminder of just how different the world of work looked less than 200 years ago.

1. From the Family Business to the Modern Corporation

Prior to the Industrial Revolution, professions were generally passed on from generation to generation within families or sometimes to apprentices. Most people lived in rural areas and work was inevitably local. In his classic book Democracy in America, the French historian Alexis de Tocqueville observed that in the 1830s, most Americans entered “a lifetime of employment” after completing their formal education at an earlier age than we do today. Almost exclusively, there was no need for formal hiring processes.

Of course, major change was just around the corner.

Professor Jeremy Atack of Vanderbilt University is an economic historian who has studied US industrialization in detail. He captured the extent and pace of that change in writing, “The transition from small, seasonal businesses meeting local needs to the large-scale corporation serving a national market in America took less than a hundred years, from 1840 to 1920.”

These changes particularly gathered pace after 1880, as major technological advancements in manufacturing, transportation, and communications all combined to facilitate rapid growth of the first modern industrialized corporations.

The burgeoning railroad industry of the mid-19th century is perhaps one of the best-known examples, and interestingly, it was also the first to appoint full-time salaried managers. Meanwhile, for the steel industry, production was around 60 times higher in 1890 than it was in 1870. The spectacular early achievements of those industries soon spilled over into other sectors, and by the early 20th century, large corporations dominated all major areas of the US economy.

It was not only technological changes that enabled this rapid industrialization and urbanization. New organizational and management structures were important too, because increasingly large businesses needed equally large numbers of workers. In fact, it has been said that the modern corporation essentially owes its existence to those “organizational innovations.”

This is perhaps the most enduring legacy of the so-called Second Industrial Revolution (1870–1914), in terms of how it laid the foundations for the modern world of work.

Put differently, the emergence of large national corporations and new organizational methods for operating them paved the way for the corporate structures we are familiar with today.?

But what did it mean for workers?

2. The Transforming Nature of Employment

For one, it meant moving to the cities in unprecedented numbers. In 1870, only around 25% of the US population lived in urban areas, but that had doubled by 1920.

The rise of modern corporations also meant that employees were part of a much larger workforce for the first time, in contrast to learning the family trade or joining a small local business. And as jobs became more specialized over the first half of the 20th century, it increasingly meant they required formal education and training to secure employment. Community colleges saw rapid growth at this time, and four-year bachelor’s degrees steadily grew in popularity.

The changing nature of work also meant that employers now had to hire outside of their immediate family, personal network, or even locality. At first, this did not present much of a problem. Many people were coming to the cities in search of new opportunities, and most of those jobs were unskilled.

As corporations grew and new management structures were introduced, more and more roles were created that required specialist skills. The need for formal recruitment processes arose… but that is a topic for another day.

Wrapping Up Part I

The period between the Civil War and World War I saw traditional models of work and employment transformed into new structures that are still largely with us today. Next time, we will explore the shaping of working conditions we now experience today, such as employee benefits, and pinpoint some of the historical origins of underrepresentation.

JOIN US IN THE COMMENTS: Has this information given you any insights that might inform your recruiting efforts? Do you think this history has something to teach us about the changes to work that are happening now? As always, we would like to hear about anything in today’s article that particularly resonated with you.