Historical Example of Supply and Demand

For this checkpoint, the assignment involves choosing a historical event relating to labor supply and demand. The historical event I'll cover or compare this assignment to is the Great Depression. For about 10 years, from 1929 to 1939, the United States was caught in an economic strangle-hold that threatened to unravel the overall wellbeing of the country. Due to various factors that caused the depression, labor demand was so low in comparison to labor supply. People were out of work because nobody could afford the products firms were selling. Therefore the firms had little to no demand for labor, yet the supply (amount of people willing to work) was exponentially higher. In relation to marginal product value, there wasn't a defined need for additional workers since firms or companies weren't making enough revenue to justify adding more employees.

The marginal product value was just too low, thus the demand for labor in those firms caused many people to become and remain unemployed. I was because of a high unemployment rate that product values decreased which ultimately compounded the issue and forced the labor market to remain out of work. It wasn't until the help (in relation to the economy) of World War II that the labor market began to see a turnaround. The massive increase in labor demand, caused by increase demand of automobiles, tanks, weapons, and other various goods helped bring back the equilibrium between labor supply and demand. Ultimately people were able to regain financial stability and, over time, the employment rate increased.