Stock Market Collapse

7 Pages 1658 Words

iances. These products were heavily advertised to the public to try to create product demand, however, consumer wages were too low to provide the purchasing power to sustain the economy therefore unsold goods began to pile up in warehouses all across the country. This over supply created cutbacks in production and workers were laid off, leading to a greater decline in purchasing. 4
During the 1920’s there was a growing gap between the rich and the working class people and there was poverty in the midst of prosperity. Underpaid workers turned out record number of goods that they could only afford to buy on credit. The enormous output at bargain labor costs created wealth for people who already had far more than enough money, thereby widening the income gap without providing the worker with an sufficient wage so he could go out and purchase the products he was manufacturing. “From 1923 - 1929 the average output per worker increased 32% in manufacturing and during that same period of time average ...