Question

Why were factory owners laying off employees in the mid-to-late 1920s?

Demand for factory goods decreased.

Machines could do the jobs of multiple workers.

The stock market was booming.

Answer 1

Factory owners were primarily laying off employees in the mid-to-late 1920s mainly due to a decrease in demand for factory goods. After a period of economic expansion in the early 1920s, there was a slowdown in consumer spending and a saturation of certain markets, leading to reduced production needs and thus layoffs.

While advancements in machinery did allow factories to operate more efficiently, the main driver for layoffs was the decrease in demand rather than a direct replacement of workers with machines. The stock market booming at that time did not translate into consistent gains for all sectors, especially as the decade progressed towards the onset of the Great Depression in 1929. Therefore, the most accurate reason for the layoffs was the decreased demand for factory goods.