Panic of 1837 · US History

What effect did the Panic of 1837 have on the American labor movement?

  1. Labor unions grew rapidly as workers sought stronger protection from the crisis
  2. It led to the first federal minimum wage law
  3. It forced the government to ban child labor to create more jobs for adults
  4. The resulting unemployment and wage cuts largely decimated early labor unions
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Correct answer: The resulting unemployment and wage cuts largely decimated early labor unions

The severe economic depression following the panic led to massive unemployment and business failures. With jobs scarce, workers lost their bargaining power, causing most of the fledgling trade unions of the 1830s to collapse.

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