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When families all lived on the farm, everyone helped with the farm work. When people moved to the city, every person in the family did what they could to add to the family income.
Children worked in factories because the machines were powered by water wheels and if something on the machine broke they would not just stop all the machines for that one machine to be fixed. Because of this they needed people with small hands to reach in and fix the machines so the employers usually only hired women and children because men often had larger hands. Also children could be manipulated into accepting low wages. ( They would work for pennies a day)