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A (sociological) term created by Karl Marx. In his writing it refers to an especially downtrodden part of the proletariat masses. Their essential function is to stabilize wages to the advantage of the factory owners.

The industrial reserve army basically works in two ways:

  1. They regulate wages by threatening employed workers with an available labor surplus. If there are two hundred people lined up outside the factory gates in hopes of obtaining a job in theory the factory workers will be less demanding in wages. It's a pretty basic issue of supply and demand but Marx was ahead of his time by applying it to the labor market.
  2. The industrial reserve army usually filled supply labor positions when there was a sudden surge in production needs. They were usually employed for far less than standard wages and often the wages of the previously employed were lowered with them. Again, the bonus laborers were serving to enforce the supply and demand quota by keeping wages low.

    In more recent years there has been a good deal of debate about the possibility that women have become the new version of the industrial reserve army.

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