Unemployment, Levels of
UNEMPLOYMENT, LEVELS OF
The Great Depression was an economic catastrophe without comparison in American history. Within a few years, between 1929 and 1933, an economy that had appeared functional and highly dynamic collapsed, throwing millions out of work. Although wage cuts, underemployment, and economic instability were common experiences, unemployment was the paradigmatic crisis of the Depression, with effects that spread through the entire economy. The fact that many of the people who lost their jobs and were unable to get new ones were, by and large, highly productive people in the middle of their working lives, more often than not the sole breadwinner for a family, created an acute sense of desperation in the country at large.
Unemployment levels reached their height in 1933, when one-quarter of the nation's work force—thirteen million people—was unemployed. To give a sense of the rapidity of the change, unemployment rates had been remarkably low throughout the 1920s, falling to 1.6 percent in 1926 and up to only 3.2 percent in 1929. For unemployment to climb so rapidly to 25 percent in only a few years was an unprecedented and shocking experience. Even more dramatic was the fact that high levels of unemployment persisted throughout the decade, never falling below 14.3 percent (1937). The high rates of unemployment also reduced wages for workers who were lucky enough to keep their jobs, and many workers worked on part-time, reduced schedules. No region of the country was immune to the crisis. The coal fields of Kentucky and West Virginia, the rural towns of the South, the cities of Los Angeles, San Francisco, New York, and Philadelphia—all were affected by the disappearance of work.
The expansion of the 1920s had hidden a deep layer of poverty in the United States, and many people worked in substandard jobs for substandard wages throughout the boom. Studies done in the early 1940s showed that among people on unemployment relief in the late 1930s, about 14 percent had actually lost their jobs at their usual occupation prior to the crash of 1929. Of the men on relief in nine cities, including Detroit, 20 percent had been unemployed prior to the Depression. In addition, much of the deepest poverty in the United States was not a product of unemployment but of the depression in farming areas, for example among sharecroppers and tenant farmers in the Deep South. Nonetheless, there is no question that the conditions of people who were poor during the boom only worsened during the 1930s, and unemployment was a major part of the crisis.
Unemployment did not affect every demographic group equally. It fell most cruelly on young, old, uneducated, unskilled, and rural workers, especially blacks, Mexican-Americans, and immigrants. Workers under twenty and over sixty were more than twice as likely to be out of work. One-fifth of the people on unemployment rolls was black, twice their proportion in the overall population. Thousands of immigrants, finding that the United States was no longer paved with bricks of gold, returned to their home countries, and in 1931, 100,000 Americans set off to find work in the Soviet Union. (Not all immigrants were eager to leave the United States; about 400,000 Mexican immigrants were deported to their home country over the decade.)
But in some ways what is most striking about the Depression is that the people affected by it were not only the marginal workers, or workers who labored under the stresses of racism and sexism in good economic times and who were usually the last hired and first fired. Instead, the "typical" unemployed worker, according to studies of the day, was a white male in his late thirties, the head of a family and the sole breadwinner, who had never completed elementary school and typically worked as an unskilled laborer in the manufacturing or mechanical industries. He was out of a job for an average of two years. Heavy industry was hit especially hard throughout the Depression, with such companies as Ford laying off two-thirds of their workers by 1933 and General Electric and Westinghouse each laying off more than half. The Depression had an acute impact upon people in the mainstream of the labor market, men and women who had likely never expected or anticipated that their adult lives would be marked by such a crisis.
For working women, who were concentrated in the service sector, the Depression, though traumatic, was different than for men. Women were more likely to lose their jobs early in the Depression, but they were also more likely to find employment again later in the decade because they benefited from the long-term trend towards greater employment in services over the course of the twentieth century. In many families, women became the primary breadwinners, a development that transformed relationships within the home.
Much of the social policy of the New Deal was aimed at alleviating the crisis of unemployment in the Great Depression. The Federal Emergency Relief Administration provided direct cash relief to families in dire need. The Civil Works Administration was the first major work-relief program, along with the Civilian Conservation Corps. By February 1934 these programs employed 22.2 percent of the population, a high for any point in American history. Beginning in 1935, the Roosevelt administration cut back on general relief in favor of work-relief programs, especially the Works Progress Administration. In some ways, this reflected the fact that the crisis of the Depression was not simply one of unemployment and poverty for individuals. It was one of a lost decade of social investment and productive capacity, and while federal investments in public works could help to make up for this somewhat, to a great extent the decade was simply lost forever.
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