The Great Depression

The USA During the Great Depression

The Economic Effects

• unemployment soared from about 3.2% in 1929 to around 25.2% by 1933 (therefore around 12,830,000 people were unemployed)
• the Labor Research Association claims that the figure of unemployed was closer to 17 million
• it was estimated that the national wage bill in 1932 was 40% of the 1929 figure

Uneven Distribution of Unemployment

• unemployment was not evenly spread throughout the country
• New York State had 1 million unemployed
• the city of Cleveland, Ohio had 50% of its workforce out of jobs
• in Toledo, Ohio 80% of the workforce was unemployed
• Women
  • working-class women were likely to be laid off before men in unskilled jobs
  • those that worked in domestic service found that families could no longer afford to keep them on
  • married women who worked were often accused of being responsible for male unemployment
  • in 1930 over 75% of American school authorities refused to employ married women
• African-Americans
  • in April 1931 the number of African-Americans out of work was 4 to 6 times higher than the number of whites
  • jobs traditionally given to African-Americans (e.g. waiter, lift attendant) were being given to unemployed whites
  • rural workers (mainly African-Americans) were used to depressed conditions and almost did not notice the change in opportunities

Effects on Individual Industries

• some areas survived the onset of the depression
• some industries, such as cigarette manufacture, were "depression-proof" as there was no lack of demand
• but by 1933 nowhere could completely escape the effects
• the rate of growth fell from 6.7% in 1929 to -14.7% in 1932
• GNP fell from $203.6 billion to $144.2 billion in the same period
• general prices fell by 25%, farm prices fell by 50%
• production in the coal industry was the lowest it had been since 1904, the workforce fell by 300,000 and wages could be as low as $2.50 per day
• 75% of textile firms were losing money
• iron and steel production fell by 59%
• by 1932 the entire workforce of US Steel Corporation worked part-time
• car sales fell from 4,445,178 in 1929 to 1,103,557 in 1933
• the only electrical goods that did not suffer a serious decline were lightbulbs as they needed to be replaced
• the number of residential units built between 1929 and 1932 fell by 82%

Problems With Credit and Banking

• credit vanished
• stock market went into serious decline
• there were 10,000 bank closures between 1929 and 1933 (compared to 5,000 over the previous decade)
• when banks had to take over farmers' properties as they could not pay their mortgagte, the bank lost liquid assets and gained unsaleable land
• depositors lost confidence in the banks - many withdrew their money which compounded the problems of bank failures

The Social Effects of the Great Depression

Life for the Unemployed

• little provision had been made for unemployment; there was no federal unemployment benefit
• the accepted view was that if you were unemployed it was your own fault
• there was a huge psychological impact
• the number of mariages fell from…