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Unemployment Statistics during the Great Depression

Unemployment Statistics during the Great Depression


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Unemployment statistics for The Great Depression show a remarkable collapse in the labor market in just a few years, with recovery that did not take place until the onset of World War II created an industrial demand that brought the economy back to prosperity. In addition to unemployment, workers during the Great Depression found themselves working in an atmosphere of insecurity for lower salaries and wages than before.

Source: U.S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1957 (Washington, D.C., 1960), p.70.

Depression Era Unemployment Statistics

Year

Population

Labor
Force

Unemployed

Percentage of
Labor Force

1929

88,010,000

49,440,000

1,550,000

3.14

1930

89,550,000

50,080,000

4,340,000

8.67

1931

90,710,000

50,680,000

8,020,000

15.82

1932

91,810,000

51,250,000

12,060,000

23.53

1933

92,950,000

51,840,000

12,830,000

24.75

1934

94,190,000

52,490,000

11,340,000

21.60

1935

95,460,000

53,140,000

10,610,000

19.97

1936

96,700,000

53,740,000

9,030,000

16.80

1937

97,870,000

54,320,000

7,700,000

14.18

1938

99,120,000

54,950,000

10,390,000

18.91

1939

100,360,000

55,600,000

9,480,000

17.05

1940

101,560,000

56,180,000

8,120,000

14.45

1941

102,700,000

57,530,000

5,560,000

9.66

Despite the evidence of a national catastrophe, support for Unemployment Relief remained sketchy until FDR introduced the New Deal in 1933.


Unemployment During The Great Depression

Unemployment during the great depression was at one of the highest levels ever in history. In America the unemployment rate reached nearly 25% at its peak. This graph shows the percentage of Americans unemployment from just before the Wall Street Crash in 1929, to the outbreak of World War 2 in 1939.

Life during the great depression was destitute and many people were starving as the economy collapsed all over the world.
In England, unemployment during the great depression also rose dramatically, negatively affecting people’s finances and credit, particularly in industrial towns and cities. Glasgow experienced 30% unemployment whilst in Newcastle the major industry of ship building fell by 90% and unemployment rose to 70%. These desperate times led people to take drastic action. On 5 October 1936, 200 working men from Jarrow (a town in North East England) marched, all the way to London to make their cause know to parliament. They handed over a petition of 12000 signatures to parliament, however the Prime Minster of the time, Stanley Baldwin, refused to see any the representatives.
The mass unemployment during the great depression finally ended in Britain as Britain, and many other countries, prepared for and fought in World War Two.


Historically high unemployment

While the Facebook post claiming that unemployment was at a historic low a year ago has been shared nearly 300 times, the opposite is true.

The seasonally adjusted unemployment rate was 14.8% in April 2020, the highest rate since 1948 as governments imposed restrictions to stop the spread of the coronavirus and businesses closed around the country.

Unemployment systems in several states were overwhelmed by the surge in claims. Fewer than half of claims in Ohio were processed within 21 days, the federal standard for success, near the peak of joblessness. Florida took down its system in April 2020 to deal with a backlog of claims.

The unemployment rate has steadily fallen again since the historic high. It dipped to 13.3% in May, 11.1% in June and 10.2% in July. Those months accounted for four of the 15 times since 1948 that the U.S. has had double-digit unemployment, according to Bureau of Labor Statistics data.

In March 2021, the unemployment rate was 6%.

The Bureau of Labor Statistics does not have seasonally adjusted unemployment data from before 1948, but its annual data from the Great Depression shows rates of more than 20% from 1932 to 1935.

Before the pandemic, the U.S. unemployment rate was on a hot streak. It was less than 4% for 13 consecutive months, dipping to 3.5% three times.

That still wasn’t a historic low though. In 1968 and 1969, the unemployment rate was at 3.5% or less in 17 out of the 24 months. The unemployment rate was 3.5% or lower for nearly three straight years between 1951 and 1953.

The lowest monthly unemployment rate since 1948 was 2.5% in May and June 1953, according to the Bureau of Labor Statistics.

Luis Mora stands in front of the closed offices of the New York State Department of Labor on May 7, 2020 in the Brooklyn borough in New York City. (Photo: Stephanie Keith, Getty Images)


Facts About The Great Depression

Please Note: This information was compiled by Jennifer Croft, who also wrote about a sedation dentist in Phoenix, as well as a Colorado drapery workroom that makes custom window treatments.

-The Dust Bowl during the Great Depression led to widespread migration, including 200,000 people who moved to California, most arriving with no money, family, or resources.

-Economic conditions that led to the Great Depression began in the early 1920s, but most people think of the stock market crash of 1929 as the start of the Great Depression.

-The Great Depression lasted from 1929 to 1941 and only ended with America’s entry into World War II.

-Franklin D. Roosevelt’s New Deal programs employed hundreds of thousands of workers, many who were unskilled. One of the most famous New Deal programs was the Civilian Conservation Corps (CCC), and these workers are credited improving dozens of US National Parks.

-Drought conditions of the Dust Bowl were prevalent in most of the years of the Great Depression, but the term was actually coined in April 1935. -At its highest point during the Great Depression, unemployment was 25% in 1933.

The Federal Deposit Insurance Corporation (FDIC) was formed in 1934, to ensure bank deposits and restore Americans’ confidence in banking.

-Before the start of the Great Depression, there were 25,000 banks in the United States. By 1933, almost half of those banks (11,000) had failed.

-When Dust Bowl conditions devastated farmers, many defaulted on their bank loans, which helped lead to widespread bank failure.

-President Franklin D. Roosevelt steered America through most of the Great Depression years, taking office in March 1933, and serving four terms, dying in office in April 1945.

-President Roosevelt (FDR) dedicated his first 100 days in office in 1933 to addressing America’s economic distress, with aggressive lawmaking and aid programs, all of which Congress passed.

-Europe’s slow recovery from World War I contributed to a global recession in the 1920s and 1930s that added to the Great Depression’s reach in the United States.

-Panic was rampant during the Great Depression years, including Americans curtailing all unnecessary spending and starting runs on banks, which led to President Franklin D. Roosevelt’s famous line, “Only thing we have to fear is fear itself.”

-At its highest point during the Great Depression, unemployment reached 25% (in 1933).

-The Great Depression began in 1929 and ended in 1941 when America prepared to enter World War II.

-Social Security, a program that continues to this day, was introduced by Franklin D. Roosevelt in the midst of the Great Depression.

-The “Roaring Twenties” weren’t roaring for everyone. By 1929, 1% of Americans controlled 40% of the wealth in this country.

– The Federal Deposit Insurance Corporation (FDIC) was formed in 1934 to insure deposits in banks and restore customers’ faith in the American banking system.

-The Dust Bowl years spanned 1930-1936, when a million acres of farmland across the Plains became worthless due to severe drought and overfarming.

-After the stock market crash in 1929, it took 27 years to reach pre-crash levels.

-In 1939, the unemployment rate in America had dropped from a high of 25% to 15%, largely due to the New Deal programs introduced by Franklin D. Roosevelt.

-Tuesday, October 29, 1929 is known as Black Tuesday because of the plunge the stock market took, and it largely symbolizes the start of the Great Depression, though the economy had been in decline for at least six months prior to that date.

-By 1933, more than 11,000 of the nation’s 25,000 American banks had shuttered, victims of the Great Depression.

-Hoovervilles were the catchphrase for the shantytowns that cropped up across the United States, as homeless Americans improvised with scraps, abandoned cars, and packing crates.

-At its highest point during the Great Depression, unemployment reached 25% (in 1933).

-The Great Depression began in 1929 and ended in 1941 when America prepared to enter World War II.

-The Great Depressions of 2008 and 2009 undoubtedly would have been worse without the $700 billion and $770 billion stimulus packages from President Bush and President Obama (not to mention bailouts of the automakers, AIG, and Fannie Mae and Freddie Mac).

-In March 2012, it was reported that 4 out of 15 of the major U.S. banks (including Citigroup) wouldn’t survive another severe recession, much less a depression.

-Photos of the Great Depression depict farmers coping during the Dust Bowl years, FDR work programs, and people standing in line at soup kitchens. Photos that would capture today’s depression include real estate and foreclosure signs, unemployed people at job fairs, and several generations of families living under the same roof.

-Franklin D. Roosevelt’s “First Hundred Days” took place in March, April, and May of 1933 and marked his attempt to stem the economic bloodbath that the Great Depression had become.

-Herbert Hoover, the 31st President of the United States, served from 1928-1932, and many economists cite his lax monetary and fiscal policies as a cause of the Great Depression.


Depression-era 'rival'

"We're experiencing something that's starting to rival what we saw in the Depression," Houseman said of unemployment.

A rate that breaches 20% and persists for several months would likely meet the definition of a "depression," economists said.

That would mean 1 in 5 Americans who want a job (and are available to work) can't find employment.

"We're already way past [prior] recessions," said Jay Shambaugh, an economist and director of the Hamilton Project at the Brookings Institution, a left-leaning think tank. "Do we push this to 20% and stay there for a few quarters?

"If the unemployment rate is 20% in December, I think it's very fair to say we're in a depression."


Our rating: True

We rate this claim TRUE, based on our research. More jobs were lost during the Trump administration than any other in history. Approximately 4 million fewer people were employed from January 2017 to September 2020, according to the most recent publicly available data.

  • U.S. Bureau of Labor Statistics, Oct. 2: "THE EMPLOYMENT SITUATION — SEPTEMBER 2020"
  • U.S. Bureau of Labor Statistics, accessed Nov. 5: "Impact of the coronavirus (COVID-19) pandemic on The Employment Situation for September 2020"
  • USA TODAY, July 16: "Fact check: Trump doesn’t outperform other presidents despite 2 months of strong job gains"
  • Federal Reserve Bank of St. Louis, accessed Nov. 5: "All Employees, Total Nonfarm [PAYEMS]"
  • USA TODAY, Nov. 3: "Trump or Biden: Who would boost growth, restore jobs faster? Here’s an Election Day guide on the economy"
  • CNN, Oct. 6: "Trump has the worst job losses on record heading into the election"
  • Conversation with Jesse Lee, Senior Adviser at the Center for American Progress, Nov. 16
  • U.S. Bureau of Labor Statistics, Oct. 2: "Employment Situation News Release"

Our fact check work is supported in part by a grant from Facebook.

This fact check is available at IFCN’s 2020 US Elections FactChat #Chatbot on WhatsApp. Click here, for more.


Unemployment Statistics during the Great Depression - History

During the 1920’s, America and the rest of the world had a false sense of prosperity. Federal spending increased three times more than tax collections during World War 1. The US government reduces spending to help balance the budget, but a recession is the result. The decade of the 1920’s saw 600 banks close each year. Membership of the United Mine Workers Union went from 500,000 in 1920 and saw it drop to only 75,000 by 1928.

The American Federation of Labor membership fell from 5.1 million to 3.4 million by 1929. 1200 mergers become the reason 6000 independent companies close. In 1929, only 200 corporations control half of all American Industry. 80 percent of all income-earners were removed from the tax rolls completely. Taxes on the rich fall throughout the decade. One percent of the population owned forty percent of the country’s wealth by 1929. More than 90 percent experienced a drop in disposable income between 1923 and 1929. A single employee Productivity goes up by 43% over ten years, between 1919 and 1929.


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Poverty and homelessness


Hooverville in the Interbay neighborhood of Seattle, 1938. Courtesy of the Museum of History and Industry Photo Archives. Click to see more Seattle Hoovervilles.

Since the government provided no unemployment insurance, lost jobs quickly translated into lost homes and extreme poverty. In 1931, tent camps and shack towns began to appear. One large encampment that residents called "Hooverville" --in honor of the President whom they blamed for the Depression--grew in the mudflats south of downtown Seattle near Elliott Bay. City authorities ordered the site burned but it was quickly rebuilt, becoming in time a nearly all-male community of more than one thousand residents. Tolerated by authorities, it remained occupied until torn down by the city in 1941.

Until 1933 when federal assistance began, it was up to local authorities to assist unemployed residents. Counties and cities did what they could, establishing work programs more often than direct relief, but declining tax revenues made it hard to do very much. Even as the need to help soared in 1931 and 1932, Seattle, like many other cities, actually cut welfare budgets as businesses closed and homeowners defaulted on taxes. Churches and charities also helped as more fortunate residents often gave generously to feed and clothe the poor.[3a]

Founded in mid 1931, the Unemployed Citizen's League demanded more funds and different kinds of programs for the unemployed and forced city officials to leave Hooverville alone. With clubs in most neighborhoods of Seattle and Tacoma and several other cities, the UCL advocated self-help production, setting up cooperatives to exchange products and services. Farmers donated food in exchange for labor carpenters, dentists, and seamstresses exchanged one kind of skill for another. In Seattle, UCL was so popular and powerful that the city's relief office used it to distribute public resources to the poor. For two years, as the economy went from bad to worse, the UCL helped some of the unemployed maintain themselves.


Comparing Unemployment During the Great Depression and the Great Recession

Barry Eichengreen’s and Tim Hatton’s January 1988 paper entitled “Interwar Unemployment in International Perspective” is a useful starting point for any effort to compare unemployment during the Great Depression and the Great Recession.

It is useful to begin by recognizing three related cautions that the authors make in that paper. First, the modern sense of the term “unemployment” (willing and able to work, but unable to find a job commensurate with the worker’s skills) was not common until the decades before the Great Depression. The prior assumption was that people were unemployed because they were lazy. There was little understanding of business cycles or inadequate demand, little sympathy for the unemployed, and no sense that business or government were primarily responsible for the the level of unemployment. This meant that keeping data on unemployment was rarely a concern of government. Data on unemployment in Europe was largely collected through industrial trade unions.

Second, this means that the data on unemployment during the Great Depression are, globally, exceptionally poor and comparability even among nations during the same time period is even poorer. Our ability to compare unemployment data today with unemployment data during the Great Depression is even more subject to error.

Third, the data on unemployment during the Great Depression are often highly biased because of the manner in which they were gathered and the nature of the Great Depression. In Europe and the U.S. the Great Depression was overwhelmingly an industrial depression and industry trade unions were far more likely to gather data on unemployment in the industrial sector. This means that the typical data one sees on unemployment rates during the Great Depression for the U.S. and Europe likely overstate substantially the actual economy-wide rates of unemployment. The authors cite findings by researchers suggesting overstatements in the overall unemployment rate during the Great Depression for many nations were greater than 50%. (In plainer English – the true unemployment rate appears to have been less than half the typically reported unemployment rate in many nations during the Great Depression.)

U.S. unemployment data during the Great Depression are substantially inflated because people employed in public works programs doing highly productive work were counted as “unemployed” in that era. This still means that the Great Depression was often catastrophic, but it also means that the far more accurate (but still far from perfect) unemployment data for the Great Recession show that the two crises are broadly similar in severity in the Eurozone when severity is measured by the unemployment rate. For much of the Eurozone, the current crisis would be more accurately referred to as “The Second Great Depression.”

I use the term “broadly similar” because of the cautions I emphasized in my second point. We cannot ascribe the same accuracy to the data from the Great Depression, even after we adjust those data for known biases, that we can to the data on unemployment during the Great Recession. That is a significant caution because the data on unemployment during the Great Recession are still subject to material error.

With those cautions firmly in mind, here are the reasons why the data show that unemployment in the Eurozone is broadly similar to the unemployment during the Great Depression. The adjusted data, for example, report an average unemployment rate for 1930-1938 of 8.8% for Germany and 9.8% for the U.K. (Eichengreen & Hatton 1988: Table 1.2, p. 9). The authors did not find a reliable adjusted figure for France, but the unadjusted figure for the average French unemployment rate in 1930-1938 was 10.2%. Unfortunately, even modestly reliable unemployment data for the European periphery during the Great Depression are not available.

“The euro zone jobless rate rose to 12.0 percent in the first two months of the year, the latest in a series of record highs tracing to late 2011, Eurostat, the statistical agency of the European Union, reported [April 2, 2013].

The agency revised upward the January jobless rate for the euro zone from the previously reported 11.9 percent, itself a record. For the overall European Union, Eurostat said the February jobless rate rose to 10.9 percent from 10.8 percent in January, with more than 26 million people without work across the 27-nation bloc.

Both the jobless rates and the number of unemployed are the highest Eurostat has recorded in data that reach back to 1995, before the creation of the euro.”

Eurozone unemployment, overall, is materially higher than the best estimates of European unemployment during the Great Depression. The length of the two crises in Europe is becoming ever more similar as the Eurozone economic crisis deepens and grows longer due to the counterproductive austerity policies and to the inherently poor design of the euro as a non-sovereign currency.

Austerity has inflicted an über-Depression on the Peoples of the Eurozone’s Periphery

While we cannot compare reliably unemployment rates during the Great Depression and the EU’s über-Depression in the nations of the EU’s periphery, we can use the same New York Times article to compare current unemployment rates in periphery with unemployment rates in France, Germany, and the UK during the Great Depression and we can compare unemployment rates in those the EU’s three leading economies directly.

“The European labor market has now declined for 22 straight months, making this the worst downturn since the early 1990s, Jennifer McKeown, an economist in London with Capital Economics, wrote in a research note Tuesday. ‘With fiscal tightening still putting downward pressure on disposable incomes and consumer confidence at very low levels, household spending is likely to fall further in the coming months,’ Ms. McKeown said.

Ms. McKeown also noted that the France’s February jobless rate at 10.8 percent — double the German rate of 5.4 percent — ‘looks very worrying.’”

German unemployment rates are materially lower now than during the Great Depression, but France’s rate is higher than the unadjusted (and therefore inflated through collection bias) average unemployment France suffered during the Great Depression.

“Britain, the largest E.U. economy outside the single currency bloc, had an unemployment rate of 7.7 percent in December, the latest available month.”

The current UK unemployment rate remains below the average rate during the Great Depression, but it is vital to remember that the UK did not adopt the euro and retains a sovereign currency. It has failed to use that key strength to end large, growing unemployment because of its embrace of the self-inflicted wound of austerity.

The eurozone’s periphery is the epicenter of the über-Depression. It is an utterly gratuitous depression, the worst Eigentor in modern economic history, inflicted by austerity.

“The jobless crisis is hitting hardest in the south of Europe. Eurostat said Greece, with its economy in free fall, had the euro zone’s highest unemployment rate ,at 26.4 percent in December, the latest month for which data are available. Among Greek youth, the jobless rate has hit a staggering level, 58.4 percent.

Spain, where the economy has contracted sharply after the collapse of the global credit bubble, posted the second-highest unemployment rate in the euro zone in February, at 26.3 percent.”

Spain’s rate for youth unemployment (which includes young adults) is also over 50% and Italy’s rate for youth unemployment is over 36%. The Great Depression generally created a “U”-shaped curve for the incidence of unemployment for workers based on age (the young and the old were most likely to be unemployed) (Eichengreen & Hatton 1988: Table 1.9, p. 31). The levels of youth unemployment in European core nations during the Great Depression was far smaller that youth unemployment in Greece, Italy, and Spain during the ongoing über-Depression. Indeed, the current reported rates of youth unemployment in each of these Nations, plus Ireland and Portugal is reduced substantially by the emigration of young workers. The sick old joke in Ireland is once again true: “What’s Ireland’s leading export?” Answer: “the Irish.” When students get their university degrees in the periphery they often emigrate to seek employment.

When a Nation gives up its sovereign currency it puts its sovereignty at risk. It becomes subject to the attacks of the bond vigilantes and can be forced into situations in which it can offer its young people so little opportunity that it forces many of its best and brightest to flee the Nation.

Austerity poses a clear and present danger to the Eurozone and the global economy. In the core nations of the Eurozone it has caused Great Depression-levels of unemployment – and unemployment is increasing seven years after the global bubbles began to crack in 2006. The periphery, however, is not suffering the levels of unemployment that the European core nations suffered during the Great Depression. The ongoing über-Depression has inflicted dramatically greater levels of unemployment – up to four times greater – than scholars believe Europe’s largest economy’s suffered, on average, from 1930-1938. I end by repeating the caution that the data during the Great Depression are sufficiently imprecise to be cautious in claiming an exact ratio. What we can say is that, measured by unemployment, the so-called Great Recession is sometimes more severe for core nations than was the Great Depression and it is dramatically more severe for the periphery than it was for the core nations during the Great Depression.