FINAL PAPER

Running head: UNEMPLOYMENT AND THE GREAT DEPRESSION

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UNEMPLOYMENT AND THE GREAT DEPRESSION

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Unemployment and the Great Depression

Student: Priscilla Nyarko

Instructor: Dr. Beryl Diamond

Saint Leo University

Democracy in Troubled Times POL-110HA-OL01

18November2017

Abstract

This paper address how the Great Depression started in the United States in the year 1929. ‘Black Tuesday ‘, as it is famously known as the day that the stock market crashed. The selling of stocks continued to increase to the summer of the same year, which was the true realization of the depression. The great depression lasted for ten years from 1929 to 1939 which saw many investors lose their money. It was the longest and most server depression ever experienced in the western countries. The Great Depression leads to the rise of unemployment which hit a peak of 25%, with an estimation of 13 million plus being unemployed. Unemployment rate recorded a peak in the 1930’s in the American history. Unemployment was one of the significant effects of the great depression.

Unemployment and the Great Depression

During the Great Depression, the economy shrank. A shrinkage of 50% of the economy happened in the first five years of the depression. In the beginning, the economic output of the United States estimated at $105 billion which was equivalent to $1.057 trillion today. In the next five years, the economy continued on a downward trend, and only an output of 57 billion generated. The downfall was partly because of deflation of the currency where prices fell by 10% every year (Eichengreen, 2015). Withering of the economy lead to failure of 650 banks. As a result, trade levels, personal jobs, and income earned decreased rapidly. The farmers were also affected as commodity prices plummeted, where the costs of some commodities went down by 60%.  The effects to the economy brought about a lot of unemployment across the country.

The unemployment rate hit a record high during the Great Depression. The unemployment rate rose by 25%. A quarter of the nation’s population was jobless during the height of this recession. Further, the unemployment pace brought about a significant impact on the society of the U.S. Back then; there were no assistance programs that guide people through hard times, similar to the ones that exist today. There wasn’t unemployment insurance that would provide benefits to those without work. The lives were quite challenging and those who were employed lived in constant fear of being laid off. The unemployment effect spread to other countries. In Canada, the unemployment rates were higher with 30% of its labor force out of work. The same percentage was recorded for Glasgow, but Newcastle almost hit because of the shipping industry, which lead to an unemployment rate of 70% (Olson, 2001).

The Great Depression ended due to an imminent war that created employment. Signs of recovery were being witnessed in 1933 with a growth of the GDP by 9% every year. But in 1937, a sharp recession hit. The depression brought the rise of extremist capital movement and most notably Adolf Hitler’s regime (McNeese, 2010). Japan bombed Perl harbor that lead to the entry of America into the World war. Entry of America into World War II lead to the nation’s factories in a full production mode. Government spending increased, which lead to the belief that spending on the military was immeasurable for the economy.  Moreover, government spending brought about employment to the people that lead to the end of the great depression in the United States.

In the final analysis, a dark time was witnessed during the Great Depression, in the U.S and other countries. The falling of the market lead to rampant unemployment. A peak reached when a quarter of the nation’s labor force became jobless. There has not been any other time in the American history where such height of unemployment has been encountered.  Ultimately, the United States joined the World War II. This movement commenced to full operation of factories, and thus jobs were created for the Americans, and that put an end to the Great Depression. 

Works Cited

Eichengreen, B. J. (2015). Hall of mirrors: The Great Depression, the great recession, and the uses-and misuses-of history.

McNeese, T. (2010). The Great Depression, 1929-1938. New York: Chelsea House.

Olson, J. S. (2001). Historical dictionary of the Great Depression, 1929-1940. Westport, Conn: Greenwood Press.

 

 

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