Unemployment and poverty during the Depression

Summary

The Great Depression caused widespread unemployment and poverty between 1929 and 1939. Falling demand, industrial production, trade, and prices led businesses to close or reduce their workforces. Unemployment rose sharply in many countries, reaching nearly 30% in Germany and 25% in the United States by 1933. Poverty deepened as workers lost income, farmers faced collapsing crop prices and drought, and about one-third of U.S. farmers lost their land. Rural communities, industrial cities, and regions dependent on farming or heavy industry were especially vulnerable, while declining wages, deflation, bank failures, and lost savings reduced living standards further.

Key Points

• 1

  Unemployment rose dramatically worldwide; in the United States it reached approximately 25% in 1933, while Germany approached 30%.

• 2

  Poverty was intensified by bank and business failures, falling wages and prices, loss of savings, and reduced access to work.

• 3

  Farmers suffered severely because crop prices fell by up to 60%, drought damaged the Great Plains, and nearly 10% of Great Plains farms changed ownership.

• 4

  The New Deal introduced relief programs, public works, farm assistance, and job creation efforts, although the United States still had about 15% unemployment in 1940.

• 5

  World War II helped end the Depression by expanding factory production and creating jobs as military mobilization absorbed unemployed men and increased employment opportunities for women.