The Great Depression and the working stiff
If you’ve been listening to the news this week, or reading the national newspapers today you’d probably be wondering if indeed we’re heading for a depression, not just a severe recession.
On the cover of the Wall Street Journal are three charts of the Dow Jones Industrial Average. One from the Great Depression, another from the downturn in the 1970s, and the final chart was of our recent collapse. They aren’t all exactly the same, but eerily similar. And New York Times columnist Paul Krugman today writes: “The world economy may well experience its worst slump since the Great Depression.”
It got me thinking about what the Great Depression was really like for workers.
So, I asked Anthony O’Brien, professor of economics at Lehigh University, to offer me a picture of employee life back then.
During the worst economic slump in U.S. history, he says, unemployment overall was 25 percent, and nearing 35 percent if you don’t count agricultural jobs, which were a bit part of the economy at that time.
Here are jobless data O’Brien provided from the Cambridge Historical Statistics of the United States:
“The sectors that lost their jobs first were in residential construction, and people making capital goods and consumer durables,” he explains. “Then it began to spread to people making machine tools, automobiles, furniture.”
Almost every sector was hit with major job losses, except those businesses tied to true staples like food.
If you lost your job in the early 1930s, you were in extra bad shape because there was no unemployment insurance or Social Security, he points out.
“Basically people had to rely on their savings or on relatives. A young couple might move in with the husband or wife’s parents, or they had to rely on charity. There was some local government assistance,” he says, but nothing on a federal level until Roosevelt’s New Deal.
For those workers who were lucky enough to hold onto their jobs, he says, wages tended to be maintained for a while, at a time when prices for goods and services were falling. That actually meant a working person’s purchasing power went up if they were able to keep their jobs.
But for those out of work, it was odd jobs and the help from others that got them through. And unfortunately when someone lost their job they tended to stay unemployed for well over a year during the toughest years of the Depression.
Here’s a great rendition of a Depression era song:
There was some relief in 1935, when the Works Progress Administration (WPA) - the biggest chuck of Roosevelt’s New Deal - was created and provided jobs to many out of work men and women.
From About.com:
The main thrust of the WPA projects had to be directed toward semiskilled and unskilled citizens, whom the Great Depression had hit the hardest. Unlike the traditional relief program focus on manual labor, the WPA sought to fit tasks to recipients’ job experience on a broadly inclusive scale.
As part of the program, O’Brien says, “People were hired to build new high schools, hired as mural painters, and unemployed writers were hired to write guidebooks for national parks. It was all federally funded.”
So are we really teetering on the brink of a Depression?
O’Brien, along with many other economists I’ve spoken with lately, believe we won’t see the devastation of the Great Depression play itself out again.
“Today,” he stresses, “it seems the government is already taking steps to make it unlikely we’ll see that kind of collapse.”
Although, even he had to acknowledge the recent stock market dive made him wonder about how effective those steps have been thus far.
No way around it, everyone’s a little nervous. But we all have to find some comfort in knowing how even those Americans who suffered so badly during the Great Depression were able to, for the most part, survive and bring back and enjoy prosperity.
Well, my hard-working grandfather was never one for the consumption craze our modern times ushered in. Every time you asked him what he wanted for Christmas or his birthday he’d say the same thing: “even if you gave me a needle this small,” he’d say pointing to the top section of his thumb, “I’d be happy.”
All he wanted was to be with his family; to fish once and a while in the polluted bay beneath the Throgs Neck Bridge in Queens; and to have a cigarette dangling from his mouth.
Miss you Papu.
October 10th, 2008 at 6:00 pm
My mother, who turns 96 next week; lived through the depression with her 11 brothers and sisters. My grandfather taught school at that time for $60 per month, 1/2 of which he sent home to my grandmother the other half was used by him for room and board. There was no work in this area of Michigan and he had to live and work away from his family. My grandmother took in laundry and all the kids that could work did, doing odd jobs and making meager or less than meager money. They all contributed for the good of the family. There was no time for self interest or frivolous wants, survival was first and foremost. Yes!, this time was extremely bad, especially for a family of 12, but guess what; they all came through it, they all went to college, lived well and raised families. The lessons learned during times of extreme hardship, value of money, family ties, etc are forgotten by following generations whose parents and families strived to make the world a better place. If these values were handed down, and realized by the baby boomer’s/now generation we would not be in this mess.
My father also came through the depression as a single man working for the WPA and living on pennies, as well as his 4 brothers and two sisters; sending money home for their support. The question is would this now generation do this; family first, goals second? Interesting question is it not?
October 10th, 2008 at 6:51 pm
What an incredible story Cuban. And what a piercing question. Can this generation put our selfish goals aside?
October 13th, 2008 at 10:22 am
Cuban, there are still some of us who put family first. My wife and I are considered oddities in our time because we have nine (very, very soon to be ten) children. We’ve made many choices to keep our family first, and will continue to do as best we can. Our kids know that they don’t have every luxury that other kids have, but they also know that their mother and I have gone without, too. One of my desires has become a long running joke in our family. I’ve always wanted a boat or a canoe, and have often earmarked incoming funds for one. Each time those funds have come in, that dream gets set aside until we’ve taken care of all of our needs, or so we can help out someone elese. It’s happening right now, in fact. We just had some long-expected funds come in. My wife and I earmarked some funds for a used boat or a canoe (maybe both if I could find a couple of bargains!), but we’ve just put that on hold: one of the old bunk beds was falling apart so we bought another one, an extended family member is going through some tough times so we provided some funds, and, given the state of the economy, we felt that getting out of debt would be more important than a boat (we just paied off the last of our credit cards–w00t!).
A lot of people deride my wife and me for having so many children, and wonder how we can ever aford them. I actually had someone deride me once because my kids don’t eat cereal for breakfast every morning–as if that is something required for life. If I cannot afford cereal for breakfast every day, then it was just proof that we could not afford our kids. Priced per serving (the serving size the kids eat, not the ones on the box), boxed (even bagged) cereals are far more expensive than oatmeal, or even potatoes and eggs. That person equated having a different standard of living (lifestyle) as something akin to neglect. I felt sorry for him.
How do we do it? We’ve just made some lifestlyle choices that make it possible. We’ve never bought a new vehicle. We don’t have cable or satellite TV. Most of our food is made from scratch. We say “yes” to second-hand stores, hand-me-downs, and rummage sales. Gifts are typically modest, or purchased at a deep discount (we’ve become excellent bargain hunters). We read books, take hikes, and go to budget (second-run) movie theaters. We pop pocorn and watch movies at home. Our supper table is always open to friends or visitors, and our couches are always available to those who need a place to stay. What some say we lack in physical goods, we make up in friends and time together (we always eat together except during the work/school day).
So, our kids may not “have” everything, but they are learning the lessons your parents learned. They’re learning that it can take a lifetime to accumulate “stuff”, and that sometimes you don’t always get what you want. They’re learning about the value of money and the reward of hard work (though I must say that this is a hard lesson to teach). They’re learning the difference between wants and needs (something sorely needed in our society).
I’ve blathered on long enough. I just wanted to let you know that there are some families out there striving for similar values (and not all of them are as large as ours).
Cheers!