The Great Depression wreaked havoc upon the global economy during the 1930s and rising unemployment was one of the most significant effects of this economic disaster. The rate of unemployment in some nations touched 33% and in the United States, it was an appalling 23%.
Unemployment during the Great Depression
As an important economic indicator during the period of 1929-1932, the rate of unemployment was the following:
- United Kingdom: +129%
- United States: +607%
- Germany: +232%
- France: +214%
Unemployment Great Depression in the United States
In the majority of the countries of the world, recuperation from the Great Depression started in 1933. In the United States, revival started at the beginning of 1933. However, the country did not get back to the 1929 Gross National Product (GNP) level for more than 10 years.
In the 1930s, the unemployment rates in the US were not computed by the government. According to Stanley Lebergott, a well-known US government economist and Emeritus Professor of Wesleyan University, the unemployment rate was 24.9% on the most severe days of 1933. Michael Darby, another famous economist, placed the unemployment rate at a topmost of 22.5% in 1932. Job cuts were not so severe among manpower in non-durable sectors (like garments and foodstuff), women, sales and services employees, and government staff. Unemployment rates were comparatively high among unskilled labors working in metropolitan areas.
The age group was a factor as well. The young generation faced more difficulties in finding their first job opening. On the contrary, aged men would scarcely get another job after losing one since proprietors preferred younger manpower. Unskilled people got into a long-standing unemployment trap. Because of severe unemployment, people started going back to their native villages and towns which they left in the 1920s since there was no job in the city areas. The unemployment rate touched 50% in Cleveland, and in Toledo, Ohio it was as high as 80%.
In 1940, the great depression unemployment rate in the United States was still around 15%, though it was less than the maximum of 25% that was recorded in 1933.
Unemployment Great Depression and Australia
Australia as a country relied on manufacturing exports and agriculture. It was one of the developed nations that were hit quite hard by the Great Depression. Sinking goods prices and demand put a huge descending force on remunerations. People would be stunned to know that by 1932 what percentage of the population was unemployed in Australia and the figure was a whopping 29%. There were recurrent events of civil disturbances all around the nation. Following 1932, a rise in meat and wool prices contributed towards a slow retrieval.
Unemployment Great Depression and Canada
The dust-bowl situation and the worldwide economic recession hit Canada badly. By 1932, the manufacturing output of the country dropped to just 58% of what is manufactured in 1929. This figure was the 2nd lowest across the globe next to the United States. Canada lagged significantly from nations like Great Britain which dropped to just 83% of its 1929 performance. The overall national income of Canada declined to 56% of its 1929 performance and this was inferior in comparison to any nation other than the United States. When the Great Depression took an intense shape in 1933, unemployment touched as high as 27%.
Unemployment Great Depression and France
The worldwide economic disaster hit France somewhat late in comparison to the other countries. It took a severe shape in France in 1931. Though during the 1920s the depression rate rose powerfully at 4.43% annually, in the 1930s, the rate dropped to just 0.63%. In France, the Great Depression was comparatively moderate. Unemployment rose below 5%. The slump in manufacturing was maximum at 20% less than its 1929 performance. Nonetheless, the banking sector did not experience any major concerns.
The comparatively elevated level of self-reliance in France implied that the disaster was substantially less in comparison to bordering countries such as Germany.
Unemployment Great Depression and Germany
Around 90% of the restitution disbursements of Germany were invalidated in 1932. There was far-flung unemployment reaching as high as 25% since every industrial sector was in bad shape. In 1932, the unemployment rate attained as high as 30%
After Adolf Hitler came to the helm of affairs, there was a massive reduction in wages. The Nazi party took over the labour unions and government expenditures. As a result, unemployment dropped considerably by 1935. Extensive outlays for armament played a key role in retrieval.
Unemployment Great Depression and Great Britain
In August 1931, when Ramsay McDonald was the Prime Minister of the United Kingdom, the administration took several unfavourable decisions such as reduced outlays, higher taxation, and lowering of unemployment benefits by 20%. The last decision created many disagreements. The consequences of the Great Depression in Britain were more severe in the manufacturing regions of Northern Britain. Falling demand for conventional manufacturing goods was one of the major reasons. Unemployment increased more than two-fold to 2.5 million from 1 million by the close of 1930. This was 20% of the insured manpower. The worth of exports came down to 50%. Around 30% of the people of Glasgow lost their jobs because of the intense slump in the heavy industrial sector. In several metropolises and towns in Northeast Britain, joblessness attained as high as 70% since the ship construction industry sank by 90%.
World War II and revival
Many economists and analysts have expressed the view that the Great Depression came to a close with the onset of the Second World War. Government expenditures on the conflict contributed to some extent of revival from the Great Depression. Some scholars believe that the Second World War sped up the revival as a minimum. However, some economists think the war was not pivotal in the revival, albeit it played a key role in lowering unemployment.
The rearmament strategies for preparing the ground for the Second World War aided in shaking up the European economies during 1937–39. Joblessness in Great Britain by 1937 dropped to 1.5 million. The deployment of the workforce after the occurrence of World War II in 1939 brought unemployment to a close.
When the US Army joined the global battle in 1941, it ultimately got rid of the final burdens of the Great Depression. As a result, the US unemployment rate sank under 10%.
In the United States, huge outlays on the war caused the economic growth rates to rise two-fold, either disguising the consequences of the Great Depression era. Entrepreneurs overlooked the escalating countrywide debt and the burden of fresh taxes. They stepped up their endeavors for higher productivity to capitalize on benevolent government agreements.