Explain why unemployment was a major problem in the USA during the 1930s, and why the problem was reduced in the years 1939-43.
Published: March 21, 2017
As during the boom period of 1920s, the industries increased the production by using mechanisation of industry that resulted in surplus production of goods. During the Great Depression as the demand for goods fell and the ineffectiveness of Republican policies, wages were reduced, workers were laid off and factories closed down. This increased unemployment and the production was reduced to half in 1933 as compared to 1929. Unemployment lowered the standard of living and condition was so serious that there was near-starvation for many people. The unemployment stood at 14 million and about one-fourth workers were out of jobs. The Republican government did not introduce any unemployment benefits and this was a major contributing factor in the fall of the government.
When Roosevelt came into power, he introduced New Deal which had three aims; relief, recover and reform. In the New Deal, the National Industrial Recovery Act 1933 introduced labour reforms and aimed at creating more employment. The Social Security Act 1935 introduced old-age pensions and unemployment benefits. And there were others reform which aimed at reducing unemployment.
After the Pearl Harbour incident, the production of armament increased. Thus the production of armament increased employment to such an extent that by the end of 1942 the employment was almost full. Economically USA did well in the Second World War as there were more jobs, rise in wages and rising standard of living.
Model Questions Category: 013 - Cold War and Other Major Events of 20th Century • 061 - Issues Related to Unemployment