Jaidyn Phillips, Jenifer Chong, Morgan Hobgood
Unemployment reached it peak in 1932. Over the years workers had suffered hard losses and couldn’t bounce back due to the diminishing economy. The closing of banks lead to businesses shutting down continuing the never ending spiral of spiked unemployment rates. In 1932 unemployment reached 23.5% crowding the streets of major cities with families shut out of their own homes due to economic struggles. The increase in stock prices along with an increasing demand for goods & services made for an unstable economy. The stock market eventually crashed. All of the spending backfired on the Americans once the Stock Market crashed and dozens of banks were forced to close down. This day was known as Black Tuesday and it spiraled the United States along with its economy into a depression in which the country would not fully recover until the end of World War 2.
America had a false sense of long-lasting wealth and confidence in the economy.“We in America today are nearer to the final triumph over poverty than ever before in the history of any land” -Herbert Hoover
At It's Worst
Peak-to-Trough Decline in Industrial Production in Various Countries (annual data)
Charities tried to help out their own by forming relief groups to aid the unemployed. The Salvation Army provided the homeless and poor (most often the ones who were unemployed) with shelter and food.
"A Snowball Effect"
-Began with the crash on wall street on October 29, 1929. (Black Tuesday)
-Prices fell, stock market crashed, and banks closed down.
-Businesses failed, went bankrupt.
-Employees would become unemployed and wouldn’t be able to buy products
which caused the demand for items to fall in which led to more people losing
-As people kept losing money, they stopped having enough to support
-This means they can only afford was they truly need for survival, hurting other
businesses, causing them to go bankrupt too; thus bringing more people into
unemployment. (Too many goods produced with too little people able to
**Once you are unemployed, during the Great Depression, with the unemployment rates so high, it was hard for people to find themselves back in a working position. Many were forced to attend soup kitchens that were run by charities and the soup was often known as “Hoover stew”.
**Once a wage isn’t being earned anymore, the money starts to run out fast; and if no more comes in, then poverty and homelessness is an inevitable effect of unemployment. The poor came to live in shabby towns known as Hoovervilles and his popularity diminished.
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