Great Depression

Definition

The Great Depression was a severe worldwide economic downturn that lasted from 1929 to the late 1930s, marked by a significant decline in industrial production, massive unemployment, and a drastic drop in consumer spending. It profoundly impacted the American economy and labor market, leading to widespread poverty and shifts in government policy aimed at economic recovery.

5 Must Know Facts For Your Next Test

1. Unemployment rates during the Great Depression reached as high as 25%, with millions of Americans struggling to find work.
2. The Great Depression led to significant changes in government policy, including increased regulation of financial markets and the establishment of social safety nets.
3. Many banks failed during this period due to bad loans and lack of deposits, leading to loss of savings for countless families.
4. The agricultural sector was hit hard, with falling prices forcing many farmers into bankruptcy and resulting in widespread rural poverty.
5. The Great Depression set the stage for social movements, including labor strikes and protests, as workers fought for better conditions and wages.

Review Questions

• How did the Great Depression impact unemployment rates and the overall labor market in America?
  • The Great Depression had a devastating effect on employment, causing unemployment rates to soar to around 25%. Millions of Americans lost their jobs as businesses closed or reduced their workforce due to plummeting demand for goods and services. This massive job loss not only created economic hardship for families but also led to social unrest as individuals struggled to make ends meet.
• In what ways did government policies change in response to the challenges posed by the Great Depression?
  • In response to the Great Depression, government policies shifted significantly with the introduction of the New Deal programs by President Franklin D. Roosevelt. These initiatives aimed to provide immediate relief for those suffering from unemployment, stimulate economic recovery, and implement reforms to prevent future economic crises. Programs like Social Security and various work relief initiatives fundamentally changed the role of government in American life.
• Evaluate how the Great Depression influenced social movements and labor rights in the United States during the 1930s.
  • The Great Depression catalyzed numerous social movements focused on labor rights and economic justice. With widespread unemployment and harsh working conditions, workers organized strikes and protests demanding better wages, job security, and improved working environments. This era saw the rise of labor unions, which gained strength as they advocated for collective bargaining rights and pushed for legislation that would protect workers' interests, significantly reshaping the American labor landscape.

Related terms

Stock Market Crash of 1929: A major stock market crash that occurred in late October 1929, which is often cited as the beginning of the Great Depression.

New Deal: A series of programs and reforms implemented by President Franklin D. Roosevelt in response to the Great Depression, aimed at economic recovery and social reform.

Dust Bowl: A severe drought in the 1930s that compounded the economic difficulties of the Great Depression, particularly affecting farmers in the Midwest.