Great Depression

Definition

The Great Depression was a severe worldwide economic downturn that began in 1929 and lasted until the late 1930s. It had devastating effects on employment, industrial production, and the financial system, profoundly impacting social and political structures. The crisis reshaped labor movements, consumer behavior, government policies, and the overall role of the federal government in American life.

5 Must Know Facts For Your Next Test

1. Unemployment rates soared during the Great Depression, reaching nearly 25% at its peak in 1933, causing widespread hardship for American families.
2. The Great Depression prompted significant government intervention in the economy, leading to major changes in labor laws and worker's rights.
3. Bank failures were rampant during this time, with thousands of banks closing their doors, which wiped out people's savings and further eroded trust in financial institutions.
4. The cultural impact of the Great Depression was profound, inspiring art, literature, and music that reflected the struggles of everyday Americans.
5. International trade plummeted as countries implemented protectionist policies, leading to a global economic crisis that affected economies around the world.

Review Questions

• How did the Great Depression influence labor movements and the push for worker's rights during this period?
  • The Great Depression significantly empowered labor movements as unemployment soared and workers faced dire conditions. Many people turned to unions for support and representation, which led to increased membership and activism. Strikes and protests became more common as workers demanded better wages, job security, and improved working conditions, resulting in notable legislation that advanced worker's rights.
• What role did consumer behavior change during the Great Depression, and how did it affect economic recovery efforts?
  • During the Great Depression, consumer behavior shifted dramatically as people faced financial hardship. With limited income, many individuals adopted frugal spending habits and focused on essentials rather than luxury items. This change in consumer confidence directly impacted businesses and the economy at large, complicating recovery efforts as reduced consumer spending hindered growth initiatives aimed at revitalizing the economy.
• Assess how the New Deal addressed the challenges posed by the Great Depression and its long-term effects on American society.
  • The New Deal was a comprehensive response to the challenges of the Great Depression, introducing programs that aimed to provide relief, recovery, and reform. It established a social safety net through unemployment insurance and Social Security while promoting job creation via public works projects. Long-term effects included a redefined relationship between government and citizens, increased federal involvement in economic affairs, and significant advancements in labor rights that continue to influence American society today.

Related terms

Stock Market Crash of 1929: A catastrophic decline in stock prices that marked the beginning of the Great Depression, leading to massive financial losses and widespread panic.

New Deal: A series of programs and reforms initiated by President Franklin D. Roosevelt aimed at alleviating the hardships of the Great Depression and promoting economic recovery.

Dust Bowl: A period of severe dust storms in the 1930s that damaged agriculture in the United States, compounding the economic struggles of the Great Depression.