Prosperity Ends

The Depression doesn't affect everyone, but the people it does touch are hit hard. Even workers who still have jobs find their wages reduced by managers struggling to keep businesses afloat. Everyone is cutting back.

Many businesses go under, but at a rate only slightly higher than normal. Instead, managers lay off workers as needed to keep the doors open, accepting reduced profit. Plans to expand, or buy new equipment, are put on hold.

Beyond that, there's little enthusiasm to re-hire laid off workers after conditions finally begin to improve. No previous panic has lasted more than four years. This time, unemployment remains stubbornly high for 10 years.
Great Depression and Dust Bowl, 1930s

  Optimism Fades
Living through the Depression is like trying to drive a car with four flat tires. The 'air' that normally keeps the tires inflated is consumer spending. But people are now cutting back on everything. Rising fear drives people to withdraw meager savings from the bank, all at once. This leads to bank failures at a rate eight times higher than during any previous panic.

Unemployment, soup kitchens, 1930s

  Armies of Unemployed
The unemployment crisis is most visible in the cities, where the vast majority of manufacturing jobs are located. Normally, businesses begin re-hiring as soon as economic conditions start to improve. But this doesn't happen during the 1930s. Almost all measures of economic activity have begun to increase by 1933, but managers remain reluctant to restore lost jobs. Profits were totally wiped out two years earlier, and have recovered only slightly since then. No one is eager to begin rehiring.


Farm foreclosures and auctions, 1930s

  Foreclosure Auctions
Farmers are hit by a double whammy. Prices for corn and wheat, their primary cash crops, plummet by well over half. At the same time, rural banks are failing, unable to cover sudden withdrawals from a pool of assets that now includes almost worthless stock and real estate holdings. Farmers are left stranded. They depend upon bank loans in the spring to tide them over until crops can be sold in the fall. Even when banks manage to stay open, they are sometimes forced to foreclose on failing farms.