U.S. unemployment level AFTER the 1929 crash and bank runs...

[CoffeeCat]

I've heard many people--mainly politicians and corporatist-media pundits--insist "Oh, we're
nowhere near Depression conditions! We're not even close to 25 percent unemployment!"

That "25 percent unemployment statistic" is often used to dismiss and minimize just how bad our economic situation is. It's
a discussion chiller used to hide harsh realities.

It's a fact--that the the Great Depression didn't begin with 25 percent unemployment.

In 1928, stock prices swelled 40 percent--and according to most historical accounts--the boom was largely artificial.

(I smell similarities, do you?)

Then, in mid 1929--production falls at an annual rate of 20 percent and so does personal income, by about 5 percent.

(Nothing to see here in the history books, folks--please move along)

Then, October 29, 1929 hits---and the stock market crashes.

Then, the bank runs begin in 1930. GNP falls 9 percent from the previous year.

What about unemployment in 1930?

The official unemployment rate in 1930--after the stock-market crash and after the initial bank run--
was 8.7 percent.

Unemployment didn't hit 15 percent until 1931. Unemployment didn't rise to 24 percent until 1931.

So you see, our economy is following a trajectory almost identical to the Great-Depression time-line. Our current economic unemployment
levels (and other economic indicators) don't contradict "Great Depression" circumstances.

They mirror them.

[lurky]

1. What is the REAL unemployment rate today?

Can we compare today's official numbers with the official numbers from 1930? I doubt it, considering all the political tweaking that has been done to the formula used to calculate the unemployment rate. I would bet if you calculated today's numbers using the same methods used in 1930, it would be even scarier. Our economy was much different, too. It was based on manufacturing and small farms.

[pschoeb]

4. Well it would be unwise to think 1930 numbers are accurate either

There was no unemployment compensation in 1930 on either the state or federal level, Wisconsin was the first to institute unemployment compensation in 1932.

So monitoring unemployment would be hard, as workers have no reason to report their status in any regimented and controlled way.

I'm thinking the only data they had was special Census data, which I think the raw data would dramatically underestimate unemployment, compared to raw data one can get from unemployment compensation programs combined with Census data.

Also since there were no unemployment compensation programs, the effect of unemployment would be much more dramatic. That is high unemployment feeds into worsening economy and raises unemployment even higher, when there is no compensation program.

[pinqy]

10. Unemployment rate is not based on unemployment insurance

But otherwise you're right...the only measures in the 20's and 30's were attempts by the Census. But there was no clear definition of Unemployed. It wasn't until 1940 that a household survey was started.

[lapfog_1]

2. Couple of big differences...

There were something like 30M people in the US then, and a majority lived on family farms.

We have over 300M, and the vast majority live in urban/suburban cities.

OTOH, they had Herbert Hoover as President, we have Barack Obama.

[demodonkey]

5. Something like 100M people living then in the USA, maybe more.

30M is way low.

[lapfog_1]

9. My bad... but the majority did live on farms, even through

the 1930s... population according to 1930 was 122 million.

[DKRC]

6. More than 30M by 1860

US Population Through History
The Growth of the Population of the United States

http://geography.about.com/od/obtainpopulationdata/a/uspop.htm

By Matt Rosenberg, About.com
Filed In:

1. Population Data


Feb 24 2008

The first decennial census in the United States showed a population of just under four million people. Today, the U.S. population is estimated at more than 300 million. Here you will find a list of the U.S. population every ten years from the first official census in 1790 to the most recent in 2000.

<snip>

1860 - 31,443,321
1870 - 38,558,371
1880 - 50,189,209
1890 - 62,979,766
1900 - 76,212,168
1910 - 92,228,496
1920 - 106,021,537
1930 - 123,202,624

<snip>

Having fewer people on family farms is a big problem. Alot of people are going to go hungry before we can sort out new ways of distributing supplies without relying on cross country delivery.

[CoffeeCat]

7. What I wouldn't give to live on a family farm right now...

That's another thing that's scary.

Our way of live vs. the way of life during the Great Depression.

We drive 30 mins to work, and have huge homes, cable tv, credit-card debt, student-loan
debt, debt on 40k cars. Our lives are much more expensive and complicated now.

We've got farther to fall these days.

Plus, we don't know how to do anything for ourselves. They knew how to sew, grow food
and fix things back then. We have the Yellow Pages now.

I'd rest a lot easier if I lived on a farm. To know that I had chickens, that could supply
fresh eggs--would be a load off my mind.

[demodonkey]

14. I do. And it's hell.

Surrounded by McMansions, our third-generation family farm has been raped by stormwater coming from a "holding pond" that never held anything much.

Worse yet the stormwater system was designed by a neocon former State Senator who got his seat in a Rovian filthy campaign against a good progressive.

http://www.pavotersfortruth.com/

The developer turned the whole thing over to his insurance company, CNA, which has been stalling and fighting my family for FIFTEEN years!!

http://www.pleasehelpus.org

We have had animals die (lots), the farm is STILL not fixed (even though the insurance co. says it is) and life has been sheer hell.

We can't have chickens, they would get in this water and probably die (unless we spend tens of thousands we don't have to completely fence the whole thing off, and then our farm is cut in half!

Ugh.

[Zen Democrat]

3. The difference is Hoover did a spending freeze. We have a recovery stimulus!

Not that this couldn't be even worse than the Great Depression ... this could be the Great Collapse, it certainly is the total and complete collapse of Friedmanism, supply-side Reagonomics, and globalistic unfettered capitalism all rolled up into one stinking pile of garbage. A new realistic and well-regulated market economy has to be devised, which is what I assume the Geithners and Summers of this world are busy devising these days.

[kentuck]

8. But in numbers of unemployed, 12% would equal the 25% ...

in the Great Depression. Numbers can be deceiving. Actually, we were approaching the same number of unemployed as the Great Depression in the "recession" of 1983 under Ronald Reagan. Remember when he added the military to the rolls of the employed to try and keep the unemployment rate under 10%??

[uponit7771]

11. We DO NOT count those who are unemployed just those who are getting UE benefits...

...the number is closer to double what is being reported.

[CoffeeCat]

12. So true...

Those who are underemployed, or those who have given up looking for work--are not counted.

There are so many businesses that have cut full-time jobs down to 3/4 or 1/2 time positions.

Technically, those people are underemployed and struggling, but their pain is not registered or
reflected in our current unemployment numbers.

I have no problem with two separate unemployment numbers. However, they never talk about
the second unemployment number--which does include the underemployed and discouraged workers.

That number exists, but it is hidden and rarely, if ever, reported by the media.

[pinqy]

13. Wrong, wrong, wrong.

I started a thread just for people like you. http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5213520

And straight from the horse's mouth: BLS Employment Situation FAQ