Effects of the Great Depression in America
The Great Depression caused a global economic downturn in 1929-1939. The event was the longest and most severe disaster or depression, to have been witnessed in the Western world and other parts of the globe. The economic depression sparked various economic challenges in macroeconomic policy, economic theory and economic institutions.
Even though the depression originated from the United States of America, drastic changes and declines in output, acute deflation and severe unemployment was witnessed in almost every country in the world. Its cultural, social and economic effects were no less staggering. It presented harshest adversity in the US since the civil war.
More on the effects of the Great Depression in America
The timing and severity of the Depression varied significantly in different parts of the world. However, its effects were long and severe in the United States of America and Europe. Much of Latin America witnessed mild effects.
Due to the depression, there were declines in consumer demands, misguided government policies and financial panics. These caused a fall in the economic output of the US. The gold standard that linked almost every nation in the world with fixed currency exchange rates transmitted the American economic downturn to other countries. However, the gold standard was later abandoned ensuring monetary expansion.
The economic impact of the depression was therefore enormous as it included extreme and profound changes in economic policy. Humans also suffered a great deal financially and emotionally.
Following the depression, prices and real output fell significantly. Industrial production in the country declined by 47 percent, while real gross domestic product dropped by 30 percent. Price index on the other hand declined by 33 percent. These declines in price level are also known as deflation and it worsened economic problems in America.
The great depression in America also caused high levels of unemployment. It exceeded its highest level of 20 percent. This made the depression of 1929-1939 more severe. Its effects became clearer when it was compared to the recession that hit the United States in the 20th century in 1981-82. During the recession, the gross domestic product of the US dropped by 2 percent only. Additionally, unemployment rate peaked at less than 10 percent.
What’s more, prices of different products continued to increase and after a short while, price rates started to slow down substantially. In other worlds, disinflation occurred after a short period of time during the recession period.
The US also witnessed mass migration throughout 1930s. People especially from the Great Plains migrated to California and Arizona.
Effects of the great depression in America on the family unit
The great depression changed the family unit in dramatic ways in the US. Many couples postponed their marriages. Additionally, divorce rates dropped significantly. This is because it was too costly to pay for support of two households and other legal charges upon divorce.
Many families also suffered loss of income especially during the leadership of Herbert Hoover. There was a drop in income of about 35 percent in his four years of office. Therefore, many families were under a lot of stress and some reacted by pulling their efforts together. Many people turned to friends and families in other countries such as England for help. After exhausting the option, many families turned to the government for assistance.
Traditional roles within the family also changed. Men had to be out of work and they helped their wives in different house chores. Others became frustrated when they failed to make ends meet and walked out on their families completely. According to a survey that was carried out in 1940, 1.5 million married women were abandoned by their husbands.
Women on the other hand assumed new roles. With little choice, they were forced to work outside their homes to help provide their families. Black women worked as domestic servants, textile workers and clerks among other occupations. This enabled them to enhance their power and status at home thus, enabling them to have a new voice when it comes to making domestic decisions.