Unemployment

Overview

Description

The emergence of the Great Depression in the United States caused a downward spiral in the U.S. economy. Not only did the Depression have a profound negative affect on the stock market it also caused high unemployment. Through high unemployment people began to save their money rather then spend frivolously, which caused aggregate demand to decrease essentially resulting in companies being forced to slow production of certain goods. Unemployment was still a large problem till Franklin D. Roosevelt was elected as President of the United States. Through his policy of the New Deal Roosevelt was able to create government jobs for the American people. Although this did not solve the problem of high unemployment it certainly helped to relieve some of the affects unemployment had on the economy. Yes, the New Deal was incredibly effective in getting the economy running again it still did not solve all the problems that caused the Great Depression.

World War II although horrible was a blessing in disguise for the United States economy.With the war hitting the United States on the home front it led to a decrease in unemployment because there was a demand for military products especially oversees. This resulted in more jobs being created to fill the factories that would begin the production of this military equipment. Also since many Americans were either enlisting or being drafted in the army specifically men, to fight oversees there were still a demand for people to fill the jobs that these men had left to go fight in Europe.

Description

This is the point when women begin to fill these positions. Due to the large amount of men off to war the people left to feel those vacancies were women. This is one of the main reasons why production continued to increase throughout and after the war. Without women filling these positions it would have been incredibly difficult for the U.S. economy to continue increasing its production. This also is arguably the turning point in U.S. history for women becoming increasingly more active participants in the labor force.

Employment During WWII

The wartime economic boom benefited from the increase in employment, with help from the gender and racial employment barriers that were broken. Calculating the labor force during WWII we look at the all employed and unemployed civilians, population who are not a part of the armed forces. In the table below there are calculations for the employment rate of all non-institutional civilians 14 years old and up

Description

There is an increase in the population of civilians from 1940 to 1941, but the decrease thereafter is in result of more of the American population going to war. With the attack of Pearl Harbor in 1941 and the declaration of war on Japan, there is a demand for more Americans to fight. The absence of workers, especially white men, due to the war, allowed space for others to work.

Along with the increase of unemployed workers finding jobs, there is an increase in the labor force as well. This is the increase of women and African American workers. By 1945, 8% of the workforce were African American approximating the population of African American, 10% of American population. There is also an increase in women workers. By 1945, about 19 million American women were working outside the home. About 2 million of those women were laborers in war industries.

Fair Employment

Description

A strong effort from The Roosevelt administration to enforce a nondiscrimination policy in war-related employment played a significant role in the economy, by offering black workers new opportunities. The government’s first initiative to enforce an antidiscrimination policy amongst defense contractors was through the Fair Employment Practice Committee (FEPC). The committee was started in order to receive, investigate, and resolve complaints of discrimination in the workplace. This independent committee received very little media attention, so every hearing was not just meant to put pressure on the industries, but it was also a chance for them to promote their antidiscrimination policy.

This first committee was organized in August 1941, but fell apart in June 1942. A year later Roosevelt reorganized the FEPC, expanding it to 16 regional offices. The FEPC still covered cases to resolve complaints on discrimination, but ended up settling most cases through persuasion and bargaining. The committee would act as an intermediary to offer suggestions on how to bring in more black workers without disrupting the workplace. Many employers found that integrating black workers hurt their work force. Trying to fight strikes, the employers referred their problem to the FEPC. Because the committee has direct influence from the president, the Army becomes involved and the defiant white workers returned to work immediately after hearing they could lose their jobs and be reconsidered in the draft. This intrusion of governmental power into labor markets made the FEPC “the most controversial federal agency in the nation during the war and perhaps in modern American history” (Merl E. Reed, 1991, p. 1). The success of the government’s efforts was skeptical. The committee had very low credibility, it was not able to directly penalize firms. Without the backing from the government, the committee would’ve held no power.

There is much evidence that there was an increase in black employment during the war, but many question whether it is in direct relation to the FEPC. William J. Collins states, “if FEPC intervention was effective, then it should have caused a larger-than-average increase in the black employment” (The American Economic Review, p. 278).

Although there is much doubt that the FEPC actually helped blacks enter the workforce, Collins proves it was surprisingly effective in Table 2. He takes the nonwhite/white employment ratio in column one and sets the caseload variables all to zero, to imply an absence of the FEPC. The results suggest that the nonwhite/whit ratio would have only been .056 rather than .092 in 1944 in the given cities.

Overall, FEPC intervention was important in breaking racial barriers in the workforce. By giving advice for integrating in the workplace, the companies lowered the expected cost of integration associated with strikes. Also the evidence suggests FEPC interventions at one firm may have affected other industries’ hiring practices by changing the local norms of segregating in the workplace.

Women and the Job Market

Description

Some historians and economist would argue that World War II not only helped the United States get out of the Great Depression but also provide many job opportunities that they may not have had in the past. Marc Miller in his article Working Women and World War II stated, “the war led to a dramatic rise in the number of women working in the United States; from 10.8 million in March, 1941, to more than 18 million in August, 1944, reversing a downward trend attributed to the depression” (Miller, p.42). So in 3 years from 1941-1943 there was 7.2 million jump in the amount of women in the job market. This jump was large in itself; however, what makes it more amazing is that this increase occurred not to long after the Great Depression. Marc Miller goes on to say “although many women entered the labor force for the first time, 29 percent of American women workers in 1944-1945 had over ten years of experience; another 19 percent had worked for over five years” (Miller, p.42). In looking at these figures, 48 percent of women had at least five years of experience; however that meant that over 50 percent of women had only five years or less work experience, which shows many women began working during World War II. This suggests that World War II did have a positive affect on women entering the job market.

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It is also important to note the reasons why women decided to enter the labor force in the first place. In the article, The of World War II in the Rise of Women’s Employment, the author Claudia Goldin discusses a couple reasons why women entered the labor force. One reason she states, “A husband’s absence often meant that his wife had less to do in the home and that the family’s labor income dropped considerably; for others, patriotic duty was reason enough to join the war effort” (Goldin, p. 741). So with many men off at war many women decided to enter the labor force in order to continue supporting their families. Another reason women entered the job market was the easing of norms held by society or by a husband against a wife’s working” (Goldin, p. 741). Also Claudia states,

The War may also have eroded various policies that had constrained the employment of married women. ‘Marriage bars’- the stated policies of firms, school districts, government, and other organizations not to hire married women and to fire single women upon marriage- were greatly expanded during the Depression. The bars vanished sometime after the early 1940’s and by the 1950’s were rarely encountered. (Goldin, p. 743)

Basically this relates to the theory that World War II was what helped break down the barriers between women joining the labor force.

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Economy of the US during WWII