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Discussion of U.S. Unemployment Rates is Misleading

(Crossposted from Recession of 1937-1938 page)

The numbers are based on Lebergott's estimates. These have two major problems and then a third interpretive problem when compared to modern unemployment numbers.

1) They exclude people directly employed in WPA and other New Deal programs. This is an issue Michael Darby covered over four decades ago in an article entitled "Three-and-a-Half Million U.S. Employees Have Been Mislaid: Or, an Explanation of Unemployment, 1934-1941".

Now for certain purposes, it may make sense to include WPA and other direct employment along with unemployed workers (notably, in estimating a reserve army of labor that is available to be hired by private employers) but it is not the current methodological practice and it misleads lay readers in the understanding of the 1930s economic experience. At the very least, both numbers should be published side by side so that readers can get a more accurate sense of what was going on, as Professor Mathy (2018) does in this recent paper on long-term unemployed during the 1930s.

2) Even the Lebergott estimates as adjusted by Darby are misleading because they are not monthly series like we have today and are based on a number of estimation strategies that leads to "spurious volatility" and incorrect estimates, or at least, estimates that are at variance with modern methodologies. Professor Christina Romer (1986)showed this in a lot of detail. To quote her at length.

"If the labor force were also procyclical in the 1900-1930 period,
then it is clear that Lebergott's labor force numbers are too high in
recessions and too low in booms. This implies that the unemployment
rate calculated as a residual is artificially high in recessions and
artificially low in booms. Thus the historical unemployment rate is, by
construction, more volatile than the truth [...] 
To estimate annual employment, Lebergott uses more complicated
procedures. He estimates it as the sum of several component series on
employment in various sectors and among various classes of workers.
To form these component series he begins with basic data on employ-
ment in each sector in whatever base years are available. He then
interpolates each employment series using some annual variable he
believes to be related to employment in that sector. The most com-
mon interpolating variables are measures of output, fragments of
employment data, and indexes of labor demand"

She goes onto explain the problems with this procedure. Meanwhile, we do have a number of estimates, the best of which is the National Industrial Conference Board monthly data as Mathy (2018) points out. These estimates continued after the war and thus we can compare them to official statistics and see how they are reasonably close. These numbers broadly conform to Lebergott's estimation strategy but, as Romer predicts, the unemployment rate is much lower than his estimates. In addition, we get to see month to month patterns we don't in Lebergott's data that qualitatively change our narrative from the era.

3) The final issue is that this number, as low as it is, is still an overestimate of unemployment when we compare it to modern headline unemployment. Today's measure, U3, doesn't include "discouraged workers" i.e. workers who desire employment but have given up searching. Meanwhile, the methodology used for the 1930s number, previous to the the search concept of unemployment developed by the WPA in the late 1930s which is used today, does capture what we now consider discouraged workers on the idea that all able bodied males are supposed to be working. Thus the appropriate comparison for the unemployment rate is U5, not U3. When compared to U5, a different narrative emerges. For example, in June 2016 U5 was 6 percent while in June 2017, U5 was 5.4 percent. This suggests the economy, while not at full employment, was recovered from the great depression in 1937 before the recession of 1937-1938. The article should be updated to reflect the best avalaible data on the 1930s economic performance and the true meaning of the "Roosevelt Recession". See e.g. Card 2011.


References Card, David. "Origins of the unemployment rate: the lasting legacy of measurement without theory." American Economic Review 101.3 (2011): 552-57.

Darby, Michael R. "Three-and-a-half million US employees have been mislaid: or, an explanation of unemployment, 1934-1941." Journal of Political Economy 84.1 (1976): 1-16.

Romer, Christina. "Spurious volatility in historical unemployment data." Journal of Political Economy 94.1 (1986): 1-37.

Mathy, Gabriel P. "Hysteresis and persistent long-term unemployment: the American Beveridge Curve of the Great Depression and World War II." Cliometrica 12.1 (2018): 127-152. — Preceding unsigned comment added by Nathan Tankus ( talkcontribs) 20:44, 13 June 2019 (UTC) reply

Dates wrong

This text is mostly incorrect. I would like updated material regarding the great depreasion, without false dates. Wikipedia states that the information was last updated 17 days ago. — Preceding unsigned comment added by Regitsu ( talkcontribs) 17:16, 14 June 2019 (UTC) reply

@ Regitsu: Which dates do you believe to be incorrect? Do you have reliable sources which we can cite for your dates? DuncanHill ( talk) 17:23, 14 June 2019 (UTC) reply
As far as I can judge it, the text is too focused on the situation in the U.S. The problem actually started in GB and then infected other countries, including the U.S. So the dates in the article are true for the U.S., but not applicable for the situation outside. This is mainly because the article ignores the development in Europe, and regarding this continent, it especially ignores Great Britain with London as the place of initial failure of relevant stock markets and early partial collapse of banking activities. 188.99.107.40 ( talk) 11:10, 14 June 2021 (UTC) reply

This text should be revised by professional historians. This text is written just terribly ridiculous. (They write about millions of dead... I want to ask why you did not write about the billions dead? Or about the trillions dead? It also has to be written that Stalin ate children.) This mess! Wikipedia should refer to the facts and scientific works of historians, especially when it comes to such topics. And not refer to the myths, invented by scoundrels. There was no socialism in those years, it was still developed by the Soviet people. Moreover, there can be no talk of communism, because there was not even socialism. What does "Russia" do in the text? This is extremely ignorant and insane. Then there was no Russia. And there was the Union of Soviet Socialist Republics (which is a socialist state of workers and peasants [since 1936]). Gnosandes ( talk) 19:36, 15 September 2020 (UTC) reply

@ Gnosandes: Your comment is as rediculous as your userpage.

Starting Point: London Stock Exchange's crash of September 1929

Globalization can be both, a blessing and a curse... The starting point of the "Great Depression" was the London Stock Exchange's crash of September 1929, massively influencing/ impairing other stock markets worldwide, and finally causing Wall Street Black Thursday crash. This should be mentioned in the article. 136.219.16.35 ( talk) 14:17, 9 June 2021 (UTC) reply

Yes, absolutely. These facts should be reflected in the article. 188.99.107.40 ( talk) 11:15, 14 June 2021 (UTC) reply

First Sentence Wrong

The current version says: "The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States". This is wrong. Trouble started in London/England/GB and continuously affected other places. On the other hand side, damage done to the U.S. economy was so bad that other economies e.g. in South America and on continental Europe were badly affected as well at this point, while the initial British failure of stock markets and related bank collapses were not able to do such enormous harm. In fact, it needed the leading economy to collapse to create such a global crisis, and the leading economy of these days had been the U.S.A. So the article should be re-written/ corrected to tell the actual story and to reflect all relevant facts in a precise and sufficient way. 188.99.107.40 ( talk) 11:20, 14 June 2021 (UTC) reply

The Great Depression only happened in the United States,not worldwide. Luke Skywalker 350 ( talk) 16:14, 15 December 2023 (UTC) reply
That is incorrect. Read Great Depression#Socio-economic effects. Regards, Thinker78 (talk) 04:22, 16 December 2023 (UTC) reply
Sorry about that. I just learned that it happened in the U.S. Luke Skywalker 350 ( talk) 16:34, 18 December 2023 (UTC) reply

Soviet Union part

Since the article is protected I would like to ask to have the sentence that reads as follows:

The Soviet Union was the world's only socialist state with very little international trade. Its economy was not tied to the rest of the world and was mostly unaffected by the Great Depression.[165] Its forced transformation from a rural to an industrial society succeeded in building up heavy industry, at the cost of millions of lives in rural Russia and Ukraine.

to be changed towards this:

The Soviet Union was the world's only socialist state with very little international trade. Its economy was not tied to the rest of the world and was mostly unaffected by the Great Depression.[165] Its forced transformation from a rural to an industrial society succeeded in building up heavy industry, however at the same time millions of lives were lost in rural Ukraine and South-West of Russia because of a forced famine through an artificially induced scarcity of crops and other foods.

This wording is clearer and closer to the context of the citation since it does not produce the second fact from the first, but only shows that they happened concurrently and are not necessarily connected (the famine did not happen due to the industrialization by itself or at all). 188.230.49.209 ( talk) 17:52, 10 August 2021 (UTC) reply

Semi-protected edit request on 8 December 2021

World War 1 was over. The 1920's in Canada were a time of peace, prosperity and changes. 66.85.12.136 ( talk) 17:22, 8 December 2021 (UTC) reply

 Not done: it's not clear what changes you want to be made. Please mention the specific changes in a "change X to Y" format and provide a reliable source if appropriate. ScottishFinnishRadish ( talk) 17:32, 8 December 2021 (UTC) reply

Consensus unsourced + incorrect

"The common view among most economists is that Roosevelt's New Deal policies either caused or accelerated the recovery, although his policies were never aggressive enough to bring the economy completely out of recession." - this is not true. Most economists since Friedman believe ND/NIRA were ineffective or worsened the Depression. Professors Harold Cole and Lee Ohanian have the most recent publications on the freshwater econ perspective. Please remove this sentence. VanessaD111 ( talk 03:15, 2 February 2022

The NIRA was in effect for a small part of the New Deal years. Overall each term showed major gains in GNP (and declines in unemployment) GNP was up sharply from March 1933 to start of 2nd term in Jan 1937; it was up from then to start of 3rd term in Jan 1941; it was up sharply from then to start of 4th term in Jan 1945. COle and Ohanian are a small minority among economists. Rjensen ( talk) 04:18, 2 February 2022 (UTC) reply
Change in GNP is not relevant to the claim made here - the article needs to demonstrate that the common view among most economists is that the ND caused or accelerated the recovery. This is highly disputable and almost certainly not following the Neutral POV rule. Cole and Ohanian are not a small minority, even Edward Prescott praised their publications and used their models in conference. Fumio Hayashi and others used the same Ohanian growth model to study Japan's lost decades. VanessaD111 ( talk) 21:05, 2 February 2022 (UTC) reply

Added lead section too long

I've added a lead section too long template to the top of the article as there are 8 paragraphs for an article more than 30,000 characters long. I'll move some of the lead section's content to the body of the page in the coming days Owen250708 ( talk) 12:41, 7 February 2022 (UTC) reply

Semi-protected edit request on 9 February 2022

March of the Hungry in Sanok [pl] Polish wiki link links improperly, should link to https://pl.wikipedia.org/wiki/Marsz_G%C5%82odnych_w_Sanoku instead. 193.43.231.70 ( talk) 09:14, 9 February 2022 (UTC) reply

 Done Thanks. (CC)  Tbhotch 18:13, 9 February 2022 (UTC) reply

Semi-protected edit request on 15 May 2022

In the first paragraph, "Great depression" should be "Great Depression" Alphazom123 ( talk) 00:22, 15 May 2022 (UTC) reply

 DoneSirdog ( talk) 01:31, 15 May 2022 (UTC) reply

Semi-protected edit request on 21 August 2022

From: With the rise in violence of Nazi and communist movements, as well as investor nervousness at harsh government financial policies. Investors withdrew their short-term money from Germany, as confidence spiraled downward.

To: With the rise in violence of Nazi and communist movements, as well as investor nervousness at harsh government financial policies, investors withdrew their short-term money from Germany, as confidence spiraled downward.

(full stop to comma before "investors") 2A00:23C4:248A:3401:81B5:41E4:677D:A21A ( talk) 01:23, 21 August 2022 (UTC) reply

 Done Aaron Liu ( talk) 22:42, 21 August 2022 (UTC) reply

Semi-protected edit request on 21 August 2022 (2)

Decapitalize "payment" on: moratorium on Payment of war reparations in 4.3. 2A00:23C4:248A:3401:81B5:41E4:677D:A21A ( talk) 01:26, 21 August 2022 (UTC) reply

 Done Aaron Liu ( talk) 22:43, 21 August 2022 (UTC) reply

A few suggestions

  1. It was the worst economic depression of the industrialized world
  2. There could be something about who the president was (Herbert Hoover when the stock market crashed and then Franklin D Roosevelt starting 1932)
  3. There could be a mention of the dust bowl and drought
  4. Mentions of Shanty towns

That is a few things I can think of you could add Wally Ferris ( talk) 03:47, 9 September 2022 (UTC) reply

Edit Requests

1) Under the heading "Gold Standard" it says "Every major currency left the gold standard during the Great Depression. The UK was the first to do so." But the chart just above shows Argentina and Brazil leaving earlier. Change to: "the first Western country to do so".

2) Under "Turning point and recovery" it says "It was the rollback of those same reflationary policies that led to the interruption of a recession beginning in late 1937." This is badly worded. Was the recession interrupted? Change to "policies that interrupted the recovery with a brief recession beginning"

3) Search for "political turmoil" which occurs in two almost-identical blocks of text. The first instance ends a sentence and is grammatical. The second doesn't and isn't. Make the second the same as the first.

4) Under "Poland" it says "To adopt to the crisis, Polish government employed deflation methods". Change to: "To adapt to the crisis, the Polish government employed deflationary methods"

5) At the end of the same paragraph it says "kicked off the economy, to over 10% annual growth rate". Change to: "kicked off the economy to an over-10% annual growth rate"

6) Under "Spain" it says "By staying neutral in the Second World War, and selling to both sides[clarification needed]".  This is nit-picking: what is unclear about "selling to both sides" after "war" has been mentioned? Do they want details of what products were sold or to what countries? Remove the note.

0) It used to be that when a restricted user attempted to edit a protected page, this automatically opened an Edit Request. Now I only get a box telling me in detail that I can't edit (which I already knew from the lock symbol). Please forward to the correct area a request that this feature be restored. But there are fairly-recent Semi-Protected Edit Requests above. How did they generate those? 202.161.64.71 ( talk) 15:27, 14 October 2022 (UTC) reply

Indonesia and the Philippines

Indonesia

The Netherlands had intended its colony the Dutch East Indies to be a producer of raw products and a consumer of foreign manufactures. By the 1920s, Java—an island of Netherlands India—was the largest producer of sugar in the world after Cuba, however two-thirds of the sugar mills on Java failed during the Great Depression. Another effect of the economic crisis was that the price of raw materials exported by the Indies fell much more rapidly than the price of finished imports. As a consequence, the liberal economic policy which dated from the late nineteenth century which enabled Dutch goods entering the islands to be taxed the same low tariff as goods from other countries, was changed at a time when inexpensive manufactured goods from Japan were beginning to flood the Indies market. The result was adoption of a quota system resulting in reciprocal trade agreements. As world tensions increased, these agreements became political rather than economic, and were aimed at halting a Japanese economic invasion.

Philippines

The market crash of 1929 affected mostly peasants and workers in the Philippines, which at that time was an American colony. Prices of the basic export crops dropped drastically, causing grave hardship on the peasantry. Many were evicted from land and home and even those who continued working sank into debt. Urban workers lost their jobs as businesses failed. Others suffered cuts in wages as employers passed on to them part of their reverses.

A source of the period linked the rise of the Sakdal movement with the Great Depression.

The postwar depression of 1932-33 further stimulated the labor movement, because our workers sought the protection of labor unions in order to be able to keep their jobs.

Sources consulted

Indonesia

  • Clyde, Paul H., and Beers, Burton F. The Far East: A History of the Western Impact and the Eastern Response (1830–1970). 5th ed. Englewood Cliffs, NJ: Prentice-Hall, 1971; reprint ed., Quezon City: Phoenix Press, 1972.
  • Pringle, Robert. Indonesia and the Philippines: American Interests in Island Southeast Asia. New York: Columbia University Press, 1980.

Philippines

  • Constantino, Renato. The Philippines: A Past Revisited (Pre-Spanish–1941). Vol. 1. Manila: n.p., 1975.
  • Zaide, Gregorio F. Philippine History: Development of Our Nation. Manila: Bookman, 1960.

122.52.197.131 ( talk) 02:48, 19 October 2022 (UTC) reply

A problem

Someone has edited the wiki. Heres what it is now.

A period of great subdression. Where the entire world went flat for 0.54333333333 seconds happened in 1928 december 31st 11:59.99 seconds which caused the great depression! Yeah!

Please edit this. 69.156.74.15 ( talk) 17:53, 30 November 2022 (UTC) reply

I have also seen this as well. I was about to report this too. Wikibrowser30 ( talk) 18:29, 30 November 2022 (UTC) reply

Semi-protected edit request on 30 November 2022

Cut "subdression. Where the entire world went flat for 0.54333333333 seconds happened in 1928 december 31st 11:59.99 seconds which caused the great depression! Yeah!" from the first line (revert changes made by Cork32454 at 17:23 today). Catogram ( talk) 18:36, 30 November 2022 (UTC) reply

 Done RudolfRed ( talk) 19:01, 30 November 2022 (UTC) reply

Vietnam

The first phase of the Vietnamese revolution began in 1930 partly because the world depression then began to hit the Indo-Chinese export economy while simultaneous crop failures and famines intensified the popular suffering in the crowded delta regions. The Vietnam Nationalist Party attempted a military rising, starting in February with a mutiny of troops at Yen Bai on the Chinese border, which the French crushed with such severity that the party was all but destroyed. The newly unified Communist network, however, receiving a great influx of ardent revolutionaries, proceeded to stir up many strikes, demonstrations, incidents, and even peasant risings. The French used their Foreign Legion in a small-scale war to get the situation under control in 1931, and as a result thousands were killed, tried, executed, or deported.

Works cited

  • Fairbank, John K.; Reischauer, Edwin O.; and Craig, Albert M. East Asia: Tradition & Transformation. Boston: Houghton Mifflin Company, 1978; reprint ed., Manila: G. Miranda & Sons, n.d.

There are only 2 mentions of the Dust Bowl in this article, one in relation to Canada and the second one in relation to FDR demagogy. In reality, the Dust Bowl was the MAIN reason for the "greatness" of this depression. FDR tyranny being the other main reason, of course. — Preceding unsigned comment added by 85.249.43.225 ( talk) 07:32, 27 December 2022 (UTC) reply

Cambodia

Economic history of Cambodia

Malaysia

Myanmar

Chart colors

The chart has a line that is red and blue, but the coloring is not explained. What does it mean? Kdammers ( talk) 23:04, 27 January 2023 (UTC) reply

Semi-protected edit request on 7 March 2023

66.242.67.111 (
talk) 14:56, 7 March 2023 (UTC)
reply

mrbeast was -59 years old aka the the greatest youtuber

 Not done: it's not clear what changes you want to be made. Please mention the specific changes in a "change X to Y" format and provide a reliable source if appropriate. M.Bitton ( talk) 13:52, 8 March 2023 (UTC) reply

Economy

The great depression 105.113.18.101 ( talk) 23:36, 1 April 2023 (UTC) reply

Semi-protected edit request on 16 May 2023

Yes October 24, 1929 fell on a Thursday not Tuesday meaning it would have been October 22 which was known as “black Tuesday” as the author states and therefore it should be edited to reflect the actual date of the event. 2603:8090:103:1E00:919A:F646:73A9:B84 ( talk) 11:19, 16 May 2023 (UTC) reply

 Done switched back to Black Thursday as the date is correct. Tuesday would've been the following Tuesday and the 29th Cannolis ( talk) 14:59, 16 May 2023 (UTC) reply

the depression of 20th century

how great depression still plays a role in this century 41.116.194.249 ( talk) 12:23, 30 October 2023 (UTC) reply

I believe the Great Depression started on October 29th, not the 24th — Preceding unsigned comment added by 69.254.140.77 ( talk) 23:14, 18 January 2024 (UTC) reply