A BRIEF HISTORY OF UNEMPLOYMENT
By Tim Lambert
Before the Industrial Revolution unemployment was much less of a problem than it is now. It existed of course but there was not mass unemployment. In an agricultural society the economy was usually stable and it changed little from year to year. However from the 18th century the British economy went in a cycle of booms and slumps (or recessions). With each recession large numbers of people were thrown out of work.
Unemployment in Britain
In Britain in the mid-19th century the economy boomed and unemployment was low. However unemployment rose in the late 19th century. It is not certain how much of the workforce was unemployed at that time but it was a significant problem. There was also underemployment when some men were not able to work a full week. On 13 November 1887 the unemployed held a mass demonstration in Trafalgar Square in London. Troops were sent in to clear the square and in the ensuing violence one man died. The event became known as Bloody Sunday.
In 1911 the government passed an act establishing sickness benefits for workers. The act also provided unemployment benefit for workers in certain trades such as shipbuilding, where periods of unemployment were common. In 1920 unemployment was extended to most workers although it was not extended to agricultural workers until 1936.
In Britain during the 20th century as in other Industrial countries unemployment varied. In the years 1900-1914 the economy was stable and unemployment was quite low. However during the 1920s there was mass unemployment. For most of the decade it hovered between 10% and 12%. Then, in the early 1930s, the economy was struck by depression. In the 1920s traditional British industries like coal mining were already declining because of foreign competition. The economic downturn, of course made things far worse. By the start of 1933 unemployment among insured workers was 22.8%. However unemployment fell substantially in 1933, 1934 and 1935. By January 1936 it stood at 13.9%. Unemployment continued to fall and by 1938 it was around 10%.
However in the late 1930s the North of England remained depressed and unemployment in the region remained very high. Traditional industries such as textiles and coal mining were severely affected by the depression. Yet in the Midlands and the South of England new industries brought some prosperity and unemployment was lower. New industries included making cars and aircraft and electronics.
During the 1920s and 1930s a series of 'hunger marches' were held from depression areas to London. The first was from Glasgow in 1922 but the most famous was the Jarrow march of 1936. Labour MP Ellen Wilkinson led 200 shipyard workers in a march from Jarrow to London. The hunger marches gained a great deal of publicity for the plight of the unemployed but they did not succeed in their aim of actually reducing unemployment.
The problem of high unemployment was only really solved by the Second World War, which started industry booming again. Unemployment remained very low in the late 1940s and the 1950s and 1960s were a long period of prosperity.
However this ended in the mid-1970s. In 1973 there was still full employment in Britain (it stood at 3%). However shortly afterwards a period of high inflation and high unemployment began. In the late 1970s unemployment stood at around 5.5%.
However in the years 1980-1982 Britain was gripped by recession and unemployment grew much worse. It reached a peak in 1986 then it fell to 1990. Unfortunately another recession began in 1990 and unemployment rose again. However unemployment began to fall again in 1993 and it continued to fall till the end of the century. Unfortunately unemployment rose again with the recession of 2009. In September 2012 the unemployment rate in the UK was 7.9%.
Unemployment in The USA and Canada
In the USA unemployment was also very high during the 1930s. From mid-September prices fell. On 24 October 1929, known as Black Thursday, panic selling began on Wall Street and prices fell catastrophically, an event known as the Wall Street Crash. Business confidence disappeared, banks failed and industry slumped. By 1932 industrial production in the USA had fallen by half and exports fell to one third of their 1929 level. Unemployment went through the roof. By 1932 about one quarter of the work force was unemployed. When people lost their jobs they could no longer buy goods and demand fell so more people lost their jobs. There had been economic slumps in America before but his one was more severe than anything previously experienced. It was known as the Depression.
President Hoover did try and help. He persuaded employers to maintain wages at their present levels. He also increased spending on roads, bridges and public buildings. However Hoover refused to introduce federal unemployment relief. He believed in what he called 'Rugged individualism'. He believed too much state help would make people dependent.
For the unemployed life during the depression was very harsh. Many were reduced to attending soup kitchens run by charities. (The soup was sometimes called 'Hoover stew'. Destitute people lived in shantytowns they called Hoovervilles. Hoover became deeply unpopular and in 1932 Franklin Delano Roosevelt was elected President.
Roosevelt assured the American people that the only thing they had to fear was fear itself. He promised the American people 'A New Deal'. However between 1933 and 1939 he had only limited success. Unemployment fell to between 14% and 15% by 1937. However in that year the economy dipped again. (It was called the recession) and unemployment rose to 17%. However industrial production rose to its 1929 level again by 1939.
On 12 May 1933 the Federal Emergency Relief Act was passed to help the unemployed. The states were given grants to provide work like repairing roads and improving parks and schools.
Also in 1933 Roosevelt founded the civilian Conservation Corps, which employed young men on conservation projects. A Public Works Administration was created which built public buildings, bridges and dams. Also the Tennessee Valley Authority was created to build dams and hydroelectric plants.
In 1935 the Social Security Act created old age pensions and an unemployment insurance scheme. In 1938 a Fair Labor Standards Act created a minimum wage.
Despite all of Roosevelt's efforts the depression only ended with the coming of war. The USA mobilised all its resources for war. Industrial output doubled during World War II and by 1943 there was full employment.
Meanwhile Canada suffered from a huge drop in exports of timber, grain and fish. By 1933 unemployment had soared to 23%. The government introduced relief works but economic hardship continued throughout the 1930s. The depression only ended when the Second World War began in 1939.
As in Britain unemployment was low in the USA in the 1950s and 1960s but it rose sharply in the 1970s. In 1980 the USA was in the grip of a recession. Unemployment was almost 11% in 1982. (The situation in Canada was similar). It fell to 7% in 1985 and 5.5% in 1988. In 1999 it stood at 4.2%. However in the early 21st century unemployment rose and in May 2010 it stood at 9.9%. By September 2012 it had fallen to 7.9%.
In Canada in April 2010 unemployment stood at 8.1%. In the fall of 2012 it still stood at 7.4%. However by September 2013 it had fallen to 6.9%.
Unemployment in Germany
Meanwhile the depression of the early 1930s was a disaster for Germany. While unemployment was 1.4 million or 8.4% of the workforce in 1928 it rose to 4.8 million in 1931. By 1932 it was 6 million or about 33% of the workforce in Germany.
The Nazis managed to eliminate unemployment in Germany. Partly they did this by rearming (even though this meant breaking the Versailles Treaty).
Hitler also built roads called autobahns across Germany and he built great public buildings such as the Olympic Stadium for the 1936 Berlin Olympics. All this helped to reduce unemployment.
The 1950s and 1960s brought prosperity to West Germany and unemployment was low. Unemployment in West Germany was higher in the 1980s and 1980s but was still significantly lower than in Britain. Germany suffered badly in the recession of 2009 and by January 2010 the unemployment rate stood at 8.6%. However by March 2011 the unemployment rate in Germany had fallen to 7.1%. In September 2012 unemployment in Germany stood at 6.9%.
Unemployment in Italy
Italy also suffered from the worldwide depression. However unemployment was not as high in Italy in the 1930s as it was in many countries because Italy was still mainly an agricultural country. Nevertheless there were 1.3 million unemployed in Italy in 1932. In Italy the fascists also responded by increasing public spending. New public buildings were erected. Roads and other public works were created.
In the late 1950s and 1960s Italy underwent an economic boom. However there was high unemployment in the 1980s. It reached 7% in 1987 and the situation worsened in the early 1990s. Unemployment in Italy peaked at over 12% in 1995. In September 2012 unemployment in Italy stood at 10.8%.
Unemployment in Scandinavia
The economic situation was similar in Scandinavia. Between the wars there was mass unemployment in Norway. It rose to 18% by 1921 and hovered at around 20% for the rest of the 1920s. Unemployment doubled in the early 1930s but it fell to about 20% again by the end of the 1930s.
The 1920s were relatively prosperous for Sweden. However in the early 1930s Sweden suffered during the depression. Unemployment rose to 24.9%. However in 1932 the Social Democrats formed a coalition with the Agrarian Party. They took steps to help agriculture and also created public works to reduce unemployment. By 1939 the Swedish economy had largely recovered.
The 1950s and 1960s were years of prosperity for Sweden and there was full employment. However unemployment was also high in the 1990s and it rose to 9.9% in 1996. Unemployment fell in the early years of the 21st century. However unemployment in Sweden rose sharply with the recession of 2009. In January 2010 it stood at 9.4%. However by September 2012 unemployment in Sweden had fallen to 7.4%.
Denmark suffered high unemployment in the 1920s especially in the periods 1922-23 and 1925-28. The depression of the 1930s also caused terrible unemployment in Denmark. At its worst in 1932-33 it reached 32%. The government responded by creating public works to reduce the numbers of unemployed. Although it was low in mid-century unemployment was high in Denmark in the 1980s and it rose to 10% in 1983. Unemployment stood at 12.2% in 1994. However unemployment in Denmark fell to a much lower level in the early 21st century. In March 2010 it stood at 4.2%. However in September 2012 unemployment in Denmark stood at 4.8%.
Norway was more fortunate than her neighbours. The depression of the 1930s was less serious in Norway than in other countries and in February 2010 unemployment in Norway was only 3.5%. In 2012 unemployment in Norway fell to only 3.1%.
Unemployment in France
The depression of the 1930s was less severe in France and Belgium and unemployment was relatively low in those two countries at that time. However high unemployment afflicted France in the 1980s and in the 1990s it rose to over 12%. In September 2012 unemployment in France stood at 10.2%.
Unemployment in Australia
In 1929 the depression hit Australia. The economy slumped and unemployment rose sharply. By 1932 unemployment was 29%. However after that year things got better and by the late 1930s unemployment had fallen to about 10%.
In Australia the 1950s and 1960s were years of prosperity. However after 1975 the period of growth and prosperity in Australia came to an end. For one thing inflation rose. Furthermore in the late 1970s unemployment began to rise. By 1983 it had reached 10%. It fell to about 6% by 1988. However in 1992 during another recession unemployment stood at 11.3%. Unemployment in Australia fell to about 4.4% in 2007 but it rose to 5.3% in March 2010. In October 2011 unemployment in Australia stood at 5.2%. In October 2012 it was 5.4%, which is still lower than many developed countries.
Unemployment in New Zealand
New Zealand did not suffer as badly from the depression. By 1933 about 14% of the workforce were unemployed. However unemployment in New Zealand vanished during the Second World War and it remained very low until 1978. It then rose until it peaked at 5.7% in 1984. Unemployment fell slightly between then and 1988 but rose sharply in 1989 to over 6%. It peaked at over 10% in 1992 then fell again standing at 5.5% in 2001. In December 2007 unemployment in New Zealand fell to only 3.4%. However it rose to 6% in 2010. By September 2012 unemployment in New Zealand was 7.3%.
Unemployment in Ireland
During the 1980s the Irish economy was in the doldrums. Unemployment was only 7% in 1979 but it rose to 17% in 1990. Then in the 1990s the situation changed completely. The Irish economy boomed and it became known as the Celtic Tiger. By 2000 unemployment in the Irish Republic had fallen to less than 4%. However in 2008 Ireland entered recession and by the autumn of 2010 unemployment had risen to 13.2%. In October 2012 unemployment in Ireland reached 14.8%.
Meanwhile in the 2010s a crisis in the euro currency caused massive unemployment in southern Europe. In Portugal unemployment reached 15% in 2012. In Spain unemployment was even worse, reaching 25% in 2012. In Greece unemployment also rose to 25% in 2012.
Unemployment was also high in Eastern Europe. In September 2012 unemployment in Poland was 12.4%. In the Czech Republic it was 8.5%. In Hungary unemployment stood at 10.2% in September 2012. Meanwhile in 2012 unemployment in Bulgaria rose to 12.3%. In Romania it was lower at 6.9%.
In 2013 a crisis in the euro caused a severe rise in unemployment in certain countries. In Greece unemployment rose to over 26%. Unemployment in Spain also stood at over 26%.
A history of Poverty
A history of Work
A history of Welfare
A history of the Industrial Revolution
A history of England
Last revised 2012