Unemployment isn’t what it used to be

Mmm, bread.

Mmm, bread, and hats.

Unemployment figures don’t accurately measure the job market. What’s reported these days omits the underemployed and those who have stopped looking. But those people were included in unemployment figures from The Great Depression…

Great Depression jobs parallel may not be far flung

Unemployment today vs. unemployment in the 1930s isn’t an apples-to-apples comparison. By today’s standards, current unemployment is at 6.7%, according to the article. And some estimates expect it to reach 10%. By Great Depression-era standards, current unemployment would be 16%, with worst-case scenarios eventually pushing it past 25%. To put this in perspective, unemployment during The Great Depression – using those standards – was also 25%.

These are very different times. Then, everyone wore a hat all the time. Today, only some people wear a hat, even when it’s 20 degrees outside. Then, people farmed and manufactured. Today, people sit in cubes and look at computer screens, wishing they were outside or at least making something useful. Like then, we still have greedy financial criminals – I mean CEOs – who wreak havoc on everyone’s lives in pursuit of a dollar. But comparing the current recession to The Great Depression is a little premature. It’s only done because this is the worst financial crisis since that one, and the media needs an easy hook with built-in images and snazzy titles. Only time can tell if this recession is that bad.

Everyone knows that The Great Depression was as advertised. I wasn’t even alive then, but I’m still feeling its effects. All of my grandparents were born during or soon after the first World War, which means they grew up and came of age during the worst market of the modern era. (The income of the average American family decreased by 40% between 1929 and 1932.) And while they were fortunate to go to college and find jobs, the economic climate colored their perceptions, altered their values and, most importantly for me, influenced their spending habits. My victimization is best expressed as a word problem…

A fair-skinned, doe-eyed child who works really hard at school receives cash gifts from each of his two sets of grandparents on his birthday and Christmas. The amount is $25 per occasion until he becomes a teenager. The clean-cut, polite teenager who still works really hard at school and wants to go to a good college and become an upstanding member of the community receives a raise. The amount becomes $50 per occasion until he graduates college at age 22. Given that grandparents who did not go through The Great Depression spend 50% more on gifts, how much did The Great Depression cost this deserving young man?

[MATH ALERT]

Basics:

  • 2 sets of grandparents
  • 12 birthdays and 13 Christmases at $25 each
  • 10 birthdays and 9 Christmases at $50 each
  • Total should be 50% more

Answer:

  1. 25*(12+13)=$625
  2. 50*(10+9)=$950
  3. 2*(625+950)=$3150
  4. 3150*1.5=$4725
  5. 4725-3150=$1575

[END MATH ALERT]

The Great Depression has cost our hero $1575, plus interest, and I’d like to have it right now please. (There are bills to pay, you understand.) This recession may be more expensive to me overall, but at least I get to experience it firsthand, in all its glory. The Great Depression cost a lot of people a lot of money, and it’s still affecting people today. The only way to make a fair comparison is to ask my future grandchildren on their college graduation days if they feel gypped. If they say yes, we’ll know. But until then, The Great Depression wins the battle of recessions going away.

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One Comment

  1. Cyn wrote:

    lucky you…all I got from my Depression-raised grandparents was $5 for bdays and Xmas. Sometimes it was only a $2 bill.

    Saturday, April 18, 2009 at 9:49 pm | Permalink

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