Comparisons between the Great Depression and the eleventh recession of the post-World War II period have extended beyond conditions in the financial market to conditions in the labor market. Speculation that the unemployment rate could reach double digits in the coming months appears to have fueled the analogy. Little if any comparative research has been undertaken, however. This report analyzes the labor market experiences of workers during the 1930s, which encompassed the almost five years of the Great Depression. Because it was a period very distant and different from today, considerable time is devoted to examining the employment and unemployment measures available at that time. The report ends by comparing the labor market conditions of the 1930s with those encountered by workers thus far during the recession that began in December 2007. The Labor Market During the Great Depression

Analysis of labor market conditions during the Great Depression is complicated by the fact that "throughout the worst years of the Depression, no one knew how many unemployed persons there were, much less their characteristics," because not until March 1940 did the federal government initiate a monthly survey of the labor force defined much as it is today. Women also fared better than men during the Depression due to the increased demand for workers in white-collar occupations (e.g., professional and clerical workers). Occupational and Industry Characteristics

Lower skilled workers were more adversely affected by the Depression than higher skilled workers. Many workers were unemployed for much longer than one year. Of those fortunate to have jobs, many experienced cutbacks in hours, and hence, earnings. Men—particularly those older and black—were among the most adversely affected during a time when age- and race-based employment discrimination were not unlawful and when occupational shifts in labor demand were operating against them. Those who toiled on farms and in factories were displaced in especially large numbers. And, states whose economies were dependent upon agriculture and manufacturing reported comparatively high unemployment rates. They are shared with many of the recessions that occurred in the intervening years. Similarities

There are a number of similarities between the characteristics of the unemployed during the Great Depression and the recession that began in December 2007. By 2008, the goods-producing sector's share of nonfarm employment had fallen to 15.6%. 4. At the peak of unemployment during the Great Depression (1933), one in four workers was unemployed, in contrast with fewer than one in eleven today. Between 1929 and 1933, employment on nonfarm payrolls fell by 24.3%, compared to 4.3% thus far in the recession. In the Impact of Being Unemployed

The implications of being unemployed have changed substantially over time. One reason for the altered situation facing jobless persons is the increased prevalence of families in which both spouses work. Another important difference between the Great Depression and the current recession, in terms of the economic hardship inflicted by high unemployment, is the nationwide availability of public assistance programs in place today.
A good deal of commentary has addressed similarities between the recession that began in December 2007 and the Great Depression. Comparisons between the two have extended beyond conditions in financial markets to conditions in the labor market. The analogy appears to be fueled by projections that the unemployment rate could reach double digits in the coming months.
Little if any comparative labor market research has been undertaken, however. To address the situation, this report analyzes the experiences of workers during the 1930s, which encompassed the almost five years of the Great Depression. Because it was a period very distant and different from today, the report devotes considerable time to examining the employment and unemployment measures then available. The report ends by comparing the labor market conditions of the 1930s with those encountered by workers thus far during the nation's eleventh recession of the post-World War II period.
A labor market analysis of the Great Depression finds that many workers were unemployed for much longer than one year. Of those fortunate to have jobs, many experienced cutbacks in hours (i.e., involuntary part-time employment). Men typically were more adversely affected than women. This was especially true for older and black men at a time when age- and race-based job discrimination were not unlawful and when occupational shifts in labor demand were operating against them. Higher-skilled workers fared better than lower-skilled workers. Those who toiled on farms and in factories were displaced in very large numbers. States whose economies were dependent on agriculture and manufacturing reported high unemployment rates.
There are several similarities not only between the Great Depression and the recession that began in December 2007, but also between the Great Depression and other recent recessions. They include the greater impact of economic downturns on male blue-collar workers in the goods-producing sector (e.g., construction and manufacturing), lower-skilled workers, and older workers.
But, there remain substantial differences between the Great Depression and the current recession:
In 1933, at the depth of the Depression, one in four workers was unemployed. In contrast, the unemployment rate had risen to 9.4% by May 2009. The number of jobs on nonfarm payrolls fell 24.3% between 1929 and 1933. Thus far during the current recession, firms have cut nonfarm employment by 4.3%. The first 17 months of the ongoing recession compare favorably with the first two years of the Depression as well. In addition to the greater magnitude of unemployment and job loss during the early 1930s as compared with today, the implications of being unemployed have changed much in the intervening years. One reason for the altered situation facing today's unemployed is the increased prevalence of families in which both spouses work. Another is the deeper drop in earnings and hours worked that occurred during the Depression. And, the social safety net that is now available to displaced workers and their families did not exist before the onset of the Great Depression.