The economic depression that beset the United States and other countries in the 1930s was unique in its magnitude and its consequences. At the depth of the depression, in1933, one American worker in every four was out of a job. In other countriesunemployment ranged between 15 percent and 25 percent of the labor force. The greatindustrial slump continued throughout the 1930s, shaking the foundations of Westerncapitalism and the society based upon it. The "roaring twenties" was an era when our country prospered tremendously. Thenation's total realized income rose from $74.3 billion in 1923 to $89 billion in 1929.However, the rewards of the "Coolidge Prosperity" of the 1920's were not shared evenlyamong all Americans. According to a study done by the Brookings Institute, in 1929 thetop 0.1% of Americans had a combined income equal to the bottom 42%. That same top0.1% of Americans in 1929 controlled 34% of all savings, while 80% of Americans had nosavings at all. Automotive industry mogul Henry Ford provides a striking example of theunequal distribution of wealth between the rich and the middle-class. Henry Ford reporteda personal income of $14 million in the same year that the average personal income was$750. By present day standards, where the average yearly income in the U.S. is around$18,500, Mr. Ford would be earning over $345 million a year! This maldistribution ofincome between the rich and the middle class grew throughout the 1920's. While thedisposable income per capita rose 9% from 1920 to 1929, those with income within thetop 1% enjoyed a stupendous 75% increase in per capita disposable income.A major reason for this large and growing gap between the rich and theworking-class people was the increased manufacturing output throughout this period. From 1923-1929 the average output per worker increased 32% in manufacturing. Duringthat same period of time average wages for manufacturing jobs increased only 8%. Thuswages increased at...
