Abby Scher on the race to elect Maine's next Governor
Eighty years ago this week, the stock market crashed and ushered in the Great Depression. We need to apply the lessons from that era to our own to relieve the needless suffering of the Great Recession.
In just two days, between Oct. 28 and 29, 1929, the stock market plummeted by 25 percent. Between September and November of that year, the Dow Jones Industrial Average lost 40 percent of its value. By July of 1932, the Dow had lost nearly 90 percent of its value.
By then the Great Depression was raging, with unemployment rates rising to 25 percent.
To combat unemployment and alleviate poverty, the federal government engaged in a massive public works and jobs program through the Works Progress Administration (WPA).
Private markets weren’t about to create jobs, and the public sector became the employer of last resort. The job creation from the WPA provided survival and sustenance for millions of American families. Where is the contemporary WPA?
Absent public job creation, it is likely that the economy will not fully recover. The official unemployment rate stands at 9.8 percent. But the Bureau of Labor Statistics acknowledges that the adjusted unemployment rate — including part-timers looking for full-time work, and those who don’t look for work because they don’t think work is out there — is as high as 17 percent. This means that one in six Americans does not have a job. Among certain subgroups — notably older Americans and blacks — the unemployment rate exceeds Depression-era unemployment.
To commemorate this anniversary of the Great Depression, the Obama administration ought to engage in Depression-era tactics to jump-start the economy. We have spent $700 billion bailing out banks and $787 billion in economic stimulus. But we have not focused on directly creating employment, on lifting people at the bottom.
The length of the Great Recession depends largely on how quickly we are able to put our nation back to work. A 10 percent unemployment rate is too high, and its costs are too great. The same nation that created a Works Progress Administration in the 1930s should create another one in the 21st century.
Julianne Malveaux is president of Bennett College for Women in Greensboro, N.C. She can be reached at email@example.com.