J. Mack Swigert remembers hunting for work in Chicago during the height of the Great Depression. Even his Harvard Law degree was no guarantee. “I had to hustle it by walking up and down LaSalle Street.”
Swigert, now 102, was pleased to be offered a $15-a-week job at a time when “there were men selling apples on the street corner.” His father, on the other hand, saw his own business falter in the harsh economic times, and ultimately went bankrupt.
It all has a familiar ring. What Swigert remembers from the ’30s echoes what millions of Americans are experiencing now. The economy has lost more than 8 million jobs since the recession began in December 2007. As of March this year, the unemployment rate stood at 9.7 percent for the third consecutive month, edging up to 9.9 percent in April, according to the Bureau of Labor Statistics. Although there are signs the recession is lessening, a record 6.7 million Americans have been out of work for 27 weeks or longer.
The comparisons between the ’30s and today are both painful and inevitable, but it’s pretty obvious this hasn’t been our fathers’ (or grandfathers’) depression. No economist has suggested our predicament is anything close to what occurred in the 1930s, when the market collapsed and 15 million people, one-fourth of the work force, were unemployed.
Nor has the current crisis led to as much imagery associated with the Great Depression: bread lines, shantytowns, homeless men—called tramps then—wandering door to door in search of handouts and charity.
One reason, of course, is the New Deal itself. The Social Security Act of 1935 created, in addition to the retirement insurance for which it’s named, a federal and state system of unemployment compensation that provides temporary, partial wages to the newly out-of-work. It’s a cushion for families, and it helps stabilize the economy during recessions.
The safety net devised under Roosevelt protects the country today “from looking like it did in 1931 and 1932,” says Nick Taylor, whose book, American-Made: The Enduring Legacy of the WPA, analyzes the economic crisis that began under Herbert Hoover, brought FDR into office, and prompted creation of the Works Progress Administration (WPA), among other economic reforms.
Perhaps more significant, the New Deal forever changed the public’s expectation of the government’s role in times of hardship. The pre-World War II generation hit bottom before government stepped in. Republican Herbert Hoover, who prematurely declared “The Depression is over” in June 1930, steadfastly opposed government action, which led to his lopsided loss to FDR. In 2008 presidential candidates Obama and McCain stood together against laissez faire banking; to have done otherwise could have been political suicide.
“The Roosevelt administration was the first one to recognize that the government was responsible for the welfare of the people,” Taylor says. “One of government’s purposes is to have a humanitarian side.”
Roosevelt’s program was controversial then. It still is igniting debate that rages among pundits and economists. Did the New Deal help end the Great Depression, or was it just a distraction until World War II provided the real economic stimulus?
Wake Forest University economist Robert Whaples conducted a survey of economists in 1995 and asked if they agreed with the following: “Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression.” Fifty-one percent disagreed and 49 percent agreed (many with provisions).
The most glowing analyses credit the New Deal for lifting the country out of the worst of the Depression and improving the mood of a panicked nation. The most critical suggest that Roosevelt’s fiscal policies not only aggravated the crisis but extended the Depression by as many as seven years. But on one aspect of the New Deal, its humanitarian impact on suffering individuals, almost everyone agrees: Government-sponsored jobs improved the economic circumstances of the people who held those jobs.
Roosevelt first proposed the idea of a permanent jobs program during his annual message to Congress on January 4, 1935. A variety of temporary relief measures had been implemented by then, but Roosevelt considered them handouts and demeaning to human dignity. At that time, 5 million people were receiving some form of government aid, 3.5 million of whom Roosevelt felt were able-bodied and could be working.
His proposal became the Works Progress Administration. At its peak in March 1938, the WPA rolls hit 3.4 million. By June 1943, when the program was ended because it was no longer needed—unemployment had fallen to 1.9 percent—the WPA had employed more than 8.5 million people on 1.4 million different projects.
After that, Taylor writes, “No one would care to look at the WPA again for quite some time. In the heat of war, there was too much else to think about, and the agency closed its doors without fanfare. Two years later, when the war was ending and life slowly began to return to normal, Americans did not want to remember the Depression.”
Its legacy, Taylor says, is measured in statistics and still evident all around us. The WPA fought floods, hurricanes, and fires; recycled toys; inoculated the sick; and “created works that even without restoration have lasted for more than 70 years.”
President Barack Obama consistently invoked the New Deal as historic evidence to support his stimulus plan. “With the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back into life. It is only government that can break the vicious cycle where lost jobs lead to people spending less money, which leads to even more layoffs,” he said.
Many similarities can be found between the New Deal and the American Recovery and Reinvestment Act (ARRA) of 2009. The most obvious is that both were designed to save or create about 3.5 million jobs.
Yet Roosevelt himself could not have imagined the size of the government’s commitment this time around. The Works Progress Administration, massive as it was, spent $11 billion during its eight-year tenure. Adjusted for inflation, that would be more than $130 billion today. That pales in comparison to the $787 billion in the stimulus package, which has gone to tax cuts; extended unemployment benefits; and government spending on education, health care, weatherization, and infrastructure. That was all on top of the $700 billion financial services bailout passed by Congress earlier.
The enormity of the investment may be what most distinguishes ARRA from the New Deal. Quoted in a report by Voice of America, historian Alan Brinkley of Columbia University suggested that the weakness of the New Deal was that it wasn’t big enough to compensate for the loss of wealth of the Great Depression. “If you want to counteract a severe recession, you have to take big measures to generate economic activity. And I think that is what the stimulus package is designed to do,” he said.
In April, President Obama said the stimulus bill has succeeded and can be credited with helping business bounce back. Economic research firms Macroeconomic Advisers, IHS Global Insight, and Moody’s Economy.com estimate that the bill has added 1.6 million to 1.8 million jobs to the economy so far.
Without question, opportunities for waste and corruption have occurred just as they did during the ’30s, when “stories were legion about people leaning on shovels,” Taylor says. Indeed, the government agency charged with keeping track of expenditures and job creation has found the task next to impossible, releasing data that indicates stimulus money has been distributed to 440 congressional districts that don’t even exist: the “phantom zip code scandal.”
The stimulus act also has piled debt on taxpayers that may not get paid off for decades. That’s a concern for many, including J. Mack Swigert, the pavement-pounding Harvard graduate who eventually became a labor and litigation attorney. “I don’t know whether a stimulus package is good or not,” Swigert says. “On the one hand, it puts us further in debt. On the other hand, it keeps businesses going and people at work.”
That’s a sentiment he’s held ever since the Depression and experienced the relief that came from getting any kind of job, even a $15-a-week one. “My feeling then was if you had a job, you ought to be happy. And I was.” And that’s good advice for every generation, not just in times of want, but times of plenty.
WPA by the NumbersBetween 1935 and 1943, workers in the Works Progress Administration:
- Created 651,087 miles of streets and highways
- Repaired or improved 124,031 bridges
- Built 125,110 public buildings
- 8,192 parks
- 853 airport landing fields.
- Served almost 900 million hot lunches to students
- Operated 1,500 nursery schools
- Presented 225,000 concerts
- Produced 475,000 works of art,
- Published 276 books and 701 pamphlets.