Daniel Amsterdam: Down and Out (Again): America's Long Struggle with Mass Unemployment

Daniel Amsterdam is an historian of American politics whose research focuses on social policy, state development and cities. He teaches at The Ohio State University.

Periodic spikes in unemployment are as American as the Big Mac.

From the early years of the nineteenth century through World War II, the American economy tanked at least every decade or two. U.S. history textbooks are filled with boldfaced subheadings that begin “The Panic of…” followed by an assortment of years, whether 1837, 1857, 1873, 1893 or 1907.

As the twentieth century progressed, the U.S. economy continued to sour with remarkable regularity: in 1914, 1920, and, of course, during the Great Depression. A long stretch of prosperity and stability followed World War II.

But by the end of the 1960s, the U.S. economy’s historic case of the wobbles had returned. Hard times defined the ‘70s, the early ‘80s as well as the late ‘80s and the early ‘90s.

Now here we are again, dealing with the consequences of what is universally described as the worst economic crisis since the Great Depression. In the fall of 2009, the national unemployment rate peaked at 10.1 percent and today remains at a distressingly high level, just over nine percent.

What is just as American as all this, however, is providing help to the jobless during moments of mass unemployment. At least from the 1850s forward, during all of the downturns listed above, Americans took a variety of steps to aid the unemployed.

Nearly all of these efforts—including those that took place long before the New Deal—involved some degree of government action. However, before the 1930s, local governments, rather than Washington, took the lead in offering assistance.

Rediscovering this history underscores an important fact. Leaving the unemployed to fend for themselves, as some pundits and political leaders have recently proposed, would be a radical departure from the American past.

The Birth of a Policy Tradition

The possibility of truly widespread unemployment arose with the spread of manufacturing and wage labor in the decades leading up to the Civil War. Societies based primarily on agriculture do not experience “unemployment” in the same way as industrial ones do.

As the nation’s first factories developed, primarily in the North, they increasingly forced self-employed craftsmen out of business and lured more and more Americans off the farm. By the time the South fired on Fort Sumter, cities like New York, Philadelphia, and Boston were filled with wageworkers. During every economic bust, those cities became filled with the unemployed.

Local governments were the first public entities to address mass joblessness. From early on, one of their leading strategies was increasing public employment.

When the ranks of the unemployed swelled after the economic panic of 1857, the mayor of New York put over a thousand men to work fixing up Central Park and gave others jobs constructing roads. Philadelphia pursued a similar but smaller program after thousands of protestors gathered in Independence Square demanding that public officials do something to help the jobless.

During the economic crisis of the 1870s, a number of cities increased spending on public works projects as a way to help the unemployed. Some also upped funding for public charity. In both the 1850s and the 1870s, public action supplemented the work of private organizations, such as churches and charitable societies.

The American economy crashed again in the early 1890s. Accurate employment statistics for the period are hard to come by, but according to some accounts, the national unemployment rate climbed as high as 17 percent.

During the especially harsh winter of 1893-94, many cities organized emergency committees to coordinate local campaigns on behalf of the unemployed. In some cities, mayors established these bodies. Elsewhere, they were founded and run by private organizations, like local chambers of commerce or large charities. Nonetheless, even privately run committees often collaborated closely with public officials and in many cases enjoyed quasi-public status.

Whether publicly or privately run, few if any of these emergency committees came close to meeting the needs of the unemployed. Nonetheless, they made sincere attempts to provide makeshift work on a number of public and private projects....