Published Jun 25 2009 by Peak Oil Blues
Archived Jun 27 2009

Greater depressions: social and behavioral trends of economic collapse

by Kathy McMahon

In this post, I’d like to look at parallels between events that happened during the Great Depression, and events we see happening around us today. Too often as events unfold, they appear to be isolated, and disconnected. It is only in retrospect that we see the interwoven framework.

The first section may be more familiar to you, as I will look at similarities in unemployment, eviction and homelessness during the 1930’s and today. But in the second section, I was surprised to learn how similar the psychological, social and emotional impacts are between our Great Depression and theirs. In the 30’s we saw economic hardship impact access to adequate nutrition, and health care, opening up an avenue for increased disease (such as diarrhea and infectious disease), malnutrition, and death. We might assume that these deaths were from suicides, homicides and increasing rates of domestic violence, alcoholism, and a host of other issues. But few of us pause to ask whether people made different decisions about whether to marry or divorce and whether we are making these same choices today. I was surprised to find that communities were more open to allowing gambling as a new stream of tax revenues and that increased gambling increase the risk of suicide. We can assume that rates of domestic violence, and infant mortality increased, back then, and even bank robberies, but are we seeing an increase in these things now? Read on. I will examine each of these in turn, in Section II, and I think the answers will surprise you too.

First, the framework:


Unemployment: Then and Now
At the start of the Great Depression, unemployment was at 8.9%, reaching a height of almost 25% in 1933 before dropping back. This was in the age before statistical funny-business.

To compare these “Depression Era” unemployment figures with today’s, we must adjust these official figures to “re-enter” what Shadow Government Statistics calls “discouraged workers.” A discouraged worker was one who was willing, able and ready to work, but had given up looking because there were no jobs to be had. They began to “disappear” from official unemployment rolls, during the Clinton Administration, as part of the “Clinton Miracle.”

The numbers in the paragraphs add these discouraged workers back into the unemployment figures, just as they were included during the Great Depression. It gives us a much more serious view of our predicament:

Today in the US, official unemployment rates in May 2009 are highest in Michigan, at 14.1 (26.1 ) percent, followed by Oregon at 12.4 (24.4 ) percent, Rhode Island and South Carolina tied at 12.1 (24.1 ) percent. The national unemployment rate for May was 9.4 (21.4) percent. In contrast, for most of my lifetime, unemployment hovered around 5%.

The velocity of change is equally stunning. Three-quarters of a million Californians lost their jobs in the last twelve months according to official government statistics. Almost a quarter million in Texas. Eighteen other states each had 100,000 more jobless citizens over the last year.

To get a sense for the magnitude of the problem, during the Great Depression, 13 million people became unemployed. Today, according to the Bureau of Labor Statistics, the total number of Americans who are not working full-time but ought to be, is about 22 million. Of course we are a bigger country, but still, these figures give you a sense for the sheer magnitude of the problem–the number of people who are out of work and need help.

The per capita income in the US fell from about $700 in 1929 to some $400 in 1933. Parallels commonly seen today are families losing one full-time worker, or each earner being forced to take a one-day pay cut per week. These families see dramatic cuts in income, while technically remaining “employed.”

Obama’s stimulus package offering youth summer jobs is the worst kind of offense, as it re-directs employment counselors away from helping adult applicants, and focuses this same money on hiring counselors to help kids secure minimum wage jobs. Reason? Teens will spend that cash in the malls, while the adults, desperate to pay for basic necessities, won’t provide enough of a “stimulus” (private communications.) Frightening, but true.

Home Building/Buying
Home building dropped by 80% between the years 1929 and 1932. Today, sales of new houses are more than 70 percent below their 2005 levels. In May of 2002 we saw a seasonally adjusted annual rate of 1.73 million units. Six years later, that adjusted annual rate was 532,000, a 70% drop. Forty-eight percent of that drop happened in the last year.

During the Great Depression, there were two million homeless people migrating across the United States, and in 1932, 273,000 families were evicted from their homes. Today, 1 million or more foreclosures have happened in this year alone. Historically, in the last five years, homelessness figures have ranged from 3/4 million to 3.5 million, including 1.5 million children. One thing is certain today: the number of people, particularly families, seeking beds in homeless shelters has increased dramatically, from double to a even a ten-fold jump in some areas. There are currently 2,104 Homeless Shelters, and if these contain even 300 beds each (and most of them don’t contain a fraction of that number), it barely makes a dent in supplying someplace for homeless people to sleep. Meanwhile, one in nine homeowners nationwide is either behind in their mortgage payments or their family homes are in foreclosure. If there are 75.4 million homeowners (2006 figure), that’s 7.5 million people in trouble, compared to less than one quarter of a million in the 1930’s (3.3%) This rate as reached dramatic heights in Michigan where one of every 137 homes is in foreclosure.

Public Protests to Stop Evictions
Protesters are staging eviction blockades reminiscent of the citizen resistance movements of the 1930s. Organized community protest with support of local sheriffs are occurring once again. Sheriffs in Illinois and Michigan made headlines when they simply stopped carrying out eviction orders on tenants. A Florida police officer asked a lawyer there, if he too, could refuse. “They see the human misery firsthand,” the lawyer says. “It’s civil disobedience from within the system. That’s kind of odd.”

“Foreclosure is not the end of the process; it’s the beginning of stage 2,” says Steve Meacham, a community organizer with City Life/Vida Urbana, a nonprofit that has orchestrated 11 blockades in Boston recently, nine of them successful. Activists are changing the rules of an overwrought system. With record-high homelessness, it makes no sense to force people out of their homes and into the street and these protests are designed to stop it.

Renters Pay Rent and Are Evicted Anyway
Twenty percent of homes facing foreclosures are rentals, “[and some estimate] 40% of those facing eviction nationwide, and 70% in some cities, are renters who paid their bills>. Their landlords, without a word to anyone, did not.” And the pace is accelerating: Total foreclosure filings – which include default papers, auction sale notices and repossessions – reached 803,489 in the first quarter, according to a report released recently by RealtyTrac. We’ve seen a 17% jump in one month from February-March 2009 – and a 46% jump since March 2008.

How does this joblessness and homelessness impact people’s emotional and physical welfare? I will look at current rates of suicide, increase in gambling, domestic violence, infant mortality and foster placements because of neglect and child abuse, the rising need for food stamps, the fall in marriage and divorce rates, extended family cohabitation, and finally, crime-particularly bank robbery and shoplifting. I will compare each of these to events of the last Great Depression.

While actual suicide statistics lag, and the most recent nationwide are from 2005, National Suicide Prevention Lifeline, the only national 24/7 suicide prevention hotline, saw a 75% increase in calls between April 2007 and April 2009. An informal survey of 10 call centers revealed that one in four callers reported financial distress as one of his or her problems.

Suicide calls to the crisis line climbed 21 percent according to one Dallas local report. In Tampa, there was a 122 percent increase in calls, according to another report. In Oregon, one professional said “It’s the worst it’s ever been.” Charlotte, North Carolina police reported a 55 percent increase in suicide attempts over the previous year, and a local hospital saw a nine percent increase in patients who’d attempted or considered suicide. For every suicide, there are probably 100 attempts according to this news story.

Suicide rates are between two and four times higher for people who can’t find a job than for people who are employed, according to the American Association of Suicidology.

In New Jersey, where crisis calls have increased 20% over last year, workers say: “So many more of our callers are distraught over financial, employment or housing issues and desperately need our support… For so many people it’s difficult to talk to those closest to them about personal problems, fearing criticism or rejection. With issues of unemployment or financial stress, there is often additional shame.”

Talk to the one in four around you that are facing economic hardship, and let them express their frustrations, fear, shame and self-blame. You may be saving a life.


The Great Depression led to a much greater legalization of gambling. The antigambling mood changed as tremendous financial distress gripped the country, especially after the stock market crash of 1929. Legalized gambling was looked upon as a way to stimulate the economy…In 1933, Michigan, New Hampshire, Ohio, and California legalized parimutuel betting. The California Legislature adopted a statute in 1933 referred to as the Horse Racing Act. The statutes took effect upon adoption by the voters of an amendment to the Constitution in June of 1933. During the 1930’s, 21 states brought back racetracks….Nevada legalized most forms of gambling in the State in 1931.

Lottery sales are up. Of the 42 states with lotteries, 22 set sales records last year, including New York, New Jersey and Connecticut. They’ll do even better in 2009. But will the gamblers?

The suicide rate among compulsive gamblers is more than 20 times higher than in the general population, according to the crisis center. As during the Great Depression, some people facing financial troubles (and State Governments as well) turn to gambling as a possible salvation. In fact, those who help with compulsive gambling problems are seeing an increase in requests for help. Calls to the 1-800 BETS OFF helpline have increased 41 percent from FY 2002 to FY 2008.

Domestic Violence
Florida saw an almost 40 percent jump in demand last fall, in those seeking help at domestic violence centers. Experts say it is related to the worsening economy. Florida’s Department of Children & Families Secretary George Sheldon calls the situation “the worst I’ve seen in years.” Rhode Island has recently seen a 25 percent increase in felony-level domestic violence crimes. In better times, more than 53,000 women, men, and children across the country received services from domestic violence programs, half of them children. Back then, more than 14% were turned away because of lack of resources. Today, as the collapse continues, “violence programs face a trio of economic factors – cuts in federal funding, increased demand for services, and decreased private donations as people lose their jobs or see a downturn in their personal finances.” (op. cit) Reports of increased need trickle in from various parts of the country.

Suffer the Little Children:

“Michigan is swamped with foster kids.”
Infants and children are dramatically impacted by economic collapse, as well. One of the dirty little secrets of economic crashes, as in the Great Depression, is that underweight babies die from a host of problems in the first year of life, and mothers don’t receive pre-natal care. Today, one County in Michigan reports an 18% increase in the infant death rate since 2000, although that is well below the state average. Over 8% of the births in this area, are low birth weight babies compared to 36% of babies born in Michigan’s poorest communities, resulting in increased infant mortality and increasind the risk for developmental delays and chronic disease. This was before thing started to get really bad. Children in need of foster placement has increased 35% as well. In Milwaukee, infant deaths outpace homicide, at a rate of 120 to 71. African-American children in that city has less chance of living beyond his or her first birthday than an infant in Albania, Sri Lanka or Thailand. In Virginia, infant mortality rates claims the lives of seven times more children each year than car accidents do. Tennessee’s preterm birth rate increased 13 percent from 1995 to 2005. Expect all of those figures to continue to rise as the collapse worsens. We had expected, by this point in our development as a nation, we would have gotten infant mortality rates down to around 4%.

Food Stamps
Started on May 16, 1939 and ended in the spring of 1943, when “unmarketable food surpluses and widespread unemployment–no longer existed.” At its peak, 4 million participated in this period. Food aid returned, however, and by August 2008, participation had reached an all-time (non-disaster) high of 29 million people per month.

Today, one in ten Rhode Island residents are receiving food stamps (SNAP), well over half of them had never before applied for assistance of any kind. Still, poverty advocates still claim 35 percent of eligible Rhode Islanders are not enrolled. “…There are a lot more people now who are saying, ‘I never would have imagined I’d be in this situation, but here I am.’ ”

But while 10% of Rhode Island’s population receives aid, Oregon is over 15% and South Carolina follows close behind. Almost 11% of the US population is currently receiving food stamps, and this is increasing at a rate of almost 2% a month; we’ve seen an 18.6% increase in the past year.

But what are benefits like? The average weekly benefits nationwide average $22.24. In Oregon, for example, where the average family size is 3, the average benefits provide $6.89 per person for the week. These benefit figures include the additional funds provided by the Obama administration.

Marriage and Divorce
From 1929 to 1933, the marriage rate fell by 22 percent and the divorce rate dropped by 25 percent. What about now?

“Although marriage rates (measured as a proportion of the population) have been sliding in recent years, the recession is expected to exacerbate this trend. Couples living together before marriage are expected to put off the big day and ride out the tough economic times. This will see marriage rates decline by a further 2.8 percent during the year, compared to an estimated decline of 6.0 percent in 2008.”

“Young couples appear to be deferring the decision until times are more certain” says one UK reporter.

If you do marry, however, you’ll find it cheaper to do so. The average cost of a wedding dropped by over 20 percent in 2008 and a further 8 percent decline in costs is expected this year.

Nationally, divorce lawyers saw a 37 percent decline in 2008, but in states that have not yet been affected by the collapse, like Utah, divorce statistics are unaffected.

In some cases, the economy is forcing divorced couples to live together, or postpone the divorce legally, but continue to share residents and living expenses. “They can’t afford to live separately. They can’t afford separate residences. More and more people, this is what they’re doing, and this is awful because they’re roommates now with their ex-spouse,” said one divorce attorney. Horrible or not, family togetherness now, as it was during the last Great Depression, will become increasingly the norm.

Let’s Live Together
Also during the Great Depression, many young people could not afford to leave their parents and start their own households. Today, the number of multigenerational houses has increased from 5 million in 2000 to 6.2 million in 2008. In a recent AARP poll of people ages 18 and older, about a quarter were living with their parents or in-laws; and about one in seven were living with a sibling. About 15 percent of the 1,002 people polled said they’re at “some risk” of having to move back into their parents’ home; about a third of those because of job loss.

To pay the mortgage or avoid foreclosure, extended families are also moving in together, just as their grandparents did. “This is an important time for family to help, the way the housing market is going. Our story is a testament to how families should come together to help with a mortgage.” said one young publicist.

From 1930 to 1932, in the early years of the Great Depression and nearing the end of Prohibition, a spike in crime swept the country because of turf battles between bootleggers and disorderly conduct among their customers.

With the end of Prohibition in 1933, however, crime rates began to drop. More people were spending time at home, making it more difficult for people to commit burglaries, in that era.

And who can forget Bonnie and Clyde? While famous for their bank robberies, they were often engaged in smaller capers. And today, like the “Public Enemy Number One,” the bank robbery rate has risen dramatically,” according to an FBI spokesperson. During 2008, NYC saw a 54% rise over 2007. In Orange County, bank heists jumped 41% to 145 robberies.

Today, the thievery remains centered on shoplifting, one profession that appears unaffected by the economic downturn. Organized crime appears to be increasingly dominating this once solo occupation, however.

Only when we line up the past along side the present can we begin to see stark similarities in the hardships of our grandparents and great grandparents to our own lives today. Then, as is the case today, nobody thought of themselves as living through “The Great Depression.” Instead, they saw a job loss or an eviction as a personal, not a social problem. They felt ashamed. They hid their problems. Some, however were able to engage in public protests that demanded action and acted on their own behalf and that of their own community.

If we remain frozen in our own economic hardship, (an understandable but deadly pre-occupation) we will lack the objectivity to move ourselves into a position that offers us maximum flexibility and options. Most of us, like in the last great economic collapse, will feel bewildered and frightened by our situation and the events that will swirl around or over us. Some, fully cognizant of their place in history, will show true innovation, mitigation, and community leadership. Knowledge is power.

I hope this article, in some small ways, encourages you to begin to act now, and not to wait for this collapse to be televised or only understood in a historical context. It’s happening now. It’s happening all around you, to you and your neighbors. Stand up, take heart and take action.


Feeling suicidal? Most people who fail to kill themselves are glad they are now alive. The phone number for the National Suicide Prevention Lifeline is 1-800-273-TALK (8255)

Have you turned to gambling to solve your financial problems? Get free confidential help here.

Need a homeless shelter? You can find a national directory here.

Need extra money for food? You can buy produce plants with food stamps. Learn how to enroll here… and don’t be put off if you aren’t eligible on paper. Often there are loopholes that aren’t in print. Call up and see.

Don’t want to be foreclosed on quietly? Kick up some dust and find some good ideas here.

~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~

More suggestions. Sharon Astyk just posted Order in Default to "give people who are already facing default a rational way of approaching the issue".

Author Kathy McMahon was mentioned today in the Freakonomics blog at The New York Times (Peak Oil Therapy):

Worried that peak oil is about to put a sudden end to cheap kiwis and civilization as we know it? Kathy McMahon is a clinical psychiatrist who wants to help. She runs a website for people with peak-oil panic, which pledges to help you separate “what’s ‘mental preparation’ from what’s just ‘acting mental.’”


Original article available here