Who did not share in the boom of the 1920s, and why?

by helenkeenan (student)

While there was a boom for many Americans, for farmers, black Americans, the unemployed, low wage-earners and new immigrants’ life remained a struggle, the wealth wasn’t distributed evenly - there was a big gap between rich and poor in the USA. From 1914-1928 the number of millionaires increased by 28,000 however, less than 5% of the wealth was owned by the poorest 60% of Americans whilst 16%of the wealth was owned by the richest 1% of people. This meant the poorest people could not afford consumer goods and were so poorly paid there was little they could do about it as consistently low wages prevented many Americans from benefiting from the boom.

Problems in agriculture led to rural poverty. During the war farmers had prospered, they had increased exports to Europe by 300% but during the 1920’s they grew more food than was needed as almost half the American people were engaged in agriculture, new machines like tractors and combine harvesters helped farmers to produce more food, and high tariffs meant foreigners didn’t buy US products. Overproduction led to falling prices and falling profits for example wheat prices fell from $183 a bushel in 1920 to 38 cents in 1929. Taxes, mortgages and wages were rising, further reducing farmers’ profits and foreign competition increased during the 1920s as European agriculture recovered from the war, while Canada, Russia, Argentina and Australia also competed on the world market. Wheat producers in Canada had opted to go down the line of mass-production. This led to their prices falling and they therefore sold much more produce than American farmers. The new Republican government didn’t believe in direct help to farmers and even though Congress passed the McNary-Haugen bill, to allow the government to buy farmers’ crops, President Coolidge vetoed it twice as he believed it would encourage overproduction. In just the nine year period between 1919 and 1928, farmers income dropped dramatically from $22 billion to just $13 billion and in 1929 the average income of farmers was only 40% of the national average, and many farmers could not afford their mortgage; in 1924, 600,000 farmers went bankrupt, also rural areas did not have electricity, so most country-dwellers were excluded from the consumer boom, in 1926 alone the Department of Agriculture calculated that the net migration in favour of the cities was over one million people. Another problem for farmers was that some areas in the mid-west of America had been farmed to extensive amount which led to them becoming 'Dustbowls', which meant unusable desert; this meant they could not sell or use their farm. For the first time ever, the American farming population began to shrink; some farmers were evicted whilst others were forced to sell their land. Farm labours also found themselves out of work due to the advance in tractors and so drifted towards towns or areas such as California where fruit farms promised work.

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Similarly almost one million black farm workers lost their jobs during the 1920s. Many African Americans had moved from the south to the northern states to work in war industries just to find themselves being restricted by prejudice and poverty into living in poor districts. They managed to find jobs after the war but they were usually the lowest paid, the same is true for immigrants. Racism was rife in the South and 75% of Black Americans lived there. Black Americans were usually poor and exploited by white landowners. The African Americans were forced to do menial labour for very poor wages. They lived lives of misery in total poverty. The KKK made this misery worse and their membership increased 50 fold between 1920 to 1925. In the northern states, decent jobs went to the white population, discrimination was just as common in the north as it was in the South (though the Klan was barely in existence in the north and the violence that existed in the South barely existed in the north) this led to many black families lived in ghettoes in the cities in very poor conditions. New York's black Harlem district was a severely overcrowded and segregated community, with more than 250,000 citizens crammed into an area 50 blocks long and eight blocks wide. Many of these people had to sleep in shifts, going to bed when others went off to work. ‘Rent parties’ were common on Saturday nights, to raise money to pay the landlord on Sunday. In the 1920’s the black population did not share in the economic boom. Their only real outlet was jazz and dancing, though this was done to entertain the richer white population, and sport, especially boxing. New-immigrants faced the same sort of discrimination because they were not seen as proper Americans that had to be WASPS, White Anglo-Saxon Protestants, they stuck out more if they were black or had a different religion which the American people did not accept. They suffered prejudice as Americans thought the best jobs should go to the proper Americans not to others, this led to immigrants not earning high-wages or being unemployed, so much for the ‘land of opportunity’ they were hoping to find. Some urban poverty was produced by the pressure of numbers – many people had moved to cities because of rural hardship and Monopolies kept prices high and wages low, by stopping competition for customers; this didn’t help the poor or the unemployed.

Despite profits rising for big companies by over 80% wages only rose by 8%. Mechanisation often replaces skilled workers. Even though some industries did well during the 1920s others like the coal industry suffered greatly from competition from new forms of power, oil, gas, electricity – which became more wildly used. Cars and trucks began to take over from the railways, which were a major use of coal and efficient mining technology was invented. This led to overproduction of coal and pay cuts or loss of jobs as mines closed down, the workers that remained saw their wages decrease so that mining towns suffered acute hardship. 10% less coal was mind in 1929 than in 1919. In 1920 the wartime cotton boom collapsed and in 1921 the boil weevil destroyed 30% of the crop however in the mid-1920s the cotton industry over produced causing prices to plunge. In 1929 a coal miners wage was barely a third of the national average income. There were also problems in the textiles industry, where 'flapper' fashions were reducing the amount of cloth used to make clothes. As not many companies’ increased wages as product prices increased it meant that for low-wage earners and the unemployed the 1920’s was a really difficult time financially.

Unemployment was starting to become a huge problem. By the end of the 1920s nearly a quarter of the workforce were unemployed- 14m people, especially in the industrial cities of the north. Many people became known as hobos. As a consequence of unemployment many people also became homeless. People who had borrowed ‘on the margin’ to buy shares lost out in 1929 and their homes were repossessed. In 1929 250,000 people lost their homes. Some people ended up on the street and park benches. Others created shanty towns which were nicknamed ‘Hoovervilles’ after the president at the time Herbert Hoover, although some people were helped by charities such as the Salvation Army this was only temporary halt to the suffering of many Americans.