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Jung Won (Claire) Lee


Ms. Manning
English, Block E
6 November 2015

Q: How did the Great Depression have an effect on economy and poverty?
When seniors of society refer to the good old days, it is unlikely that they are
referring back to the days of the Great Depression. The Great Depression, as its name
suggests, was the very apex of misery and down-turns. Although the event occurred
approximately eighty years ago in the 1920s to the 1930s, it is an event that is reminisced to
this day. The reason why it is invoked intermittently is due to the impact it has had on our
society. Yet, the greatest impact that the Great Depression had on economy and poverty was
the unemployment rate.
Before commencing further analysis, it is imperative to cognise the origin of the
Great Depression. Distinguishably, the Wall Street Crash provoked this event but import
duties which discouraged trade, savings due to uncertainty of the economy, unemployment
due to low demand, outdated British industrial practices, and partial government actions led
to destitution, says the British Broadcasting Company (BBC). The source also affirmed that
unemployment rates in Britain rose to 2.5 million (25 percent of the workforce). History
states that 6 million American contemporaries were unemployed. Although many believe that
less production caused the high unemployment rate, studies show surprising results. The
study conducted by the National Institute Economic Review states quote on quote A general
conclusion from both sets of studies is that wage flexibility and a willingness to adopt parttime working have been important factors behind the generally modest increase in
unemployment.

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In order to resolve these issues concerning unemployment, the government executed
some recognition worthy solutions. The BBC article states that first, the government
discontinued its gold standard, which is quote on quote Where the total currency in a
country is equal in value to the amount of gold that the country owns. The aftermath of this
policy resulted in the government to be able to enlarge the money to disseminate. Also, the
government reduced interest rates which facilitated peoples ability to pay back their
mortgage. In addition, the government passed the Special Areas Act of 1934 which intrigued
corporations to initiate their businesses in dejected operations. Lastly, local assemblies
constructed over 500,000 council houses which injected more capital into the economy.
No time period is impervious and it is flagrant that the Great Depression has its
signature on our society today. The hardships during this period prompted several extremist
political movements such as Benito Mussolinis regime in Italy. Later, this dictator influenced
Adolf Hitler of Germany who escalated the tension and triggered World War I, states History.
As of today, the Daily Herald addresses the issues of the constantly expanding gap between
the wealthy and the poor. Rates of unemployment for the lowest-income familieshave
topped 21 percent, nearly matching the rate for all workers during the 1930s Great
Depression the Daily Herald claims.
Though a tragic time of history, the Great Depression reinforces the perception that
the society must abridge drastically on its expenditure. To add, society must never be ignorant
of the capacity of their possession, always be on guard, and be ready to act when exigency
breaks out.

Works Cited
"The Depression of the 1930s." BBC News. BBC, n.d. Web. 06 Nov. 2015.

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History.com Staff. "The Great Depression." History.com. A&E Television Networks, 2009.
Web. 06 Nov. 2015.
"Employment Gap between Rich, Poor Widens." Daily Herald (Arlington Heights, IL). Daily
Herald, 17 Sept. 2013. Web. 06 Nov. 2015.
Solomou, Weale, Martin, and National Institute Economic Review. "Unemployment and Real

Wages in the Great Depression." National Institute Economic Review. National


Institute Economic Review, Oct. 2010. Web. 6 Nov. 2015.