How successful was Roosevelt in solving the problem of unemployment in America?

            Franklin D. Roosevelt based his ‘New Deal’ on government spending. He believed in spending government money – even more than he could raise through taxes – to get the economy going again. He figured that the government needed to hire the unemployed. The government money would go into the pockets of the workers, who in turn, would spend their earnings. This consequently would cause demand for goods from factories, which would hire more people. In the end, this would result in solving the problem of unemployment in America.

The British economist J.M Keynes actually of this way of ‘buying your way out of trouble’. Actually, Roosevelt had based his projects on Keynes’ very own theory. However, many Americans opposed to this method. They argued that FDR should not spend what he did not have.

While some of Roosevelt’s actions were surely successful, others had slow effects but above all, contradictory ones. For example, the TVA (Tennesse Valley Administration) was a successful model of government intervention. It revitalised farmland and brought electricity in a vast area, but most important of all, it created a great number of industries and therefore millions of new jobs. On the other hand, though, the AAA (Agricultural Adjustment Administration) was not as effective. It set quotas to reduce farm production to force prices upwards, and also helped farmers to modernise. But if this made farm incomes rise by 50% by 1936, on the other hand, it led millions of poor crop workers, mainly black people, to being pushed off their land.

            Roosevelt set up a work relief agency, the CWA (Civil Works Administration). It gave work to four million people who were paid by the government. This agency, though, was shut down. It was deemed to give ‘boondoggle’ jobs: jobs that had no obvious public value, walking with balloons to frighten pigeons for example. Another agency was set up: the Public Works Administration (PWA). It provided work for the skilled and able-bodied workers. However, it did nothing for the millions who did not have a skill or a trade.     

Due to these actions, a short while after the 1932 elections the first signs of the lifting of the unemployment were visible. From 24.9% in 1932, the percentage of unemployed work force decreased to 16.9% in 1936. Despite problems with the Supreme Court and with members of his own party, not to mention with the republicans, Franklin Roosevelt won the 1936 election easily and said that “everyone was against the New Deal except the voters”. Consequently, with the renewed approval of the American population, FDR continued on his quest to solve unemployment as well as other matters.

In 1935, he passed the Social Security Act which began a basic system of welfare such as old age pensions, unemployment benefit and sick pay. It did not cover health care, and was set at a lower level than welfare in Europe, but it was better than nothing. Furthermore, to replace the CWA, Roosevelt created the WPA or the Works Progress Administration. This gave work to 8.5 million people, skilled or non-skilled.

Unemployment had reached a low figure in 1937 – 14.3% of total labour force unemployed. Prosperity seemed to be returning to the nation. However, by continuously pumping money into the government, America had been left with a four billion dollar deficit, a figure which Roosevelt panicked at. He consequently did what all conservatives had wanted: he cut spending. In my opinion, this was Roosevelt’s biggest mistake. This, of course, caused a new recession, and unemployment rose again, it reached 10.5 million. Unemployment was still 9.5 million when the Second World War broke out in 1939 and only fell below 1 million in the 1940’s due to the rearmament caused by the war.

As we can see, Roosevelt was not very successful in solving the problem of unemployment in America. He did manage to reduce the figures greatly, but he still did not give the finishing touch to the piece of work. Some things were still missing. Spending was only 75% of what it had been in 1929 and unemployment was still too high when the War broke out. He also committed the mistake of sometimes changing his mind on policies, for instance, when he cut government spending.

On the other hand, the crisis of 1929, created a series of problems, so serious and difficult to solve that only the intervention of the government could have stopped its course. As Roosevelt believed, the individual economic strength itself, would have never been able to deal with such a serious crisis.

In conclusion, I have to say that, certainly Roosevelt was not very successful in solving the problem of unemployment in American, but, on the other hand, he had tackled the situation better than Hoover. As the American historian Samuel Rosemann wrote, he, at least, tried to do something.

“Many of Roosevelt’s experiments were failures, but that is what experimentation entails. He would be satisfied he said if seventy-five per cent of them produced beneficial results. Experimentation depended on one of his distinctive characteristics: receptivity to new and untried methods and ideas”. (Written by American historian Samuel Rosemann)

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