Friday, November 22, 2013

Economic History blog dedicates space to the Great Depression

Echoes is an Economic History blog worth visiting. Here Philip Scranton's take on the early phase of the recovery and how FDR and the often forgotten Hugh Johnson wanted a wage-led recovery.
As in earlier economic recoveries, in 1933, U.S. production began increasing more quickly than workers could find jobs. A 50 percent increase in industrial output from March to July generated just 14 percent more factory employment. With orders rising, manufacturers commonly extended current employees’ weekly hours instead of rehiring those who had been laid off.

Hugh "Iron Pants" Johnson, director of the National Recovery Administration, focused on closing this gap as President Franklin D. Roosevelt's first 100 days in office came to an end in June. The purpose of the National Industrial Recovery Act was simple: "Wages are to be increased and hours of work curtailed in order to distribute more widely the available employment," according to the Economist.

"The Administration has made no secret of its belief that if the slump is to be overcome, employment and wages must rise much faster in the initial stages of the recovery than output and prices."
Read thing whole thing here.

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