Inequalities of wealth
Despite the growing prosperity of American society in the 1920s, the boom did not lead to higher profits for all industries. Two key industries where profits declined were agriculture and traditional industries.
Agriculture
Farmers had prospered during World War One. Many had taken out loans to increase their capacity to produce and meet the additional export demand from Europe. Machinery such as tractors also made farming more efficient, so farmers could produce more.
However, prices went down as demand from Europe decreased and a food surplusWhen there are extra crops and more than enough food to feed a population. arose. European governments responded to American tariffsA tax added to the cost of imports. on produce made by their famers, with a tariff on American goods. Farmers struggled to sell all their produce. As a result, prices fell and farmers鈥 profits dropped dramatically. Roughly 600,000 American farmers lost their farms in 1924, as they struggled to keep up with their debts. By 1928, half of all American farmers were living in poverty.
Traditional industries
The traditional industries declined and many people were made redundantLaid off from work because they are no longer needed. Those workers who managed to keep their jobs received very low wages.
The older industries suffered from overproductionThe production of more of a product than is wanted or needed. and under-consumptionA decrease in demand for a product so any extra production cannot be sold. This leads to lower prices. At the same time, new industries rose up to overtake older industries that had once been at the forefront of the economy. Two examples are the coal industry and the textile industry.
Question
How was the coal industry affected?
The coal industry was affected by the surge in demand for electricity. Demand had increased for electricity, to power homes and consumer products. However, oil had become a more popular way of producing it. The coal industry was producing too much coal, and not enough people and countries wanted to buy it. As a result, the price of coal went down. Many coal mines closed as a result.
Question
How was the textile industry affected?
New industries that produced synthetic textiles were in more demand. Businesses and workers in older textile industries, such as cotton and wool, suffered as there was less demand for their products.
Disadvantaged groups
The quality of life did not improve for all Americans during this period.
African Americans
African Americans continued to face discriminationTo treat someone differently or unfairly because they belong to a particular group. and economic inequality in all areas of the country. In the South, farm workers and sharecroppersFarmers who had to pay to use land by giving a proportion of their produce to the owner. struggled to make a decent standard of living. Agriculture was suffering overall. However, African Americans additionally faced racism and injustice, which led to them suffering significantly more than other groups. In urban areas, African Americans were most likely to be employed in menial, low-paying jobs.
In the 1928 election for president, Herbert Hoover鈥檚 campaign proclaimed that there would be a "car in every driveway, and a chicken in every pot". At the time, this standard of living was beyond the reach of the majority of Americans.
Native Americans
Most Native Americans lived in extreme poverty. Despite being the original nations of America, in the 19th century they were dispossessed (the Europeans took land from them) of large amounts of their lands. Mining companies, the gold rushA period between 1848 and 1855 when many people quickly moved westward across America to California to try to make money from mining gold. and Americans wanting to buy the valuable land fuelled the systematic loss of Native American lands. By the 1920s, they had been largely forced off their traditional lands to areas called reservationAn area of land managed by Native American tribes under the US government. This land was often unfertile and desolate. For Native Americans, life expectancy was extremely low and life was overshadowed by poverty.
Other groups
Immigrants were discriminated against and often forced to take low-paying jobs. The elderly and disabled also suffered as there was no national system of support or pensionA sum of money paid to people upon their retirement..