Cities in The Great Depression - United States

United States

America's larger cities in the 1920s enjoyed strong growth. With the end of large-scale immigration, populations stabilized and the plentiful jobs in the cities pulled families upwards in terms of social mobility. Investment in office buildings, stores, factories, utilities, streets, and, especially, apartments and single-family homes, added substantially to the infrastructure, and contributed to the notion that better times lay ahead. However, after 1929, the optimism ebbed away, overwhelmed by a deepening pessimism that made long-term private investment seem inadvisable.

The Depression's damage to large cities, suburbs, towns and rural areas varied according to the economic base. Most serious in larger cities was the collapse of the construction industry with new starts falling to less than 10% of the norm of the late 1920s. Although much needed work was deferred, maintenance and repair of existing structures comprised over a third of the private sector construction budget in the 1930s. Devastating was the disappearance of 2 million high paying jobs in the construction trades, plus the loss of profits and rents that humbled many thousands of landlords and real estate investors.

Second came the general downturn in industry, especially heavy manufacturing. Steel in Pittsburgh, Pennsylvania, and Gary, Indiana, and automobiles in Detroit took the heaviest hits, along with railroads and coal mining. In these sectors, the largest cities suffered somewhat less than smaller mill towns, mining camps and railroad centers. Unemployment was a problem everywhere, but it was less severe among women than men, among workers in nondurable industries (such as food and clothing), in services and sales, and in government jobs. A sharp educational gradient meant that the less skilled inner city men had much higher unemployment rates than the high-school and college educated men who lived in outer zones and suburbs.

Although suburbia stopped growing, it did not suffer nearly as much as the central cities. While some unemployed came to the cities looking for relief, it appears that even larger numbers of unemployed returned to family farms. For the first time ever, the movement of native population was away from cities and toward rural America.

The fiscal soundness of city and county governments was challenged by the rise in relief expenditures and the sharp fall in tax collections. The Hoover Administration had encouraged state and local governments to expand public works projects, which they did in 1930 and 1931. While this expansion may have slowed the rise in unemployment, the spending was a luxury that could not be borne in the face of falling tax revenues and the unwillingness of investors to put more money into municipal bonds. After 1933, new sales taxes and infusions of federal money helped relieve the fiscal distress.