Download Real wages

The Economy Inspires Trust
• Wonderful prosperity
– Stock market sky rockets throughout the 20s
– Real wages climb 40% in the 20s
– Low unemployment
• Everybody ought to be rich
– Business is good, people are confident in business
– Investments bring people lots of money
The Economy Inspires Trust
• Welfare Capitalism
– Employers raise wages
– Better benefits include paid vacations and
health plans
Signs of Trouble
• Uneven Riches
– The economy was truly out of balance despite
what it seemed
• Economy was dominated by huge corporations not
small business
• Mainly the rich got richer not everybody
• Personal wealth was very unbalanced
– .1% had incomes over 100,000
– 71% made less than 2,500
– 80% had no savings
Buying On Credit
• Installment buying
– Purchasing expensive items and pay, with
interest, over many months
• Get rich quick
– More and more people are playing the stock
market
– People that don’t have the money buy on
margin
• Pay only a percentage of the price and borrow the
rest
Signs of Trouble
• Too many goods, too little demand
– Production rose faster than real wages
• Causes a surplus of goods
– Many industries slumped as a result of
over production
• Farmers have hard time
– Farmers have an increase in production
but a decrease in demand
– Crop prices fall
– Farmers can’t afford to pay for land or
machinery
“We were in the Depression
before 1929, we just didn’t call it
that.”