Unemployment
One of the main effects of the Depression was the significant increase in unemployment in Britain. It rose to 2.5 million in 1933. This was 25 per cent of the workforce. Areas of heavy industry in Northern Ireland, Scotland, Wales and the north of England were worst hit, including the following industries:
- coal
- iron
- steel
- shipbuilding
These industries were already struggling because they had not modernised after the war, and had been badly affected by competition from other countries. Sadly, these industries crumbled.
For example, when the Palmers Shipbuilding and Iron Company closed down in Jarrow in the north-east of England, the town’s unemployment rate rose to 68 percent, and it was said the town of Jarrow effectively 'died'.
A vicious circle – the impact of unemployment
The 2.5 million who were unemployed had no wages and could not buy things. This had an impact on the demand for goods produced in Britain, and more businesses went bankrupt which then led to more unemployment.
The problem was not helped by the fact that unemployment benefit, the dole, was not enough to cover basic costs such as food and clothing.
