The Market for Farm People

by Helen Hill

U.S. Department of Agriculture

December 1936

 

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FORMAL unemployment insurance, between 1929 and 1933, was confined to scattered firms in exceptional industries and a few highly enterprising states. But the three quarter million people who made up the net migration back to the land between 1930 and 1933 found unemployment insurance on the farm.

There is an exceptional batch of records on this subject. Dam building is a skilled business. When the Tennessee Valley Authority began its operations, there was danger of Knoxville becoming a Mecca for the unemployed. As part of a definite labor policy, the Authority encouraged the registry of qualified persons already on the spot. Some 44,000 applications were filed. Power drill operators; cement finishers; carpenters; electricians; shovel operators; painters, stone and brick masons; timekeepers; plumbers; steamfitters; machinists; the list read like a trade directory. During the first twenty months of its operation, the TVA gave employment to more than 13,000 laborers, none of whose skills were remotely connected with agriculture, yet practically all of whom were found on hand within the Valley limits.

Clearly, a good part of industrial America spent the depression on the farm. But the cities didn't pay the board bill.

Old age assistance, except as a charity measure, has been almost as rare in America as unemployment insurance. During the latter part of the 1920's, when the speedups of the new technology set forty as the age when factory workers are divided into the quick and the dead, the farm offered a welcome alternative to permanent unemployment. The farm didn't get paid for this support, either.

Such a balance of payments is obviously not a balance. If America's farms and America's cities were separate political entities, trade between the two would be today in much the same condition as trade between Europe and the United States, and for reasons (including the tariff reason) that are much the same. The fact that they are not separate political entities prolongs the period of breakdown.

On the one hand, agriculture continues to use the capital of its soil to make up the disparity between the prices of farm commodities and the prices of industrial goods. On the other hand, large agricultural areas withdraw from the price system almost altogether.

The land that was least able to support a large population lost the most people when times were good, but took on the most people when times were bad. Some of the most extreme shifts are in the agricultural counties of states bordering on the great industrial centers.

The backing up of population in the poorer farm areas is increasing the number of communities incapable of supplying the most elementary services in connection with education and public health. It is increasing the population fitted only for the unskilled, inaccurate and intermittent work of which both industry and agriculture have decreasing need.

The growth of such farm areas decreases the market for industrial goods. The relation between farm income and factory payrolls, between farm purchasing power and urban employment, has been too well and too frequently emphasized to need further mention. The existence of communities living on the ragged edge of the commercial system is, however, a threat to industry not only because of its lack of consuming power. Its producing power is also a threat.

Northern mill wages, in recent years, have been low in part because southern mill wages were lower. Southern mill wages were and are low because back of the mills where existence is precarious are the mountains where existence is more precarious still, peopled by men and women to many of whom a pittance seems like a windfall.

They are there, waiting for a chance to reenter the industrial system, willing to reenter the industrial system at wage levels which weaken the standards of consumption that a mass production industry must maintain if it is to survive.

Economies with industrialized sectors cannot maintain life on too great a number of income levels. The market for industrial goods must be kept open if the machines are to be kept running. Stabilization of the market for farm people is directly related to stabilization of the market for industrial goods.

HOW YA GONNA KEEP 'EM...

Pictures of Rural America by Lewis W. Hine