Impacts of the New Deal

The New Deal changed America politically, socially, and economically. While some New Deal programs still exist today, many modern welfare programs are inspired by its changes. How did it change America? Did everyone benefit from it? What was the impact of the New Deal? Let's explore those questions and more!

Long-Term Impacts of the New Deal

In 1929, America found itself in the Great Depression because the stock market crashed. Banks that made bad investments lost all of their depositor's money, which led to people rushing to withdraw from their banks that were unaffected by the crash. Many people lost their homes and jobs.

President Franklin D. Roosevelt was elected in 1933 and sought to combat the Great Depression by introducing the New Deal. The New Deal had three goals, the three R's, Relief, Recovery, and Reform. This means that the New Deal would provide immediate relief to needy families, jobs that would allow people to recover, and changes so that an economic crisis like the Great Depression never happened again. Let's explore the long-term impacts of the New Deal!

Fig 1: Mural

Social Impacts of the New Deal

Before the New Deal, there were no social safety nets. If someone lost their job, tough luck. It was not the government's role to assist them. If an elderly person was unable to work, then they had no income. Elderly people tended to live impoverished and were a financial strain on their communities.

The Social Security Act of 1935 addressed these issues. Unemployment insurance was created, if people met certain qualifications and lost their jobs, then the government would temporarily assist them. The elderly could draw social security pension if they were older than sixty-five years old. Social Security is a program created by the New Deal that still exists today.

Fig 2: Surplus Food Stand that Accepts Food Stamps

Other programs were created to ease the burden of people struggling with the Great Depression. Emergency relief funds were given out to people who had low incomes. Food was given to those who couldn't afford it. Housing was provided for some struggling families.

The New Deal also had lasting impacts on women and people of color. Let's take a closer look!

New Deal Impact on Women

Women worked while men were away during World War I. When the men returned and took back their jobs, women were forced out of the workforce. Around 1933, the employment rate for women was at twenty-five percent, where it would remain until World War II.

During the New Deal, we see women in the political sphere. Francis Perkins, Secretary of War, was the first woman to work in the Presidential Cabinet. First Lady Eleanor Roosevelt made the role of first lady political as she advocated for women's, African American's, and Native American's rights.

Fig 3: Woman with Child

When the minimum wage was established, men were granted higher pay than women. If a woman worked a skilled job, she still earned less than men in unskilled labor. When a single mother tried to get benefits, she would be interviewed. The interviewer would ask her embarrassing questions and make her explain why she didn't have a husband.

The New Deal introduced plenty of legislation that was aimed at women, some good and others bad. Women were valued in their relationship with men or the family unit. This means that the benefits that women received either came through their husbands, or they received them because they were mothers.

The New Deal Impact on African Americans

After President Roosevelt's first term, African Americans stopped voting for Republicans and became loyal Democratic voters. This is because the Roosevelt Administration did more for African Americans than any other president since Abraham Lincoln. The Republican Party was the party of Lincoln, but the Democrats were the party who assisted African Americans during the Depression. While the New Deal excluded African Americans from many programs, it assisted many Black people.

The New Deal Impact on Native Americans

Some New Deal programs aimed at giving autonomy back to the Indigenous nations. There was also the Civilian Conservation Corps - Indian Division (CCC-ID) which hired indigenous men to build infrastructure on reservations. While some Native Americans welcomed the governmental assistance, others wanted the government to remain off reservations. Many of the structures built by the CCC-ID still exist today.

Fig 4: CCC-ID Celebration

The Economic Impacts of the New Deal

The second of the three R's was recovery. The Roosevelt Administration needed to create jobs so that Americans could recover from the Great Depression. Unemployment was up to twenty-five percent in 1933 and was down to fifteen percent by 1940.

The New Deal did not end the Great Depression and did not have great lasting economic impacts. What the New Deal really did was change the relationship between government and citizens, in part by creating legislation to protect workers. The Fair Labor Standards Act ended child labor and established minimum wage. The Social Security Act created a safety net for the unemployed and the elderly. Some unions were protected by the Wagner Act.

Fig 5: Seamstress Working During the Great Depression

New Deal Impact on Federalism

The New Deal had lasting impacts on the way that the American government operated. America worked on a system called "dual federalism" this meant that the state and national government worked together but had clearly defined roles. Poverty, social welfare, and minimum wage are examples of state responsibilities. The Roosevelt Administration began to blur the roles of state and government.

This blurring of the roles led to the American government operating by "cooperative federalism." State and national governments work together, but their exact roles are not clearly defined. Americans began to consider it the role of the government to ensure the safety and happiness of the people by maintaining a social safety net.

How Did the New Deal Prevent Another Great Depression?

The Roosevelt Administration introduced important pieces of legislation that help prevent another Great Depression, the Banking Act of 1933 and the Securities and Exchange Act (SEA). The FDIA created the Federal Deposit Insurance Corporation (FDIC) which federally backs banks. Banks pay a premium to the government and if the bank were to fail then the depositors would get repaid. No insured funds have ever been lost, and this is the longest lasting of Roosevelt's programs.

The SEA created the Securities and Exchange Commission (SEC) which regulates the stock market. It is supposed to prevent insider trading and secret trading that would make stocks more valuable. It still exists today but is much weaker than it was during the New Deal.

The Lasting Impact of the New Deal

The New Deal didn't end the Great Depression, but it had a lasting effect on the American government and people. Americans expect the government to provide a social safety net for needy Americans. Women had jobs in the political sphere but were valued in their relation to men and their children.

African Americans and Native Americans were given assistance, but less than white people. The government began to shift to a cooperative federalist system while the New Deal acted to prevent another Great Depression. While the New Deal didn't end the Great Depression, it had lasting effects on the government, social state, and everyday lives of the American people.