The “Silent Depression”: Are We Really in The Midst of Another Great Depression?

The term “Silent Depression” has been coined by social media users to describe the current state of the U.S. economy, often drawing comparisons to the Great Depression. With these comparisons, many have come to the conclusion that we are currently living in an economic depression of proportions much greater than that of the  Great Depression. With housing prices soaring, wages stagnating and the cost of living increasing, is the US economy really in another, even greater, depression? The short answer is no. 

Now to dig into that comparison. The most common way in which the Great Depression is compared to the US’s contemporary economy is through straight statistics. Aquick Google search for the average wage in the US in 1930 (the first full year of the Great Depression) shows the average income during the Great Depression was around $4,820 annually, which adjusted for inflation totals to about $87,860. This is a good bit more than the current annual salary, which is about $59,420. The comparison does not stop there. Looking at the housing prices in the 1930s, the median price of a home was about $3,900 or $91,707.30 today, while in 2023 the actual average cost was $416,100 for a house. Another statistic worth mentioning in this light is the price of a car. In 1932 a new car cost between $410 and $450, meaning the lowest price for a new car today for that price would be $9,641.02. In 2023 the average price of a new car is $48,808. All of these statistics paint quite a pessimistic picture of the current economy and taken at its face, this would be an economic depression on the scale of theGreat Depression, if not greater. These statistics are not wrong, but they do not tell you the whole story. 

While the $4,820 figure is an actual income bracket during the Great Depression, this was not the average wage. This figure instead comes from an IRS tax bracket which represented only around 1.7 million people of the 123.2 million who lived in the United States. Doing a bit more research, the actual average salary during the Great Depression comes to around $1368, which is $32,168 dollars today. This adjustment to the baseline for this comparison completely recontextualizes the entire argument around the Silent Depression. Instead of wages during the Depression being roughly 150% greater than the average wage today, in actuality, wages during the Depression were half what they are today. While wages have stagnated, the general wealth of the population is higher than during the Great Depression. The comparison continues to falter when you compare the unemployment rates of today and the Great Depression. 

In 2023, the unemployment rate was 3.8%, while at the height of the Great Depression, unemployment hit 24.9%, leaving 12.8 million people without a job. This further underscores this statistics-based comparison, as even the measly annual wage of $1368 was not received by a quarter of the available workforce. 

That leaves the housing and car comparisons. It can be conceded that the difference in new car prices is staggering, and this cannot be explained away by the unemployment rate or wages. New cars are more expensive than ever, and compared to the Great Depression, their price has grown out of proportion to the wages of today. The thing that makes all the difference today is the saturation of the car market. In the 1930s, there were three main brands: Ford, General Motors, and Chrysler. By that time, Ford had only existed for around thirty years. Now, there are over 60 different car brands, all competing for the same market. The age of the industry also plays a large role in this price. In 1930, the car market had only existed for around thirty years, meaning there was little room for a used car market. Nowadays, the used car market makes up the majority (56.7%) of the total car market, and provides cars for a lot cheaper than if you were to buy them straight off the production line. So, while new cars are overly expensive, this portion of the car market provides a cheaper alternative to consumers and thus means that the comparison is not indicative of an actual depression in the current economy.  Now all that is left is to tackle the housing problem. 

The housing problem is the most validating point of the entire comparison and is indicative of a larger problem at play, which is the mass privatization of vital commodities, such as health care, education, and housing. The wages and prices of housing today mean that the average person would need to save their entire wage for seven consecutive years before being able to afford an entry-level single-family home. During the Great Depression, the average person would need to save their entire wage for only three years, with some wiggle room for expenses. This is truly insane.

Now back to privatization. The reason housing prices are so high today is the mass buyup of houses by corporations who set whatever price they see fit. This is a consequence of the neoliberal approach to economics. Neoliberal capitalism prioritizes a completely free market and the privatization of every possible commodity, giving the maximum amount of power to the business class. Nationalized industries and social services are given over into the domain of the public, allowing for even more privatization. Consequently, the working class becomes dependent on the business class, as the working class needs money in order to afford the privatized services and commodities to live outside of poverty. If not, the only other choice is poverty. The neoliberal approach to economics is the school of thought that also birthed the concept of the “pulling yourself up by your bootstraps” mentality, positing that, if you work hard, you can become a wealthy, successful part of the business class. This mentality further enforces the dependence of the working class on the business class, as it implies that the only way to transcend the working class is to join the business class, leading to greater power being given to the business class. 

Now how does the Great Depression play into this? This neoliberal free market mirrors that of the “laissez-faire” approach to economics that had been dominant before Black Tuesday. The problem with today is that we have yet to see a more worker-oriented reversal of these pro-capitalist trends, such as what happened with the New Deal after the Great Depression. The economy has effectively had a depression with the housing market crash of ‘08, yet there have been no substantial efforts to curtail the excesses of the business class. If anything, there has been an increase in privatization and monopoly, leading to an ever-increasing wage gap. 

These effects, while not conveyed through statistics, are still present in today’s economy, leading to many feeling the onset of an economy that disadvantages the worker. So is the US economy in another depression? The short answer is no, as statistically the average person is better off, but the counterbalance to this is that the long answer is yes. The effects of neoliberalism and the rise of the business class, as well as the implementation of post-Fordist working conditions, have led to the extraction of wealth from the working class and created a dependence on the business class for vital commodities. Thus, as many are forced into a free market system, the flaws begin to bare their teeth anew.

By Holden Gruel