"The rich people got richer, and the poor people got poorer."

Most of the money in America was distributed between the richest Americans, while the poor received barely any money. This imbalance of wealth created an unstable economy.

According to a study done in 1929, the top 1% of Americans had a combined income that was more than the bottom 42% of Americans. For example -- Henry Ford made $14 million in one year, while the average personal income was only $750.

Reasons for the growing gap between rich and poor:
  • Increased manufacturing output

  • Production costs fell quickly, wages rose slowly, and prices remained constant --> the bulk benefit went into corporate profits

  • Unemployment increased, so many people were homeless and couldn't afford to buy anything

  • Factory workers were working long hours with low wages