1929: Mass Unemployment

The slight economic boom that had started in 1925 with the Geneva Economic Reconstruction Programme (under the Geneva Protocol) and the transition to the Shilling currency in Austria lasted only a short time. From 1929, the Republic got caught in the maelstrom of the world economic crisis.

The unemployment rate had risen by 10% between 1925 and 1930 due to the structural problems of the Austrian economy and the hard currency policy of the government. During the crisis, it shot up to 23%. In 1933, about one third of the available workforce was unemployed. When Creditanstalt, Europe’s largest bank at the time, threatened to collapse in 1931, the state had to intervene in support of it and could only survive economically through another League of Nations Loan.

Unemployment radicalised politics on the one hand, but also led to resignation on the other, as the study “The Unemployed of Marienthal” (Hans Zeisel and Marie Jahoda) so convincingly showed.