The 1920s are usually characterized as a “golden decade,” a time of prosperity, growth, and tight labor markets. There is evidence to support this popular view: The aggregate unemployment rate for the civilian, nonfarm labor force was lower between 1923 and 1927 than it had been for any five-year period since 1900, and real annual earnings for nonfarm civilians increased 26% between 1920 and 1929.1

But these aggregate figuresmask the fact that during the 1920s, the labormarket in manufacturing was moving in an opposite direction (see Table 6.1), and this is critical to understanding why the decade was so different from the period that preceded it. Manufacturing employment was stagnant throughout the 1920s, and stood at the same level in 1929 as it had in 1919. This understates the decline in blue-collar employment because shifts occurred in the occupational composition of themanufacturing labor force:Wage earners as a proportion of allmanufacturing employees fell from 92% in 1916 to 89% in 1929, with the decline in transportation and utilities being even steeper (from 90% to 81%). Further, between 1923 and 1927, unemployment rates in industry were higher than for any other five-year period since 1900, excluding depression years (see Table 6.2).2