As you might guess it’s a bit complicated. To quote a meme from a few years ago, “Well yes, but actually no.”

To take unemployment, the Nazis did indeed reduce unemployment from 6 million to virtually nothing. And there were real gains, which I’ll get to in a moment. But a lot of the figures were accomplished by accounting tricks. For example both women and Jews were removed from unemployment figures. So if a woman lost her job as a secretary or a Jew lost their job as a baker they didn’t matter in the official statistics anymore. However their families still remained without that income.

Secondly the Nazis did implement a lot of work programs and make work laws. The Deutsche Arbeitsfront (DAF or German Labour Front) was created to represent labor after all unions and strikes were outlawed. This had the effect of nationalizing labor representation. Follow up laws made it illegal for employers to fire anyone without state approval, but workers also couldn’t quit or change jobs without state approval either. And if one were unemployed and refused a job, they could be declared a work shirker and sent to a concentration camp.

This was followed up with the Reichsarbeitsdienst (RAD or National Labour Service) which was a rough German equivalently the American Civilian Conservation Corp. It did public works projects like building the autobahns and other infrastructure. It also provided temporary seasonal labor for farmers and industry. Employment in the RAD was by conscription, not voluntary. So any single man without another job was liable for it. And it paid very little. Once the mandatory food and lodging was removed it amounted to little more than pocket change.

Similar to the RAD, in 1935 military conscription was reintroduced. By 1939 1.4 million Germans were serving in the armed forces. Again helping cut unemployment. As did massive increases in spending on military rearmament.

In addition to these, actual slave labor, from the labor concentration camps consistently and regularly grew throughout the 1930s. This combined with the RAD allowed German industry to keep overall pay below 1927 levels.

So while unemployment did truly plummet, it was partially due to redefining what “unemployment” meant and who was counted, and partially due to both civilian and military conscription. Over all total wages (“real earnings”) nationwide didn’t tick up much at all. And production and consumption of wheat bread, meat, bacon, milk, eggs, fish vegetables, sugar, tropical fruit and beer in 1937 were still all below their levels from 1927; although rye bread, cheese, and potato consumption did see a slight uptick. The average German really wasn’t at all better off in 1939 than they were in 1927, and not much better than they had been in 1933. But the leadership had stats that said they were. And as long as one wasn’t a dissident or a Jew, they weren’t really worse off either. So the public by and large felt like the economy was better even though their personal situation wasn’t.

To achieve this “economic miracle” government spending had more than doubled from 12 Billion ℛℳ in 1928 to 30 Billion ℛℳ in 1939 and the national debt stood at 38 billion ℛℳ. Direct monetary transition into modern figures is hard because the Reichsmark was a fiat currency and didn’t really trade on currency markets like it might today. But using official exchange rates the German debt was in the $100 trillion range in modern terms.

A variety of financial juggling had kept the debt and its effects from being widely seen by the general public; tricks such as the sale of junk bonds called MeFo Bills issued by a dummy corporation called Metallurgische ForschungsAnstalt (Metallurgical Research Institution). Basically the Nazi government ran a Ponzi scheme on its own citizens and whatever few foreign nationals they could induce to invest. But by 1939 most of the financial trickery was coming to an end. Confiscations from Jews and by raiding Austrian and Czech currency reserves helped temporarily balance the books for a few quarters each.

Germany was being hindered in international markets because no one would trade in currency with them, because the Reichsmark was increasingly considered worthless abroad and the Germans had virtually no foreign currency to use in trade. Germany had been forced to settle international exchanges with raw material barter rather than currency. Likewise faith in tricks like the MeFo Bills had crashed and the investors were trying to pull their money out. The German economy was likely heading for a total market collapse and runaway inflation when it was put on a war footing in June 1939. In all the Nazi pre-war economy was a house of cards held up by illusion and showmanship that was on the verge of collapse in mid 1939.

As to why the myth of the Nazi economic miracle exists today, I’ll leave for someone familiar with post war Nazi apologia to address.