“There wasn’t a new poverty crisis that didn’t previously exist in that timeframe. Poverty was a fact of life for centuries among European Jewry.”
No new poverty, but at that time many Jews were going OTD because of poverty, something that they did not or could not do before. Secular society was more welcoming.
See what Rav Avigdor Miller said about how assimilation (Chillul Shabbat of going to work in particular) had “escalated out of control” during just the 6 years he spent in Kovno. (Beyond Reasonable Doubt By Shmuel Waldman, page 207)