America Boom Bust And Recovery - Transformation Of The USA Flashcards
USA Post War
During WW2, the USA dominated the economy
Their enemies were destroyed due to fighting on their lands and the allies were virtually bankrupt
The USSR had just lost 20 million people
The US economy continued its growth after 1945
Changing Employment Opportunities
Technological advances continued due to the Cold War
Unlike after WW1, the US remained in a period of preparedness
This meant investment into defence continued
Events such as the Berlin Airlift Crisis and the Korean War kept demand high s people feared the war heating up and therefore this boosted the economy
The growth of disposable income sustained demand
Once again, the automobile industry began to boom
- new job opportunities were created for skilled workers meaning a higher wage
The growth of the clerical sector allowed more women to get into employment
The US retail sector also expanded which allowed for new jobs
- in 1945, there were 8 shopping centres and by 1960, this had increased to 4,000
This then had a knock on effect on other industries as it stimulated demand
All of these changes were fuelled by advertising
- during the 50’s, advertising expenditure increased by 1000%
- the growth of TV allowed advertising to have a greater impact
- increased investment into advertising also created new job opportunities in this area
Additionally, the aircraft industry continued to develop
- there was advancement in both military and passenger aircraft
- in 1958, Boeing produced the 707
- this lead to a decline in railways, but offered new jobs in the aircraft industry
There was also increases opportunities in computing
- IBM produced the first general use computer in 1944 and by the 1950s, computer had begin to appear in US businesses
There was a major increase in white-collar jobs
- for the first time, white-collar workers outnumbered blue-collar workers
However, blue-collar jobs (such as in the chemical industry) were also increasing
- however, all of these new jobs favoured white males
Government Policies
The Federal Government actively attempted to stimulate the economic growth through spending on defence
After 1945, the government sold many of its industrial facilities to private buyers who created some of the fastest growing businesses
The Cold War led to increased government spending
The government began to play such a role in the US economy that outgoing President, Dwight Eisenhower, talked of a military industrial complex
Government spending on research grew by 600%, which led to a so-called ‘Knowledge revolution’ in the USA, where the number of jobs in professional and technological work grew
The number of salaried middle class workers rose by 61% between 1947 and 1957
However, this spending helped to concentrate the power in the hands of a few corporations, such as General Motors
This also limited the power of trade unions
- in 1945, 35.5% of the workforce were in trade union
- after a number of strikes due to inflation, the Republican controlled Taft Hartley Act to limit trade union rights
Provisions for Veterans
GI Bill 1944 (Serviceman’s Readjustment Act)
- this bill introduced a range of benefits for veterans
- The Federal Housing Authority supported veteran mortgage applications
- the Veteran’s Administration gave returning servicemen low interest mortgages
- these benefits helped to stimulate a construction boom
This act also gave veterans educational opportunities
- just over 1/2 of the 7.8 million returning servicemen attended colleges through grants
The GI Bill cost the government $14.5 billion
Growing Mobility
Between 1946 and 1954, car production quadrupled
- in 1950, the USA produced 2/3 of all the world’s car and trucks
- production was dominated by General Motors, Ford and Chrysler
This growth of car ownership allowed for people to move to suburbs
This boom in car ownership was fuelled by an increase in credit purchasing
- the first credit cars, Diner’s Club (1950) helped this
- American Express (1951) then followed this
- short-term credit grew to $45.6 billion in 1958
The boom in car ownership was aided by a new system of inter-state highways, which were built due to fear of the need for mass evacuation in the case of a nuclear attack
Baby Boom
In 1946, 3.4 million babies were born
Between 1946-1964, 7.4 million were born
This formed 40% of the population
Huge producers of baby and child products came forward
Growth of Suburbs
Due to a rapid growth in car ownership, new housing developments were built on the edges of towns and cities
The number of people living in suburbs grew by 10%
Cheap land and mass construction made it easier to buy a new house
In 1947, William Levitt from NY bought 1,200 acres of farmland on Long Island and built 10,600 houses, which were bought and occupied by more than 40,000 people
- swimming pools, school and tennis courts were included in the development
- these areas were known as ‘Leviitown’s’
Leviitown houses in Pennsylvania originally sold for $6,990
- each one had a white picket fence, a fully equipped kitchen and a green lawn
However, William Levitt made sure his houses were only sold to white people
- this policy of racial segregation was declared illegal in the 1960s
In California, the suburbs around LA offered ranch-styled housing with front lawns and backyards, a huge change from inner city living
Consumer Society
By 1955, the USA was the world’s first consumer society
Good housing, TVs, cars and easy credit were all features of this affluent society
Suburban dwellers earned more than anyone else and bought boats, winning pools and went on foreign holidays
Cars led to greater mobility, which encouraged the development of drive in restaurants, drive in movie theatres and out of town shopping centres
In 1945, Ray Kroc devised a new way to serve hamburgers and French fries to meet the demand for eating out
- McDonalds was born
- this provided a completely different dining experiences
We start to see a society which has a great focus on recreation
Despite this prosperity, in 1960, nearly 40 million Americans (22%) lived below the poverty line of $3,000 a year for a family of 4
- the inner cities, which the middle class had left, fell into economic decline and became associated with crime and poverty
