KEY TOPIC 3: The Impact of economic change on society Flashcards
What was the United States’ economic position after WW2?
They were the worlds wealthiest nation, however there were some issues by the 1960’s such as:
industries in decline
the expense of vietnam war
also greater federal government deficit which went from 1.6 billion dollars in 1965 to 25.3 billion in 1968.
Economy also suffered inflation due to rising oil prices +overspending.
Weakened currency
all of this impacted Americans
What was happening with inflation and name statistics?
It was a potential problem for the vast majority of Americans and was affecting the American dream. During 1973-80 inflation was near double figures for most of the decade and made everything more expensive like mortages, loans, food and energy.
prices rose by 3.7% alone in 1974.
In 1978, 63% of americans said it was their greatest concern.
It rose at a yearly average of 8.2% from 1973 and 1983 and affected family incomes.
How did inflation affect the rust belt?
The Rust Belt refers to the industrial region of the northeastern and midwestern United States, including states like Pennsylvania, Ohio, Michigan, and Illinois. Manafacturing and instrueies was decline here, and workers found themsleves unemployed. It had industries like steel and auto manafacturing.
What was unemployment like?
It was rising across the nation for a decade. For example it was 6.5% in decemeber in 1974 but 8.9% by may 1975.
Why was unemployment increasing?
Due to two main factors:
- Other countries were producing manafactured goods at lower prices and superior quality
- There were increasing mechanisation and men replacing machines.
This decreased employment opportunities in occupations like car manafacturing in Detroit + it was hard to find alternative employment.
Were service jobs popular in USA
Service jobs constituted 60% of employment opportunities in 1970 but 70% by 1980. However, many were low paid. Although federal wage rose from 2.10$ an hour in 1975, to 3.35$ per hour in 1981, it failed to keep with rising prices.
Why were more women working?
Mothers then had to work in order to mantain the usual family income. 38$ of women worked in 1960, 52 % in 1980.
How did poverty increase?
Proportion of US citizens below poverty line grew from 11.2% in 1974, to 12.5% in 1976. More people elegiible for food stamp programme (grew from 18 million to 20 million). Also blacks hit most because they were mostly in unskilled occupations.
What was the issue with homelessness?
Increasing problem (homelesness crisis) and in 1980 there were 200,000 to 1 million homeless.
What were the reasons for homelesness?
. In mid 1970’s instituations for mentally ill decreased because they were struggling financially and people wanted mentally ill to have more freedom. They wanted to decrease expenditure on these instutions, which led to these people homeless on the street.
. Many inner city skid row hotels were demolished due to urban renewal (and expectionally poor used to stay here so they were forced onto streets).
. Rising unemployment led to depression and lower wlefare benefits let people on streets.
. There were declining marriage rates and more single mothers, so more women on the street too.
What was oil like in America before the oil crisis?
Americans cosumed 1/3 of worlds oil production. 30% of american oil had to be imported from middle east. Leading to economic vulnrability.
What was the 1973 Oil Crisis?
Nixon supported Israel in the Yom Kippur war which led to OPEC putting an oil embargio on the usa. it ended by creating a 387% hike in oil prices which damaged economy and americans had to pay 30% for heating and petrol.
What events showed that the seriousness of energy crisis after 73?
In 1974 100,000 independant truckers who wanted lower fuel prices brought stores to a standstill for 11 days
Also there was a harsh winter of 76-77 and a natural gas shortage closed schools/factories. Longer cues at petrol pumps and first energy riott in levittown where truckers barricaded expressways (100 injured).
late 1977 united mine workers began 3 month strike and coal shortage led to skl closing or working weeks shortening.
in 79, half of petrol stations without fuel or charging 50% more.
What happened in 1979?
The iranian revolution (removal of american backed shah) also led to oil crisis and bad middle eastern relations. OPEC raised prices again
What was significange of energy crisis?
end of cheap oil hit standard of living and one third of inflationwas prob due to increasing oil
one way politcians could handle is raising oil taxes, but the public did not want this
also from 73 private citiens tried saving fuel and joined carpools
carter also began controlling thermostats.
what was the impact of foreign competition in the mid 60’s?
USA still produced 25% of manafactured goods, but they struggled against rivals like germany and japan which led to unemployment and a trade deficit (40 billion in 78-79).
why were japanese cars so attractive?
cheaper, well made and used less oil. japanese companies had 23% of american autombile market bu 1981 and american cars slow to adapt and continued producing big gas guzzlers which used lots of fuel.
What happened with chrysler?
such a big company went bankrupt and lost billions.
gov gave them controversial 1.5 billion bailout in 1980.
Jobs in this industry fell
what was government response?
voters were unimpressed w how gov was handling it.
carter gave out WIN buttons and also asked congresss to aprove tax raise/cut federal expendutre.
his repsonse to unemployment and inflation did not please anyone. he did decrease gov expenditure. but blue collar workers did not like carters focus on inflation and not unemployment and his cristicm of the striking workers in 177.
business community disliked him as they thought his energy proposals would damage their industries and they also hated the trade deficit.
How did carter handle the energy crisis?
he suggested an energy programme which said:
conserve oil- cut down travel
develloping altenrtive power like nuclear/coal/solar
higher tax cut son bigger cars to encourage americans to buy smaller ones
greater insulations in homes
why did his proposed energy programme not pass senate?
he had inssuficient lobbying and voters did not wanna change lifetsyle/pay more.
