Topic 3 - C2 - The Economic Change on Society

Question 1

By the 1960s, what economic concerns were there?

Answer 1

• US still led in terms of manufacturing but many of these industries were in decline.
• Expense of VNW and GS raised fed gov deficit from $1.6 billion in 1965 - $25.3 billion in 1968.
• Led to inflation and weakened dollar.

Question 2

How had inflation increased between 1955 and 1980?

Answer 2

1955 - inflation at 0%
1973 - inflation at 6.16%
1980 - inflation at 13.8%

Question 3

What impact did rising inflation have?

Answer 3

This made mortgages, loans, food and energy expensive. July 1974 alone, prices rose by 3.7%.

Question 4

How did people feel towards inflation by 1978?

Answer 4

1978 poll showed that 63% of US thought inflation was their biggest concern.

Question 5

How had the cost of living risen and what impact did it have?

Answer 5

Cost of living rose 8.2% a year between 1973 and 1983 - hit those in manufacturing the hardest (rust belt states).

Question 6

How did unemployment rise from 1974 to 1975?

Answer 6

1974 - 6.5% unemployed in Dec

1975 - 8.9% unemployed in May

Question 7

Why was there an increase in unemployment?

Answer 7

Due to other countries producing manufactured goods at lower prices and often superior quality, also due to increasing mechanisation in US industry.

Question 8

Where was unemployment particularly prominent?

Answer 8

Rust belt states. Decreased employment opportunities in Detroit - car manufacturing and Pennsylvania - steel. Difficult to find alternative jobs apart from in service industry.

Question 9

What proportion of people were service jobs as opposed to manufacturing jobs?

Answer 9

Service jobs made up 60% of the employed 1970. Rose to 70% in 1980. Mostly low paid.

Question 10

What were the issues with jobs in the services sector?

Answer 10

• Minimum wage rose from $2.10 p/h in 1975 to $3.35 p/h in 1981.
• Failed to keep up with rising prices.
• Mothers had to work to maintain family income

Question 11

What proportion of women worked in 1960 compared to 1970 and 1980?

Answer 11

38% women worked in 1960 → 43% in 1970 → 52% in 1980.

Question 12

How did poverty increase throughout the 1970s?

Answer 12

• Proportion living below the poverty line grew from 11.2% in 1974 → 12.5% in 1976
• This included 50% of all black female heads of households.

Question 13

Which demographic of family was hit the worst by poverty?

Answer 13

Black family incomes hit the worst as the represented unskilled occupations.

Question 14

What evidence is there that poverty increased between 1970 and 1980?

Answer 14

Numbers eligible for food stamps rose from 18.5 million in 1976 to 20 million in 1980.

Question 15

Why was there a recognised homelessness crisis in 1980?

Answer 15

Figures reached 1 million in 1980.

Question 16

What were the reasons behind homelessness in America in the 1970s and 1980s?

Answer 16

• Institutions for mentally ill decreased, former residents ended up homeless
• Urban renewal policies meant that housing for exceptionally poor was demolished - struggled to find alternative accommodation
• Rising unemployment and lower welfare benefits
• Declining marriage rates = more homeless women and more single mothers.
• Increased use of crack cocaine

Question 17

How big of an oil consumer was the USA in the 1970s?

Answer 17

US consumed ⅓ of the world’s oil production. 30% of the oil they used was imported - mostly from the Middle East.

Question 18

Why did importing oil from the Middle East make the US economically vulnerable?

Answer 18

RN supported Israel against Egypt and Syria in Yom Kippur War (1973) led to OPEC oil embargo on US, end of embargo followed by 387% hike in the price of oil. Paid 30% more for heating and petrol.

Question 19

What impact did the OPEC oil embargo have?

Answer 19

Oil shortage = high prices. End of embargo followed by 387% hike in the price of oil. Paid 30% more for heating and petrol.

Question 20

How did independent truckers respond to the 387% hike in the price of oil in 1973?

Answer 20

They did a strike which left roads at a standstill for 11 days and left stores with empty shelves

Question 21

After the 1973 oil crisis, what caused schools and factories to shut?

Answer 21

Harsh winter of 1976-1977, natural gas shortage. Fuel stations closed on Sundays and cut their hours. Long queues at petrol pumps.

Question 22

How did the Union of Mine Workers respond to the oil crisis?

Answer 22

1977 - United Mine Workers began 3 month strike, coal shortage led to school closures and shortened working weeks

Question 23

By 1979, what impact had the OPEC oil crisis had?

Answer 23

½ of nation’s petrol stations without fuel, those with it charged 50% higher than the year before

Question 24

What was the significance of the energy crisis?

Answer 24

• Ended cheap standard of living.
• ⅓ price rises due to increase in cost of oil.
• Difficult to solve problem without putting higher tax on oil but this was unpopular.

Question 25

How did the government and the people respond to the oil crisis?

Answer 25

• 1973 - some people tried to save energy by carpooling and turning down their heating.
• 1977 - Carter said AC should only be used at 26 degrees and heating only on to 18 degrees.

Question 26

What impact did foreign competition have on America?

Answer 26

US still produced 25% of world’s goods in 1970 but struggled to compete with Germany and Japan = unemployment and trade deficit. 1978-9 trade deficit at $40 billion, Japanese cars had 23% of market in 1981

Question 27

How was the US car industry impacted by Japanese imports?

Answer 27

• Chrysler needed a $1.5 billion bailout in 1980.
• Detroit’s car manufacturing city had 24% unemployment by 1980
• Jobs in automobile industry fell from 940,000 to 500,000 1978-1982
• US manufacturers started offshoring production

Question 28

How did the government respond to economic problems?

Answer 28

• Ford asked people to cut their mileage voluntarily by 5% and to stop throwing out food
• WIN - Whip Inflation Now badges handed out
• JC decreased gov spending - froze federal workers wages and urges voluntary wage controls- unpopular

Question 29

What act was put in place to reduce oil consumption?

Answer 29

1975 Omnibus Energy Act - domestic oil prices rose slowly to decrease consumption

Question 30

How did Carter want to solve the energy crisis through ending dependence on the Middle East in 1977?

Answer 30

• Oil conservation through cutting down on travel
• Development and usage of alternative sources of power - nuclear, solar and coal
• Higher taxes on large cars to encourage US to buy smaller models
• Greater insulation in homes and workplaces

Question 31

Why did Carter struggle to pass legislation?

Answer 31

• Had insufficient consultation and lobbying
• States where cars, natural gas and oil were produced opposed it
• Voters did not want to pay higher taxes in a period of high inflation or change their lifestyles

Question 32

After OPEC raised oil prices in 1979, how did congress respond?

Answer 32

-Energy Security Act (1980) offered loans and incentives to search and use alternative sources of energy

Question 33

Why was nuclear energy unpopular in the 1970s?

Answer 33

Nuclear energy unpopular after nuclear meltdown in Pennsylvania’s Three Mile Island reactor in 1979

Question 34

What impact did the Energy Security Act 1980 have?

Answer 34

Energy consumption per capita decreased by 10% between 1979 and 1983