US Economic Transformation (1945-1954)

Economic Transformation (1945-1954)

• The post-war period in the U.S. saw unprecedented long term prosperity unlike any other time in its history.
• By 1945, the U.S. held 42% of the world's wealth with only 7% of the world's population.
• The Gross National Product (GNP) increased by 35% since 1941.
• Federal government spending rose from $9.4 billion in 1939 to $36.5 billion in 1948.
• Various industries like aircraft, chemicals, and electrical goods saw increased employment opportunities.
• There was significant migration to areas offering more jobs.
• Despite earning around $3000 per year, many Americans saved carefully.
• The consumer boom didn't take hold until the late 1940s, when long-term economic confidence grew.
• Some regions, especially poorer areas in cities and the South, did not experience equal prosperity.
• In 1947, 33% of U.S. homes lacked running water, and 40% lacked flush toilets.
• Many families lived in rented housing, unable to afford home ownership.
• By 1960, home ownership increased to 62% from 55% a decade earlier.

Government Policies to Encourage Growth

• In 1944, Franklin D. Roosevelt proposed an 'Economic Bill of Rights' committing the government to full employment and adequate welfare.
• The 1946 Employment Act formalized the pursuit of full employment.
• The demand for labor was so high that the new law was not really needed

GI Bill of Rights

• Known as the Servicemen's Readjustment Act, it passed in 1944.
• The Act provided grants to veterans for education, skill development, or to start businesses.
• 8 million veterans took advantage of the GI bill
• Veterans received $20 per week while seeking employment, but jobs were readily available.
• Universities expanded after the war to accommodate veterans, with the government paying their fees.
• Low-interest home loans allowed ex-servicemen and families to buy new homes in the suburbs.
• This resulted in a better skilled and more productive workforce.
• Educational opportunities made people more employable.

Increased Mobility

• The growth of the car industry led to a rise in mobility and suburban development.
• Fewer Americans had to live in crowded urban areas.
• Homes became important to offer privacy, comfort, and a symbol of prosperity through owner-occupancy.
• Cars were the lynchpin of the 1950's middle-class family.

The Growth of the Car Industry

• New car sales rose from 69,500 in 1945 to 6.7 million by 1950.
• Cars were symbols of the area and were sleek, big, and colorful.
• In 1958 Ford produced a 5.79-meter Lincoln model, offering lots of choice in car color and style.
• New Chryslers cost about 40% of a families income, and most were bought on credit
• Two-car families doubled between 1951 and 1958.
• There was growth in associated facilities developed such as motels, gas stations, and garages.
• McDonald's made its first appearance in April 1955 and enjoyed annual sales of $37 million from 228 restaurants by 1960
• The 1956 Interstate Highway Act boosted road building through federal subsidies.
• 41,000 miles of US highways, mainly dual carriageways, were developed.
• Improved highways signified the demise of public transport in America.
• The railroad lost an average of $700 million p/a for passenger services by the mid-1950s.
• Some of this was down to air travel.

The Growth of Suburbs

• There was rapid housing construction away from urban centers beginning after the war.
• 114,000 new family homes in 1944 rose to 1.7 million in 1950.
• 15 million new homes were built across the U.S. in the decades following the conclusion of WW2.
• Many Americans were able to buy for the first time with government-sponsored mortgages and interest rates as low as 4%.
• Suburbs grew from housing 17% of the population to 33% in the 40 years from 1920.
• Critics argued they lacked variety.
• Restaurant and cinema managers in urban centers complained of a lack of business.
• City residential areas began to decline due to wealthy people leaving for the suburbs.
• Shopping malls began to become established in the suburbs, with 8 in 1946 rising to over 4000 by the late 1950s. Americans could by almost anything under one roof, and many shop keepers went out of business.
• William Levitt developed cheap, affordable housing called "Levitt Houses".
• His houses were constructed on-site in 27 parts.
• They were constructed in mass production format in factories, allowing for mass production.
• 82,000 people lived in houses that Levitt built on Long Island.
• In Pennsylvania a Levitt house costs $7990-$15000 - which was less than other houses of a similar size.
• Black Americans were not allowed to buy them.

HUAC

• The House of Un-American Activities Committee was set up by Congress in 1938 to investigate Americans who were sympathized with the Nazis.
• Their focus shifted after the war to investigate people who were suspected of supporting communism.
• Campaign against members of the Hollywood film community who were accused of showing communistic views in films to brainwash Americans in the late 1940's also began.
• Charlie Chaplin was a victim of the HUAC.
• The 'Hollywood Ten' refused to answer the Committee's questions and were blacklisted.
• In 1954 a blacklist made 350 people unemployable in the industry.
• HUAC was suspicious of labour unions and their links to communism.
• Union leaders had to swear they were not communist under The Taft-Hartley Act.

Taft-Hartley Act

• Between 1945 and 1947 food prices rose by 25%, creating labour discontent.
• GM employees asked for a 35% wage increase, and in 1946 there was a terrible coal strike and threatened railroad action.
• 4.6 million workers went on strike in 1946 which was 10% of the labour force.
• Republicans took command of Congress and promised to restrict union activity.
• Many lacked sympathy for the workers as they were trying to recover from the disruptions of wartime.
• Passed in June 1947 when Truman failed to veto it This act outlawed closed shops and secondary strikes.
• It made union leaders had to swear they weren't communists,
• It created an 80-day cooling off period for a investigation.