Post WWII Economic Expansion
«The U. S. embarked on one of the greatest periods of economic expansion in its history.»
America did indeed embark on one of the greatest periods of expansion in the postwar years. People had money, consumers were spending that money, and corporations were profiting from that. New types of companies got started and were succeeding, and older businesses folded because of this. New industries were created which opened many possibilities for the near future. Current workers were getting promoted into white-collar jobs in all sorts of industries, and new jobs were created because of new technology. The postwar era was the beginning of the technology boom, which would transform the world within 50 years. The move away from the cities still continued, and the baby boom was still occurring. All of this made the postwar years some of the best economic years in American history.
During World War II people were earning wages, but not spending much of them. This was mostly because of the small supply of consumer goods, if they were even produced during the war. This meant that the average American consumer had several years of wages saved by the end of the war. Some unfortunate families also had money from the government and insurance companies if they lost a relative due to the fighting in Europe and the Pacific. This meant that at the end of the war Americans had money, and the want to buy new things and give the economy a nice, long awaited boost.
Americans had thousands of dollars saved up, and now they wanted to do something with that money. The obvious solution was spending it. For the first time in years consumer good were once again produced and sold in large quantities. That set-up was a perfect situation for economic growth. Consumer has money, corporation has product, consumer wants product. It’s very simple, the consumer will pay for what they want, and that will cause economic growth because of increased spending. This spending was very obvious, the Grosse National Product increased by 292 billion dollars from 1945 to 1960, which was an increase of almost 150%. That proves how much American consumers were spending compared to the war years.
This increase in buying did not just make the consumers happier. The corporations welcomed the buying increase, because that meant a profit increase for them. The «big three» automotive companies, General Motors, Ford, and Chrysler, because the clear industry leaders, because they were outselling competitors by a long shot. These large companies were using their large profits to take-over smaller companies, thus causing the parent corporation to grow. Some large corporations bought up totally unrelated companies, like a telephone company buying an insurance company, and a rent-a-car place. These unrelated companies were called diversified conglomerates. Hundreds of companies found themselves diversified conglomerates in the postwar years. This is how companies benefited and grew during the postwar years.
During this time of economic growth some people wanted to get themselves a piece of the pie. Several large corporations that still exist today first opened their doors during the postwar era. Companies such as McDonald’s, American Express, and Visa led the way. These new businesses quickly grew, and were industry leaders within just a few years. These new businesses were too successful for existing businesses such as corner cafй’s, and soda shops. These private, small businesses were mostly all taken over by these large franchises, like Burger King, Kentucky Friend Chicken, and the previously mentioned McDonalds. Credit card companies also make millions during these years. For the second time Americans had hundreds of dollars of personal debt because of credit, but this time there were precautions in place to prevent a major disaster for reoccurring. These are just a few examples of new corporations booming in the growing economy of America.
Technical advances made during World War II led to the development of several new industries in the postwar era. The largest, and perhaps most intriguing was nuclear power. The atomic bomb created thousands of possibilities for future usage. Not all of these uses were destructive weapons either. The most important peacetime use, which still exists today, is commercial power. The first nuclear power plant was built in 1957 in Shippingport, Pennsylvania. Sense then nuclear power has become an incredibly valuable resource to our nation.
Another factor that contributed towards the growth of the American economy was the promotion of a large portion of the current workforce. This meant pay increases, but it also caused a lot of internal conflict amongst workers. Blue-collar workers were not white-collar office workers, and some didn’t quite like that. The companies pushed for uniformity, and not individual expression. Some of the workers didn’t feel comfortable with this, and the impersonal feeling that came with the job. They felt like a number, not a living, breathing person. Even with this set back many workers kept their jobs, and enjoyed the high pay, and good benefits that came with the job. Their increased salary was yet another factor that lead to a growth of the economy.
The economic boom in the postwar years led to the creation of many new jobs, which ended up boosting the economy further. Corporate expansion of the main cause of more jobs available to the American people. These large corporations were making millions each year, so hey turned around and invested some of those profits in the expansion of the company. With capital expansion you must also make human resource expansion, so that was a main source of new jobs. Other new jobs were ones left open by men who were killed during the war. Thousands of jobs had to be filled, because the men who previously held them were never going to come back, so they hired new people. All of this helped to lead towards a larger job market, and a much lower unemployment rate.
Wartime technology made it’s way into the civilian consumer world in the years immediately following the war. These technologies would end up laying the groundwork for the computer; a thing that fifty years later would totally transform the world. This second Technological Revolution would create many new jobs in several new industries; as well create new inventions at a rapid pace. All of that would help to transform the way we live, and it would change the way that people worked, more and more people would have to be educated to enter this workforce, which meant colleges would experience growth, just like the rest of the economy. The computer was becoming a device that would start to enter homes within several years, and silicone «chips» would start to replace big, bulky vacuum tubes used in older computers. This invention made the home computer possible. Even know the computer had a small effect of the economy of postwar America, it did have a major effect on the economy within the end of the century.
One of the largest events of the postwar era, and one that had a major effect of the economy was the move away from the cities. People were flocking to the suburbs once again, and this time the move was on a much larger scale. This movement was held back by one thing, a lack of housing. This would have to be dealt with in a fast manner, but the homes still had to be high quality. This posed a relatively major problem. The solution came from a developer named William J. Levitt. He thought that communities should be built like cars; just bring the assembly line to the worksite. Buyers were offered very few options, just color for the most part, so all the homes looked similar. This was revolutionary idea; it allowed more houses to be built it less time, which increases profits that the builder received. This also increased the number of jobs available in the construction industry, because of the number of people required to build these homes. This is how the move to the suburbs affected the growth of the postwar economy.
The final major event that affected the growth of the economy was the baby boom. The birthrate was skyrocketing, up about 20% from before the war. With more children running around the country came more bills. You have to spend money to pay bills, and that means that along the line someone is profiting. Thus profit helps the economy grow. That means the more babies there are the more bills that have to be paid. That is how the economy positively benefits from a baby boom, because more money gets spent. That is the baby boom’s contribution towards the growth of the economy in the postwar years.
The economy did grow tremendously during the years following World War II. Those years had a huge impact on the future of the world. Some of those impacts were nuclear power, computers, and even an assembly line process for building homes. The economy grew with huge leaps and bounds, instead of tiny steps like in the past. The Gross National Product increased by nearly 150 percent from the en of the war a 1960. People were earning more money, and they had a lot saved up from during the war years. All of that factored together caused the greatest period of economic expansion in America history.
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