The Affluent Society

America in the 1950’s

America after the War

• Celebration…. and

DEMOBILIZATION

• 1945 – 12m military• 1947 -- 1.6m military

Demobilization

• War industries convert to peace production– Autos, TV's, household appliances, cameras

• War-time price controls/rationing removed– Prices rise

• Increased demand– Inflation sky rockets1945-1947– Labor Strikes (5 million strikers 1946)

• Truman’s Fair Deal– Taft-Hartley Act

• Limits union power

• Many women exit the labor market

The Economy Grows in the 50’s

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billions of dollars

Year

GNP Gross National Product

1940

1950

1960

“Real Income – up 20% 1950--1960

Consumer Society• 1950’s We were 6% of the world’s

population, producing and consuming 50% of the world’s products.

Why were the 50’s so prosperous?

• Rise in real income/savings from WWII

• “Pent-up” demand– Little consumer spending WWII/Great Depression

• New Technologies

• GI Bill

GI Bill of Rights Servicemen's Readjustment Act of 1944

• Provides funds for education for Veterans– an estimated 2.2 million

veterans received education at colleges and universities

– A total of 7.8 million veterans, or 50.5 percent of the World War II veteran population, received training or education under the bill.

GI Bill

• Funds Home Loans– Over 2 million loans by

1950– Housing starts:

• 1944 -114,000• 1950 - 1.7 million

• Home ownership increases to 62% of the population by 1960

New Jobs• Construction

• Government Jobs

• Education

More New Jobs• “White collar” jobs

– Big Business– Finance– Advertising

(mostly white and male) • Service Industry

– Insurance– Transportation– Retail– Hospitality

• MacDonald’s• Holiday Inns

– Service and repair workers (service jobs > manufacturing jobs)

– A shift from producing goods to providing servicesA shift from producing goods to providing services

Why were the 50’s so prosperous?

• “Bigger is Better” efficiencies in industry– IBM sales grow 10x between 1946-1961– GM doubles its assets to $2.8 billion in 1960

• Conglomerates-large companies with holdings in unrelated industries, brought about by business mergers

– benefit: company could grow without violation of anti-trust law– Example: General Electric, Berkshire-Hathaway, Time-Warner, Phillip-Morris

Farms Become Big Business

• Small family farms replaced by agribusiness corporations.– Cost efficiencies on larger farms– Expense of new technologies– Pesticide/Synthetic fertilizers

• 1940 to 1960– Farm size doubles– Total farms: 6 million to 4 million (2.3 million now)

– Farm population: 30 million to 13 million

Mobility

• Post-war shifts in population– To “Sunbelt”– Rural to Urban

(20% of American moved each year of the 50s)

• The “Automobile Culture”– 58 million cars purchased during the 1950s– Highway Act of 1956

• $32 billion to build 40,000 miles of roads• Interstate Highway System

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Supporting Businesses

Suburbia

Small, mass-produced homes that the middle-class can afford

“Sunbelt” Growth