The Postwar Economy: 1945-1960
As the Cold War unfolded in the decade and a half after World War II, the United States experienced phenomenal economic growth. The war brought the return of prosperity, and in the postwar period the United States consolidated its position as the world's richest country. Gross national product, a measure of all goods and services produced in the United States, jumped from about $200 thousand-million in 1940 to $300 thousand-million in 1950 to more than $500 thousand-million in 1960. More and more Americans now considered themselves part of the middle class.
The growth had different sources. The automobile industry was partially responsible, as the number of automobiles produced annually quadrupled between 1946 and 1955. A housing boom, stimulated in part by easily affordable mortgages for returning servicemen, fueled the expansion. The rise in defense spending as the Cold War escalated also played a part.
After 1945 the major corporations in America grew even larger. There had been earlier waves of mergers in the 1890s and in the 1920s; in the 1950s another wave occurred. New conglomerates -- firms with holdings in a variety of industries -- led the way. International Telephone and Telegraph, for example, bought Sheraton Hotels, Continental Baking, Hartford Fire Insurance, and Avis Rent-a-Car, among other companies. Smaller franchise operations like McDonald's fast-food restaurants provided still another pattern. Large corporations also developed holdings overseas, where labor costs were often lower.
Workers found their own lives changing as industrial America changed. Fewer workers produced goods; more provided services. By 1956 a majority held white-collar jobs, working as corporate managers, teachers, salespersons and office employees. Some firms granted a guaranteed annual wage, long-term employment contracts and other benefits. With such changes, labor militancy was undermined and some class distinctions began to fade.
Farmers, on the other hand, faced tough times. Gains in productivity led to agricultural consolidation, as farming became a big business. Family farms, in turn, found it difficult to compete, and more and more farmers left the land.
Other Americans moved too. In the postwar period the West and the Southwest continued to grow -- a trend that would continue through the end of the century. Sun Belt cities like Houston, Texas; Miami, Florida; Albuquerque, New Mexico; and Tucson and Phoenix, Arizona, expanded rapidly. Los Angeles, California, moved ahead of Philadelphia, Pennsylvania, as the third largest U.S. city. By 1963 California had more people than New York.
An even more important form of movement led Americans out of inner cities into new suburbs, where they hoped to find affordable housing for the larger families spawned by the postwar baby boom. Developers like William J. Levitt built new communities -- with homes that all looked alike -- using the techniques of mass production. Levitt's houses were prefabricated, or partly assembled in a factory rather than on the final location. The homes were modest, but Levitt's methods cut costs and allowed new owners to possess at least a part of the American dream.
As suburbs grew, businesses moved into the new areas. Large shopping centers containing a great variety of stores changed consumer patterns. The number of these centers rose from eight at the end of World War II to 3,840 in 1960. With easy parking and convenient evening hours, customers could avoid city shopping entirely.
New highways created better access to the suburbs and its shops. The Highway Act of 1956 provided $26 thousand-million, the largest public works expenditure in U.S. history, to build more than 64,000 kilometers of federal roads to link together all parts of the country.
Television, too, had a powerful impact on social and economic patterns. Developed in the 1930s, it was not widely marketed until after the war. In 1946 the country had fewer than 17,000 television sets. Three years later consumers were buying 250,000 sets a month, and by 1960 three-quarters of all families owned at least one set. In the middle of the decade, the average family watched television four to five hours a day. Popular shows for children included Howdy Doody Time and The Mickey Mouse Club; older viewers preferred situation comedies like I Love Lucy and Father Knows Best. Americans of all ages became exposed to increasingly sophisticated advertisements for products said to be necessary for the good life.
Presentation U.S. History Primary Source Timeline
The early 20th century was an era of business expansion and progressive reform in the United States. The progressives, as they called themselves, worked to make American society a better and safer place in which to live. They tried to make big business more responsible through regulations of various kinds. They worked to clean up
corrupt city governments, to improve working conditions in factories, and to better living conditions for those who lived in slum areas, a large number of whom were recent immigrants from Southern and Eastern Europe. Many progressives were also concerned with the environment and conservation of resources. This generation of Americans also hoped to make the world a more democratic place. At home, this meant expanding the right to vote to women and a number of election reforms such as the recall, referendum, and direct election of Senators. Abroad, it meant trying to make the world safe for democracy. In 1917, the United States joined Great Britain and France--two democratic nations--in their
war against autocratic Germany and Austria-Hungary. Soon after the Great War, the majority of Americans turned away from concern about foreign affairs, adopting an attitude of live and let live.
The 1920s, also known as the "roaring twenties" and as "the new era," were similar to the Progressive Era in that America continued its economic growth and prosperity. The incomes of working people increased along with those of middle class and wealthier Americans. The major growth industry was automobile manufacturing. Americans fell in love with the automobile, which radically changed their way of life. On the other hand, the 1920s saw the decline of many reform activities that had been so widespread after 1900.
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