The Economic Boom of the 1950s and '60s

Aspects of the Economic Boom [ASPECTS]

1. Affluence

   In 1958 Kenneth Galbraith wrote The Affluent Society about America.  By 1960 the Standard of Living of the average American was three time that of the average Briton.  During the '50s, the number of houses with a TV increased from 3 million to 55 million, watching shows from 530 stations.  The number of cars increased from 25-60 million, 1945-60. 

2. Suburbs

   By 1960 25% of Americans lived in the suburbs and more than 60% owned their own homes. 

3. Prosperous Middle Class

   The 1950s have been called the ‘Golden Age’ – New York Times reporter on the Economy Jim Tankersley thinks THE highpoint – of the American Middle Class, with more than twice the real annual salary of their grandchildren today, numerous ‘white-collar’ jobs, strong unions (e.g. the AFL‐CIO) securing higher wages and better working conditions, and more leisure and less debt. 

4. Economic Growth

   The US economy grew 37% during the 1950s.  The stock market rose steadily, with the Dow Jones index topping 1,000 for the first time in 1966.  Growth was characterised by the growth of large corporations, and high-tech electronics, military and the aerospace industry. 

5. Consumerism

   The Stockdale Center in Minnesota, opened in 1956, was the first shopping mall.  Conspicuous consumption was the marker of status in American society, and was seen as the pathway to achieving a happy life. 

6. Teenagers

   The economy increasingly aimed at young people with – for the first time in History – money to spend. 

7. Sham!

   It was of course, simply not real for many of the population. 

   • At a time when there was no national system of health care, or of welfare benefits, 35% of the population were still living below the poverty line. 

   • Included in that 35% were the ‘hillbillies’ of the Appalachians, Mexican and Hispanic Americans, and Native Americans.

   • The Southern states were much poorer than the North. 

   • Two thirds of the elderly were living on an income which was less than a quarter of the average wage. 

   • Levels of poverty for African Americans were three times higher than those for white Americans. 

Going Deeper

The following links will help you widen your knowledge:

BBC Bitesize on:

- The American Dream & Post-war prosperity

- Industrial Output

- Affluence and Consumerism

- Suburbanisation and the baby boom

- Poverty amid Plenty

  Essay: How did prosperity change the lives of the American people in the 1950s?

YouTube

Contemporary account - excellent

Causes of the Economic Boom [An Incredible Dream, G. I. Joe]

1. American Dream

   • Originally, the idea of ‘the American Dream’, as popularized by James Truslow Adams in his 1931 book Epic of America, was a social ambition for an America which was a free, equal and prosperous nation.  After WWII the term was hijacked by businesses and advertisers so that wealth and possessions became markers of identity and status in American society, and the supposed pathway to achieving the perfect life. 

   • Betty Smith’s A Tree Grows in Brooklyn ((1943) – a semi-autobiographical novel detailing the successful struggle of the Nolan family to achieve happiness – was widely read.  Popular TV series such as Leave It to Beaver and Father Knows Best portrayed idealised versions of American suburban life, with a well-kept home, modern conveniences, healthy living & morals, and a happy family life. 

   • Advertising drilled home the idea that the way to make your family happy was to give them the latest [whatever]. 

   • The expansion of consumer credit made it easier for Americans to purchase goods and services. 

2. International Trade

   • The Bretton Woods agreement of 1944 stabilised world trade by basing all currencies on the US dollar. 

   • After WWII, to restart the economies of Europe (and prevent the growth of communism), the Marshall Plan poured American investment into the countries of Europe … which then bought things from America. 

   • The 1947 GATT (General Agreement on Tariffs and Trade) promoted international trade by reducing tariffs. 

3. Demand

   • $$200 billion of war bonds matured, and people went out and spent them, e.g. on housing and automobiles, but also on the latest ‘gadgets’ – e.g. consumer electronics like televisions, radios, and household appliances. 

   • A post-war baby boom and growing population meant increased demand. 

   • The move to the suburbs increased demand for automobiles, household goods, and services. 

4. Government Policy

   • The GI Bill provided veterans with low-cost mortgages, loans to start businesses, and tuition for education, leading to a more skilled workforce and increased homeownership. 

   • Truman’s ‘Fair Deal’ policy raised the minimum hourly wage from 40 to 75 cents, and cleared slums for new housing (though he failed to persuade Congress to improve African-Americans' rights). 

   • President Eisenhower invited businessmen into his government, and introduced 'Keynesian' economics.  Federal-Aid Highway Act of 1956 which created the Interstate Highway System) poured money into the economy. 

   • After 1953, the government used surplus agricultural produce as American foreign aid, selling it to needy nations … and increasing American farmers' prosperity. 

   • Increased investment in education, especially higher education, produced a more skilled workforce. 

5. Industrial modernisation

   • Advances in automation and production techniques increased productivity and efficiency; the average price of a TV dropped from $500 in 1949 to $200 in 1953.

   • Large corporations grew, merged and diversified, benefiting from economies of scale. 

   • Heavy investment in research and development led to innovations, particularly aerospace, electronics, and pharmaceuticals. 

6. Jobs, wages and Unions

   The growth of Unions, along with Truman’s Fair Deal, led to increased wages.  Better wages then allowed increased spending, fuelling further growth. 

Source A

A cereal advert from 1958 offering prizes.