The U.S experienced remarkable economic growth after WWII. Precisely, the war enabled the country to achieve a significant level of prosperity characterized by improved living standards, enhanced income levels, and high GDP. While other countries struggled to reconstruct from the damages of WWII, Americans saw their living standards rising steadily. These improvements aided the prosperity of the country’s economy, which got revealed by the shift in GDP from $200 billion in 1940 to $300 billion in 1950, making it the world’s wealthiest nation. The U.S economic prosperity gets attributed to several factors, such as the growth in the automobile industry, reduction in unemployment rates, and rise in consumerism.
The growth in the automobile industry contributed significantly to the prosperity of the U.S economy. Before 1941, the automobile industry made substantial output from their manufacturing activities. However, after 1941, when the U.S got involved in WWII, the automobile industry’s production levels declined considerably. Specifically, the industry’s output dropped to less than 22300 and 139 in 1942 and 1943, respectively (Sparrow, 2014). The sharp decrease of civilian production allowed the automakers to focus on producing war materials, including warplanes, machine guns, aircraft bombs, and aircraft engines. As a result, the automotive sector got fully transformed into a war-material producing industry, contributing to the overall increase in U.S productivity and output.
In the period between 1940 and 1944, the U.S experienced the highest growth in industrial production (Sparrow, 2014). The percentage change in the volume of output between these years got approximately 15 %. Besides, the aggregate production of manufactured products between 1940 and 1944 rose by 300 %. The U.S government investment caused a 15 % increase in America’s productive capacity. The productivity of labour rose by 25 % in the years between 1939 and 1944 (Sparrow, 2014). Compared to other countries, the productive output of America was twice that of Germany and nearly four times the prolific production of Japan. The above increase in productivity of labour got attributed to the common objective of winning the war. Generally, the transformation of the automotive sector into a war-producing industry contributed to the increase in war production, which became the critical driving force of the American economy throughout the early 1940s. The country’s GDP increased from $88.6 billion to $135 billion in 1939 and 1944 (Sparrow, 2014). This improvement in productivity ended the great depression while setting a foundation for U.S economic and peacetime prosperity, which started in 1945 following WWII.
Besides, the growth of the automobile industry contributed to the development of its related sectors. The rising demand for automobiles by the citizen and the government led to increasing demand for inputs, such as oil and steel, improving the steel and oil industry (Sparrow, 2014). The road construction industry also grew as a result of automobile industry expansion. The production of more vehicles necessitated the construction of more roads and the repair of old ones. The establishment of the automobile related-industries led to the overall growth in the economy.
Also, the U.S economic prosperity gets attributed to the decrease in unemployment rates in the post-war period. The growth of industries, such as the automobiles industries and related firms, created more opportunities for jobs. The increasing demand for automobiles meant that more cars had to be produced, which further implies that more labour had to be employed (Rose, 2018). Thus, the staffing needs in the industries established in the post-war period led to the absorption of many skilled individuals, leading to a substantial drop in the unemployment rate. However, while the establishment of industries could be considered the primary cause of a decline in unemployment rates, the U.S involvement in war also played a part in decreasing unemployment rates. The drop in the levels of unemployment gets attributed to WWII because more individuals were required to serve in the armed forces. During the war, over 22 % of the labour force got absorbed into the armed forces, causing a drop in unemployment. The unemployment in the period between 1940 and 1944 declined by 7.45 million, while the armed forces rose by 10.87 million (Rose, 2018). In general, the decrease in unemployment rates contributed to economic growth. A rise in employment levels leads to increased productivity, which raises the country’s GDP. Considering that the employment rate positively correlates with the GDP, it is evident that the increase in employment rates in both the 1940s and 1950s contributed to the U.S economy’s prosperity.
Moreover, the rise in consumerism in the 1950s fueled the U.S’s economic prosperity. The increase in consumer spending resulted from the rise in individuals’ real income caused by the growth in the overall economy. During the WWII, Americans were inhibited by the wartime rationing policies from purchasing various kinds of goods (Nacey, 2016). The government established these policies to encourage the public to save for their future. Compared to the 3 percent in 1920s, the Americans begun saving 21 percent of their income. By 1950s, the Americans’ real income had doubled their previous revenues, specifically those earned in the 1920s. After WWII, Americans regained their freedom to spend their money freely. Most of them focused on products that could enable them to modernize their lives. Televisions and automobiles made the highest sale throughout the 1950s. With the immense growth in the suburban populace, the car was in high demand and was accessible for many buyers. Considering that the automobile industry had developed, it could meet the public’s increasing demand for automobiles. Besides cars, many families regarded TV as an essential tool for modernizing their lives. The increased consumption rate of Americans caused the society to shift from production to consumer society, which focused on consumers’ wants. The rise in individuals’ consumption rates enabled companies to make substantial profits, allowing them to hire more employees, thereby reducing the unemployment rates. Also, the vast profits earned from the sale of goods enabled companies to expand their operations and make more investments, contributing to the country’s economic growth. Thus, this indicates that the rise in consumerism was a contributing factor to the U.S economic prosperity.
In conclusion, the U.S economy prospered in the 1940s and 1950s because it focused on increasing its war production with the primary objective of winning the war. This strategy led to the transformation of the automobile industry into a war material producing sector, resulting in the sector’s growth. The development of automobile industries contributed to the increase in economic productivity, causing a rise in the GDP. Besides, the reduction in unemployment rate dues to the growth of sectors facilitated the U.S economic prosperity. Moreover, the increase in consumerism led to the growth of companies’ profit levels, which enabled them to expand and make more investment, thus supporting the country’s economic growth.
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