Links and Resources with information about the Post War Boom, a time of economic expansion, low inequality, lowering poverty, and great prosperity for the middle class that ended in the 1970s. A great empirical battery of evidence demonstrating the effectiveness of Progressive policies. You can’t “legislate prosperity” is the great foundation of Conservative idealism. Here was a time we had high taxes, a strong government, with solid growth, shared prosperity, lowering poverty, raising wages, and a strong middle class.
Growing together then pulling apart: Productivity and median compensation in the postwar era
The hourly compensation of a typical worker grew in tandem with productivity from 1948–1973. That can be seen in Figure A, which presents both the cumulative growth in productivity per hour worked of the total economy (inclusive of the private sector, government, and nonprofit sector) since 1948 and the cumulative growth in inflation-adjusted hourly compensation for private-sector production/nonsupervisory workers (a group comprising over 80 percent of payroll employment). After 1973, productivity grew strongly, especially after 1995, while the typical worker’s compensation was relatively stagnant. This divergence of pay and productivity has meant that many workers were not benefitting from productivity growth—the economy could afford higher pay but it was not providing it.
US Annual Productivity growth great at almost it’s fastest pace in history from 1950 – 1973, about 2.7% per year. That’s not merely GDP Growth, that’s productivity growth, the unit of productivity per unit of labor. Productivity is an economic measure of output per unit of input. It wasn’t that we were merely rebuilding, or that our GDP was good because everyone else was trashed, it was that we were able to do more with each unit of input in this time.
European Productivity growth grew at an amazing 4.7% in that time. So it wasn’t just the United States recovering from the war, or that the rest of the world was trashed, because other countries grew too, some faster than us.
The Great Courses, Modern Economic Issues, Lecture 4 – Productivity and Productivity Growth, 12:30
We weren’t merely rebuilding, but we were doing it better.
In fact our post war economic boom was considerably worse than MANY other countries during that same time period, including Denmark, Spain, France, Germany, (and others) and Germany’s infrastructure and economy was certainly damaged during the war.
Poverty and the Post War Boom
The Poverty Rate alone Fell from 21% in 1959 to 12.4% in 1969.
The Great Courses, Modern Economic Issues, Lecture 19 – Poverty and Families, 3:00
High GDP Growth
What Went Wrong
Everything for Sale