The New Economy
Technology and Economic Growth
- The nation's manufacturing output rose by more than 60 percent during the decade
- per capita income grew by a third
- Inflation was negligible
- A mild recession in 1923 interrupted the pattern of growth, but when it subsided early in 1924, the economy expanded with even greater vigor than before
- The economic boom was a result of many things
- An immediate cause was the debilitation of European industry in the aftermath of World War I, which left the United States for a short time, the only truly healthy industrial power in the world
- More important in the long run was technology, and the great industrial expansion it made possible
- The automobile industry, as a result of the development of the assembly line and other innovations, now became one of the most important industries in the nation. It stimulated growth in many related industries as well
- Other new industries benefiting from technological innovations contributed as well to the economic growth
- Radio began to become a popular technology even before commercial broadcasting began in 1920
- With the discovery of the theory of modulation, pioneered by the Canadian scientist Reginald Fessenden, it became possible to transmit speech and music
- Commercial aviation developed slowly in the 1920's, beginning with the use of planes to deliver mail
- On the whole, airplanes remained curiosities and sources of entertainment. But technological advances; the development of the radical engine and the creation of pressurized cabins were laying the groundwork for the great increase in commercial travel in the 1930's and beyond.
- Trains became faster and more efficient as well with the development of the diesel-electric engine
- In both England and America scientist and engineers were working to transform primitive calculation machines into devices capable of performing more complicated tasks
- Genetic research had begun in Austria in the mid-nineteenth century through the work of Gregor Mendel, a Catholic monk who performed experiments on the hybridization of vegetables in the garden of his monastery.
- The remarkable economic growth was accompanied by a continuing, and in some areas even increasing, maldistributional of wealth and purchasing power
- American industrial workers experienced both the successes and the failures of the 1920's as much as any other group
- On the one hand, most workers saw their standard of living rise during the decade, many enjoyed greatly improved working conditions and other benefits.
- Some employers in the 1920's, eager to avoid disruptive labor unrest and forestall the growth of independent trade union, adopted paternalistic techniques that came to be known as "welfare capitalism".
- Welfare Capitalism brought many workers important economic benefits, but it did not help them gain any real control over their own fates
- Welfare Capitalism affected only a relatively small number of workers in any case
- Most laborers worked for employers interested primarily in keeping their labor costs to a minimum.
- Workers as a whole, therefore, received wage increases that were proportionately far below increase in production and profits
- Many laborers continued to regard an effective, independent union movement as their best hope
- But the new Era was a bleak time for labor organization in part, because the unions themselves were generally conservative and failed to adapt to the realities of the modern economy
- A growing proportion of the work force consisted of women who were concentrated in what has since become known as "pink-collar" jobs; low-paying service occupations with many of the same problems as manufacturing employment
- large numbers of women worked as secretaries, salesclerks, telephone operators, and other similarly underpaid jobs.
- Because technically such positions were not industrial jobs, the AFL and other labor organizations were generally uninterested in organizing these workers
- Similarly, the half-million African Americans who had migrated from the rural South to the cities during the Great Migration after 1914 had few opportunities for union representation
- Most blacks worked in jobs in which the AFL took no interest at all; as janitors, dishwashers, garbage collectors, commercial laundry attendants, domestics, and in other types of service jobs.
- In the West and Southwest, the ranks of the unskilled included considerable numbers of Asians and Hispanics most actively excluded from white-dominated unions
- In the wake of the Chines exclusion acts, Japanese immigrants increasingly took the place of the Chinese in menial jobs in California, despite the continuing hostility of the white population
- Mexican immigrants formed a major part of the unskilled work force throughout the Southwest and California
- Mexican workers, too, faced hostility and discrimination from the Anglo population of the region, but there were few efforts actually to exclude them
- Whatever the weaknesses of the unions and of unorganized, unskilled workers, the strength of the corporations was the principal reason for the absence of effective labor organizations
- After the turmoil of 1919, corporate leaders worked hard to spread the doctrine that unionism was somehow subversive, that a crucial element of democratic capitalism was the protection of the open shop
- The crusade for the open shop, euphemistically titled the "American Plan" received the endorsement of the National Association of Manufactures in 1920 and became a pretext for a harsh campaign of union busting across the country
- When such tactics proved insufficient to counter union power, government assistance often made the difference
- In 1921, the Supreme Court upheld a lower-court ruling that declared pocketing illegal and supported the right of courts to issue injunctions against strikers
- As a result, of these developments, union membership fell form more than 5 million in 1920 to under 3 million in 1929