Coming out of the depression filled years of the 1930’s, America was facing the possibility of war. The U.S. wanted to remain isolated from the conflict but after the Pearl Harbor Attack, there was no choice but to enter into World War II. The economy of the 1940’s can generally be divided into two periods: the economy during the war and the economy after it.
World War II did not merely revitalize the U.S. economy; it altered it in a drastic way. America’s involvement in WWII quickly boosted the economy during the war years of 1941-1945. It also laid the foundation for the U.S. to become an economic superpower (Vatter 169).
To begin with, one of the more outstanding economic performance achievements by the U.S. during WWII was the virtual elimination of unemployment (Vatter 21). Between 1940-1944 industrial production rose by 88%, this was attained by employing more labor and by using more energy and raw materials inputs with moderate additions to preexisting capital stock (Williams 230). During this period, employment went up from 47.52 million to 53.96 million, an increase of 13.5%. Unemployment rates had fallen from 4.7% in 1942 and could decline only to 1.2% in 1944 (Williams 230). This accomplishment was even more significant because of the diminished labor force caused by the 11 million men and women entering the armed forces during this period. This drainage of manpower created opportunity for categories of workers who had previously never had a chance to work; such as young people, minorities, older workers and especially women. The labor force was one of the main reasons U.S. industry was able to meet the great demand in productivity created by the war.
The year of 1942 saw America’s conversion to a “total war” economy. In January of that year, President Roosevelt established the War Production Board to redirect the nations production to the war effort. The automobile industry stopped production of automobiles and redir...
Bailey, Ronald H. The Home Front: U.S.A. New Jersey: Time-Life Books, 1981
Finkelstein, Joseph The American Economy: From the Great Crash to the Third Industrial Revolution. Arlington Heights: Harlan Davidson, 1992.
Goodwin, Doris K. No Ordinary Time. New York: Simon and Schuster, 1994.
Vatter, Harold G. The U.S. Economy in World War II. New York: Columbia University Press, 1985.
Williams, Raburn M. The Politics of Boom and Bust in Twentieth-Century America. St. Paul: West Publishing, 1994.