The United States Economic Development in the World War II - Essay Example

? The United s Economic Development in the World War II Introduction The post era of the United s of Americawas between 1945 to 1960.Americans were worried about their economy after the Second World War. One of the worries was because their declined expenditure in military (Davis, 2012). They did not want to go back to economic depression that had been witnessed before. Following the World War II, the increase in the demand of consumers for commodities fueled a robust economic growth. One industry that benefited from the consumer demand was the motor vehicle industry. The automobile industry reverted back to large scale manufacture of cars. To add to that, electronic and aviation industries witnessed an enormous growth. Housing boom was also witnessed. This also added to the expansion of the economy that was being experienced. The Boom in housing was an attempt to provide the militaries that were returning from war an affordable mortgage (Michael, 2011). The Gross domestic product grew extensively. At the beginning of the year 1940, the gross domestic product stood at about 200 000 million dollars. This figure shot to about 300 00 million dollars in 1950.By the year 1960, the gross domestic product had rose to about 500 000 million dollars. There was also increased number of births after the Second World War. These births were referred to as the baby boomers. This also added to the bigger statistics of consumers.Consequently, the percentage of Americans in the middle class increased significantly. There are several reasons that led to the success of the United States of America after the Second World War. According to Young (2012), one of the reasons was because of the elimination process. In the elimination process, countries struggled to fill the huge vacuum that was left after the Second World War. Among the countries that remained strong after the Second World War included Britain, Japan and Germany. The strongest nations that were left were the United States of America and Russia. The process of elimination left the United States of America as the world super power, and was referred to as the capitalist. According to Davis (2013), the strong army the United States of America possessed is also a reason that led to their post war prosperity. The army was well marshaled to a force that was feared in the battlefield during the entire season of the war. By the year 1945, the military of the United States of America comprised of at least 13 000 000 million men, in addition to women who were in unison. This jump started the successful tradition in battle fields the United States of America has enjoyed till today. The industrial strength of the United States was also a crucial factor that was observed not only during but also after the Second World War. As much as they imported most of the resources they used outside the nation, their Gross domestic product stood the highest across the entire world. This margin was very large compared to those of other parts of the world (Young, 2013). During the post war era, the industry was transformed into an economic powerhouse still being witnessed today in the United States of America. These are of the reasons that led to the success of the United States as far as economic growth was concerned. They were able to recognize some of the gaps by other countries which they filled well. The post war prosperity that was witnessed in the United States of America after the Second World War was such a golden chance to the capitalists. This was attributed to maturity in bonds of about 200 million dollars from the years between 1945 to 1973.These bonds were financed by their work force that was educated. The post war prosperity and economic growth was also brought about by the increased number of farm workers who secured jobs in cities and towns across the United States of America. Before the Second World War, the economics of the United States ditched into a great depression. This occurred in the period between 1929 to 1941.In 1932, the United States of America unemployment rate stood at about 25%.This unemployment affected industries such as lumbering, heavy industries, mining and agriculture (Davis, 2012). The great national debt the United States witnessed in 1932 resulted into increased tax rates of incomes. Compared to the sector of the white collar jobs, the industrial field was worse.Governement expenditure increased tremendously between 1932 to 1936.This resulted in deficits in the government expenditure in economic issues. The contributions of The United States of America to the allies were in the form of money, food, soldiers and technological innovation. The focus of the United States was to maximize an outcome in economy. Section one The wages were determined by the level of economic growth. There are several reasons that led to wage rise during the Second World War. One reason that led to the rise in wage rates during the Second World War was the increased efficiency in jobs (Davis, 2012). Millions of residents of the United States of America who worked in occupations that were less productive moved to more efficient occupations. By acquiring efficient jobs, they earned more from their occupations. During the Second World War, wages also increased because productivity was equally improved. The improvement in productivity was brought about by better technologies that were put in place. The technologies increased the output of most firms. Firms experienced great profits, and they also advanced part of the increased profits to the wages of the workers. Besides, the increased wages in the United states of America was because most of the Americans were involved in active labour.Both students and the retired persons involved themselves in active labour.Another group of people who involved themselves in active labor was the unemployed and the housewives. In addition to getting involved in active labour, they increased the hours of the time they worked. This added to the amount of wages they earned at the end of the day because of the extra time they were paid from extra time. The reduction in leisure activity was also important in increasing the wages. The time that was devoted to leisure activities was devoted to productive work (Michael, 2011). This lead to increased output among the Americans. Further, Patriotism among the inhabitants of the United States of America also contributes to the increased wages. They loved their nation hence participated in all activities that would lead to the growth of the economy. They had confidence that everything was going to be normal after the Second World War. Tax controls also an important issue during the Second World War. Several tax policies were put into practice by the federal government. There were a lot of disagreements on which tax measures to be enforced so that the American wages would be reduced. Heavy borrowing of resources was recommended as one of the approaches that were going to be used in order to fully fund the Second World War. There was an additional tax that was imposed on income of employees. This forced the employers to raise the wages of their workers so that they counteract the effects of the increased taxes. The income of persons was also high because the goods that were to be bought were fewer with the dominant dollar that was at people disposal. Since most of the unemployed secured job opportunities, there was an increase in wages. Millions of jobs that were created offered greater opportunities for higher wages to persons who were not previously employed (Young, 2013).Roosevelt, encouraged everyone to take an occupation that would support the war. Those who occupied such opportunities for employments also benefited from the higher wages that they were paid. In particular, more women were encouraged to take more professions in the manufacturing industries where they could earn more wages. Women recognized that they could join the working class just like their men counterparts. The post war era led to some unemployment and decreased wages. For example, the victims of war and the Section two The United States of America got its resources using an array of methods. One of them was excessive use of taxation. High taxes were imposed on workers as a way of mobilizing resources. The congress had been conservative for a long regarding the issue of taxation...However; they decided to break away from their conservative nature. As a result, the congress collaborated with Roosevelt to impose heavy taxes as a way of mobilizing resources. The rates of marginal taxes increased from 81 per cent to about 94 per cent during the entire duration of the Second World War. The income level that was subjected to tax was also lowered (Davis, 2012). Consequently; this resulted to a higher number of people being taxed. The income level that eligible to taxation became as low as 200 000 dollars from the previous level which was about 500 000 dollars. This meant that even the lower socio economic group was captured in taxation. Despite the issue of taxation being used to mobilize resources, it failed in some instances. For example, Roosevelt was unsuccessful in implementing 100% surtax. Another aspect of taxation that greatly improved resource mobilization was the issue of tax exemptions as far as individuals were concerned. Individual exemptions besides deductions were reduced. This led to more individuals to be categorized as those under taxation. By the year 1944, all employees of the government were paying taxes from their federal income. This was a remarkable improvement as a way of using taxation to mobilize resources compared to before the war (Michael, 2011). In 1940, only 10% of the employees were subjected to taxation. The price administration office was concerned with regulation of prices of commodities and monitoring. A system called rationing was useful in preventing inflation. After the war, the tax regimes were revised to affordable levels. Just like any employer would make some regulations that boost the income of employees, those in the United States also did the same. Their policies favored the employees so much leading to higher wages during the war (Young, 2013). For instance, the benefits of employees were not taxed. Among this group of benefits that were not taxed included pensions, health insurance and vocational time. This resulted into increased income among the workers despite the frozen rates of wages that were prevalent. After the Second World War, the wage differences between skilled and unskilled workers were narrowed. The overtime that was a prevalent trend among those who did the unskilled jobs led to their increased wages. At some point, the wage from unskilled labor almost matched the skilled labor. This is because, as the wages of those who worked in households increased heavily, that of the middle class rose slightly. This rise in wages among the middle class was very insignificant when compared to those of the lower classes. However, the increases in wage rates during and after the war were not uniform. In some instances, heavy taxes were imposed on all employees regardless of class. During such instances, wages reduced significantly. Examples of taxes that reduced the wages earned during and after the Second World War was were federal taxes that were imposed on incomes and marginal taxes. Organizations especially the labor unions were also useful in reinforcing the support the government needed during the war. The relationship between the labor unions, the national government, and employees changed. The labor Federation of America supported both the war and the administration of Roosevelt (Davis, 2012). This support from the labor unions triggered the government to offer better labor conditions to the workers. The labor unions were a strong resource during the war in America. This was because the pressure the government of the United States of America was exerting on them to be obedient to trade unions. According the Government at the time of the war, all workers were obliged to be loyal to their trade unions. This formed the foundation from which the government could have a control of all the resourceful employees. The human resources in the United States of America were also met by importing people from other regions of the world to beef up the Unites states army. In the 1940s, there was a need for men with an ability to provide human resources in the industries, in the United States of America. Teenagers were being recruited to provide the human resource to the industry. The use of humans to supply labor in the United States of America suffered some challenges (Young, 2013). The most important is that the laws prohibited child labour.This was a blow as most of the teenagers were regarded as children. Another reason that made the use of child labor to unacceptable was that it made many children drop out of school. Children who were already employed shared their experiences with the unemployed. Their ability to make many at a tender age made them to have love for money. In 1992, statistics indicate that there was a tremendous increase in the number of teenager’s workers to about 1.9 million. Conversely, the number of teenagers who dropped out of school was estimated to be 6.6 million. Section three The Second World War affected farming activities negatively in the United States of America. For example, there was labor shortage in the field of agriculture. This was in time when the country really needed to boost food production so that all the population could be fed (Young, 2013). There was a lot of migration by farmers to the urban areas especially the cities so that they could secure jobs in the factories. This happened despite the fact that they were exempted from any taxation. This was a challenge to the agricultural sector which was the major source of food to the large population present during the war. The large population that was experienced in the United States of America was because of several reasons; for instance, many individuals who had come and were participating in the army as soldiers during the Second World War. Many soldiers from all the regions of the world including Africa and all the allies of the United States of America during the war participated. Hence, more production in the agricultural sector was encouraged so s to meet the demands as far as food was concerned. The prices of commodities of agricultural items were controlled by the federal government. People from outside the United States of America were recruited to work in the farms to enhance food production (Davis, 2012). Such a step was very useful in ensuring that the increased demand in agricultural activities was met. In 1942, labor agreement was signed between the United States of America and Mexico. This led to about 290 00 people being brought in to work in the agricultural farms in the United States of America...Between the years 1942 to 1946, war prisoners of Germany and Italy were brought to America to work in the farms as laborers. About a third of agricultural production in the Michigan City was attributed to human resources derived from foreign labor. The post war era some improvement in the agricultural sector. There was increased mechanization which led to increased yield in the agricultural sector. Machineries were used to produce and process foods.However, the use of machines was opposed especially by the law class because it led to higher rates of unemployment. After the second world war, the United States of America through their leaders were committed to ensure that the their economy was the best especially after the disability that was attributed to the war. They provided aid to the rest of the world so that the other parts could equally grow. For example, through their program of economic recovery, they advanced aid to the Europe between the years 1947 to 1951 (Michael, 2011). It approximated that the total aid given to Europe during the time of war was approximately 13 billion dollars. Other countries that benefited from the program of economic recovery included Germany, Japan, France and Great Britain. These attempts were for America to prove that they were the super powers. Conclusively, Americas’ economy emerged stronger in 1944 than it was in the early years of 1940s. In 1945, the United States of America had secured a strong economy that it later dominated in the reaming quarter of the century. This was the major consequence of the Second World War that influenced the rest of the world to develop after post war that was experienced across the world. In addition, there was growth in the agricultural sectors as new techniques of production were introduced. For example mechanization of farms and industries was seen. Policies regarding taxes were handled in a unique manner during and after the war. In some instances taxes were well thought of as a means of increasing production. References Davis, L & Duncan M. (2012) American Economic History: The Development of a National Economy, London: Oxford UP. Hudson, L & Michael, P (2011). "Simon Patten on Public Infrastructure and Economic Rent Capture" in American Journal of Economics and Sociology, 70 (4): 234-435. Young, N (2013). Why We Fight: Congress and the Politics of World War II, University Press of Kansas. Read More