A Study on the American Experience Since 1945

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HIS/145 The American Experience Since 1945 SECTION I - Economic Miracle AFL-CIO Interstate Highways Suburbs The Salk Vaccine Government Spending Post-war government spending reached 10.2 percent of the GDP during the half decade following World War II (See Figure 1 for 1950 example). Defense was still a major piece of the government spending pie, generating manufacturing prosperity nationwide. At the same time, labor unions negotiated contracts that linked wage increases to productivity growth and to cost of living increases. The wage norms in the private sector reinforced the underlying postwar social contract. Until the 1970s, labor unions led the wage improvement with that particularly benefitted less-skilled, less-educated workers. A spillover effect from union-negotiated wages and benefits was felt by nonunion workers and managers across the economy. Wages and salaries were increasing people had more discretionary income and could afford options like moving to the suburbs and furnishing larger home, and buying cars. The transportation sector had to move the goods nationwide to consumers. The interstate highway system which was originally conceived to move troops and tanks across the country enabled the nation to profoundly improve economic efficiency and productivity. By increasing speed and expanding access, freight costs were substantially reduced. Tractor-trailer operating costs are estimated to be 17 percent lower on interstate highways than other highways.
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