HS-HSS-TAP-Part_6_--_Chapter_39-_Stalemated_Seventies.pdf

HS-HSS-TAP-Part_6_--_Chapter_39-_Stalemated_Seventies.pdf -...

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The Stalemated Seventies __ .,..ck>"'" -- 1968-1980 IN AL L MY YE AR S O F PUBLI C LIFE, I HAV E NEVER OBSTRUC TE D JUST I CE. PEOPLE HAV E GOT T O KNOW WHETHER OR NOT THE I R PRESIDEN T IS A CROOK . WELL, I'M NO T A CROOK; I EARN E D EVERYTHING I'VE GOT. R ICHARD NIXON, 1 973 A s the 1960s lurched to a close, the fantastic quarter- century economic boom of the post-World War II era also showed signs of petering out. By increasing their productivity, American workers had doubled their aver- age standard of living in the twenty- five years since the end of World War II. Now, fatefully, productivity gains slowed to the vanishing point. The entire decade of the 1970s did not witness a productivity advance equivalent to even one year's progress in the preceding two decades. At the new rate, it would take five hundred more years to bring about another doubling of the average worker's standard of living. The median income of the average American family stagnated in the two decades after 1970, and failed to decline only because of the addition of working wives' wages to the family income (see the chart on p. 939). The rising baby-boom generation now faced the depressing prospect of a living standard that would be lower than that of their parents. As the postwar wave of robust economic growth crested by the early 1970s, at home and abroad the "can do" American spirit gave way to an unaccustomed sense oflimits. 938 Sources ol Stagnation What caused the sudden slump in productivity? Some observers cited the increasing presence in the work force of women and teenagers, who typically had fewer skills than adult male workers and were less likely to take the full-time, long-term jobs where skills might be developed. Other commentators blamed declining investment in new machinery, the heavy costs of com- pliance with government-imposed safety and health regulations, and the general shift of the American economy from manufacturing to services, where pro- ductivity gains were allegedly more difficult to achieve and measure. Yet in the last analysis, much mystery attends the productivity slowdown, and economists have wrestled inconclusively with the puzzle. The Vietnam War also precipitated painful eco- nomic distortions. The disastrous conflict in Southeast Asia drained tax dollars from needed improvements in education, deflected scientific skill and manufacturing
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55 50 45 (j) 40 "'0 c:: ro 35 VI :::J 0 £ 30 § VI 25 0 20 0 u) :::i 15 10 5 Current ~I>~~E.:·~;· _ _ . ,.,: .. _;·~~ . ,.I~-.:~.~r~~,~ . illlil:lll<~<lili-:saii!ll!' .... ~,to~'"- "" ~·.olil• •.ti.m~iiilii:li.,, •. , il!.t\"";UI~- Economic Woes 939 Median Family Income, 1970-2001 During the long post-World War II economic boom (from about 1950 to 1970), family incomes increased dramatically, but after 1970 "real," or inflation-adjusted, incomes stagnated. Prosperity in the late 1990s led to a slight upward trend, though adjusted median family income began to decline in the early years of the twenty-first century. (Sources: U.S. Census Bureau, Bureau of Labor Statistics, Statistical Abstract of the United States, 2003, and John J. McCusker, "Comparing the Purchasing Power of Money in the United States (or
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