The economic impact of World War Two and post-war developmentsPoverty amid plenty

The economic impact of World War Two affected the USA and the American people in various ways. There is some debate as to how far the USA had become an affluent society by 1960.

Part ofHistoryThe USA, 1929-2000

Poverty amid plenty

Unfortunately, not all Americans experienced In 1962, Michael Harrington’s book The Other America stated that 40 million Americans were living below the This meant that around a quarter of the American population couldn’t afford to clothe and feed themselves.

A 1960 report stated that 8 million Americans earned less than $1,000 a year and that some rural workers’ wages were as low as 50 cents an hour. By the early 1960s, the military was reporting that one-third of people wanting to join the armed forces had to be rejected because they were medically unfit to serve.

Causes of poverty

In a speech in 1952, Democratic senator Adlai Stevenson declared:

“How can we talk about prosperity to the sick who cannot afford proper medical care, to the mentally ill for whom there is no room in our over-crowded institutions? How can we talk about prosperity to the hundreds of thousands who can find no decent place to live at prices they can afford? And how can we talk about prosperity to a living on worn out land, or city dwellers packed six to a room in an unlit tenement with a garbage-strewn alley for their children’s playground?”

A photograph showing a man standing, a young boy sitting in a chair and two small children sitting on a bed in a slum house
Figure caption,
An African American family living in slum housing in Chicago in 1952

There were many reasons why people were living in poverty in the USA, even during this age of affluence and consumerism:

  • African Americans and other ethnic minorities were against, so they were paid a lot less than white Americans. They had less job security as they were often the first people a business would fire. They also found it much harder to afford decent accommodation. In 1955, 40 per cent of the people in New York who were claiming benefits were African Americans.
  • The elderly had little in the way of as they had not had the money to save for one. Many faced expensive bills for their medical treatment or needed to pay for someone to look after them when they could not look after themselves. In 1960, almost 68 per cent of people over the age of 65 had an income of less than $1,000 a year.
  • Disabled people found it difficult to get jobs as a result of discrimination and a lack of suitable roles. People faced rising costs for medical treatment and many people ended up with long-term illnesses because of their living conditions. In 1947, 3 per cent of US homes had no running water and 40 per cent didn’t have access to a toilet. People receiving low incomes were only able to afford poor-quality rented accommodation.
  • With no national health service, the USA was behind many European countries in terms of medical, pension and welfare provision.
  • In rural communities there were fewer job opportunities as a result of and farm wages were very low. The situation was particularly difficult in the southern states. For example, in Mississippi in 1960, 60 per cent of families were living on less than $2,000 a year.

Welfare, health services and pensions

Many European countries had adopted a in the first half of the 20th century, in order to help their citizens who could not help themselves. This was paid for from taxes. Welfare states provided pensions for the elderly, unemployment benefits, access to free medical treatment, slum clearance and programmes to build new

However, there was very little of this in the USA beyond the very basic systems put in place by the New Deal, which only covered a very small number of people. This was because:

  • there was still a very strong belief, particularly among Americans receiving decent incomes, in rugged individualism - the idea that people should work hard to improve themselves and that charities should only help out when people were unable to help themselves
  • people were reluctant to pay higher taxes to help those who were unable to help themselves
  • medical insurance companies had pressured to not provide health care so that they could continue to sell expensive health insurance policies to people

It was only in the 1960s that the presidents began to give the government some responsibility for solving these problems directly.