Impact of World War II on the U.S. Economy and Workforce (2024)

FAQs

Impact of World War II on the U.S. Economy and Workforce? ›

Millions of new jobs were created and millions of Americans moved to new communities to fill them. Annual economic production, as measured by the Gross National Product (GNP), more than doubled, rising from $99.7 billion in 1940 to nearly $212 billion in 1945.

The gross national product of the U.S., as measured in constant dollars, grew from $88.6 billion in 1939 — while the country was still suffering from the depression — to $135 billion in 1944. War-related production skyrocketed from just two percent of GNP to 40 percent in 1943 (Milward, 63).

Many businesses moved from the production of consumer goods to the production of war supplies and military vehicles. American companies began producing guns, planes, tanks, and other military equipment at an unbelievable rate. As a result, there were more jobs available, and more Americans went back to work.

However, its response in the face of World War II was something that still remains unique in modern history. The U.S. economy faced one of the largest mobilizations in human history, as almost 20 million new jobs were created during the war.

The major economic effects of World War 2 included extreme poverty in war-affected areas. Shortage of gold and US dollars, which resulted in inflation. As the US emerged to become a global superpower, the designation of the US dollar as a global reserve currency was also announced.

Gross private investment rose by 223 percent in real terms, with a whopping six-fold real increase in residential- housing expenditures. The private economy boomed as the government sector stopped buying munitions and hiring soldiers. Factories that had once made bombs now made toasters, and toaster sales were rising.

During WWI, economic growth continued and even accelerated as the United States mobilized for the war in Europe. After the war ended in November 1918, the global economy began to decline. Between 1916 and 1921, the U.S. economy experienced two recessions.

The wars have also impacted interest rates charged to borrowers by banks and other creditors. This is the result of war spending financed entirely by debt, which has contributed to a higher ratio of national debt to Gross Domestic Product (GDP) and subsequent rising long-term interest rates.

Overall, unemployment declined from 7.9 percent to 1.4 percent in this period, in part because workers were drawn in to new manufacturing jobs and because the military draft removed from many young men from the civilian labor force.

Organized labor emerged from World War II in a strong position. More than 14 million workers belonged to unions, about 35 percent of the total workforce. The power of unions began to wane, however, when hostile political leaders passed the anti-labor Taft-Hartley Act in 1947.

How did WWII end unemployment? ›

The war created 17 million new jobs at the exact moment when 15 million men and women entered the armed services--unemployment virtually disappeared. Union membership jumped from 10.5 million to 14.75 million during the war.

The Economic Impact of World War I

Unlike in some European countries, the United States was not laid to waste by war. America's factories and countrysides were unharmed, and performing better than ever. World War I sped up American industrial production, leading to an economic boom throughout the 'Roaring Twenties.

World War II transformed the United States from a midlevel global power to the leader of the “free world.” With this rapid rise in power and influence, the United States had to take on new responsibilities, signaling the beginning of the "American era."

High growth needn't require a war. America's response to World War II was the most extraordinary mobilization of an idle economy in the history of the world. During the war 17 million new civilian jobs were created, industrial productivity increased by 96 percent, and corporate profits after taxes doubled.

Following World War II, the United States began an economic boom that brought unparalleled prosperity to a majority of its citizens and raised Americans expectations, breeding a belief that most economic and social problems could be solved.

The First World War 1 Consequences shattered empires, birthed a slew of modern nations, sparked independence movements throughout Europe's colonies, drove the United States to become a global power, and paved the way for Soviet communism and Hitler's ascent.

Expert-Verified Answer

The effect of world war II on the economy was that it increased wages. Thus, option B is correct. Not just in Europe but around the globe, World War II wrought many upheavals. The cultural and economic changes that were brought about during this time still have repercussions today.

The war efforts brought the return of prosperity, and in the postwar period the United States consolidated its position as the world's richest country. This is becasue the war itself brought works to million of America as industrial production also skyrocketed to meet the demand of the war.