1920s -­‐ Boom in Business US-­‐ 21.2/3 Notes Chapter 20 Sec<on 2 Feelings about the 1920’s •  Stock Market seen as economic pulse of the na<on –  Con<nued increase in the market value of stocks –  Low unemployment (4%) –  “Everybody ought to be rich” – John J. Raskob •  Welfare Capitalism –wages raised and provided benefits – paid vaca<on, health care, English classes – to strengthen morale and loyalty Chapter 20 Sec<on 2 A Consumer Economy •  New growth due to a consumer economy – one that depends a large amount of spending by consumers. –  Large profits for business -­‐> higher wages -­‐> more spending. –  ShiY away from tradi<onal values of thriY Chapter 20 Sec<on 2 Reasons for the Consumer Economy •  Credit – used to encourage the purchase of expensive goods. –  Installment plan – consumers make par<al payments. •  By 1929, 60% of cars, 70% of furniture, and 80% percent of small appliance bought on with installment plans. Chapter 20 Sec<on 2 Reasons for the Consumer Economy Chapter 20 Sec<on 2 Reasons for the Consumer Economy •  1913-­‐1927 Electric customers quadrupled. –  New appliances for homes drive the increase. –  Rural areas leY out of the expansion of electricity. •  Adver<sing – used to sell products – focused on how goods enhanced the consumer’s image. –  Appeal to insecuri<es and fears to sell goods. Chapter 20 Sec<on 2 Reasons for the Consumer Economy Chapter 20 Sec<on 2 Chapter 20 Sec<on 2 Chapter 20 Sec<on 2 Chapter 20 Sec<on 2 Chapter 20 Sec<on 2 th
6 Hour Homework •  One paragraph per adver<sement. Write in complete sentences. 1.  What images are being used by the adver<sement? 2.  Who is the intended audience? Why do you think so? 3.  What messages are being sent to the audience? 4.  How is the ad similar and different to adver<sements today? Chapter 20 Sec<on 2 Chapter 20 Sec<on 2 Chapter 20 Sec<on 2/3 Reasons for the Consumer Economy •  Rise in Produc<vity – rise in number of goods for purchase. –  Development of new management methods, resources, and technologies. •  Gross Na<onal Product (GNP) – total value of goods and services a country produces. –  1921-­‐1929, grew at average rate of 6% each year. Chapter 20 Sec<on 2 Henry Ford and the Model T •  Goal – to produce more cars and sell them at a price that common people could afford. •  Assembly line – process where each worker does one specialized task. –  Increased efficiency -­‐> Model T built every 24 seconds. •  Able to sell more cars at cheaper prices than compe<tors. Chapter 20 Sec<on 2 Assembly Line Chapter 20 Sec<on 2 Assembly Lines Today Chapter 20 Sec<on 2 Industrial Growth •  The automobile industry = #1 industry in the US in the 1920s. •  Spurred the steel, rubber, oil, glass, and leather industries. –  Spurred housing in the suburbs, road construc<on, restaurants, gas sta<ons, and other economic ac<vity. Chapter 20 Sec<on 2 Bypassed by the Boom •  LeY Behind: Unskilled workers, African Americans, and migrant workers •  Farmers default on loans used to buy tractors and other equipment –  Farms abandoned –  Decrease in crop prices –> Decrease in Wages Chapter 20 Sec<on 2