Servicemen’s Readjustment Act of 1944: The Affluence of America in the Mid-20th Century
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As World War II came to an end, Congress saw fit to pass the Servicemen’s Readjustment Act of 1944, now commonly referred to as the GI Bill. This bill, created to provide financial assistance to those coming home from war, had a greater impact on American society and economics than could have ever been foreseen by members of Congress. This Act would lead to the growth of the automobile industry, suburban development, and the rise of consumerism.
When we look at items that have shaped the nation, I think that the automobile, more than any other, had the most impact on America’s growth and culture. This is not to say that the creation of cars should receive all of the credit for America’s prosperity; however, the mass production, the usage, and the ownership of cars were instrumental to the success of America in the 1950s and 60s.
The increased usages of cars led to passing of the Interstate Highway Act of 1956. With this Act, America added 41,000 miles of road to America’s highway system. Due to sheer volume of cars on the road and miles driven annually, business innovators saw an opportunity to create travel necessities, such as interchangeable motels and fast-food chains, the two most popular being Holiday Inn and McDonald’s.
Another benefit of the Servicemen’s Readjustment Act was low interest, zero down payment home loans. With thousands of servicemen looking to purchase homes for their new families and most urban cities suffering from overcrowdedness, sales of homes in suburban areas exploded.
Builders like William Levitt made the suburban dream a reality with his 4,000-acre potato field in Hempstead, Long Island. Using a mass-production, cookie cutter layout, Levitt was able to build 150 homes a week. With so many servicemen looking to use their low interest, zero down loans, Levitt sold 1400 homes within the first three hours of lot sales, in 1949. It this one area, which is now Levittown, New York, he built 6,000 of these mass-production homes. This suburban town would be the first of many to come.
There was no argument that money was more plentiful that it had been in decades. The education benefits provided by the Servicemen’s Readjustment Act sent hundreds of thousands of men to college or technical school. With this now highly educated middle class, the American workforce saw a shift away from blue-collar workers to white-collar workers. As these jobs tended to pay more, the middle class saw a nice increase in median household income. With more money came more luxuries and the rise of consumerism.
As the children of these families became teenagers and got part-time jobs, they would give breath to a new market, the teen market. This market would focus on clothes, makeup, and music. As these teens became young adults, they would create a world dependent upon using credit for consumer products. I don’t necessarily think that this is strong for America’s growth and economics; it is still a staple of American culture.
My father went to college on the GI bill. If not for that, he likely would have been a factory worker instead of a teacher. Interesting though, on the credit card introduction – I think that was a huge transfer of wealth from the middle-class to the banks – which was ultimately bad for the well-being of the country.