A BOOMING ECONOMYSEC. 24-3 PAGES 709-712

Define: Recession – scientific management –

gross national product – productivity –

welfare capitalism - installment buying

Explain impact of Ford’s assembly line – impact of autos on other industries

Growth in the 1920s• Post WWI returning soldiers found competition for jobs –

companies laying off workers – some went bankrupt.• Recession ( economic downturn) for 2 years• Economy will begin to improve in 1922 - electricity in most

factories by 1929 – cheaper than steam power• Scientific management – hire experts to study how goods

could be produced more quickly.• By adopting new work methods, businesses lowered costs

and increased productivity ( the amount of work each worker must do).

• Many companies used assembly lines (ex. Ford, Chrysler , General Motors)

Growth in the 1920s• Welfare capitalism – practices designed

to link workers to the company to avoid unions

• Businesses offered: safety programs – insurance – stock buying options – activities – cost saving products – health clinics

• Economy boomed as consumers bought new appliances (radios, stoves, refrigerators) automobiles helped travel, tourism

• Consumers used installment buying

(system of paying for goods in which

customer promises to pay small, regular

amounts over a period of time).• Advertising encouraged buying

SUMMARIZE• Vocab term that means economic downturn• Vocab term –hire experts to study how goods could be produced more quickly

• Vocab term- amount of work each worker must do• What did most companies use to increase production?

• Vocab term – practices linking workers to company to avoid having a union

• Vocab term that means system of paying for goods by making small regular amounts over a time period

Automobiles• Detroit, Michigan- auto manufacturing center

of the world• Ford’s assembly line became standard

- paid workers $5 day • Lowered price of car to $300 – affordable

Model T – came only in black• Workers averaged $1300/yr – could afford

luxuries• General Motors began making various

colored cars – Ford responded with the

Model A• Auto industry helped other industries to boom

( new roads, highways, gas stations, rest stops,

restaurants , steel, rubber, glass, gasoline )• Cars contributed to spread of suburbs – drive

to work, entertainment, tourism

Other Industries• Farmers after WWI saw competition with European nations in producing food.

• Prices fell- farmers could not repay debts –lost farms• Railroads were being replaced by trucking industry • Coal replaced by electricity• New fabrics replaced demand for cotton – cost of

living continued to rise- wages rose slightly.• By 1929, nearly ¾ of families’ incomes were below

$2,500 – accepted level for a comfortable life

SUMMARIZE• What was the auto capital in the 1920s?• Whose company was the example of the assembly line?

• Name two industries that did not share in the economy boom.

• Which group of workers in America began to lose their property?

• By 1929, what percentage of families were below the acceptable level of comfort?