9.4: A Changing Economy
9.4: Explain the causes and effects of economic and technological change over time.
In the last set of notes, we talked about the end of the Cold War and now, we’re going to be talking about the changing American economy.
Economic Change
As the world became more and more interconnected in the late 20th century, the American economy began to transition. Some jobs went overseas and some U.S. companies expanded to become multinational corporations. Originally, in the late 19th and early 20th centuries, the American economy was based on manufacturing but by the 1980s, many of these jobs were transferred overseas or became automated. This created the Rust Belt, a stretch of industrial Midwest cities such as Pittsburgh and Detroit that were degrading and rusting away due to the closing of factories and the lack of manufacturing needed in them anymore. In contrast, this also led to an increased demand for higher education since many fields such as healthcare, finance, engineering, and computing often required a Bachelor’s Degree or higher.
Digitalization
In addition, the United States was ushered into the digital age during this period and more and more people began to use the Internet, which went public in 1991 with the World Wide Web. Computers spread all over the country and became present in almost every home. Inventions such as email and smartphones greatly increased the ease of communication and allowed people to communicate from around the world. The internet allowed people to access any information from anywhere whenever they wanted. The rise of online stores such as Amazon and eBay, along with the rise of Paypal and Venmo, allowed people to buy things online and transfer money online, changing how people shopped. Social media sites such as Facebook, Twitter, and Instagram changed how people communicated and interacted with each other and also transformed the advertising industry. More and more media began to be consumed online and as a result, newspapers and magazines transferred to be online as well. Streaming services emerged so people could watch films and series online.
Economic Inequality
But economic inequality continued to persist during the 21st century. While the wages of the working and middle class mostly stayed the same, we see a rise in the number of millionaires and billionaires during this period such as Elon Musk, Mark Zuckerberg, and Jeff Bezos. This was the result of tax cuts under Reagan and 43rd President George W. Bush that benefited the rich. In addition, the transition to a post-industrial economy meant that many people were no longer protected by unions and that now, many were just working minimum-wage jobs in the service sector. Events such as the Great Recession in 2008 also hurt the lower and middle classes much more severely than the upper class.
