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TJ Juvera (U0827899)
Bus 3950
April 9, 2019

How Did World War I Shape The American Economy Today?

America’s economy faced major changes in the early 1900’s due to the country’s

involvement in World War I. A recession had been stifling America’s economic growth

before they entered World War I in 1917, but wartime efforts and the rebuilding of the

world after the completion of the war allowed America to evolve and emerge as an

industrial and economic leader (“U.S. Economy in World War I”). By looking deeper at the

causes and effects of the war on the American workforce, it is possible to see how World

War I shaped the American economy into what it is today through advances in

manufacturing and production, the rise of urbanization, the organization of labor unions,

and the inclusion of women in the workforce.

After World War I, when assessing the physical and economical destruction of the

war, it was apparent that European homes and industries sustained much more damage than

their American counterparts. While Europe was focused on rebuilding their cities and

recovering from the war, America was working on improving and advancing as a world

power. During the 1920’s, America experienced a massive economic boom that increased

demand for American goods and resulted in industrial growth (Rockoff, 2004). America

quickly grew in manufacturing and production, and also emerged as the military and

industrial leader. The 1920’s as a decade saw America’s economy grow by forty-two

percent, that period is now referred to as the “Roaring Twenties.” Massive growth occurred

in a large variety of industries during the Roaring Twenties. New industries grew in areas
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such as electric power, gasoline, automobiles, and construction of homes and roads

(Rockoff, 2004). This lead to many improvements in job availabilities all over America,

and also set the foundation of how America manufactures and produces products today. An

example of new industries causing change is the shift from water-powered factories to coal-

powered factories. This shift allowed manufactures to be closer to markets and suppliers.

By fixing and making new roads, it became easier and faster for companies to ship and

transport their products to other markets as well as do business with neighboring companies

(“U.S. Economy in the 1920s”). This is something that takes place all over America to this

day. For example, if an automobile manufacturing factory is placed in a big city there will

be other smaller companies such as tire, window, and other parts companies located in that

same city or just outside the city to be able to do business with the factory.

With America’s economy developing so quickly, Americans took advantage of the

situation to grow and produce as much as they could. Mass production techniques that were

developed and used back in the Roaring Twenties, such as the assembly line, are still

concepts that are used in America’s industries today. America today has an “I want it now”

mentality and companies now need to produce large quantities of product to ensure they

cover a large amount of customers, while also providing a guaranteed product. With the

adaption of the assembly line, an idea established in the 1920’s, it has become easier for

companies to produce large quantities of products. Guaranteeing the quality of the product

was also made easier by the innovation of the assembly line, because it allows focus on

each individual part of a product (“U.S. Economy in the 1920s”). All of these developments
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in industry pushed the economy to produce and manufacture goods at a very high rate, and

created a system that continues to expand and evolve even today.

America’s quick growth and ability to manufacture and produce goods faster than

anyone else led to the urbanization of America. Agricultural efficiency, a result of new

innovations and production practices, took place and made it more difficult for Americans

to find employment by working on a farm ("Industrial Revolution", 2018). The lack of farm

work pushed people to move towards the city or into new towns to find work furthering the

urbanization of the country. Industrial growth, urbanization, and new employment

opportunities all worked together to shape America’s new economy. For example, by the

mid-twenties there was over sixty-two radio stations that broadcasted news, music, and

weather reports to cities across the country. The airline industry advanced by authorizing

commercial airline flights, which also supplied jobs for many returning veterans with pilot

experience (Rockoff, 2004). The auto industry greatly expanded due to the creation of

Henry Ford’s assembly line. The assembly line also made it possible for the Model T to be

listed at $300 allowing more families to be able to purchase a car, which resulted in the

everyday Americans’ ability to travel further distances (“U.S. Economy in the 1920s”). One

of the biggest productions post-war for the United States was the increase of production in

steel. With the growth of cities and production, steel was a large need in American

industries. Steel was used for rail roads, bridges, and making of buildings such as sky

scrapers and office buildings as more people moved into large cities ("Industrial

Revolution", 2018). These advances effectively created jobs all over America and allowed
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more opportunities for people to find work while simultaneously furthering industrial and

economic growth.

The creation of jobs and growth of cities in the post-war period constructed the

foundations of big cities that still exist today. Many skyscrapers and bridges that were built

in the post-World War I period can still be found in big cities like New York and San

Francisco. Many of the big skyscrapers and bridges that were built brought job

opportunities to the city through the building of the structure. The externality of building a

big structure such as a skyscraper gave employment to many Americans. Bridges that were

built allowed easier transportation of goods in and out of the city, and this also supplied

more jobs in both areas of the city (Elazar, 1987). Suppliers began locating closer to the

city center in order to do business transactions more quickly, and people began building

homes and neighborhoods just outside of the city. Neighborhoods, small towns, and

suburbs located just outside the city are called urban areas (National Geographic Society,

2012). These urban areas serve as living areas for many Americans who work inside the

city, but don’t want to live in the city center. Urban areas were also developed so some

business could be located outside the city, but could also still work with other businesses

inside the city. As the cities in America grew, more urban areas continued to be created

(National Geographic Society, 2012). The Salt Lake valley is a good demonstration of a

cities growth creating outlying urban areas. Towns like West Valley, Bountiful,

Taylorsville were created to support the people who want to work and live close to the city,

but not live exclusively in the Salt Lake City center.

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The growth of cities and new occupations created a need for an organized

association of workers. Labor unions played a huge role in the American economy during

World War I. They advocated against child labor, and for improved working conditions and

wages (“Industrial Revolution”, 2018). Employers in America needed a reliable labor force

to ensure that production continued to progress during World War I. Unions took advantage

of this particular moment in history and the jump of economic growth in the country to

push for greater respect. Labor unions and the United States government agreed to terms

that allowed the unions to have greater leverage and a stronger voice if they agreed to war

time regulations. These regulations included promises to not strike or stop production, both

events that could have affected the war effort (Cuff, 1973). Unions continued to grow and

push for change after the end of the war, demanding living wages and democracy in

industry. However, the wartime gains made by labor unions were short lived. Many labor

unions began striking across a wide range of occupations, and this led to a dramatic

decrease in labor union membership due to the uncertainty of work (“Industrial

Revolution”, 2018). Though labor unions faltered after the war, the experience shaped

American industrial relations for many decades.

An additional development in the workforce due to World War I was the inclusion

of women in the workplace. During World War I many women joined the work force

because a large amount of jobs were left vacated by the men who moved overseas to fight

in the war. In 1914 around twenty-three percent of women in the United States were

working, and by 1918, just four years later, approximately forty percent of women were a

part of the work force in America (Braybon, 2016). Wartime needs pushed the market into
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creating new types of jobs and many of these positions were filled by women due to the

lack of available men in the country. For example, during the war there was a high demand

for weapons and ammunition, and because of the urgent need for workers during the war

many companies adapted and incorporated women into the work force. Munitions factories

during the War quickly became the largest employer of women (Gilbert, 1994). Other job

opportunities for women included positions such as railway guards, bus and tram

conductors, postal workers, police officers, and firefighters. Some women even worked

with heavy or precision machinery, however they were not compensated fairly. These

working women often labored in harsh conditions without adequate protective clothing or

proper safety equipment, and were paid lower wages than their male counterparts (Braybon,

2016).

The movement to incorporate more women into the workforce was a huge evolution

that played a major role in the development of today’s workforce. When considering that

women were previously unwelcome or not accepted in many jobs it is interesting to see

how many women now own companies, lead major businesses, and fill a variety of

occupations today. World War I created a situation that allowed women in America to

evolve and take a larger part in their countries economy. Women continued to hold down

jobs after the war and this led to the accomplishment of many milestones for women in

America. Shortly after the war, women were also given the right to vote through the passing

of the nineteenth amendment, and more women moved into positions of authority. Women

today are still fighting for equal pay and rights in the workforce, but now many companies

do their best to make sure the workplace is an equal opportunity work environment.
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Without World War I it is possible that women would not have found a foothold to begin

their growth and change in the workforce.

A world war is never something to be wished for, however World War I did much to

push America into the economic position it is in today. In some ways World War I, and the

consequent evolution of America’s economy can be compared to the universe’s big bang

theory. One large event can be devastating, but through that event’s fallout amazing

advances and systems can be created. In the post-war period, America was able to take

advantage of their resources and push for growth and change in industry. Advancements in

mass-production techniques during wartime set the stage for the growth of large cities. The

urbanization of the country was a direct result of the advancements seen post World War I.

Urbanization also led to larger companies and the need for labor unions. Labor unions

protected workers’ rights and continued to push the country towards more fair and equal

working conditions. World War I is also responsible for the surge of women in the

workforce. Though it was not ideal to lose many men to an overseas war, there is no

arguing that World War I was a key milestone for women in the workforce.

After World War I, America became the industrial and military leader of the world,

and this is a status that is still seen today. Without World War I it is possible that America

would not have found its footing in the world economy. Today in America assembly lines,

advanced mass production techniques, big cities, urban areas, labor unions, and women in

the workforce are all still used and can all be considered direct effects of World War I on

the American economy.

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Bibliography

Braybon, Gail. Women Workers in the First World War. London: Routledge, 2016.

Clark, John Maurice. The Cost of the World War to the American People. New Haven: Yale
University Press for the Carnegie Endowment for International Peace, 1931.

Cuff, Robert D. The War Industries Board: Business-Government Relations during World
War I. Baltimore: Johns Hopkins University Press, 1973.

Elazar, Daniel Judah. Building Cities in America : Urbanization and Suburbanization in a

Frontier Society. Lanham, MD : Hamilton Press, 1987.

Forbes, Steve. "The Horrid Economic Consequences of World War I -- We Still Suffer
From Them." Forbes. August 06, 2014. Accessed April 10, 2019.
https://www.forbes.com/sites/steveforbes/2014/08/02/economic-consequences-of-
the-great-war/#222d578e2b21.

Gilbert, Martin. The First World War: A Complete History. New York: Henry Holt, 1994.

"Industrial Revolution." Riots, Strikes and Unions. January 09, 2018. Accessed April 7,
2019. http://www.american-historama.org/1866-1881-reconstruction-era/us-labor-
unions-history.htm.

National Geographic Society. "Urban Area." National Geographic Society. October 09,
2012. Accessed April 10, 2019.
https://www.nationalgeographic.org/encyclopedia/urban-area/.

Rockoff, Hugh. “Until It’s Over, Over There: The U.S. Economy in World War I.”
National Bureau of Economic Research, Working Paper w10580, 2004.

"U.S. Economy in World War I." EHnet. Accessed April 4, 2019.

http://eh.net/encyclopedia/u-s-economy-in-world-war-i/.

"U.S. Economy in the 1920s." EHnet. Accessed April 5, 2019.

https://eh.net/encyclopedia/the-u-s-economy-in-the-1920s/.