Three Effects of the Prosperity of the 1920s

Henry Ford's assembly line spurred American economic growth in the 1920s.
... Central Press/Hulton Archive/Getty Images

After World War I in 1918, the United States underwent an economic boom that would last until 1929 and change the face of American society. The mainstreaming of Henry Ford's assembly line innovation also sped industrial production that spawned economic growth. Meanwhile, a succession of three Republican presidents during the 1920s -- presidents Warren Harding, Calvin Coolidge and Herbert Hoover -- promoted laissez-faire economic policies. Suddenly some Americans had access to a level of wealth to which they were not accustomed.

1 New Consumerism

The economic boom of the 1920s saw the establishment of a consumer population that was unprecedented. U.S. assembly lines were so efficient that they lowered the cost of cars, making them more readily available to the public. More and more homes acquired electricity, which brought increased sales of household electronics like telephones and radios. People also began to receive credit that allowed them to purchase homes and property.

2 Rural Poverty

While the 1920s meant upward mobility for some, the years also left many behind. Rural Americans, people of color and poor Southerners did not fare as well. Coal miners, textile mill workers, farmers and seasonal farm laborers were hit hard. Too much crop production resulted in a glut of highly perishable products and put many farmers out of business. Sharecroppers -- most of them black Americans -- saw their wages stagnate and then decline. By the end of the decade, about 60 percent of Americans lived in poverty.

3 Urban Southern Poverty

Meanwhile, ship production decreased, and laborers who had gone to Southern cities like Norfolk, Virginia for shipyard labor -- formerly reliable and financially stable work -- found themselves out of jobs. The immigrant experience in the United States during this time was also one of economic hardship as it was difficult for immigrants to find work at all. Immigrants and people of color often wound up living in very poor conditions in urban ghettos.

4 After the 1920s

Increased inequality meant that a majority of Americans could not afford to purchase the new consumer goods that glutted the market. That is, the people could not sustain the rate of production because there was not sufficient demand for goods. In spite of the industrial innovations of the period, then, short-lived economic prosperity for some in American society left the economy unstable and helped facilitate the devastating Wall Street Crash of 1929 that began the Great Depression.

Christina Lee began writing in 2004. Her co-authored essay is included in the edited volume, "Discipline and Punishment in Global Affairs." Lee holds a Bachelor of Arts in English and politics from the University of North Carolina at Chapel Hill, a Master of Arts in global affairs from American University and a Master of Arts in philosophy from Penn State University.

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