2. A Growing Economy
Chapter 16
Section 2

3. The Rise of New Industries
During the 1920s, Americans enjoyed a new standard of living. Wages increased and work hours decreased. What effect would this have on workers?
More disposable income made innovations affordable. (money people had to spend)
Mass production increased the supply of goods and decreased costs.
The assembly line, used by carmaker Henry Ford, greatly increased manufacturing efficiency that unskilled workers could perform.
The assembly line divided operations into simple tasks.
Ford’s assembly-line product, the Model T, sold for $850 the first year but dropped to $490. By 1924 the Model T was selling for just $295. Thus, the aim was to increase sales by reducing the cost of each car.
The Model T Ford became known as the “Tin Lizzie”.

4. Assembly Line of new cars

5. Model T Ford

6. The Rise of New Industries, cont.
Henry Ford changed American life with his affordable automobiles.
Small businesses such as garages and gas stations opened.
The petroleum industry expanded tremendously.
Car industry contributed towards 15% of the nation’s steel.
Cars revolutionized American life:
Eased isolation of rural life
Allowed people to live farther away from work = commuters
Allowed for the construction for suburban areas.

7. Consumer Goods
New consumer goods became available and affordable like:
the electric razors
frozen foods
household cleaning supplies
labor-saving appliances, e.g. irons, vacuum cleaners, refrigerators, gas stoves.
Americans used their new income to make life easier.

8. Refrigerator

9. The Rise of New Industries, cont.
By 1919 the Post Office had expanded airmail service across the continent.
By the end of 1928, 48 airlines were serving 355 American cities.
The Air Commercial Act of 1926 provided federal aid for building airports.
However, aviation did not see the same boom as the car industry because many saw planes as dangerous.

10. Aviation in the 1920s

11. The Radio Industry
In 1926 the National Broadcasting Company (NBC) established a permanent network of radio stations to distribute daily programming.
In 1928 the Columbia Broadcasting System (CBS) set up coast-to-coast stations to compete with NBC.

14. The Consumer Society
Higher wages and shorter workdays led to an economic boom.
People began to borrow money, and banks offered people credit: buy now, pay later (with interest)
Americans became confident that they could pay back their debts.
75% of people bought their radios on an installment plan.
Ads linked products with qualities that were popular to the modern era, such as convenience, leisure, success, fashion, and style. Adverts were persuasive.

15. Radios in the 1920s

16. The Consumer Society, cont.
By the early 1920s, many businesses hired professional managers and engineers.
Corporations introduced welfare capitalism:
where employees were able to purchase stock
participate in profit sharing
receive medical benefits
made unions seem unnecessary.
Effect: Many workers felt better off and were able to spend their income on consumer goods that they could not have afforded before.

17. The Farm Crisis Returns
American farmers did not share in the prosperity of the 1920s.
The problem:
Farmers could produce more thanks to new technology
Demand for crops did not match the supply.
Europe could not afford American crops, and began to raise their own again after WWI.
Prices dropped while the cost to improve technology increased.
Farmers borrowed money at inflated prices to buy new land and new machinery to raise more crops.
This meant that farmers experienced declining profits throughout the 1920s.

18. Farming in the 1920s

19. Summary