Modern history

The Home-Front Economy

The global conflict had profound effects on the American home front. World War II ended the Great Depression, restored economic prosperity, and increased labor union membership. At the same time, it smoothed the way for a closer relationship between government and private defense contractors, later referred to as the military-industrial complex. The war extended U.S. influence in the world and offered new economic opportunities at home. Despite fierce and bloody military battles throughout the world, Americans kept up morale by rallying around family and community.

Managing the Wartime Economy

To mobilize for war, President Roosevelt increased federal spending to unprecedented levels. Federal government employment during the war expanded to an all-time high of 3.8 million workers, four times as many as during the New Deal, setting the foundation for a large, permanent Washington bureaucracy. War orders fueled economic growth, productivity, and employment. In 1939 the federal budget stood at $9 billion; by the end of the war, it had grown to more than $100 billion. The gross national product increased from $91 billion to $166 billion during the war (Figure 23.1), union membership rose from around 9 million to nearly 15 million, and unemployment dropped from 8 million to less than 1 million. The armed forces helped reduce unemployment significantly by enlisting 12 million men and women, 7 million of whom had been unemployed. Workers earned extra income for overtime work, but because of the rationing of consumer goods, Americans had to defer personal spending.

FIGURE 23.1 Real Gross Domestic Product of the Great Powers, 1938-1945

Although World War II stalled or damaged the economic productivity of most of the warring nations, the U.S. economy grew dramatically between 1938 and 1944. With all the battles taking place outside the continental United States, the demand for food, weapons, ships, airplanes, gasoline, and other items by Great Britain and other Allied powers ensured increased employment, productivity, and profits for American workers.

Source: Data from Mark Harrison, ed., The Economics of World War II: Six Great Powers in International Comparison (Cambridge: Cambridge University Press, 1998), 11.

Prosperity was not limited to any one region. The industrial areas of the Northeast and Midwest once again boomed, as automobile factories converted to building tanks and other military vehicles, oil refineries processed gasoline to fuel them, steel and rubber companies manufactured parts to construct these vehicles and the weapons they carried, and textile and shoe plants furnished uniforms and boots for soldiers to wear. As farmers provided food for the nation and its allies, the index of farm production (which was 100 in 1939) jumped from 108 in 1940 to 126 in 1946. The economy diversified geographically. Fifteen million Americans—11 percent of the entire population—migrated between 1941 and 1945, and another 12 million left their homes and joined the armed forces. The war transformed the agricultural South into a budding industrial region. The federal government poured more than $4 billion in contracts into the South to operate military camps, contract with textile factories to clothe the military,

and use its ports to build and launch warships. The availability of jobs in southern cities attracted sharecroppers and tenant farmers, black and white, away from the countryside and promoted urbanization while reducing the region’s dependency on the plantation economy. In similar fashion, the West Coast prospered because it was the gateway to the Pacific war. The federal government established aircraft plants and shipbuilding yards in California, Oregon, and Washington, resulting in extraordinary population growth in Los Angeles, San Diego, San Francisco, Portland, and Seattle. Black and white migrants from Texas, Mississippi, and Louisiana headed west to take advantage of these opportunities.

Following the attack on Pearl Harbor, Congress passed the War Powers Act, which authorized the president to reorganize federal agencies any way he thought necessary to win the war. Roosevelt replaced the agencies he had created to combat the Great Depression with another outpouring of organizations to fight the Axis powers. In 1942 the president established the War Production Board to oversee the economy. The agency enticed business corporations to meet ever-increasing government orders by negotiating lucrative contracts that helped underwrite their costs, lower their taxes, and guarantee large profits. During the course of the war, corporate net profits nearly doubled. The government also suspended antitrust enforcement, giving private companies great leeway in running their enterprises. Much of the antibusiness hostility generated by the Great Depression evaporated as the Roosevelt administration recruited business executives to supervise government agencies for the token pay of $1 a year. Indeed, the close relationship between the federal government and business that emerged during the war produced the military-industrial complex—the government-business alliance that would have a vast influence on the future development of the economy.

In the first three years of the war, the United States increased military production by some 800 percent. American factories accounted for more than half of worldwide manufacturing output. On their best days, U.S. plants built a ship a day and an airplane every five minutes. By 1945 the United States had produced 86,000 tanks, nearly 300,000 airplanes, 15 million rifles and machine guns, and 6,500 ships.

Financing this enormous enterprise took considerable effort. The federal government spent more than $320 billion, ten times the cost of World War I. To pay for the war, the federal government sold $100 billion in bonds, only about half of what was needed. The rest came from increased income tax rates, which for the first time affected low- and middle-income workers who had paid little or no tax before. At the same time, the tax rate for the wealthy was boosted to 94 percent. In addition to paying higher taxes, American consumers shouldered the burden of inflation. Shortages in household and personal goods produced higher prices, which meant lower purchasing power. During the war, consumer prices jumped by 28 percent, despite the efforts of another federal agency, the Office of Price Administration, to stabilize them.

Building up the armed forces was the final ingredient in the mobilization for war. In 1940 about 250,000 soldiers were serving in the U.S. military, compared with Germany’s 6 to 8 million troops. By 1945 American forces had grown to more than 12 million men and women through voluntary enlistments and a draft of men between the ages of eighteen and forty-five. The military reflected the diversity of the U.S. population. The sons of immigrants fought alongside the sons of older-stock Americans. Although the military tried to exclude homosexuals, they managed to join the fighting forces. Some 700,000 African Americans served in the armed forces, but civilian and military officials confined them to segregated units in the army, assigned them to menial work in the navy, and excluded them from the U.S. Marine Corps. The Army Air Corps created a segregated fighting unit trained at Tuskegee Institute in Alabama, and these Tuskegee airmen, like their counterparts among the ground forces, distinguished themselves in battle. Women could not fight in combat, but 140,000 joined the Women’s Army Corps, and 100,000 joined the navy’s WAVES (Women Accepted for Voluntary Emergency Service). In these and other service branches, women contributed mainly as nurses and performed transportation and clerical duties.

The concentration of power in the executive branch that accompanied the war effort, together with the president’s expanded role in international diplomacy, fostered what historian Arthur Schlesinger Jr. termed “the imperial presidency.” As commanders in chief, Roosevelt and his successors waged war and negotiated peace by controlling and manipulating the flow of information that reached Congress and the American public. Together with the burgeoning military-industrial complex, the imperial presidency redistributed power both within Washington and throughout the country at large.

Tuskegee Airmen Twenty black pilots, among those known as the Tuskegee airmen, line up for a photograph, which they signed. The Army Air Corps created two segregated units of African American airmen, the 442nd Bombardment Group and the 99th Pursuit Squadron. The latter flew combat missions in Europe. The success of the Tuskegee airmen contributed to the postwar desegregation of the armed forces. Courtesy National Park Service, Museum Management Program and Tuskegee Institute National Historic Site, TUAI 31,

The government relied on corporate executives to manage wartime economic conversion, but without the sacrifice and dedication of American workers, their efforts would have failed. The demands for wartime production combined with the departure of millions of American workers to the military created a labor shortage that gave unions increased leverage. By 1945 the membership rolls of organized labor had grown from 9 million to nearly 14 million. In 1942 the Roosevelt administration established the National War Labor Board, which regulated wages, hours, and working conditions and authorized the government to take over plants that refused to abide by its decisions. Unions at first refrained from striking but later in the war organized strikes to protest the disparity between workers’ wages and corporate profits. In 1943 Congress responded by passing the Smith-Connally Act, which prohibited walkouts in defense industries and set a thirty-day “cooling-off” period before unions could go out on strike.

New Opportunities for Women

World War II opened up new opportunities for women in the paid workforce. Between 1940 and the peak of wartime employment in 1944, the number of employed women rose more than 50 percent to 6 million. Given severe labor shortages caused by increased production and the exodus of male workers into the armed forces, for the first time in U.S. history married working women outnumbered single working women. At the start of the war, about half of women employees held poorly paid clerical, sales, and service jobs. Women in manufacturing labored mainly in low-wage textile and clothing factories. During the war, however, the overall number of women in manufacturing grew 141 percent; in industries producing directly for war purposes, the figure jumped by 463 percent. By contrast, the number of women in domestic service dropped by 20 percent. As women moved into defense-related jobs, their incomes also improved.

As impressive as these figures are, they do not tell the whole story. First, although married women entered the job market in record numbers, most of these workers were older and without young children. Women over the age of thirty-five accounted for 60 percent of those entering the workforce. The government did little to encourage young mothers to work, and few efforts were made to provide assistance for child care for those who did. One notable exception was the Kaiser Corporation shipyards, which operated child care facilities twenty-four hours a day. In contrast to this situation, in Great Britain child care programs were widely available. Second, openings for women in manufacturing jobs did not guarantee equality. Women received lower wages for work comparable to the work that men performed, and women did not have the same chances for advancement. Typical union benefits, such as seniority, hurt women, who were generally the most recent hires. In fact, some contracts stipulated that women’s tenure in jobs previously held by men would last only for the duration of the war.

Gender stereotypes continued to dominate the workforce and society in general. Magazine covers with the image of “Rosie the Riveter,” a woman with her sleeves rolled up and her biceps bulging, became a symbol for the recruitment of women, but reality proved different. The government, private employers, and mass media advertised for women workers by adapting traditional views of women to their new roles. One piece of literature suggested that an overhead crane operated “just like a gigantic clothes wringer” and that winding wire spools was very much like crocheting. Women who took war jobs were viewed not so much as war workers but as women temporarily occupying “men’s jobs” during the emergency. As the war drew to a close, public relations campaigns shifted gears and encouraged the same women they had recently recruited to prepare to return home.

Everyday Life on the Home Front

Morale on the home front remained generally high during the war, as prosperity returned and American casualties proved relatively light compared with those of other Allied nations. As in World War I, the government set up an agency, the Office of War Information, to promote patriotism and urge Americans to contribute to the war effort any way they could. Schoolchildren collected scrap metal and rubber to donate to the production of military vehicles and weapons, and families planted “victory gardens” to grow vegetables for domestic consumption. Mothers and daughters helped staff USO (United Service Organizations) dances and recreational activities for soldiers headquartered in the United States. Americans also contributed to the war effort by adhering to restrictions on the consumption of consumer goods. Rationing cards restricted purchases of gasoline for cars and for food such as meat, butter, and sugar.

Hollywood kept the American public entertained, and movie attendance reached a record high of more than 100 million viewers. Films portrayed the heroism of soldiers on battlefields in Guadalcanal and Bataan. They celebrated the courage of Russian allies in propaganda epics such as Mission to Moscow (1943) and explored the depth of personal and political loyalties in classics such as Casablanca (1943). Hollywood stars signed up for the military, and some fought overseas; others, such as Ronald Reagan, made informational films and entertained the troops. A number of Hollywood celebrities, including the comedic actor Carole Lombard, helped raise funds in war bond drives. Others such as Betty Grable kept up servicemen’s spirits by posing for photos that GIs pinned up in their lockers, tents, and equipment.

For many, life went on, but not quite in the same way. Around 15 million Americans moved during the war, with more than half of them relocating out of state. With husbands at war and wives at work, many children became “latchkey kids” who stayed home alone after school until their mothers or fathers returned from their jobs. With less parental supervision, juvenile delinquency rose, resulting in increased teenage arrests for robbery, vandalism, and loitering. Prostitution flourished around military installations, and with it came more cases of sexually transmitted diseases. High school graduation rates, especially for boys, fell sharply, but many of the dropouts found jobs to add to the family income and relieve the labor shortage. With the end of the Great Depression and with more young people working, marriage rates increased, and couples wed at a younger age. By 1945 the winding down of the war and the rapidly increasing number of marriages produced the first signs of a “baby boom.” At the same time, the stresses of life during wartime, including long separations of husbands and wives, also resulted in higher divorce rates.


• How did the war accelerate the trend that began during the New Deal toward increased government participation in the economy?

• How did the war affect life on the home front for the average American?

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