THE IMPACT OF THE GI BILL
To help ease
veterans’ return to civilian life, Congress passed
the Servicemen’s Readjustment Act, or the
GI Bill of Rights, in 1944. In addition to
encouraging veterans to get an education by
paying part of their tuition, the GI Bill guaran-
teed them a year’s worth of unemployment
benefits while job hunting. It also offered low-
interest, federally guaranteed loans. Millions of
young families used these benefits to buy
homes and farms or to establish businesses.
HOUSING CRISIS
In 1945 and 1946, return-
ing veterans faced a severe housing shortage.
Many families lived in cramped apartments or
moved in with relatives. In response to this
housing crisis, developers like William Levitt
and Henry Kaiser used efficient, assembly-line
methods to mass-produce houses. Levitt, who
bragged that his company could build a house
in 16 minutes, offered homes in small residen-
tial communities surrounding cities, called suburbs, for less than $7,000.
Levitt’s first postwar development—rows of standardized homes built on tree-
less lots—was located on New York’s Long Island and named Levittown. These
homes looked exactly alike, and certain zoning laws ensured that they would stay
the same. Despite their rigid conformity, Americans loved the openess and small-
town feel to the planned suburbs. With the help of the GI Bill, many veterans
and their families moved in and cultivated a new lifestyle.
REDEFINING THE FAMILY
Tension created by changes in men’s and women’s
roles after the war contributed to a rising divorce rate. Traditionally, men were the
breadwinners and heads of households, while women were expected to stay home
and care for the family. During the war, however, about 8 million women, 75 per-
cent of whom were married, entered the paid work force. These women support-
ed their families and made important household decisions. Many were reluctant
to give up their newfound independence when their husbands returned. By 1950,
more than a million war marriages had ended in divorce.
ECONOMIC READJUSTMENT
After World War II, the United States converted
from a wartime to a peacetime economy. The U.S. government immediately can-
celed war contracts totaling $35 billion. Within ten days of Japan’s surrender,
more than a million defense workers were laid off. Unemployment increased as
veterans joined laid-off defense workers in the search for jobs. At the peak of post-
war unemployment, in March 1946, nearly 3 million people were seeking work.
Rising unemployment was not the nation’s only postwar economic problem,
however. During the war, the Office of Price Administration (OPA) had halted
inflation by imposing maximum prices on goods. When these controls ended on
June 30, 1946, prices skyrocketed. In the next two weeks, the cost of consumer
products soared 25 percent, double the increase of the previous three years. In
some cities, consumers stood in long lines, hoping to buy scarce items, such as
sugar, coffee, and beans. Prices continued to rise for the next two years until the
supply of goods caught up with the demand.
While prices spiraled upward, many American workers also earned less than
they had earned during the war. To halt runaway inflation and to help the nation
convert to a peacetime economy, Congress eventually reestablished controls sim-
ilar to the wartime controls on prices, wages, and rents.
The Postwar Boom 841
A
Background
See unemployment
rate on page R47
in the Economics
Handbook.
A. Answer
Housing short-
ages, employ-
ment, readjust-
ment to family
life, rising in-
flation and
lower wages,
and shortages
of goods.
▼
The suburbs
were a mass
phenomenon,
even on moving
day.
MAIN IDEA
MAIN IDEA
A
Identifying
Problems
What
problems did
Americans face
after World War II?
