The 1970s relates to the postwar era that marked the end of economic expansion and consumer prosperity and setting in of the recession. The US experienced a bottleneck competition from overseas, which led to the decline of the American Industry.
After the war, there was a rise in movements calling for equality in the US workforce. Numerous women groups sprawled to see an increase in women in the workforce from 20% to 40% in 1980. The other reason that brought about this increased demand for equality was the return of veterans from combat after the end of the war. There was a dire need to bolster household incomes to neutralize the effects of the recession and inflationary economy.
The inflation during the 1970s period was severe. The mix of high demand and low supply of items such as jobs, housing, and lack of interventionist efforts fueled the rates of inflation. The pricing of goods kept on rising with little or no increment in the income of the working class. The results were reduced purchasing power of the working population of the US. The real income of the working force was severely reduced. The high demand for jobs coupled with a shrunken industry supply due to the recession had mounted negative effects, especially on workers. The rise of mergers and combinations in the industry sector focused on cutting labor costs. Therefore, the introduction of labor cuts led to reduced employment opportunities and reduced levels of income.
The rise in prices of things continued to surge, leading to overwhelming challenges to consumers in the market. These challenges gave rise to an impetus for the protection of excessive exploitation by firms that took advantage of the challenges of the moment. Economic distress of the 1970s through the 1990s saw a dramatic increase in inequality in income-earning levels. The ratio of the earnings between the high-class and poor declined from 26: 1 in the early 1970s to 310: 1 in 2000. The US dropped in rank as the world’s leading payer of hourly wages.
During the period between 1977 and 1999, the income of the lower workforce dropped by 12%, while the income of the middle-income working-class fell by 3%. Although the income of the top workforce rose over this period by 38%, the overall results had a far-reaching negative impact on the US labor sector. Throughout this period, the labor sector continued to experience a serious downturn in which several firms sought to cut down on economic and production costs.