Transforming American Economy Since 1980

Well hey there and welcome back to Heimler's History. Now we've been going through Unit 9 of the AP U.S. History curriculum, which covers the period 1980 to the present. And in this video, we're going to look at how the American economy was transformed during this period by new innovations in technology and America's increasing participation in a global economy. So if you're ready to get them brain cows milked with an astonishing amount of increased productivity, well then let's get to it. So in this video, we're really trying to do one thing. Explain the causes and effects of economic and technological change over time. So we're basically going to be talking about how the US economy changed with the rise of digital technology, and then we're going to talk about the effects of that change in the 21st century in America. So by the time the clock ticked over to the 21st century, America was firmly settled into the economic demands of the digital revolution. And here we need to start with the advent of the computer. This device had its origins in the United States in 1946, and back then a computer basically required a whole new wing of the building to be built. Like, they were massive. But over the course of the 20th century, a series of technological innovations like transistors and then microprocessors steadily decreased the size of the computer. And by 1977, the computer was so small in comparison with its ancient mid-century relatives that Apple created a computer for use in the home. IBM followed suit in the 80s with the production of PCs, and by the time the decade came to an end, personal computers were in dang near every workspace. Then in the 90s, the widespread use of the internet changed everything yet again. The internet was originally conceived of as as a series of interconnected computer pages that could be accessed all over the world by dialing into the network, which if you're like me and grew up in the 80s and 90s sounded just like this. Oh baby, the sweet digital sounds are my childhood. Anyway, computers and the internet dramatically altered many aspects of American life, especially with respect to the workplace and the economy. Email became the digital replacement for letter writing and handwritten memos. File sharing programs like Napster, which allowed people everywhere to share digital music files quickly became you ubiquitous, and it forced the music industry to completely alter the way it did business. I can still remember staying after class in college so I could have internet access in the journalism building at my college and just downloading music for free for hours. I'm not saying it was right, but that's what I did. Additionally, the internet had a major impact on the news and media industries, who struggled to digitize their content for the new age. Thanks to sites like Amazon.com, Americans could now purchase goods remotely and have them delivered to their door, which had the effect of driving many brick and mortar stores out of business. So the impact of all of this on the economy has been a subject of debate. On one hand, the digital revolution led to an increase in productivity starting in 1995, which is a good indicator of the overall health of the economy. This increase was primarily attributed to the speed with which communications across the globe could be handled in the internet age. On the other hand, this increased productivity has not led to as dramatic of an increase in standards of living that economists would have expected. One of the major reasons for this is in the changing nature of what we are. work in the digital age and a growing income gap. Let's deal first with the changing nature of work. In the late 20th century and early 21st century, manufacturing in America has declined sharply, while the service sector has increased sharply. Since the 1980s, there has been a steady decrease in American manufacturing, as that task has increasingly been outsourced overseas, especially to China. And because of free trade agreements like the General Agreement of Trade and Tariffs signed in 1994, it has become far easier to outsource manufacturing to countries who will do the work for far less. less than their American counterparts. One major result of this transfer of manufacturing work out of America is the decline of American labor unions. In 1954, there were more workers in labor unions than at any other time, and in that year, 35% of all workers were involved in a union. Today, it's a little more than 12%. Now a major blow to unions occurred in 1981 when President Reagan put on his big boy pro-business pants and got a bunch of striking air traffic controllers fired. This action essentially broke their union, and this is consistent with Reagan's economic policies. Remember, he was a supply-side economics guy, which means in this case he was standing up for the supply side, which is to say the airline industry, over against the demand side, which is to say the airline workers. So as the manufacturing sector was in decline, the service sector was rising to take its place. The manufacturing sector makes stuff. The service sector provides intangible products like education and legal services and food service operations, etc. As you are watching this right now, you are participating in the service sector. I think. I'm making a video which is just a bunch of ones and zeros, and you're watching it and hopefully being helped. But after you're done, you're not actually holding anything tangible. So that's what the service sector is all about. And as of today, about 71% of American jobs are in the service sector. And that might be a puzzle to you, because you look around right now and you probably have a lot of stuff, like computers and cups and phones and chairs. Like if 71% of Americans are working in the service sector, then where is all that manufacturing stuff coming from? China! It's coming from China! Now, all of these changes had a tangible effect on the increasing gap between the wealthy class and the middle class. Over the course of this period, real wages have essentially stagnated for the working class. Between 1979 and 2007, the top earning 1% of American households have seen their wealth increase by 275%, while the middle 60% of earners have seen their incomes rise by 40%. 275%, 40%. That's a big difference. Partly this has to do with the outsourcing of high-paying manufacturing jobs and the rise of low-wage service sector jobs. And partly it has to do with the restructuring of the tax code begun under Ronald Reagan which has privileged the earners in the top 1%. All in all, the digital revolution fundamentally changed the American economy, and we're still seeing the fruit of that change today. Okay, that's what you need to know about Unit 9, Topic 4 of the AP US History curriculum. If you want help getting an A in your class and a 5 in your exam in May, then click right here and grab your review packet. If you appreciate the service sector type work that I'm doing for you, then subscribe and I shall keep serving. Heimler out.

Explain the causes and effects of economic and technological change over time. So we're basically going to be talking about how the US economy changed with the rise of digital technology, and then we're going to talk about the effects of that change in the 21st century in America. So by the time the clock ticked over to the 21st century, America was firmly settled into the economic demands of the digital revolution. And here we need to start with the advent of the computer. This device had its origins in the United States in 1946, and back then a computer basically required a whole new wing of the building to be built.

Like, they were massive. But over the course of the 20th century, a series of technological innovations like transistors and then microprocessors steadily decreased the size of the computer. And by 1977, the computer was so small in comparison with its ancient mid-century relatives that Apple created a computer for use in the home. IBM followed suit in the 80s with the production of PCs, and by the time the decade came to an end, personal computers were in dang near every workspace. Then in the 90s, the widespread use of the internet changed everything yet again.

The internet was originally conceived of as as a series of interconnected computer pages that could be accessed all over the world by dialing into the network, which if you're like me and grew up in the 80s and 90s sounded just like this. Oh baby, the sweet digital sounds are my childhood. Anyway, computers and the internet dramatically altered many aspects of American life, especially with respect to the workplace and the economy. Email became the digital replacement for letter writing and handwritten memos.

File sharing programs like Napster, which allowed people everywhere to share digital music files quickly became you ubiquitous, and it forced the music industry to completely alter the way it did business. I can still remember staying after class in college so I could have internet access in the journalism building at my college and just downloading music for free for hours. I'm not saying it was right, but that's what I did. Additionally, the internet had a major impact on the news and media industries, who struggled to digitize their content for the new age.

Thanks to sites like Amazon.com, Americans could now purchase goods remotely and have them delivered to their door, which had the effect of driving many brick and mortar stores out of business. So the impact of all of this on the economy has been a subject of debate. On one hand, the digital revolution led to an increase in productivity starting in 1995, which is a good indicator of the overall health of the economy. This increase was primarily attributed to the speed with which communications across the globe could be handled in the internet age.

On the other hand, this increased productivity has not led to as dramatic of an increase in standards of living that economists would have expected. One of the major reasons for this is in the changing nature of what we are. work in the digital age and a growing income gap. Let's deal first with the changing nature of work.

In the late 20th century and early 21st century, manufacturing in America has declined sharply, while the service sector has increased sharply. Since the 1980s, there has been a steady decrease in American manufacturing, as that task has increasingly been outsourced overseas, especially to China. And because of free trade agreements like the General Agreement of Trade and Tariffs signed in 1994, it has become far easier to outsource manufacturing to countries who will do the work for far less. less than their American counterparts.

One major result of this transfer of manufacturing work out of America is the decline of American labor unions. In 1954, there were more workers in labor unions than at any other time, and in that year, 35% of all workers were involved in a union. Today, it's a little more than 12%.

Now a major blow to unions occurred in 1981 when President Reagan put on his big boy pro-business pants and got a bunch of striking air traffic controllers fired. This action essentially broke their union, and this is consistent with Reagan's economic policies. Remember, he was a supply-side economics guy, which means in this case he was standing up for the supply side, which is to say the airline industry, over against the demand side, which is to say the airline workers.

So as the manufacturing sector was in decline, the service sector was rising to take its place. The manufacturing sector makes stuff. The service sector provides intangible products like education and legal services and food service operations, etc. As you are watching this right now, you are participating in the service sector.

I think. I'm making a video which is just a bunch of ones and zeros, and you're watching it and hopefully being helped. But after you're done, you're not actually holding anything tangible.

So that's what the service sector is all about. And as of today, about 71% of American jobs are in the service sector. And that might be a puzzle to you, because you look around right now and you probably have a lot of stuff, like computers and cups and phones and chairs.

Like if 71% of Americans are working in the service sector, then where is all that manufacturing stuff coming from? China! It's coming from China! Now, all of these changes had a tangible effect on the increasing gap between the wealthy class and the middle class.

Over the course of this period, real wages have essentially stagnated for the working class. Between 1979 and 2007, the top earning 1% of American households have seen their wealth increase by 275%, while the middle 60% of earners have seen their incomes rise by 40%. 275%, 40%.

That's a big difference. Partly this has to do with the outsourcing of high-paying manufacturing jobs and the rise of low-wage service sector jobs. And partly it has to do with the restructuring of the tax code begun under Ronald Reagan which has privileged the earners in the top 1%. All in all, the digital revolution fundamentally changed the American economy, and we're still seeing the fruit of that change today.

Okay, that's what you need to know about Unit 9, Topic 4 of the AP US History curriculum. If you want help getting an A in your class and a 5 in your exam in May, then click right here and grab your review packet. If you appreciate the service sector type work that I'm doing for you, then subscribe and I shall keep serving.

Heimler out.

Transcript for:Transforming American Economy Since 1980

Transcript for:
Transforming American Economy Since 1980