In America, the post World War II years are thought to represent the best economy the U.S. has ever enjoyed.
It was a time of low unemployment, a housing boom, and – in general – a time of great stability for the country’s economy.
The 70s, however, would bring that prosperity to a halt.
The 1970s economy experienced trouble for a number of reasons. One of the prime reasons was the 1973 Oil Embargo, which had a very serious affect on the American economy.
The price of oil quadrupled in just a short period of time and it was immediately felt at the pumps. Americans had to sit in long lines at the gas stations to fill up their tanks because of a national gas rationing program imposed.
As a matter of fact, for a long period of time you could only buy gas every other day, depending on the last number of your license plate. It was a time of great stress for most Americans, particularly those who depended on their automobile for daily transportation.
Another oil crisis in 1979 caused prices to rise again, but the shortage was not present the second time around.
Some economists believe that the troubling economy of the 1970s was due to the decline of the work ethic at the end of the 1960s. Crime rates were higher than in previous decades, people spent more time in front of the TV, and divorce was becoming more prevalent.
Many believe that a desire to work less and play more contributed to what economists in the 70s liked to call “stagflation.”
Stagflation occurs when inflation and unemployment rates are very high – as they were in the 70s – and economic growth is quite low. In other words, the economy isn’t growing but prices are.
The beginnings of stagflation occurred when Nixon imposed wage and price controls in 1971 and persisted through the decade and into the 80s.
Unemployment was higher than it had been for quite some time. The average unemployment rate during the first half of the decade was about 5.4 percent and by the second half it had soared to just under 8 percent.
The economy of the 70s was also marred by a number of large labor strikes and dissatisfaction among workers in a variety of fields. In 1970, more than 200,000 postal workers walked off the job.
A year later, a massive longshoreman walk-out closed ports on both coasts and in the Gulf of Mexico. It was also during the 70s that the first legal strike by state workers occurred, this one in Pennsylvania in 1975, involving 80,000 workers.
Miners also conducted one of the longest strikes in the history of that industry during the late 1970s.
By the time the 80s hit and Ronald Reagan took office, the 1970s economic slump was still a problem.
By 1983, however, when interest rates went way up, inflation started to come down and most economists believe that by that time, the economy was on its way to recovery.