San Jose State University
Jules Eggli

SOURCE: Millward, Alan S. War Economy and Society 1939-1945. Berkeley and Los Angeles. University of California Press. 1977. Stokesbury, James L. World War 2.World Book Encyclopedia. 1987. Wilkinson, Sylvia. Automobiles World Book Encyclopedia. 1987

U.S. Economic Productivity 1941-1944

In 1941 America was in disarray. Although Franklin Roosevelt's New Deal had created thousands of new jobs and had offered a boost in the country's moral, unemployment was still hovering around 15 percent. But when the U.S. joined the war effort, drastic changes began to take effect. The United States quickly converted its struggling civilian economy into the most productive producer of war materials on the planet. Nowhere was this shift in industrial output more prevalent than in the automobile sector. Even in the depression era between 1935 and 1941, American automakers sold an average of 3.3 million cars per year. When the U.S. entered the war, civilian car manufacturing virtually grinded to a complete halt. In order to increase war production, the number of cars sold fell to less than 223,00 cars in 1942 and only 139 in 1943. This sharp reduction in civilian output allowed U.S. automakers to produce 2.6 million military trucks, over 600,000 jeeps and northward of 49,000 tanks. U.S. auto manufacturers also retooled their plants in order to produce 10 percent of the nations warplanes, 75 percent of its aircraft engines, 47 percent of its machine guns and 87 percent of its aircraft bombs. Detroit, Michigan, America's automobile center, soon became affectionately known as "The Arsenal of Democracy."

The automobile sector, which had been transformed into a war goods-producing powerhouse, was representative of America's overall increase in productivity and output. The period between 1940- 1944 saw the greatest expansion of industrial production that the U.S. had ever experienced. The volume of output was increasing at an annual rate of over 15 percent between these years. Traditional growth rates between 1896 and 1939 averaged 4 percent per year. Also, from 1940 to 1944, total output of manufactured goods increased by 300 percent. Investments by the U.S. government, and to a lesser extent private enterprise, increased America's productive capacity by 50 percent. The average productivity of labor in industry was increased by about 25 percent between 1939 and 1944. America had twice the productive output per person than Germany and five times that of Japan. All these gains in the productivity of labor were due to new capital equipment, an increase in the hours of the workweek, pooling of industrial information and the common cause of winning the war, which was deeply important to nearly every American.

Although war production was the main driving force of the U.S. economy during 1941-1944, consumers at home also benefited from the increased productivity. Despite shortages of particular items and a general decline in the quality of some goods, consumer's expenditures increased in virtually all non-war industries with the exception of printing, publishing and clothing. Expansion of war and non-war output together led to consumer purchases of goods and services to increase by 12 percent between 1939 and 1944. Measured in 1939 constant dollars, the Gross National Product of the United States rose from $88.6 billion in 1939 to $135 billion in 1944. The increased productivity of the war years not only ended the Great Depression but also set the economic and cultural foundations for America's peacetime prosperity, which began just immediately after the end of the war in 1945.