The Public Interest

The hidden prosperity of the 1970s

Christopher Jencks

Fall 1984

BY NOW almost everyone knows that the long economic boom which began after World War II petered out in the early 1970s. Inflation accelerated, unemployment rose, productivity stagnated, and after adjusting for inflation, real wages fell. As a result, Americans had to run hard just to stand still, and the dream of a steadily rising standard of living evaporated.  The most widely cited evidence for this view is probably the Census Bureaus annual report on trends in family income. This report, published every year since 1948, always begins by comparing the change in median family income during the previous year to the change in the Consumer Price Index. This comparison shows that “real” family income, which had risen 38 percent during the 1950s and 34 percent during the 1960s, rose only 0.4 percent during the 1970s.

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