The Economy in the 1920's

The Boom years
Unemployment was never above 3.7% between 1922 and 1929.
Inflation was never above 1%.
Employees worked less hours - 44 hours per week in 1929 compared to 47 hours per week 1920.
Real wages (the actual value of the wage) of industrial workers increased by 14% between 1914 and 1929.
Leisure - more time for leisure because of the development of labour saving goods such as vacuum cleaners and washing machines.
People could travel more with the development of motor cars.
More spending on entertainment - in 1929 80 million cinema tickets were sold weekly.
- boxing - Gene Tunney v. Jack Dempsey September 1927 - 107,943 attended.

Why Prosperity?
1) Government policies
Calvin Coolidge believed in Laissez Faire - leave the economy to run itself and as the rich got richer their wealth would filter down to the rest of the population.
However he helped business in 3 ways:
A) High Tariffs on foreign goods - encouraged Americans to buy more American products - Fordney - McCumber Act 1922 - raised tariffs which led to some products having import duties so high that it ensured that domestic products were bought and comparatively few foreign goods were bought.
B) Tax reductions to lessen pressure on businesses and also ensure that the population had more money to spend on American goods.
C) Fewer regulations - therefore businesses could carry in as they saw fit for example in the south child labour continued where they worked 56 hours per week and received 18 cents an hour.