A Changing ECONOMY [APUSH Review Unit 9 Topic 4] Period 9: 1980-Present

Well, hey there, and welcome

back to Heimler's History.

Now, we've been going through Unit Nine

of the AP U.S. History Curriculum,

which covers the period 1980

to the present. And in this video,

we're gonna look at how the American

economy was transformed during this period

by new innovations and 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 U.S. economy changed

with the rise of digital technology,

and then we're gonna 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 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.

[modem connecting] Oh baby,

the sweet digital sounds of 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.

Filesharing programs like Napster,

which allowed people everywhere to share

digital music files,

quickly became ubiquitous, and it forced

the music industry to completely

alter the way it did business.

Like 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 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

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 percent of all

workers were involved in a union.

Today, it's a little more than 12 percent.

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, et cetera.

As you are watching this right now you

are participating in the service sector.

Like 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 percent 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 percent of Americans are working

in the service sector, then where is all

that manufacturing stuff coming from?

China.

It's coming from China, like mostly.

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 percent

of American households have seen their

wealth increase by 275 percent, while the middle

60 percent of earners have seen

their incomes rise by 40 percent.

275 percent, 40 percent, 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 percent.

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 Nine, Topic Four of the

AP U.S. History Curriculum.

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Heimler out.