2.1 What Made the Old Social Contract Work and Why did It Break Down?
Wages and productivity rose in tandem during the post WWII period, resulting in strong businesses and a high standard of living for many Americans. Professor Kochan introduced this so called “Post-War Social Contract” at the end of last week. Why did it work so well for so many? He elaborates on this history, and what it means for our future, in the video below.
Pent up demand for new homes and consumer goods check
High pay disparities between management and workers close
Government spending on infrastructure, including roads close
Pattern bargaining and wage norms check
Strong pay incentives that encouraged workers to work harder close