Demobilization

Demobilization

Although the United States established worldwide military bases under the terms of the Lend-Lease Act, the nation rapidly scaled down the size of its forces following Japan’s surrender. From a wartime high of 12 million men and women, the military shrank to 1 million soldiers by the end of 1947. The United States granted Filipino independence in 1946 and maintained numerous bases on its commonwealth, the euphemism Americans used in place of the word “colony” when referring to the Philippine islands. By 1950, the military had been reduced to 600,000 personnel. The rapid demobilization led military officials to cancel orders for manufactured goods, which caused great concern among workers and factory owners. America’s wartime economy was largely based on defense spending, and demobilization also meant that most of the 12 million Americans serving in the armed forces would quickly return to civilian life. With the government cancelling its orders, what would become of the millions of veterans as they searched for civilian employment?

Economists estimated that the sudden influx of these men and women into the labor force combined with the end of wartime production would lead to unemployment rates similar to the latter years of the Great Depression. Other economists believed that these ominous forecasts underestimated personal savings and the immense pent-up demand for consumer products. They pointed out that US families had worked longer hours for higher wages and saved a higher percentage of their pay than at any time in history.

The demands of wartime production meant that US factories had produced tanks instead of automobiles and machine guns instead of sewing machines. As a result, millions of Americans had put their money in savings bonds and savings accounts in eager anticipation of the day they could purchase all of the items they dreamed about during the lean years of the Great Depression and the demanding years of the war. These more optimistic predictions proved correct as the United States enjoyed a postwar boom that rivaled the economic growth of the war years. Unemployment remained negligible as construction companies went back to work building homes, and US factories churned out a wide array of consumer goods for an eager public with cash to spend.

One of the reasons why unemployment did not spike was the Serviceman’s Readjustment Act of 1944, popularly known as the Montgomery GI BillA postwar program providing money for veterans so they could attend college or a trade school. The GI Bill also provided certain limited unemployment benefits and a loan program to help veterans purchase a home.. Veterans groups such as the American Legion lobbied Congress for its passage using a mix of moral suasion and economic self-interest. After World War I, they reminded Congress, veterans received little more than a final paycheck and a boat ride home. The result was a catastrophic shock to the labor market as millions of veterans sought jobs at the same moment the War Department stopped purchasing factory products. To prevent another Bonus March and perhaps the unemployment that caused it, the American Legion called on Congress to ease the shock on the labor market by providing returning veterans with college or vocational training. The GI Bill also provided modest unemployment pay of $20 per week for up to one year.

More than 6 million veterans took advantage of the GI Bill’s educational benefits, which covered tuition and books at most colleges and technical schools as well as a modest living allowance. The law revolutionized the US university system as schools rushed to accommodate veterans and the revenue they brought with them. The majority of these veterans would have likely never had the opportunity to attend college because they were not the children of wealthy and upper-middle-class families. Many of the veterans were not children at all, and the GI Bill inspired many colleges to build their first housing for married students. Veterans programs also reversed the trend toward female dominance in higher education as women represented only 3 percent of GI Bill recipients. Many colleges that had slight female majorities returned to Victorian-era gender ratios as thousands of veterans took up residence in army surplus tents on campus quads and eagerly awaited new dorms and their turn for a date with an overwhelmed coed.

Figure 9.7

A soldier pointing to the GI Bill of Rights. Six million veterans took advantage of the GI Bill’s educational benefits after World War II.

While over half of those receiving educational benefits attended technical schools, the number attending college was equally vast. In 1947, roughly half of all new college students were veterans, and schools such as the University of Michigan tripled in size from 10,000 to 30,000 students. Most of these veterans hoped that their degrees would make them more competitive on the job market, which led colleges to reconsider their traditional liberal arts focus in favor of career-oriented programs and degrees. Many of the established leaders in academia feared that these changes would lead to a gradual abandonment of their mission to produce well-rounded graduates with strong analytical and communication skills.

A handful of critics even feared that the influx of nonwealthy students might lead to a reduction in academic rigor. Admission standards were not the only concern, as colleges rushed to hire new professors to meet the demand. Colleges in the California state system, for example, had to nearly double the number of instructors from 8,000 to 13,000 in 1946 alone. However, concerns about “dumbing down the curriculum” proved largely groundless as GIs performed so well in the classroom that traditional students referred to them as DARs—an acronym for “Damned Average Raisers.” Most university personnel welcomed the opportunity to serve veterans and viewed the GI Bill as a means by which a college education might become more accessible to those from less-affluent backgrounds. Perhaps most significantly, the GI Bill led to a dramatic increase in the education level of the US workforce, resulting in higher levels of productivity.

More than 2 million veterans also took advantage of the GI Bill’s home-loan program. In combination with other federal home-loan guaranty programs, millions of American families went from being urban renters to suburban homeowners in the postwar period. The GI Bill made no distinctions of race or ethnicity, but the climate of the 1940s meant that nonwhite veterans found it difficult to use the program to find a home. The same practices of redlining and restrictive covenants that prevented black, Latino, Asian, and Jewish homeowners from obtaining loans under the terms of New Deal programs also limited the ability of many veterans to use their GI Bill benefits to purchase a home.

In large cities, black realtors and black mortgage companies met the needs of black veterans, but even these businesses were unable to help veterans purchase homes beyond the handful of vacancies in ever-congested black neighborhoods. Members of other ethnic groups faced similar challenges in finding housing as Asian and Latino residents were frequently unable to find homes in “white” neighborhoods at any price. As a result, ethnic neighborhoods, barrios, and black communities expanded in the postwar period, while newer suburban communities became exclusively white. Neighborhood segregation emerged from individual choices, yet the process was anything but organic. Residential developers throughout the country mandated racial exclusion and then used the “whiteness” of their new suburban communities as a selling point to attract white homebuyers.