THE END OF THE GOLDEN AGE ★^1045country. Coal production in Wyoming boomed. Western energy companies
benefited from the high oil prices set by OPEC— the Organization of Petroleum
Exporting Countries.
But rising oil prices rippled through the world economy, contributing to the
combination of stagnant economic growth and high inflation known as stag-
flation. Between 1973 and 1981, the rate of inflation in developed countries
was 10 percent per year, and the rate of economic growth only 2.4 percent, a
sharp deterioration from the economic conditions of the 1960s. The so- called
misery index— the sum of the unemployment and inflation rates— stood at 10.8
percent when the decade began. By 1980, it had almost doubled. As oil prices
rose, many Americans shifted from large domestically produced cars, known for
high gasoline consumption, to smaller, more fuel- efficient imports. By the end
of the decade, Japan had become the world’s leading automobile producer, and
imports accounted for nearly 25 percent of car sales in the United States.
The Beleaguered Social Compact
The economic crisis contributed to a breakdown of the postwar social com-
pact. Faced with declining profits and rising overseas competition, corpora-
tions stepped up the trend, already under way before 1970, toward eliminating
well- paid manufacturing jobs through automation and shifting production to
Table 26.1 The Misery Index, 1970–1980
Year Rate of Inflation (%) Rate of Unemployment (%) Misery Index (%)
1970 5.9 4.9 10.8
1971 4.3 5.9 10.2
1972 3.3 5.6 8.9
1973 6.2 4.9 11.1
1974 11. 0 5.6 16.6
1975 9.1 8.5 17. 6
1976 5.8 7.7 13.5
1977 6.5 7.1 13.6
1978 7.7 6 .1 13.8
1979 11. 3 5.8 17.1
1980 13.5 7.1 20.6In what ways did the opportunities of most Americans diminish in the 1970s?