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Growth of Technology
As the 1990s began, so did another era of technological revolution. A combination of communications technology—the Internet, email, cable, and personal computing—all helped create an economic surge in productivity. “E-commerce”—the use of computers for buying and selling goods—became a norm for American consumers. Large technology companies like Apple, Amazon, Google, and Microsoft were the new corporations that fueled the American economy. The number of Americans whose family worth was more than $1 million increased fourfold, and by the end of the 1990s, unemployment dropped from 7.5 percent in 1992 to below 4 percent by 2000. But the result of this economic growth was economic inequality between American citizens: by 1999 the top 20 percent of American households earned 50 percent of the income. Like the economic trends from the 1970s and the 1980s, in the 1990s the wages of the working class decreased, while highly-educated workers continued earning even more than before.
Globalization
Another important aspect of the economic changes of the late twentieth century was the growth of globalization—the interconnection of the economy across the globe. This meant that many American corporations sought to move production to new regions of the world where they could take advantage of cheaper labor costs and increase profits (shareholder value). By 2000, the amount of manufacturing done by American corporations overseas had tripled since 1980. Outsourcing labor—moving it to other nations to keep costs, and thus prices, down—was considered crucial to business success. Corporations could also avoid environmental and labor laws imposed by the federal government, allowing consumers to receive cheaper goods. Meanwhile, foreign companies such as Volkswagen or Toyota opened manufacturing plants in the United States to lower shipping costs. Containerization—the standardization of transoceanic shipping using uniform, reusable shipping containers—further contributed to the expansion of global markets. With this simplified packing and shipping, goods that originally cost more than five dollars per ton to ship would drop to less than 25 cents per ton.
