After the economy took off in 1983, some Americans won great fortunes. Popular culture celebrated making money and displaying wealth. Books by business wizards topped best seller lists, the press described lavish million-dollar parties, and a new television show, Lifestyles of the Rich and Famous, drew large audiences. College students listed making money as their primary ambition.

Many of the newly wealthy got rich from moving assets around rather than from producing goods, making money by manipulating debt and restructuring corporations through mergers and takeovers. Notable exceptions included Steven Jobs, who invented the Apple computer in his garage; Bill Gates, who transformed the software industry; and Liz Claiborne, who created a billion-dollar fashion enterprise. Most financial wizards operated within the law, but greed sometimes led to criminal convictions.

Older industries faced increasing international pressures, as German and Japanese corporations overtook U.S. manufacturing in steel, automobiles, and electronics. International competition forced the collapse of some companies, while others moved factories and jobs abroad to be closer to foreign markets or to benefit from the low wages in countries such as Mexico and Korea. Service industries expanded and created new jobs at home, but at substantially lower wages. The number of full-time workers earning wages below the poverty level ($12,195 for a family of four in 1990) rose from 12 percent to 18 percent of all workers in the 1980s.

The weakening of organized labor combined with the decline in manufacturing to erode the position of blue-collar workers. Chicago steelworker Ike Mazo, who contemplated the $6-an-hour jobs available to him, fumed, “It’s an attack on the living standards of workers.” Increasingly, a second income was needed to stave off economic decline. By 1990, nearly 60 percent of married women with young children worked outside the home. Yet even with two incomes, families struggled. Speaking of her children, Mazo’s wife confessed, “I worry about their future every day. Will we be able to put them through college?” The average $10,000 gap between men’s and women’s annual earnings made things even harder for the nearly 20 percent of families headed by women.

In keeping with conservative philosophy, Reagan adhered to trickle-down economics, insisting that the benefits of a booming economy would trickle down to everyone. Average personal income did rise during his tenure, but the trend toward greater economic inequality that had begun in the 1970s intensified in the 1980s, encouraged in part by his tax policies. During Reagan’s presidency, the percentage of Americans living in poverty increased from 11.7 to 13.5, the highest poverty rate in the industrialized world. Social Security and Medicare helped to stave off destitution among the elderly. Less fortunate were other groups that the economic boom had bypassed: racial minorities, female-headed families, and children. One child in five lived in poverty.