The 1980s was a period of increased wealth for many, as areas of the economy improved and new technologies appeared. Cuts in social programs, however, left many Americans in need, leading to new activism.

A Booming Economy

How did discount retailing and new forms of media contribute to the economic boom of the 1980s?

By late 1983, stagflation had largely ended and stock prices soared as many companies reported record profits. Stockbrokers, speculators, and real estate developers made multimillion-dollar deals. Many of the new moneymakers were young, ambitious, and hardworking. They were nicknamed yuppies, short for “young urban professionals.”

The rapid economic growth and emphasis on accumulating wealth in the 1980s was partly caused by the baby boom. By then, most baby boomers had finished college, entered the job market, and begun building their careers. Because baby boomers were so numerous, their concerns tended to shape the culture.

The growth of the private sector in 1980s created enormous economic opportunities for American citizens—particularly for those working in media, finance, and new digital technology. But there was an unintended consequence of the growth of the private sector. The new jobs of the 1980s mostly benefited middle- and upper-class Americans and tended to concentrate wealth at the top of society. From 1967 to 1986, the amount of money earned by the top 5 percent of Americans fluctuated between 14.4 and 16.5 percent of the nation’s aggregate family income. In the late 1980s, their share of the nation’s income began to rise. By the mid-1990s, the top 5 percent of Americans earned over 20 percent of the nation’s income.

A Retail Revolution

In addition to the booming real estate and stock markets, the economy witnessed a revolution in retail sales with the growth of discount retailing. This type of selling had actually begun to emerge in the 1960s, but did not have a major impact on the economy until the 1980s. Discount retailers sell large quantities at very low prices, trying to sell the goods fast to turn over their entire inventory in a short period.

Discount retailers could make more money than traditional retailers who sold fewer products at higher prices. The most successful discount retailer was Sam Walton, the founder of Wal-Mart. Annual sales at Wal-Mart increased from about $2 billion in 1980 to over $20 billion by 1988. By 1985, he was the richest person in the United States.

Walton was one of the first retailers to track inventory and sales with a computer database. He also used a system of distribution centers to resupply stores. Others soon copied this approach. By the late 1970s, discount retailers such as Home Depot and Best Buy had begun to build “superstores.” Their innovations created millions of new jobs in the 1980s and helped fuel the era’s rapid economic growth.

A Revolution in Media

In the 1980s, other entrepreneurs began changing the news and entertainment industries. Until the late 1970s, television viewers were limited to three national networks, local stations, and the public television network. In 1970 a businessman named Ted Turner bought a failing television station in Atlanta, Georgia. He pioneered a new type of broadcasting by creating WTBS in 1975. WTBS was the first “superstation”—a television station that sold low-cost sports and entertainment programs via satellite to cable companies across the nation.

The Rise of Cable Television Turner’s innovation changed broadcasting and helped spread cable television. Other new cable networks focused on specific audiences, such as churchgoers, shoppers, or minorities. In 1980 entrepreneur Robert Johnson created Black Entertainment Television (BET). In 1981 music and technology merged when Music Television (MTV) went on the air to broadcast performances of songs and images, or music videos. Although the videos were often criticized for their content, MTV was a hit. Music videos boosted the careers of artists such as Madonna and Michael Jackson.

Rap music was the new sound of the 1980s. Originating in local clubs in New York City’s South Bronx, rap emphasized heavy bass and rhythmic sounds and lyrics that frequently focused on the African American experience in the inner city. Its rapid rise in popularity made rap into a multimillion-dollar industry.

Technology and Media Technology also transformed how people accessed entertainment. Until the 1980s, most people listened to music on large stereo systems that played records in their homes and relied on the car radio when they were driving. The new Sony Walkman made music portable, marking the beginning of a new way for people to access music. In the 1990s, portable compact disc (CD) players replaced the Walkman, and in the early 2000s, digital audio players, such as the iPod and MP3 players, advanced the technology even further.

Videocassette recorders (VCRs) allowed people to tape television shows or watch taped films whenever they wished. By the early 2000s, digital video disk (DVD) recorders began replacing VCRs.

Initially, the entertainment industry worried that VCRs would lead to copyright violations, but when the Supreme Court ruled in Sony Corp. of America v. Universal City Studios that people could record television shows and movies for home use, Hollywood quickly adapted. Studios soon realized that the VCR had created a demand for home video editions of movies, and that a lot of additional money could be made selling videos. 

The new technology also helped to accelerate the diffusion of American culture around the globe. By the 1980s, Hollywood movies were often making more money overseas than they were in the United States.  The VCR accelerated that trend, particularly in nations in Asia and Africa, where other forms of media were less accessible. In places where there were few movie theaters or local television offerings, VCR recordings of American movies and television shows often served as the main source of entertainment.

Technology also brought about a new form of entertainment—the video game. Early video games grew out of military computer technology. The first video arcade game was a game called Pong, released in 1972. Home video games developed quickly. In the early 1980s, sales reached about $3 billion with the popularity of games such as Pac-Man and Space Invaders. By the mid-1980s, home video games competed with arcade games in graphics and speed. Video games have continued to grow in popularity to the present day.

GPS is Launched Another major technology that began to be deployed in the 1980s and which plays an important role in improving the quality of life today is the Global Positioning System, or GPS. The GPS is composed of a series of satellites in low earth orbit that allow users to precisely determine their location on earth and navigate more accurately.

The system was proposed in the 1970s by the U.S. military as a way to improve military navigation. But in 1983, a civilian airliner, Korean Air Lines Flight 007, made the mistake of crossing into Soviet airspace and was shot down. Soon afterward, President Reagan issued an order that GPS be made available for civilian use as soon as the system came online.

The first GPS satellite was placed in orbit in 1989 and the system was completed in 1994. Since then, the use of GPS has grown exponentially. It was quickly and widely adopted for air and sea navigation. And as the computer revolution took hold, technology companies found ways to build inexpensive GPS units that drivers could use in their cars. By the early 2000s, cell phones had begun to incorporate GPS signals allowing anyone with a smart phone the ability to use GPS to navigate. The GPS system is a dramatic example of how space technology has improved safety and the quality of life around the world.

New Social Activism


Why did new activist groups form in the 1980s?

The 1980s was a decade of wealth and prosperity. Yet social problems, such as drugs, poverty, homelessness, and disease, continued.

Social Problems

Drug abuse in the 1980s made many city neighborhoods dangerous. Drug users often committed crimes in order to get money for drugs. Drug use spread from cities to suburbs, small towns, and rural areas.

Fighting Drugs and Alcohol In an effort to reduce teen drug use, some schools began searching student bags and lockers for drugs. In 1984 one teen who had been arrested for selling drugs challenged the school’s right to search her purse without a warrant. In 1985 the Supreme Court case New Jersey v. T.L.O. upheld the school’s right to search without a warrant if it had probable cause. Similarly, the 1995 case of Vernonia School District v. Acton held that random drug tests do not violate students’ Fourth Amendment rights.

Abuse of alcohol was also a serious concern. In 1980 Mothers Against Drunk Driving (MADD) was founded to try to stop underage drinking and drunk driving in general, and “[t]o aid the victims of crimes performed by individuals driving under the influence of alcohol or drugs, to aid the families of such victims and to increase public awareness of the problem of drinking and drugged driving.” In 1984 Congress cut highway funds to any state that did not raise the legal drinking age to 21.

The AIDS Epidemic In 1981 researchers identified a deadly disease that they named “acquired immunodeficiency syndrome,” or AIDS. AIDS weakens the immune system. In the United States, AIDS was first noticed among homosexual men. Soon, though, it spread among heterosexual men and women. Many people were infected by sexual partners. Between 1981 and 1988, the Centers for Disease Control and Prevention identified more than 100,000 cases in the United States.

MADD's Articles of Incorporation, 1980.

New Activist Groups

AIDS increased the visibility of the country’s gay and lesbian community, but some homosexuals had been engaged in efforts to defend their civil rights since the 1960s. On June 27, 1969, New York City police raided a nightclub called the Stonewall Inn. The police had often raided the nightclub because of the sexual orientation of its patrons. Frustration among the gay and lesbian onlookers led to a riot. The Stonewall Riot marked the beginning of the gay activist movement. Soon after, organizations such as the Gay Liberation Front began efforts to increase tolerance of homosexuality.

Rock ’n’ Rollers Become Activists Many musicians and entertainers in the 1980s began using their celebrity to raise awareness about social issues. To help starving people in Ethiopia, Irish rocker Bob Geldof organized musicians in England to present “Band Aid” concerts in 1984. In the next year, the event grew into “Live Aid.” People in some 100 countries watched benefit concerts televised from London, Philadelphia, and Sydney, Australia. The organization’s theme song, “We Are the World,” was a best seller. In the same year, country singer Willie Nelson organized “Farm Aid” to help American farmers who were going through hard times. Musicians also publicized efforts to end the segregated apartheid social system in South Africa. By the late 1980s, the United States and other nations were attempting to end apartheid in South Africa by imposing economic sanctions against the country.

Senior Citizens Begin To Lobby Another group that became politically active in the 1980s was senior citizens. Decades of improvements in medicine had resulted in more Americans surviving to an older age. In addition, the birthrate had declined, so younger people represented a comparatively smaller proportion of the population. The fact that more Americans were receiving Social Security payments created budget pressures for the government. Older Americans became very vocal in the political arena, opposing cuts in Social Security or Medicare. Because they tend to vote in large numbers, senior citizens are an influential interest group. Their major lobbying organization is AARP (which originally stood for the American Association of Retired Persons).

Reviewing Vocabulary

TEKS: 18A, 27C

Using Your Notes

TEKS: 9B, 9F

Answering the Guiding Questions

TEKS: 18A, 27A, 27C, 28A, 28C

TEKS: 9B, 9F

Writing Activity

TEKS: 27A, 28A, 28C