Under the direction of the Somoza dynasty and the influence of the Central American Common Market and Alliance for Progress, Nicaragua began to industrialize rapidly and expanded its commercial exports of agriculture during the 1960s and early 1970s. The overall economic growth statistics were very impressive during this period but, for the majority of the working class, conditions actually deteriorated. This industrial growth was accompanied by a huge amount of people moving to the cities to work in the expanding manufacturing sector and a lot less people working on farms.
In spite of all this impressive growth, the money didn’t ever seem to reach the poor Nicaraguans.
The unions which would have helped to get wages raised were suppressed by the Somoza regime which set the amount of everybody’s wages. Prices weren’t too high during this period, but just about when the 1973 OPEC oil embargo occured, inflation in prices went crazy and the average worker suddenly couldn’t buy enough food to survive.
By 1977, the richest tenth of the people in Nicaragua earned the vast majority of the money. What this means is that even though the average salary in Nicaragua wasn’t very high, most people were making a lot less than that average. The highest average salary in Nicaragua was one thousand three hundred dollars per year in 1970. In the United States, families who make eighteen thousand dollars each year are considered poor.
Another problem with the economy was that there were not enough jobs for all the people who were moving to the cities. In 1970, only four percent of the people could not find full-time jobs. But by 1978, thirteen percent of the people couldn’t find a job no matter how hard they looked.
One major cause of the unemployment was the 1972 Managua earthquake. Managua had been the manufacturing and commercial center of the country with more than 90% of the businesses located there. A huge section of the city was completely destroyed and, in spite of the fact that millions of dollars were sent from international donors to help rebuild the country, Somoza never repaired the destruction. Somoza’s failure to help the country in it’s time of need was also a major factor which led to his downfall.
In agriculture, the small-landowners who lived on small farms and managed to feed themselves completely off of their farms started to disappear.
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