U.S.^JP^deral Works Agency.
^#orks Progress Administration
^Jlational Research Project
^Preliminary Statement and Outline
: of the Study
Northwestern
University Library
Evanston,
Illinois 60201
Untve>>
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jkWA-1
|ORKS PROGRESS ADMINISTRATION
Hetfry L. Hopkins, Administrator
NATIONAL RESEARCH PROJECT
7512
DEC X 7 'MS
on
Reemployment Opportunities and Recent Changes in Industrial Techniques
12 South Twelfth Street
Philadelphia, Pennsylvania
Corrington Gill
Assistant Administrator
ftarks Progress Administration
David Weintralib
Director of Study
PRELIMINARY STATEMENT AND OUTLINE OF THE STUDY
INTRODUCTION - The public attitude toward the floating army of the un¬
employed has even within very recent years been characterized by a cal¬
lousness and resignation to fate which expressed itself by a disposition
to "explain" the striking volume of unemployment by a statement that
even during "normal" years one or two million workers are unemployed in
the United States. This attitude is, however, rapidly giving way to an
increasing social regard concerning the persistently high levels of un¬
employment. The concern is further accentuated by the observation that
as industry turns to the resumption of former production levels, reemploy¬
ment and new employment does not keep pace with the growth of the volume
of production due, at least in part, to the improved production techniques which
are continually being introduced.
To modern industrial society, characterized by mass production,
technological development has been a necessary condition. The continuous
improvement in production technique is simultaneously a consequence of
the operation of economic forces and itself a force which so rearranges
the balance of other economic factors as to make the introduction of
further improvements appear profitable and desirable. Although techno¬
logical changes have resulted in tremendous increases in the volume of
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goods and services produced and have thus made possible the potential
attainment of ever higher standards of living, they have been accompanied
by a cumulation of conditions making for greater economic insecurity of
the individual worker. "While in the past the increase in the volume of
production resulted in the eventual absorption of a number of workers
equal to or greater than the number displaced by improved production
techniques, the individual workers involved often became either tempo¬
rarily or permanently subject to loss of employment and claims to income.
During the period from 1920 te 1929 the physical volume of
production in manufacturing industries increased 37 percent while employ¬
ment dropped about two percent; freight car loadings increased 6 percent
from 1923 to 1929 while employment on steam railroads declined 10 percent;
the production of coal increased 10 percent from 1919 to 1929 and was
accompanied by a decrease in employment of about 14 percent; despite an
increase in the production of agricultural commodities, 800,000 agricul¬
tural workers were displaced between 1919 and 1927. These are some of
the facts of common observation which even prior to 1930 served to con¬
centrate attention on a problem commonly referred to as "Technological
Unemployment". That the trend shown by some of the data given above
has continued since 1929 is indicated by the fact that the output per
man-hour in manufacturing industries is estimated to have increased ap¬
proximately 25 percent between 1929 and 1935.
In the light of the facts described above, the question of the
relative potency of the forces making for displacement and absorption in
the near future is of immediate practical importance, particularly to
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governmental agencies charged with the task of either creating employment
opportunities or caring for the victims of unemployment. The extent of
unemployment during the past four years lias been variously estimated at
14 to 17 millions at its peak, or approximately one-third of the total
number of gainful workers. And even during the current period of partial
resumption of production the volume of unemployment remains at extremely
high levels. The appreciation of these facts and of the recent attempts
to ameliorate the condition of the unemployed through relief measures
which are estimated to have consumed over five billion dollars of public
funds since 1933, are more and more persistently forcing some of the fol¬
lowing questions to the foreground: What are the prospects for the re¬
employment of a substantial number of the unemployed? How many of the
■unemployed would be absorbed by a return to former production levels?
What groups of workers are likely to remain unabsorbed? To what extent
is the present volume of unemployment the result of recent changes in in¬
dustrial techniques? To what extent has the volume of employment been
affected by technological improvements? Has employment in the machinery
industries offset the declines in other industries caused by the intro¬
duction of new machines? Is there an appreciable number of workers who
may be classified as "permanently displaced"? Do workers displaced by
the introduction of nexv techniques become public charges or are they able
to adapt themselves to other work? To what extent are displaced workers
forced to take employment at less skilled work, at lower wages? Has the
introduction of high speed processes resulted in the reduction of the
hiring age of workers? To what extent are "stranded" communities the
result of technological changes?
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These and a multitude of related questions arise in one form
or another according to the interests or sooial functions of individuals,
sections of the population or governmental bodies. Among members of the
business community those questions spring from the desire for relief from
taxation and the simultaneous safeguarding of the monetary structure;
among the members of the labor community, the questions reflect an anxiety
for the security of their livelihood and the will to maintain a reasonably
adequate standard of living; in the administration of government, these
questions represent the appreciation of the need for guide posts to the
road along which lie effective measures for relief and for a program of
social security - a financial program to meet these measures and a social
program to further the ends of the community at large,
PLAN OF WORK - An effective approach to the basic questions here involved
requires a comprehensive examination of the human and economic resources,
of the development of the techniques of production and of the effect of
changes in these techniques on the volume of production, on production
capacity, on the volume of employment and unemployment and other related
factors within the framework of the national economy.
It thus becomes necessary to assemble and organize the existing
data which bear on these questions and to augment these data by systematic
surveys and analyses designed to meet the following objectives:
A. A comprehensive statement of the economic role played by
changes in techniques of production.
B. Measurement of the net effects on total employment of
changes in production techniques and the incidence of
such changes with respect to employment in the various
industries, occupations, age-groups, etc.
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C, Analysis of social problems arising out of changes in
*
production techniques and
1. The extent to which present or imminent economic
developments may be expected to relieve or accentuate
these problems, and
2. The basis of and requisites for a remedial program.
The core of these objectives may be expected to lie in the
economic role of the changing techniques of production and the attendant
social consequences. The central problem therefore revolves around the
determination of the not displacement of man-hours and man-years of labor
by improved production techniques and the measurement of such increases
in the volume of production and employment as may result from the economics
introduced.
With respect to the question concerning the number of workers
who may be said to be unemployed as a result of changes in industrial
techniques, our analysis starts with the recognition of the fact that the
volume of employment (in terms of man-hours) depends upon the total volume
of output and the output per man-hour. From this it follows that, given
a continuously rising output per man-hour, an increase in the physical
volume of output is accompanied by a less than proportionate increase in
the volume of employment, and a decline in the physical volume of output
results in a more than proportionate shrinkage in employment. Therefore,
a national economy with a progressive technology must either contrive to
raise the total physical volume of output at a rate which is at least as
fast as the increase in the output per man-hour, or prepare to deal with
the problem of an ever increasing number of unemployed. The situation
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is further complicated if the national economy in question is faced with
the problem of a growing population and an ever increasing number seeking
gainful employment.
Technological unemployment is the net result of simultaneous and
continuing processes of displacement and absorption. Quite aside, though
not apart from the other unemployed, there exists a pool of unemployed
persons which is being fed by the displacement effect of technological
improvements, and simultaneously either drained or fed by the effects of
the increasing or decreasing volume of production. The volume of techno¬
logical unemployment rises or declines depending upon whether the forces
making for displacement are more, or less potent than the simultaneous'
forces making for absorption.
In the case of a rapidly growing economy or industry, the fact
of technological unemployment is primarily a reflection of the lag between
displacement and absorption. However serious a personal or social problem
this lag may represent, it is temporary in character and is engendered
by the interaction of economic forces which are in the process of readjust¬
ment upward, toward a greater volume of production, toward more employment,
and toward a potentially higher general standard of living. A declining
economy or industry, on the other hand, is faced not only with the problem
of displacement but also with an absorption process which is at all times
insufficient to absorb those displaced as well as those newly entering the
labor market; the personal and social problems engendered are thus no
longer the results of temporary unemployment, they become problems arising
out of permanent unemployment.
"When confined to individual industries, or plants, or occupations,
a study of the effects of improved production techniques can be fruitful
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only in a very limited sense because of the interdependence of the various
aspects of modern economic society. Within such limitations, the measure¬
ment of the effects of technological improvements would have to confine
itself to the determination of the volume of displacement and absorption
separately without being able to determine the net effects upon total em¬
ployment or unemployment because of the inability to determine what happen.ee
to those who remained unabsorbed by the particular industry, plant, or
occupation studied. For example, employees laid off in a New York plant
as a result of the failure to meet the price set by a San Francisco firm
which reduced its labor costs and prices by introducing modern machinery,
are as much displaced by the machinery as if that machinery had been in¬
stalled in the New York plant. An approximately similar situation arises
when silk workers are displaced by the development of the rayon industry
or when coal miners are displaced by the introduction of improved means
of utilization of coal. Thus while "displacement" and "absorption" can
be studied in individual industries or plants, the net effect of the two
processes, "technological unemployment", can be appreciated and measured
only in terms of the interrelated parts which adequately reflect the whole
of the national economy. It is proposed to accomplish this objective by
the followwing investigations;
I - Measurement of the Volume of Technological Unemployment -
A series of statistical studies, based primarily upon data
already available, will be undertaken and directed toward
the development of a statistical method designed to yield
a reasonably reliable approximation of the total number of
technologically unemployed wrorkers.
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II ~ Changes in Productivity in Solootod Groups of Industries -
In order to make possible a more concrete appreciation of
tho economic role of the changing industrial techniques and
the social consequences which flow from those changes, a
number of productivity surveys will be carried out in co¬
operation with the U. S. Department of Labor, Bureau of
Labor Statistics, and will be conducted approximately along
tho lines already established by that Bureau in connection
with its previous studies in that field. The major dif¬
ferences will concern the scope of the studies. Whereas
the Bureau's past studies covered only single commodities
such as: rubber tires, electric lamps, brick, etc., the
surveys which are now being planned are designed to com¬
prise not only a sample covering the entire industry, but
groups of industries comprising the whole of the vertical
process of production from the raw material to the finished
product. It is hoped that it will thus be possible to
consider not only the displacement and absorption within
single industries but also the new opportunities for em¬
ployment arising out of the production and development of
the new technical equipment and out of the demands made for
the requisite raw materials. In addition to yielding con¬
crete data on specific industries and providing the oppor¬
tunity for bringing certain of the Bureau of Labor Statistics
studies up to date, these surveys will also provide an impor¬
tant check on the statistical analyses mentioned earlier.
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HI "* Surveys of Social Consoquonoos of Displacement
(A) It is oxpootod that tho productivity surveys carried
out in cooperation with the Bureau of Labor Statistics
will yield, as a by-product, the basic data needed for
some of the surveys of the social consequences of dis¬
placement due to changes in industrial techniques.
These basic data are expected to consist of the names
and personnel records of persons laid off or dismissed
as a result of the introduction of certain techno¬
logical changes or managerial improvements. It is pro¬
posed to accumulate an appreciable number of such
records and to survey the unemployment history of as
many displaced persons as can be traced with a view of
determining:
1. How long the displaced workers remained unemployed.
2. How many were compelled to resort to public or
private unemployment relief.
3. How many of the skilled workers found employment in
the same occupation in the same industry, in a
different industry, at what difference in wage
rates and earnings.
4. How many of the skilled -workers found employment in
a semi-skilled or unskilled occupation in the same
industry, in a different industry, at what difference
in \vage rates and earnings.
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5. YJhat were the differonoos in the experience between
a. Older workers and young workers
b. Male and female workers
c. Skilled and unskilled workers
d. Manual workers and clerical, professional
and technical workers
e. Yiforkers in manufacturing, mining and agriculture.
An attempt will be made to determine whether and where
changes in industrial techniques resulted in the migra¬
tion of industries and consequent "stranded" areas and
communities and to survey such areas and communities for
the purpose of determining:
1. The character of the social and economic adjustments
imposed upon such communities.
2. The degree of success with which such adjustments
are accomplished.
3. The extent to which public bodies have aided or
can aid in bringing about desirable adjustments.
Concurrently with the studies to be conducted under
(B) above, it is planned to survey the objectives and
activities of the "Subsistence Homesteads", "Rural-
Industrial Communities" and "Suburban Rehabilitation
Communities" in order to determine:
1. The extent to which these emergency programs have
addressed themselves to the problems of the in¬
dustrially "stranded" areas, and
2. The extent to which they were successful in meeting
these problems.
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(D) Plans are being drawn for additional studies, to be con¬
ducted in cooperation with Federal agencies whose
regular functions are related to the problems outlined
above.
IV - Supplementary Studies - It is also expected that as a by¬
product of the study as a whole, it will be possible to
assemble certain types of information which, with little
additional effort, will yield;
(A) A comprehensive bibliography of the literature on unem¬
ployment, specifically "technological unemployment" and
"rationalization in industry". This bibliography will
not only list the titles, authors, publishers, etc.,
but will also contain comprehensive abstracts of the
important theoretical and technical work in these
subjects.
(B) A historical analysis of the development of industrial
techniques in relation to the development of industries
and standards of living. This analysis mil also cover
the contribution of organized industrial research to
the development of industrial techniques.
ADMINISTRATIVE ORGANIZATION - The study outlined above is one of the research
projects being conducted under the WPA National Research Program which is
to secure, tabulate, analyze and report information necessary to aid the
Works Progress Administration in carrying on its program. The entire
National Research Program has been allotted 12 million dollars. From this
total, sub-allocations will be made to the several studies as funds are
needed.
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All of tho studies under this program are sponsored by the Federal
WPA and will be conducted under tho supervision of Mr. Corrington Gill,
Assistant Administrator, who will appoint the Directors of the individual
studies. Mr. David Weintraub has been appointed Director of the study on
"Reemployment Opportunities and Recent Changes in Industrial Techniques",
with headquarters at 12 South Twelfth Street, Philadelphia, Pennsylvania.
It is expected that this study will find it necessary to set up temporary
branch offices from time to time in various parts of the country in order
to facilitate the collection of the necessary data.
DURATION OF STUDY - In view/- of the character of the Works Program, it is
impossible to fix the duration of the study. However, it is expected that
sufficient information will be collected end analyzed during the next
twelve months period to permit the presentation of findings in the form
of a report.
ADDITIONAL INFORMATION - All inquiries concerning this research project
should be addressed to Mr. Corrington Gill, Assistant Administrator, Works
Progress Administration, 1734 New York Avenue, Washington, D. C.