WORKS -P ft U V K B U" S ADMINI S T R A T I 0 H
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Analysis of the Trend, of WPA Employment
The WPA was initiated in the slimmer of 1935, and from July
1935 until February 1936 was taking persons from the direct and work
relief program of the Federal Emergency Relief Administration over
to projects of the Works Progress Administration as rapidly as pos¬
sible. By February 1936 this transfer was completed and the WPA
reached a peak of 3,035,000 in the latter part of February 1936.
The period from the winter of 1936 to the fall of 1937 was
one of steady improvement in industrial conditions and steadily de¬
clining industrial unemployment, with only seasonal or temporary in¬
terruptions of the general trend; the regular employment activities
of the WPA were correspondingly curtailed during this period, WPA
employment declining from the peak of 3,000,000 in February 1936 to
2,150,000 in February 1937, and 1,450,000 in September 1937.
The only interruption in this continuous decline occurred
during the summer and autumn of 1936 when a severe drought in the
Western plain states caused a temporary increase. At the peak a
total of 324,000 persons wore employed on this emergency drought
program. It was discontinued in the early winter of 1936-37, partly
because of the difficulty of operating a widespread program of work
projects in these states during severely cold weather. The families
who had previously been given work V7e^| transferred to the Resettle¬
ment Administration at that time.
2.
During this period from February 1936 to September 1937
when WPA rolls were more than cut in half, the Bureau of Labor Sta¬
tistics showed that non-agricultural employment in the United States
increased by 3,486,000 persons; total non-agricultural employment
rose from 31,628,000 in February 1936 to 35,114,000 in September 1937.
In September 1937 the stock market broke sharply and in
the months following, the most drastic declines on record occurred in
industrial production and in private employment. Industrial produc¬
tion dropped from 109 percent of the 1923-25 average to 80 percent in
January and 77 percent in June 1938. Employment of non-agricultural
workers declined from 35,114,000 in September 1937 to 31,753,000 in
July 1938. As a result of this decline in production and private
employment the need for WPA employment increased and consequently WPA
employment increased from 1,450,000 in September 1937 to 2,967,000 in
July 1938.
The increase in WPA employment was much less rapid than the
increase- in. unemployment between September 1937 and July 1938 for two
reasons. In the first place, many workers who lost their jobs were
able to live for a number of weeks or months on their--accumulated
savings* and were" not forced to - seek TO? A employment immediately.
Secondly, unemployment compensation programs began operating in 22
states in January and many unemployed workers were eligible for com¬
pensation payments. Thus, the need of thousands of workers for WPA
employment was considerably delayed. However, as their resources
3.
"became exhausted and the workers f til led to find new jobs or reem¬
ployment at their former johs, it was necessary to continue expan¬
sion of the YTPA program.
The decline in industrial production and employment was
halted in July and industrial conditions have improved since that
time. In August 1938 an increase of 240,000 occurred in non-agri¬
cultural employment, and there was a further increase of 440,000
persons in September- No figures are available as yet for October
but assuming that there was another increase of 400,000 in non-
agricultural employment in October, this would mean an increase of
slightly over 1,000,000 workers in private industry since July.
Obviously, all of the workers who lost their jobs after September
have not yet benefitted from the upturn, and since June many of these,
having used up their savings and unemployment compensation benefits,
have been taken on to IP A projects. Since the end of July. "BPA
employment has increased by about 200,000 workers to a total of
3,167,000 on Octsber 15.
Another important factor in the trend of WPA employment
since July has been the situation of tenant farmers and laborers in
the cotton producing areas of the South and 105,000 of the increase
in WPA employment since July has been in the Southern states. The
price commanded by this year's cotton crop is so low that many
farmers will not break even on their direct costs of production.
The need of cotton tenants and laborers of course is not reflected
in industrial production or non-agricultural employment figures.
4.
The hurricane and flood in Now England and New York
necessitated additional work both during the emergency itself and
subsequently in the clearance of debris, carrying out necessary
sanitation and health measures, and the rehabilitation and restora¬
tion of public structures and other property. There has been an
increase of about 18,000 WPA workers in New England since the end
of July.
Workers going back to work in private industry are drawn
from the entire unemployed group; WPA workers usually get a propor¬
tionate share of available new jobs. In fact, from June through
September 550,000 workers voluntarily left the WPA, practically all
to take private jobs. However, the number coming on to the WPA as
a result of the exhaustion of their resources has exceeded the num¬
ber leaving projects for private jobs, even after the upturn in
private employment occurred. Over 1,000,000 persons were receiving
unemployment compensation in July and hundreds of thousands of these
persons exhausted their benefit credits during the last two or three
months and became eligible for WPA. It seems clear that the opera¬
tions of the unemployment compensation program will cause a lag
between changes in private employment and WPA employment in the
future. Thus, when private employment goes down, WPA employment
will not immediately increase proportionately, since many workers
would be entitled to unemployment compensation benefits for twelve
to sixteen weeks and would not be eligible for WPA employment until
the expiration of that period. Similarly, when private employment
5
turns up there will he a large number of persons getting unemploy¬
ment compensation benefits who will exhaust their benefits and be¬
come eligible for TO? A during the first months of the increase in
private employment; this is the situation that has occurred during
the past three months.
Division of
Statistics and Iconomic Research