MACHINE-MADE UNEMPLOYMENT
Belfer, Nathan
Machine-Mode Unemployment By Nathan Better Projeasor of Economics at Brooklyn College IT 19 OFTEN said that labor-saving machinery will not cause any unemployment because some of...
...800.0 1*37 1.081.3 1939 mx Employment in the Machinery Pro ducing Industries as a percentage oi wag* earners in all manufacturing industries 1929...
...1,121.3 1931...
...Some of the displaced workers will find employment in the construction of this labor-saving machine...
...The burden of evidence would seem to indicate that the construction and maintenance of the new machines will reemploy only a nortion of those workers initially displaced by the machine...
...Fixed capital in the obsolescent industry will not be liquidated immediately...
...The figures do reveal that the ratio of wage-earners in the machinery industries to wage earners in all manufacturing declined between 1929 und 1939...
...After the dial system was introduced, only 12 operators were needed—a decline in labor requirements of 93 percent...
...A new industry may give birth to a whole group of new industries...
...Machine-Mode Unemployment By Nathan Better Projeasor of Economics at Brooklyn College IT 19 OFTEN said that labor-saving machinery will not cause any unemployment because some of the displaced workers will find jobs in the maintenance and construction of these machines...
...In the case of such very labor-saving devices it is doubtful if all the unemployed workers could have been absorbed in the construction of machines which displaced them...
...An entirely new industry is usually job-creating...
...For the manufacturing industries covered by the National Research Project, output per man-hour stood at an index ol 123.9 in 1936 on the base of 100 if...
...13.* 1931 U.3 1933...
...Old hand production methods turned out 118 bulbs an hour...
...In the city of Terre Haute, Indiana, 180 operators were employed when the system was manual...
...The output of manufacturing industries, in value terms, declined from approximately 68 billion dollars in 193 to 57 billion dollars in 1939...
...The rate of disinvestment in the old industry will be less than the rate of investment in the new industry...
...AUTOMATIC control devices like the electric eye reduce supervisory and maintenance labor, and result in an enormous increase in labor productivity...
...698.3 1933...
...It is obvious that Such non-mechanical improvements would not provide any employment for labor in the construction of machinery...
...The evidence does indicate, nevertheless, that the relative decline in employment in the machinery industries was greater than the decline in the ©utpul of manufactured products in the thirties...
...The maintenance and repair of the machine will necessarily require less labor than was displaced by the machine...
...They are not new machines...
...they are merely auxiliary additions to existing machines...
...The immobility of labor thus makes it highly improbable that those workers displaced by the labor-saving machines are the same ones who will be employed in the construction of the machines...
...A substantial part of the output of the machinery industries consists of supplies and raw materials...
...Subsidiary and complementary industries are developed...
...Superior agricultural equipment produced in Minneapolis will not provide jobs for farm workers displaced in Kansas...
...However these machines may bo constructed in Detroit, Chicago, or Milwaukee, and not in Pennsylvania...
...New industries open up great opportunities for new real investment...
...The dial telephone effected a very significant reduction in the number of telephone operators...
...Even if this were the case, there would arise the problem of interoccupational mobility and the need for displaced workers to acquire new skills...
...This is a decline in labor requirements of over 99 percent...
...4 BETWEEN 1936 AND 1839 there were further increases in productivity...
...Workers in an obsolescent industry lose their positions, but their numbers are small compared to the number of jobs created by new industries...
...M 1935 1U 1937...
...Lastly, labor-saving improvements in the equipment goods industries themselves will reduce the quantity of labor required to produce a given machine...
...With our highly specialized regional economy there are only a very few cases where the machine would be constructed and used in the same geographic area...
...The introduction of the continuous strip mill in the steel industry reduced the quantity of labor required per ton of steel 96 percent...
...More efficient management, improved working conditions, time and motion studies, scientific selection and training of workers, elimination of wastes, coordination of processes, and better plant layout have resulted in considerable increases in labor productivity and a corresponding amount of labor displacement...
...Jobs and investment opportunities are thus also opened up in the investment-goods industries...
...The statistical and theoretical evidence leads to the conclusion that the construction of machinery is of only secondary importance in reemploying technologically displaced workers...
...Labor productivity has frequently been increased by non-mechanical improvements which require no new equipment...
...The situation is different, however, in the .case of a labor-saving improvement in an existing industry...
...IS* 1939...
...Since such improvements represent merely a more efficient use of available machinery and labor, and not the use of new machines, there is no possibility that displaced workers could be absorbed in the construction of machines...
...We must allow, of course, for the cyclical decline in employment during the thirties...
...The revised Federal Reserve index of output indicates that the physical volume of industrial production was only a little lower in 1939 than it was in 1929...
...Moreover, those workers employed to construct the new machines may not be the same workers whom the machine displaced...
...The index stands at 110 for 1929, and 109 for 1939 (1935-39 . 100...
...1U These figures overstate the number of workers employed in the manufacture of machinery for domestic uw . Some machinery is exported...
...Such non-mechanical increases in productivity can be summed up roughly by the term scientific management...
...There was thus a job opportunity loss of 76 percent...
...While not attempting to estimate the amount of labor that would have been required to produce the 1939 output at 1929 productivity levels, we note that there was a substantial increase in productivity in the thirties...
...More efficient coal-nflning machinery will displace miners in Pennsylvania...
...Employment in the machine producing industries declined from 1.1 million in 1929 to 883 thousand in 1939, a decline of about 21 percent...
...Employment in the Machinery Producing Industries (in thousands for establishments with products valued at $5,000 or mors) 1929...
...The ribbon-bulb machine turns out 36,000 to 48,000 electric light bulbs an hour...
...545.1 1935...
...The displaced coal miners will probably not be the ones who secure the positions constructing the new machines...
...The new industry may require (he construction of entirely new and novel forms of machinery...
...The use of the long«flller cigar machine reduced the quantity of labor required to produce a quantity of cigars by well over 50 percent...
...They cost very little to apply...
...The construction of these new machines will, it is true, provide jobs...
...DURING THE 1930's there was a decline in the number of workers employed in the machinery manufacturing industries...
...Once the machine is constructed, this labor is no longer needed until ft is /time to replace the machine...
...In Boston, approximately 12,000 workers would be required to handle the annual business if the system were on a manual basis, while only 3,500 to 4",000 operators are now employed...
...A new industry may make some existing industry obsolescent...
...Otherwise, it would not have paid to scrap an existing machine in order to introduce a more efficient one...
...The quantity of labor required in their production is far less than the amount of labor-saving they give rise to...
...Considerable internal migration of labor must occur if the displaced workers are to be reemployed...
...FOll NUMEROUS other reasons it would appear that the construction of labor-saving machinery can only partially offset the total amount of labor displacement caused by the machine...
Vol. 32 • April 1949 • No. 14
