Stability of occupation and industry A worker's attachment to his occupation is somewhat more stable than to the industry in which he works, according to the 1961 study. Comparison of the occupation and industry group of each job shows that 51 percent of the job shifts made by men and 56 percent of those made by women involved no change in major occupation group (table 10). Only 44 percent of the shifts made by men and women involved no change in industry. Perhaps because men find a wider range of occupations than women, the proportion of job shifts involving changes in both occupations and industry was higher for men than for women39 versus 34 percent. TABLE 10.-Pattern of job shifts, by occupation group of job left and sex, 1961 [Percent distribution] Professional men and craftsmen had the highest degree of occu pational stability, as might be expected from their investment in training and the current demand for workers with specific skills. Managers and proprietors, on the other hand, were more likely to shift to other occupational groups, chiefly clerical and sales, when they changed jobs. It would appear that opportunities for other jobs as managers and proprietors are not so readily available. Clerical workers and nonfarm laborers also tend to move to other occupational groups but there was no particular pattern in their job shifts. Women in professional and technical occupations, like men, have a strong occupational attachment; 75 percent of their job shifts were to other professional and technical jobs. But women who are clerical workers (including stenographers and secretaries) also tend to stay in the same group when they change jobs even though their industrial mobility is high. About 70 percent of the clerical job shifts involved no change in occupation but about the same proportion involved a shift to another major industry group. Job shifts by sales workers and private household workers were frequently to other occupation and industry groups; sales workers often shifted to clerical work, and private household workers to other types of service jobs in commercial establishments. Although it gives no certain evidence of a permanent decline in the general mobility of the labor force since 1955, the 1961 study shows a definite increase in the occupational and industrial stability of job changers (table 11). Shifts were more likely to be jobs in the same occupation or industry in 1961 than in 1955. It is not clear whether the increasing stability reflects a fundamental change in workers' attitudes or simply the difference between two phases of the business cycle. Both studies show that job shifts made to improve status are more likely to involve a change in occupation and industry than are those made because jobs have been lost. As we have seen, job shifting to a better job was more frequent in 1955 than in 1961. TABLE 11.-Percent of job shifts to same occupation and industry group, by industry group of job left and sex, 1955 and 1961 Includes wage and salary workers in industries not shown separately as well as self-employed and family ます。 Tercent not shown where base is less than 100,000. Ideally, a country's labor force should adjust smoothly to changing needs for skills and changing locations of demand for workers. With a minimum of frictional loss, workers then could and would shift from declining areas, industries, and occupations to those that are growing. In practice, however, the specific interests of employers and workers may not coincide with the interests of the economy as a whole. Just how much mobility is desirable and what types of job shifts lead to the optimum patterns are questions that cannot be answered with present knowledge. Perhaps if most job shifts were voluntary, and all workers who lost their jobs found equally good or better ones in a short period of time, the operation of the labor market could be considered highly satisfactory. [From the Manpower Report of the President, 1962] UNEMPLOYMENT AND MANPOWER UTILIZATION RECENT TRENDS AND IMPACT OF UNEMPLOYMENT Unemployment is a serious problem for the United States. Although employment and output increased during 1962, the Nation is still far short of reasonably full utilization of its manpower resources. An average of 4 million Americans, about 512 percent of the civilian labor force, were unemployed in 1962. This was less unemployment than in 1961-a recession year-and in the next preceding recession year of 1958, but it still was more than the average rate for the postwar period as a whole and nearly double the unemployment rate in 1953, the post-World War II year with the fullest manpower utilization record. This chapter summarizes key statistics on unemployment-the major trends, the groups hardest hit, and the geographical and industrial concentrations. It does not dwell on the general significance of unemployment. The important reasons for concern about excessive unemployment must, nevertheless, be borne in mind. For the economy, unemployment means wasted manpower and loss of potential production of goods and services. The curtailment of unemployed workers' income reduces their buying power, with resulting braking effects on economic growth. Heavy social costs are also involved the community is burdened and deprived in many ways when its workers and their families suffer repeated or prolonged joblessness. The individuals and families involved are hurt, not alone in terms of depressed living standards, but by damage to the dignity of the human spirit, surely a matter of great concern in a free, democratic society. In the broadest terms, too, unemployment is a measuring rod in the eyes of the world of our Nation's and our economic system's concern for its least fortunate people and its ability to provide them with a genuine opportunity to participate in the country's general well-being. 1 The rate of unemployment 1 has fluctuated considerably in the past 1 The rate of unemployment is a more meaningful measure for comparison over time than the number of unemployed, because the number tends to rise along with the increasing size of the population and labor force. 15 years, reaching a low of 2.9 percent in 1953, at the end of the Korean conflict, and a high of 6.8 percent in the recession year 1958. The rate in the last year of World War II, 1945, was 1.9 percent. Since November 1957, however, the seasonally adjusted rate of unemployment has been consistently 5 percent or higher, and has averaged close to 6 percent. Not since the decade of the 1930's has unemployment remained this high for so long a period of time. The 1962 unemployment rate of 512 percent is particularly disturbing because the rate has held tenaciously to this level many months after a substantial recovery from the 1960-61 business recession. Moreover, in the latter part of 1962, there were signs that even the modest improvement in unemployment over 1961 was showing up. The first sections of this chapter focus primarily on the full-time unemployment measured by these rates. It should be recognized, however, that underutilization of the Nation's manpower resources exists also in the form of underemployment and hidden unemploy ment. One type of underemployment, readily visible and measurable is the restriction to part-time employment of workers who would like to work full time. Such involuntary part-time employment, for "economic reasons," is discussed at greater length later in this chapter. In 1962 the average number of workers on part time for economic reasons was 2.7 million. If the hours they lost are added to the hours lost by those totally unemployed, the combined rate of idleness in 1962 would represent 6.7 percent of the potential worktime of our labor force. Another form of underemployment, difficult to measure, occurs when workers are employed on jobs which do not utilize their full capacity, or on which their productivity is lower than it would be in some other occupation. During a severe recession, for example, many skilled workers are demoted to semiskilled jobs, foremen are put back on production work, and so on. This general downgrading of the labor force means that even those workers who continue in employment are not used effectively and that their output and income and that of the Nation-fall below potential levels. In some industries, notably agriculture, there is a chronic tendency toward disguised underemployment even in good years. The rural areas of the country have a relatively high rate of population growth while the labor requirements of agriculture are declining. The result is an accumulation of surplus workers in agriculture, who have low wage rates, low earnings, and relatively low though rapidly increasing productivity. During prosperity the situation is alleviated by largescale migration from rural areas to urban ones where job opportunities are increasing. In periods of slack economic growth, however, this movement is checked or even reversed, and underemployment in agriculture is aggravated. According to estimates by the Department of Agriculture, there are Dow 700,000 heads of farm families who have a net annual income of less than $1.200 and who are therefore regarded as unemployed for the purposes of the Manpower Development and Training Act. Taking into account the other workers in these families and other individuals of working age, the Department estimates that, altogether, 2.8 million persons in rural areas, many of them on marginal farms, fall within the criterion of less than $1,200 of annual family income. These estimates, which do not include persons over 65 nor those classified as unemployed by conventional definitions, are indicative of serious underutilization of American manpower. Another form of underutilization is that of persons reported as not being in the labor force because they are neither working nor looking for work, but who would nevertheless accept employment if it were available. This may represent a kind of hidden unemployment in the case of workers who have lost their jobs and have simply given up looking for work because a long period of jobseeking has persuaded them that they have little chance of being hired for the jobs available in their community. Unfortunately, virtually no information is available under present statistical programs regarding the number and characteristics of the potential workers currently outside the active labor force. Among the recommendations of the President's Committee To Appraise Employment and Unemployment Statistics were several relating to the collection of more information on persons reported as not in the labor force. Research programs are currently being developed in this area in accordance with these recommendations. UNEMPLOYMENT AND THE FULL EMPLOYMENT GOAL In view of the high recent rates of unemployment, our economy is obviously falling short of full employment of manpower resources. The exact magnitude of this shortcoming is difficult to measure. However, some unemployment is, of course, unavoidable. Worktime lost in the process of voluntary job changing indeed often results in benefit to the individual worker and the economy. Unemployment for such other reasons as seasonal shifts in business activity, geographic movement of families and industries, voluntary intermittent participation in the labor force, and even chance events such as natural disasters, is ordinarily beyond control. When job opportunities are ample and individual workers are prepared to cope with the necessary changes, periods of unemployment due to such causes are typically brief and may, in the aggregate, fall within a level of acceptable minimum unemployment. The definition of an acceptable level of unemployment-that is, the unemployment rate that accompanies "full employment"-is consequently difficult to determine and may indeed vary from time to time. No universal agreement has been achieved as to the goals in this area which are feasible in a free society, and adequate information is lacking on essential points (e.g., causes of unemployment and the extent and nature of job vacancies). Nevertheless, even without agreement on a specific minimum rate, there is a national consensus that the economy has been operating well below its full potential utilization of manpower, and also plant ca pacity, since 1957. One measure of the economy's recent failure in this respect is simply the lower levels of unemployment attained in the preceding years. Of the 12 years between 1946 and 1957, 6 had an average unemployment rate of 4 percent or less, and of the remaining 6 years, 2 had higher rates because of marked business recessions. An unemployment rate of 4 percent or less has thus been achieved in actual practice, without the application of special measures directed at reducing labor market limitations and without Government assist |