ance on any broad scale in qualifying workers for new jobs. Therefore it seems reasonable to assume that, given a national effort directed at specific aspects of the unemployment problem and accelerated economic growth, unemployment could be reduced well below the 4percent level without undue strain on the economy.

Another yardstick of the degree to which the current 512-percent rate falls short of feasible goals is the current experience in other industrialized Western countries. Even after allowance is made for differences in concepts and definitions, unemployment rates in many such countries are in the neighborhood of 2 percent.

UPWARD TRENDS IN UNEMPLOYMENT

This country has had three business recessions during the past decade, and after each one the rate of unemployment remained higher than before the preceding downturn.2 In 1953 the rate of unemployment was under 3 percent before it started to increase as business activity declined toward the end of the year. During the subsequent recovery period (1955-57), however, the unemployment rate never fell significantly below 4 percent. Then in 1959 and 1960, after the recovery from the 1958 recession, unemployment dropped only as low as 5 percent (for limited periods) instead of returning to its 4 percent prerecession level. And in 1962 the rate again stayed at a higher plateau, 52 percent, after recovery than it was prior to the downswing late in 1960 (chart 8).

Unemployment levels and rates have always responded to changes in business conditions, although usually with some lag. But there is reason for concern that each recent cycle has left unemployment at a higher rate than the previous one. To look at the situation another way, the unemployment rate averaged as high in 1962 (a nonrecession year) as in 1954 (a recession year).

In terms of human welfare, another disquieting aspect of the unemployment situation since 1957 has been the disproportionate rise in long-term unemployment-the increase in the proportion of unemployed workers remaining out of work for 15 weeks or longer (table 6). Between 1957 and 1962 when total unemployment increased by 36 percent, short-term unemployment (less than 5 weeks) increased by only one-fifth, whereas long-term unemployment (15 weeks or more) doubled. In other words, in 1957, out of every 100 jobless workers, 51 had been seeking work less than 5 weeks, while 19 had been without work 15 weeks or longer. But in 1962 only 44 of every 100 unemployed were in the short-term group, while the long-term unemployed had increased to 28 per 100. (See chart 9.) (It must be remembered, however, that it is usual for long-term unemployment

Some observers have claimed that the problem has been exaggerated by the concepts and methods used in gathering the unemployment statistics, principally because the totals acade some married women and teenagers who presumably do not need jobs. It should be noted, however, that (1) the concepts, definitions, and sampling and other procedures have remained unchanged since 1957 (when unemployment last registered 4 percent) and the data are basically comparable at least for the postwar period and for most purposes 1940; (2) that married women and teenagers who look for work have always been tended in the jobless count and that their needs for employment and income are probably Buch stronger than is commonly supposed; (3) that unemployment rates have risen Ang adult men 20 to 64 years of age-a group which is strongly attached to the labor free and whose need for work is obvious: (4) that the rise in unemployment since 1957 firmed by data on insured unemployment which do not depend on sampling and which include only experienced workers who have lost jobs through no fault of their own.

to rise disproportionately during periods when overall unemployment has increased.)

There is a great deal of turnover among the unemployed; that is, a large and continuing movement of previously unemployed workers into jobs or out of the labor force, while other workers lose their jobs and nonworkers start looking for work and thus join the ranks of the unemployed. Even among the long-term unemployed (out of work 15 weeks or longer) movement into and out of the group is at the rate of about 25 percent a month. In terms of manpower utilization, however, this turnover means only that aggregate weeks of idle manpower during the course of a year are spread among many more persons than are the unemployed at any given time. Moreover, the extent of turnover is now less than it used to be, and spells of unemployment tend to last longer with consequently greater distress for the workers involved.

Prospects for unemployment improvement in the years ahead depend to a great extent on our ability to achieve a more satisfactory rate of economic growth, but several special manpower trends warrant comment since they will present significant problems in efforts to achieve fuller manpower utilization.

TABLE 6.—Unemployed persons, by duration of unemployment, 1957 and 1962

The anticipated rapid rate of labor force growth (discussed in ch. 7) is one such trend. With the labor force expected to grow at an average rate of 14 million a year between 1960 and 1970 (compared with about 840,000 per year during the 1950's), labor supply pressures will increase. Moreover, in the years immediately ahead, growth will be concentrated to a great extent among young persons in their late teens and early twenties, who cannot (unlike many adult women who will be the second largest source of additional workers in the near future) long postpone their entry into the labor market.

Added pressure on the labor world arises from the advances in productivity and technology (discussed in ch. 6). Automation and other kinds of technological progress affect employment in varying degrees in different situations, under the impact of many influences which are in need of further study. Whatever the overall effect, however, it is apparent that such advances are drastically altering the composition of labor demand, with consequent dislocations and at least temporary unemployment for many workers during the adjustment process.

The continuing outmigration of workers from farm areas is another notable source of pressure on the urban labor market. Inasmuch as most persons of farm background have limited nonfarm work experience, their problems in finding and retaining suitable employment in urban communities are often particularly serious.

Another important factor which has a potential limiting effect on new hiring is the tendency in some industries to rely on overtime hours rather than an enlarged work force to meet expanded production schedules. During 1962, when unemployment averaged 52 percent of the work force, average overtime hours in manufacturing reached a 6-year peak of 3 hours a week. Although no comprehensive study has yet been made of the reasons responsible for this situation, these undoubtedly include the difficulty of recruiting satisfactory workers for skilled and responsible jobs and also the fact that employers may find it inefficient to take on temporary workers to handle short-term increases in production.

THE LOCATION OF UNEMPLOYMENT

Unemployment has never been evenly distributed throughout the economy. There has always been great variation in unemployment by area, industry, and occupation, and in the kinds of individuals affected, so that certain communities or groups are hit much more sharply than others. These variations in impact explain the need for special purpose programs to meet the unemployment problems of particular groups and localities.

The differential impact of unemployment on communities is evident from the data for 150 major labor market areas regularly classified according to level of unemployment by the Department of Labor. In December 1962, 41 of these areas were listed as having relatively substantial unemployment (a rate of 6 percent or over) while another 10 were listed as having a relatively low level of unemployment (less) than 3 percent). (See chart 10.)

Many of the areas with substantial unemployment have had persistent unemployment problems for several years. Some have had high unemployment rates throughout most of the postwar period-in years of overall national prosperity as well as those of recession. Factors which underlie these persistently high local unemployment rates include the shutdown of obsolete plants, the transfer of important local industries to other areas, changes in consumer demand or production technology, and depletion or exhaustion of natural reSources. Local employment cutbacks arising from such developments have been particularly severe in coal mining, textile, steel, automobile, and machinery manufacturing centers.

Ares classifications are based mainly on the area employment rate, as listed below-however, consid tion is also given to the labor market outlook, seasonal patterns of employment and unemployment, and several other factors: