What Is Actually Being Done about Postwar Employment?
The particular plan or plans that should result in full employment are subject to constant debate. How much employment can pri-vate industry provide? What policies and practices should government follow to encourage private employment? Will public work, unemployment insurance, or relief be needed to take up the slack? If so, how much?
In this pamphlet no attempt will be made to enter into, much less try to decide, these arguments. We will not skate on the thin ice of what is proposed to be done and why, including the pros and cons of each point of view and the asserted merits and de-merits of every employment scheme. Instead, we will stay on the solid ground of what has already been done and is actually being done toward the provision of full employment.
What is business doing?
The Chamber of Commerce of the United States has made periodic consumer surveys to find out what the American people want to buy in the period following the war. The results are supposed to be not so much reliable predictions as guiding indications for commerce and industry to follow in their postwar planning. The USCC believes that its figures, as a matter of fact, are underestimates rather than overestimates because it questioned only families whose incomes are under $4,000 a year, and because it thinks people are more likely to buy when goods are available than to make buying plans now.
Of the families interviewed in the Chamber of Commerce poll, 64 per cent said they intend to buy one or more major articles within six months after the end of the war. On the basis of the sample, it appears that 3-5 million families intend to buy new automobiles-a market of 3.3 billion dollars. Millions more intend to buy household appliances such as refrigerators, washing and sewing machines, stoves, vacuum cleaners, radios, electric mixers and irons-a market of 1.2 billion dollars. A million and a half families plan to put their savings into homes-a postwar building boom of 7.2 billion dollars. Millions more plan repairs, home and farm improvements, purchases of furniture, and soon.
The National Planning Association, made up of leaders in business, labor, agriculture, government, and the professions who are interested in coordinated intelligent preparation for future problems, using another sampling poll, got results not quite so optimistic. Only 45 per cent of the people it questioned had already scheduled postwar purchases-mostly for houses and house repairs. The same public opinion poll indicated that 57 per cent of the people have faith in our ability to do away with unemployment in America. The Chamber of Commerce found that 55 per cent believe that the first postwar year will be one of prosperity, 32 per cent expect “lots of unemployment,” and 13 per cent said conditions would be “somewhere between.”
Probably the people who answered these questions had little exact information on which to base their optimism. But their confidence in the postwar future is shared by the leaders of business who presumably are better versed on the chances. The Fortune “Management Poll” mentioned above showed a slight majority in the management group guardedly confident that business for their particular company would be better after the war than it was before. Only 8.5 per cent took the gloomy view that their company’s business would be worse.
This feeling of optimism is not founded on pure wishful think-ing. There is a great deal of solid work being put into plans by business for this better business world. Probably the greater part of it is in the sphere of planning by individual companies for what they are going to do after the war. While the great majority of businesses- will return to the same line they were in before, there is enough promise of new products to make the postwar outlook -and the postwar possibilities of jobs in new industries-quite exciting. A survey conducted in 1942 brought out that in time of war 240 out of 360 industries were maintaining or expanding independent research departments in order, among other purposes, to develop new products.
There isn’t space here even to hint at the separate plans being made by hundreds and thousands of American businesses. Suffice it to say that a good many of them are aware that in the United States the consumption or supply of houses, house furnishings, clothing, food, education, medical care, travel, and so on is far below the ideal American standard of living. And they are doing what they think possible to get their share of the postwar purchasing melon.
However, among those businessmen who have thought about the problem in all its aspects there seems to be agreement that postwar employment is too big a problem to be solved by haphazard, uncoordinated planning (or lack of planning) as each individual businessman thinks fit. Out of their thinking has developed what is called the Committee for Economic Development. This independent, self-financed, nonpolitical, and non-profit organization of businessmen believes that it can help foster the necessary expansion in American production and employment not through planning at the national level, but by stimulating individual employers to make plans for their own businesses. Its Field Development Division has helped to organize over 2,000 local Committees for Economic Development whose responsibility is to generate action in their own communities. More than 50,000 business leaders, it is said, representing two-thirds of the nation’s productive capacity, are active on these local committees. Their programs are independent and suited to local needs. The national headquarters serves to coordinate the activities of the community committees and to keep them informed of developments elsewhere in the nation.
Mr. Paul G. Hoffman, chairman of the CED, estimates that there must be 53 to 56 million civilian jobs after the war in order to avoid serious unemployment. “To be certain we not only have jobs enough but also that they are the right kinds of jobs,” he has declared, “we must increase: our gross output of goods and services more than 40 per cent over the record-breaking peacetime year of 1940.”
In order to reach this high level of productive employment, says Mr. Hoffman, “we must genuinely accept the possibility of our achieving an economy of plenty.” And that, he says, means an abrupt about-face, for he finds that many of the current policies of government, business, labor, and agriculture “spring from fears inherent in an economy of scarcity.” From “fears that there won’t be enough customers for our goods,” he says, grow monopolistic business practices where there ought to be free competition. In fear “that there are not enough jobs to go around,” he thinks are rooted labor support of such things as “featherbedding rules in opposition to incentive payment.” From fears of production beyond demand come all “restrictive measures in the field of agriculture.” And he believes that all these fears are reflected in government policy.
To study the bearing on production and employment of such business policies, labor practices, and government measures, the CED also has a research division. It is staffed with some of the leading economists and social scientists of the country. These men are making independent analyses and, in company with leading businessmen, are expected to make recommendations for changes in policies and practices in order to aid employment and production.
“If industry could now show our people that there needs be no postwar depression; that on the contrary there can be America’s greatest economic and social opportunity, there would be at once a magnificent response demonstrating the fact that the average man wants most of all to be creative, productive, independent, and secure in the fruits of his own efforts.” (Henry J. Kaiser.)
“Mass unemployment would contain within itself the seeds of disillusionment and discontent on the part of our return-ing military forces as well as our civilian workers who justly feel that after the war they are entitled to the security which a job at fair wages brings. An army of unemployed with. no adequate income to sustain them until jobs are available is fertile ground for foreign ‘isms’ of the most in-sidious and dangerous form, as well as a breeding place for conflict between races, soldiers and civilians, men and women workers vieing for employment, etc.” (William Green, President of the AFL.)
What is labor doing?
American labor, as one would expect, is mightily interested in the question of postwar employment. Both the AFL and the CIO have postwar planning committees in operation and both are publishing pamphlets on the subject. The independent labor unions are similarly concerned. On the level of the local unions, postwar planning for jobs often takes the form of provisions in contracts for reinstatement of servicemen without loss of seniority and so forth, and some unions are opening their memberships to returning veterans without payment of initiation fees. The AFL committee on postwar planning has recognized that union responsibility for full production and employment includes the “review and revision of rules and practices which were developed to protect workers in a depressed and severely fluctuating economy,” that is, feather bedding, output limitations, prohibitive initiation fees, and the like.
On the national level, the emphasis of labor is toward getting “an opportunity to participate in national postwar planning groups and administrative agencies concerned with this vital problem,” in the words of William Green. Labor leaders appear to be doubtful of the promises of some business leaders that business alone, if left alone, can do the reemployment job; labor seems to be more impressed with the ability of the federal government to deal with the problem on an over-all basis and to stand by with jobs on public works to take up any slack that occurs. In short, labor sees mass unemployment as the worst of national disasters and is quite willing to resort to governmental action to prevent it.
“The task of converting after the war is too huge and the stakes too vital to be left to business alone. The nation must. work unitedly for peace as for war. . . . Only the federal government can act for the nation as a whole and effectively control economic forces that ignore state lines.” (CIO Postwar Planning Committee.)
What is government doing?
There is no room for doubt that the vast majority of Americans prefer a system of private enterprise rather than government control. We like to be our own bosses, or at least to work in businesses owned and run by private citizens or corporations, and we prefer that public employment be kept close to the minimum necessary to man essential governmental services. People may not agree as to what is “essential” in the way of governmental services, but it is still true that they look overwhelmingly to private enterprise as the proper agency for doing most things and for providing most jobs. Those who believe that only an economy completely controlled by the government can guarantee full employment are in the minority.
Likewise in a minority are those who believe that there is no relationship at all between government and the problem of full employment in private enterprise. Even the people who most vehemently deplore “government in business” and the necessity of strict governmental controls in wartime testify thereby to a realization of the importance of the government’s part in the situation. Most people agree that public policy, in fact, is of utmost importance in two ways: First, by friendliness toward private business it can foster a “climate” of confidence in the future with consequent expansion of job opportunities in private employment. And second, it can erect stand-by safeguards against unemployment in case it should turn out that there are not enough jobs in private business to go around.
The question of inspiring confidence
There are two reasons why the question of fostering confidence through government action cannot be discussed here. The first arises out of the highly political complexion of the subject, and the second out of the fact that it is still partly in the talk stage.
The questions involved have to do mostly with such matters as taxes, price and wage controls, monopoly policy, monetary policy, war contract termination, and the disposition of government-built war plants and of government-owned surpluses of war materials. In the same Fortune “Management Poll” already mentioned, the men questioned put downward revision of taxes, especially the excess-profits tax, first in order of importance. For the reconversion period they prescribed uniform and prompt settlement of war contracts, early formulation of plans for easing wartime controls over materials and prices, determination of the order in which industries producing for war will be released for reconversion, and announcement of plans for the sale of war surpluses.
�“It therefore seems fundamental that the first consideration in the shaping of governmental policies should be to inspire confidence on the part o f management, the investor, the employee, and the consumer. . .
“Careful consideration should also be given to the preparation o f a portfolio o f useful public works that can be started quickly and terminated quickly, to be held as a reserve, and to be utilized only when necessary.” (Senate Committee on Post-War Economic Policy and Planning.)
On the governmental side, much of the initial work in planning the return of the nation and its citizens to peacetime pur-suits was done by and through the National Resources Planning Board. According to an authorization of the President in July 1942, the NRPB set up a Conference on Postwar Readjustment of Civilian and Military Personnel. This was an informal group of men from various government departments and agencies, including the Army and Navy, who studied all aspects of the problem for a year and agreed upon 96 recommendations which were issued in June 1943. Space is lacking here todiscuss or even list these recommendations, but they will be found to under-lie many of the later proposals of other groups.
More concrete proposals for the transition from war to peace are to be found in the report of the Advisory Unit on War and Postwar Adjustment Policies of the Office of War Mobilization. This report, issued on February 15, 1944, is commonly known as “the Baruch report” after Mr. Bernard Baruch, the chairman of the unit. Its recommendations cover most of the problems of removing the government from the business of war production and at the same time protecting the public’s interest.
The Baruch report emphasized throughout the need of early clarification of plans for “unwinding our war economy,” and within four days of its appearance the President acted to put into effect some of its proposals. A joint Contracts Termination Board and a Surplus War Property Administration were created within the Office of War Mobilization to work out policies and supervise government operations in the fields indicated by their names.
Both the Senate and the House of Representatives have set up special committees on postwar economic policy and planning whose functions are to study the economic problems of the post-war period and recommend to their respective houses methods of dealing with the issues. With expert advice and help, both committees are exploring the many aspects of reconverting the nation to the ways of peace-with full production and full employment the central objective.
Some of the results of these investigations have already become evident. Before recessing in September 1944, Congress passed laws dealing with demobilization and reconversion, contract termination, and surplus property disposal. These and other measures will have both direct and indirect bearing on postwar employment. As this pamphlet goes to press, however, the Congressional postwar legislative program has not yet been completed. A discussion of it cannot, therefore, be attempted here.
One prominent exception, of special interest to servicemen and women, is an omnibus measure nicknamed the “G. I. Bill of Rights.” This law, approved on June 22, 1944, provides for hospitalization, education, financial assistance, job placement aid, and unemployment compensation for honorably discharged veterans of this war who have served at least go days or have been released in less time because of disabilities acquired in service. Some of its provisions will be discussed later.
What about public works?
Mr. Eric Johnston, president of the Chamber of Commerce of the United States, has set forth his views on the subject of private enterprise and public works as follows: “Businessmen with faith in the private enterprise system recognize that they cannot do the job alone. Public works under the cities and counties, as well as the national government, have a vital place in our economy. We want to avoid leaf-raking projects as much as possible, and also do not wish to infringe upon the field of private enterprise. Nevertheless, we realize that many desirable public works projects have been held back during the war and that an expansion of activities of this nature in the period of demobilization will help to reduce the amount of threatened unemployment.”
The original idea of using public work to offset employment slumps was simply to postpone public construction in times of prosperity and then make up the resulting deficit in public buildings and so forth when private business was slack. Thus the effects of a depression could be lessened through supplementary employment on public construction. Depressions were looked upon as temporary and were expected to cure themselves in due course. No increase in the total volume of public works, beyond what might ordinarily occur without regard to the employment situation, was contemplated.
Whenever private enterprise is already providing jobs for the great bulk of the working population, the choice between public works and a corresponding amount of private construction is determined in the main by what public facilities the people want badly enough to forego the enjoyment of other goods and services. But this freedom of choice does not exist in times of prolonged mass unemployment. For then the choice is between work on public projects or a corresponding amount of continued idleness of men and materials.
During the depression of the thirties, work was provided both on permanent public building projects and on the basis of relief. The former is the traditional kind of public work. Work relief, on the other hand, is directed more to fill the momentary needs of the individuals than the needs of the whole community for generations to come. Projects are designed to start quickly, to employ large numbers on the basis of their need, and frequently to spend as little as possible on supervision, materials, equipment, and skilled labor.
Although work relief was heavily used in the depression, with large federal expenditures, it did not fully take up the slack. More persons than were on work relief had to apply for direct relief grants from local, state, and federal funds. This fact, plus the difficulty of distinguishing traditional public work from work relief, raised many important questions of policy. These are now being revived in discussions of public works after the war. Some of them you will find at the end of this pamphlet.
All the states and most of the principal cities are making public work a central part of their postwar planning. In most instances it consists of preparing what the United States Conference of Mayors describes as “a shelf of ready-to-go projects with complete plans and specifications for each project so that it may be started at the end of the war.” In almost all states the combination of high wartime tax revenue with limited expenditures has brought about the accumulation of surplus funds. Many of the states are putting these surpluses aside in special reserves for postwar reconstruction and development. They are thus in better shape financially than the federal government, whose debt is rapidly growing under the burden of extraordinary war expenses.
Major General Philip B. Fleming, administrator of the Federal Works Agency, has constantly urged the development now of plans and of actual blueprints for postwar projects in order to avoid hasty and inadequate plans later. In particular, he has emphasized the need of being ready for unemployment that may come during the period when “manufacturers who have converted their facilities to war production must convert back to production for peace.” Some such public works may also be under-taken by the federal government, if the need exists; there is talk of building a great nation-wide system of superhighways, for instance. But most of it probably will be done by the states and their subdivisions.