The Automation Jobless


Not Fired, Just Not Hired

THE rise in unemployment has raised some new alarms around an old scare word: automation. How much has the rapid spread of technological change contributed to the current high of 5,400,000 out of work? Labor Secretary Arthur Goldberg last week set up a special group to find an answer. While no one has yet sorted out the jobs lost because of the overall drop in business from those lost through automation and other technological changes, many a labor expert tends to put much of the blame on automation. In Illinois, where 315,000 are unemployed, State Labor Director Robert Johnson says most of them are victims of automation. Dr. Russell Ackoff, a Case Institute expert on business problems, feels that automation is reaching into so many fields so fast that it has become "the nation's second most important problem." (First: peace.)

The number of jobs lost to more efficient machines is only part of the problem. What worries many job experts more is that automation may prevent the economy from creating enough new jobs. Says Pennsylvania's Democratic Congressman Elmer J. Holland, whose subcommittee is about to study the matter: "One of the greatest problems with automation is not the worker who is fired, but the worker who is not hired."

Throughout industry, the trend has been to bigger production with a smaller work force. In the highly automated chemical industry, the number of production jobs has fallen 3% since 1956 while output has soared 27%. Though steel capacity has increased 20% since 1955, the number of men needed to operate the industry's plants—even at full capacity—has dropped 17,000. Auto employment slid from a peak of 746,000 in boom 1955 to 614,000 in November, just before the current layoffs became severe. Since the meat industry's 1956 employment peak, 28,000 workers have lost their jobs despite a production increase of 3%. Bakery jobs have been in a steady decline from 174,000 in 1954 to 163,000 last year. On the farm one man can grow enough to feed 24 people; back in 1949 he could feed only 15.

Many of the losses in factory jobs have been countered by an increase in the service industries or in office jobs. But automation is beginning to move in and eliminate office jobs too. In the U.S. Census Bureau, 50 people last year did the census tabulations that required 4,100 statisticians in 1950. California's Bank of America and other banks are introducing sophisticated machines to process all checks and paperwork. While no one is being laid off, the banks expect to expand their business vastly without increasing their staffs. The Bell System's volume of calls has lumped 50% in the past ten years; yet its phone company jobs increased only 10%.

In the past, new industries hired far more people than those they put out of business. But this is not true of many of today's new industries. The switch from manned military aircraft to missiles has cost 200,000 production jobs, even though the aircraft industry's dollar volume is up. In the past, new industries such as autos and household appliances used relatively unskilled workers. Today's new industries have comparatively few jobs for the unskilled or semiskilled, just the class of workers whose jobs are being eliminated by automation.

Labor and management have been slow to face the problem over the bargaining table. Harry Bridges' West Coast longshoremen's union recently agreed to give shippers a free hand to mechanize cargo handling—in exchange for a guarantee of present jobs, plus early retirement and liberal death benefits. In Chicago this week, President Clark Kerr of the University of California, one of the top labor economists, will preside over a company-union committee meeting at Armour & Co. to draw up a plan for the rapidly automating meat industry.

A similar committee is at work at Kaiser Steel Co. But many authorities think such efforts are far too few, that management must do more. E. C. Schulze, acting area director of Ohio's state employment service, says: "I've yet to see an employer's group willing to take a look at this problem and seek solutions. They refuse to recognize their responsibility. They talk about long-term trends —but nobody talks about the immediate problem of jobless, needy people."

Labor-management committees are beginning to realize that the problem is more than they can meet themselves. Says Kerr: "The public benefits from technological change in the form of better products and lower-prices. It is only reasonable that the public should share the costs." He would like Government funds to lighten the blow on specific industries or workers.

Other experts talk of massive Government-and industry-supported retraining programs as a cure all. But Max Horton, Michigan's director of employment security, is skeptical of this oft-repeated panacea: "I suppose that is as good as any way for getting rid of the unemployed—just keep them in retraining. But how retrainable are the mass of these unskilled and semiskilled unemployed? Two-thirds of them have less than a high school education. Are they interested in retraining? But most important, is there a job waiting for them when they have been retrained?" The new California Smith-Collier Act retraining program drew only 100 applicants in six months.

Many businessmen, while conceding that automation has reduced jobs, feel that a good healthy recovery from the recession will provide all the employment needed. But labor experts think this too optimistic a view, fear that unless something is done by management, union and Government, the hard core of permanently unemployed will continue to rise.

The article above appeared in the February 24, 1961 edition of TIME Magazine. The Front Page of the New York Times shown is April 20, 1961. Given the dates, it looked like the first order of business for John F. Kennedy's newly appointed Secretary of Labor, Arthur Goldberg.

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Donald R. Davret, Investment Advisor Representative

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