L , ^ j:!if^. i r' ' 1 r. ALBERT R. MANN LIBRARY New York State Colleges OF Agriculture and Home Economics AT Cornell University HD5724.H3™""""""""-"'"^ Fluctuations in unemployment in cities o 3 1924 013 936 806 'A 'N 'asnaejAs "I 'soaa aaoiAvs ] U3aNiaX31HdWVd m^^r^^^m^ '^'mfmMm STUDIES FROM THE HELEN S. TROUNSTINE FOUNDATION VOLUME 1 MAY 15, 1918 NUMBER 2 FLUCTUATIONS IN UNEMPLOYMENT IN CITIES OF THE UNITED STATES, 1902 TO 1917 By Hornell Hart Research Fellow of the Helen S. Trounstine Foundation, Cincinnati. U. S. A. All books are subject to recall atter two weeks. Library Annex DATE DUE .l &N 7 3 2( 01 PBMTEOINUSA rHE Helen S. Trounstine Foundation, built as a monument to the memory of Helen S. Trounstine, was incorporated in the State of Ohio, February p, 1917. The Foundation is supported by private contri- butions, and is administered by a self-perpetuating Board of Trustees. It is devoted to the investigation of social problems, particularly those presented within the City of Cincinnati. In pursuance of the purposes for which it was estab- lished, the Foundation issues publications at various times setting forth the , results of investigations carried out under its head. It naturally assumes no responsi- bility for the contents of the papers which it sees fit to print. The publications of the Foundation may be ob- tained by addressing the Foundation at Room 806, Neave Building, Cincinnati, Ohio, U. S. A. Price of this paper, 25 cents. FLUCTUATIONS IN UNEMPLOYMENT IN CITIES OF THE UNITED STATES, 1902 TO 1917 By Hornell Hart Research Fellow of the Helen S. Trounstine Foundation. Cindnnati, U. S. A. 45 ¥2. Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/cletails/cu31924013936806 FLUCTUATIONS IN UNEMPLOYMENT IN CITIES OF THE UNITED STATES, 1902 TO 191 7 By Hornell Hart Research Fellow of the Helen S. Trounstine Foundation, Cincinnati, U. S. A. OBJECTIVES The purpose of this monograph is to answer as accurately as existing data permit, the following questions: 1. How much unemployment has there been in occupations other than agriculture in the United States in recent years? 2. How has the amount of unemployment fluctuated from month to month and from year to year, and what have been the chief factors in these fluctuations? 3. What is likely to be the employment situation in the United States when the war ends? 4. What light do the facts under i and 2 cast upon the relative values of the leading remedies proposed for unemployment? This survey does not claim to have found the final answers to these questions. The following report is issued simply as a step in the direction of further light on these problems. Criticisms, amendments and improve- ments are urgently invited. Such quantitive information as has hitherto been available about un- employment has been of two sorts: surveys, and periodic reports. Among the best surveys are those of one hundred representative blocks in New York City by the United States Bureau of Labor Statistics, in February and September, 1915, and those carried out by the Metropolitan Life Insurance Company in families of its policyholders in fifteen cities, in April, 1915. Such surveys, of course, do not give continuous information, and they cover only a selected group of workers. The Metropolitan survey omitted perforce the families who had never been insured and those who, because of unemployment or other misfortune, had allowed the insurance to lapse; hence the group studied was probably more regularly employed than the average. Neither the Metropolitan report, nor the Bureau of Labor Statistics survey, could very well cover the unattached laborers living in lodging houses, who unquestionably suffer most severely of all industrial classes from unemployment. 47 48 / Helen S. Troutistini Fa, oifru / ■dation The moitth-to-month type of information on employment is of two sorts. The /first consists of labor union Teturns as to the percentage of union mea' unemployed. These cannojr be accepted as representative of industry As a whole, since they cover ^iefly such seasonal occupations as building', transportation and clothing^manufaeture, and since relatively few unskiUfed workers are included. Tbe second type of periodic report gives returns as to the total numbey of workers employed from month to month in selected industries. TJiese usually apply only to manufacturing. The number employed, morqpver, does not show directly the number unemployed. This defect the United States Census of Manufacturers and the Massachusetts Bureau of Statistics have endeavored to correct by showing the percentage of difference between the maximum and minimum number employed during the year, but the method is inadequate because the maximum number employed is often far less than the total available supply of labor; even at the maximum of employment in 1914, for instance, millions of workers were unempiloyed in American cities. EXTENT OF UNEMPLOYMENT The following table aims to supply the information which these reports, invaluable though they have been, have not provided: TABLE I Estimated Number, in Millions, of Unemployed Workers in Occupations Other than Agriculture in the United States, 1902 to 1917 Year 1 ^1 ^ Number Unemployed, by Months A.1 .^ -^ i u; » ■ < C/J Jan. Feb. Mar. Apr. May • June July Aug. Sept. Oct. Nov. Dec. Aver- age 2.5 9-9 3-4 31 2.8 2.5 2-4 2.5 2.6 2.3 2.0 1-9 2.1 2.4 '\ 1902- 2.7 14. 1 3-5 3-3 2.9 2.7 2.9 2.9 2.8 2.6 2.4 1.8 2.0 2.2::; \e 1903 1-9 9 3 2.5^ -2.4- 2.6" 1.6 1.8 2.0 2.1 19 1.8 1.6 1-5 1-5 s 1904 2.4 II-5 2.9 2.0 2.3 2.2 2.3 2.4 30 .2.7 2.1 . 1-9 2.3 2.7 Jl 1905 2.0 9-3 2-7- 2.8 2.5 2.0 2.1 2.4 21. 1.8 1.6 1.2 1-3 1-5^ ^ 1906 ■i.2 h.4 5-5 1-9 1.8 1.2 I.I I.I 1-3 1-4 I.O* 1.0* I.O* 1.0* I.O* 1907 6.0 I.O* 1.0* 1.0* I.O* 1.0* I.O* I.O* 1.0* 1.0* 1-7 2.^ .3.6. A \ 1908 3-5 14.8 41 3.8 3-8 4-2. 3-9 3-6 t:J 2.9 3-i5 30 3-2 3.2 Q 1909 2.1 8.6 3-5 3-3 2.7 2-3 2.0 2.1 2.1 1.4 1.0 1.2, 1-5 -1 1910 1-7 6.5 2.5 2.6 2.1 '•7 1-4 1-5 '•7, 1.6 I.I I.I 1-5 2.1 -v 1911 2.8 10.8 3-2 3-5 31 2.9 2.7 2.8 30 2.9 2.13 2.1 2.4 2.9 I 1912 2.6 9.6 3-5 3-7 3-2 2.9 2.7 2.8 2.8 2.3 1-7 1-5 1-7 2.1 1913 2.6 9-3 3 .'2 3-2 2.8 2.5 2.1 2.4 2.6 2-5 2.6 2.0 2.6 3-3 1914 4-5 15-8 4.6 4.6 4-4 41 40 4,-4. 4.8 ■4.8 4-3. 4.2 4-8 5-5- 1915 4.6 16.0 6:5 6.4 5.« 5-3 4.8 4. '8 4.8 4.5' ,3-5 31 31 3-2. A 1916 2.1 71 4.2 3-9 30 2.2 1.8 1-9 1-7 1.3 ii3* 1.3* 1.3* 1.3* % 1917 1.4 4-7 1.8 2.0 1-5 1-3* 1.3* 1.3* 1-3* 1.3* 1:3* 1.3* 1.3* I. J* * Items starred represent months in which the 4emand for labor exceeded the normal supply, and only the industrial reserve margin of labor was unemployed.' Fluctuations in Unemployment in Cities of the United States, IQ02-17 49 The general method of arriving at the above estimates was to ascertain for each year and month the total number of persons normally occupied in non-agricultural pursuits, and to subtract from these "normal supply" figures thfe estimated "connected demand" for labor, consisting of the total number of persons actually employed in non-agricultural pursuits. Estimated fluctuations in various elements of the supply of labor are shown in Table 2. TABLE 2 Estimated Normal Supply, in Millions, of Non-Agricultural Workers in the' United States, by Years, 1902 to 1917, Subdivided According to Determinant Factors.* Based on United States Censuses of Occupations, and Reports of the United States Commissioner General of Immigration Year 1902 1903 1904 1905 1906 1907 1908 1909 Native Born: Males over fifteen years. . Females over fifteen years, t Children ten to fifteen Foreign Born 10.5 34 7 4-9 10.9 3-6 6 5-1 II .2 5-3 "•5 3 9 6 5.6 II. 8 4-1 6 5-8 12.3 6.2 12.6 4-5 6 6.2 12.9 4-7 6 6.4 Total. ... , r.77: T. .~ 19-5 20.2 20.9 21.6 22.3 234 239 24.6 Year 1910 191 1 1912 1913 1914 1915 1916 1917 Native Born: Males over fifteen years . . Females over fifteen years, tChildren ten to fifteen Foreign Born 133 4-9 6 6.8 13 -.7 5-0 5 6.9 14.0 5-3 5 7.0 14.4 5.6 5 7-5 14-7 5-7 5 7-7 15-0 5-9 5 7.6 15-4 6.2 4 7-5 15.8 6.5 4" 7-5 Total 25.6 26.1 26.8 28.0 28.6 29.0 29.5 30.2 ' These figures are estimates of the normal supply of wotkers, and do not include temporary influxes of women and agricu.tural workers in 1907 and 1917. t Of children in industry, about one-eighth are foreign born, but for purposes dii simplification, they are all considered above as native. \ \ .. The "connected demand" for labor was determined by a synthesis of widely scattered information on employment fluctuations. Data were gathered from the United States Censuses of Manufactures, Occupations, Population, Street Railways, Telegraph and Telephone, and Mortality Statistics; from reports of the United States Geological Survey, the Bureau of Mines, the Interstate Commerce Commission, the Eight Hour Com- mission, and the United States Commissioner of Education; from the Monthly Review of the United States Bureau of Labor Statistics; and from reports of California, Iowa and Wisconsin Bureaus of Labor Statistics, the Kansas, Michigan and New York State Departments of Labor, the Massachusetts and New Jersey Bureaus of Statistics, and the Ohio In- dustrial Commission. Those who are interested in the details of the sta- tistical methods used are invited to address inquiries to the author. 50 Helen S. Trounstine Foundation ■o o a O cS a o o o o u o o o It v •1 A •* •H 15 o o o o o o 99 O o Vrv o A ^ m " - 03 a o U) -H C 4» •H at s ** «H ^-•^ Pi ♦» 2 S o ^ O o 'H 1-4 o s <* B (8 OS o <» 43 a CO TJ (U •i-l B « S 01 (J -H o ^ +» +» CO m c 5 no r-4 B a ■H h 3 ■»* *» iH O 3 d o 3 B h ^ I c B O -H Si T3 C - « s CM 'I ■ ::::::::r \, ■ ■ s ■ , i : ^^ III ; . . «,., . % ' < .31 .. rt.. , IV ^' ■ fl i • il V .: X V \ f 5- 1i t i ( I-l l-t NO I-t i-< UN .-I H CJN H ON H i-t o >* CJ^ H 00 o CJN o ON NO o ON XfN o ON o o O o o o o o o o o o o o o o o o o o o o o. o o o o o o o o o o o o o o o o o o o o o o o o o o a o o o o o" o o O ON 30 o \o Fluctuations in Unemployment in .Cities of the United States, iQ02-iy 51 The reliability of this synthetic method of estimating fluctuations in the demand for labor is strikingly indicated by the fact that the changes from year to year in the total number of persons engaged in occupations other than agriculture, as thus estimated, is found to fluctuate in close ufiisofi with the changes in the number of railroad employees as reported by the Interstate Commerce Commission. The correlation between the yearly average number employed in all non-agricultural occupations and the number of railroad employees on June 30 of the same years, from 1909* to 1917, is. 948± .0215 in terms of Karl Pearson's coefficient of cor- relation, perfect correlation being 1.0. Such a close connection in the actual facts would be expected, since railroad activity depends directly upon the general business activity of the country; and its appearance here, in figures from quite independent sources, is strongly' corroborative of the reliability of the method. Even more striking is the correlation between changes in the number employed in manufacturing and the number employed in all non-agricul- tural occupations. Here the parallel extends not only to yearly changes, but also to monthly variations. These correlations are shown graphically in Chart A, a ratio graph, whose vertical scale is logarithmic so that all variations in the height of historigrams shown on it represent proportional and not absolute changes. Thus a ten percent increase in the "all industries" line on this scale would appear just as large as a ten per cent increase in the "manufacturing" line. The fact that the three lines are almost exactly parallel demonstrates the correlation. The information contained in Table i is shown graphically in Chart B. The active supply is indicated by the height of the upper line in the dia- gram. The connected demand is indicated by the height of the wavy line below. The black area between the two lines represents the number of unemployed. THE LABOR SHORTAGE A study of Chart B and Table i brings out certain striking facts. First, the number of unemployed in cities of the United States (entirely omitting agricultural labor, for which no reliable data are now available) has fluctuated between 1,000,000 and 6,000,000. The least unemployment occurred in 1906-1907, and in 1916-1917, while the most occurred in 1908 and in 1914 and 1915. The average number unemployed has been two and a half million workers, or nearly ten per cent of the active supply. * The demand for labor was estimated for each industry separately only as far back as 1909. After the correlations had been established, estimates for previous years were based on the fluctuations in railroad and manufacturing employment. 52 Helen S. Trounstine Foundation C H O CT« rt H f I no si > o - ID tf to U) 3 t3 u a> tiOC I B a> B B ^ ' 1 1 1 i ih ^ !i » 1 1 IE 1 (J c o -rl iH •H "3 i L o o a It B > ^ 1 k in o 4> B E O a ^1 ^ in-o W V f O 3 Sk .H - ^ ID O U a ^ 1 1 ^ i 1 t L ^ 1—1 1 tt^ si 1-1 o >« o a o o o o o O o o o o o o o n o o o o o o • (< 0) o o o o o o 41 «§ o o o o o p o o o o o io UN o \r\ o V\ ta lO ni CM >-< r-« Fluctuations in Unemployment in Cities of the United States, igo2-iy 53 Much has been written lately of the drain on agricultural labor and the increase in the number of women workers caused by the labor shortage. It will be noted in Chart A that in 1907 and 1917, the demand for labor exceeded the normal supply, and that additional workers were called in, as indicated by the humps in the supply line in these years. Even at these times, however, unemployment is shown. The reason is this: Urban industries require a working labor-margin of at least four or five percent, or a million to a million and a half workers. These are the men and women who, though normally employed, are temporarily not working because of sickness, seasonal fluctuations in their trades, changing from one position to another, strikes, shortage of material or transportation facilities, and so forth. Hence, we have the paradox of a million and a quarter unemployed at the same time with an unprecedented demand for labor. The amount of the drain on agriculture can be estimated roughly from the fact that in October, 1917, the non-agricultural industries employed approximately 30,900,000 workers, in addition to the working margin of at least 1,300,000, while the normal supply of non-agricultural labor was only about 30,300,000. This meant an overdraft of approximately 1,900,000. Since immigration was practically cut off, this shortage was made up from women and farm workers. Certainly a million, and prob- ably more, farm workers were thus absorbed, in addition to about 500,000 who were drafted, or enlisted. This was the condition, however, at the peak of demand. Winter decreased the labor overdraft by at least i ,000,000, and 1918 may see very different conditions from last year. SEASONAL FLUCTUATIONS Chart B reveals certain marked rhythms of demand. Each year sees more or less pronounced peaks of demand in spring and fall, with a slight depression in midsummer, and a marked depression in winter. The first line in Table i shows that, for the past sixteen years combined, the average number of unemployed has tended to be greatest in January, averaging three and a third millions, and least in October, averaging less than two millions. This yearly rhythm is due chiefly, either directly of indirectly, to changes in temperature. Chart C shows graphically the three chief types of seasonal industries. 54 Helen S. Trounstine Foundation ' Chart C. Segaonal Vluctuatlona Inaustries With Sufliin'er Peak iRduatries With Winter Peak 8,000,000 7,000,000 6,000,000 I ;-^ h ^^ n^ ^I^^\ » '' ■•«« 1 1 1 II Coal Mining r 1 1 1 1 " - Medical Service 1 ' 'HILh'i ' 1 Industries. With Fall and Spring PeaJca pjST HEM'S" rr^ ?: ^ ? ^ " £^ -* r« da rn Tf Ij J] cfl h fa^CH spa*? >o Fluctuations in Unemployment in Cities of the Uiiited States, igo2-i7 55 The facts about the summer industries are compiled iri Table 3. TABLE 3 Estimated Seasonal Fluctuations in Employment During the Past Decade in the Chief Industries Having a Greater Demand for Labor in Summer than in Winter* Industry Fluctu- ation No. %of Max- imum Average Number of Persons Employed in Ten Thousands (f) Lumber. Service (not in homes) . . . . Transportation Stone Quarrying Brick and Tile Building and Construction Preserving and Canning . . Total 5 16 •43 4 7 132 16 7-5 8.0 13-9 33-3 430 50.0 89.0 61 180 255 7 9 141 3 63 181 258 7 9 131 2 65 185 266 8 10 150 3 65 189 282 10 13 197 3 66 193 297 II 15 224 4 67 196 304 II 16 243 6 66 200 308 II 17 253 12 66 200 308 12 16 257 17 66 199 308 12 15 263 18 66 192 310 II 14 248 65 191 290 10 12 221 7 63 187 280 9 10 169 4 192 21.8656 651 687 759 810 843 867 876 853 796 722 \ * In determining the amount of fluctuation, allowance has beee made for normal growth. The fluc- tuation of the whole group does not tally with the total of the fluctuations of the several industries, since the peaks do not coincide exactly. Agricultural pursuits, occupying 13,000,000 persons, have a very high summer peak. No reliable estimate can yet be made of the amount of this seasonal fluctuation, but unquestionably several million agricultural laborers are out of work every winter, and a large number of these doubtless drift to cities where they swell the number of the unemployed. The facts as to winter industries are shown in Table 4. TABLE 4 Estimated Average Seasonal Fluctuations in Employment During the Past Decade in the Chief Industries Having a Greater Demand for Labor in Winter than in Summer Industry Fluctu- ations Average Number of Persons Employed, in Ten Thousands No. %of Max- imum e to 1 — » 1 3 1 — 1 3 < 4.J 1 1 Q Meat Slaughtering and P'k'g. Medical Service 2 8 25 II 3 60 16.4 20.5 38.8 47.0 80.0 95 12 36 65 24 4 62 12 39 61 24 3 62 II 36 58 24 2 63 10 35 42 21 2 60 10 31 40 18 I 52 II 34 42 13 I 21 II 34 44 13 I 3 10 33 46 18 I 3 ID 33 52 23 3 18 II 33 59 25 4 51 II 36 65 25 4 62 12 38 66 25 4 64 Coal Mining Amusements , Cottonseed Oil Teaching Total 100 48.5 203 201 194 170 152 122 106 III 139 183 203 209 56 Helen S. Trounstine Foundation For fall and spring industries, the facts are shown in Table 5. TABLE 5 Data for Industries with Larger Labor Demands in Spring and Fall than in Summer and Winter Industry Fluctu- ations Average Number of Persons Employed, in Ten Thousands No. %of Max- imum c at > — I ■8 a! 1. < 3 ' — > "3 ' — ) < i. m i cJ Furniture Manufacturing . . . Trade (including all stores) . . Women's Clothing 2 61 5 10. 131 25.0 13 403 17 14 396 19 15 410 20 14 415 19 14 416 17 13 415 16 408 15 14 405 17 14 421 19 15 433 19 14 438 18 14 466 16 Total . 60 12. 1 433 429 445 448 447 444 436 436 454 467 470 496 These seasonal fluctuations, serious as they ire, cause far less social damage than the fluctuations which occur in longer cycles. Carpenters,, coal miners, school teachers, and other persons with seasonal occupations, know when their brief slack periods come and can prepare. The periodic depressions which throw millions out of work cannot be forecast by the average workman, and last so long that the savings and resources of the unemployed are likely to be exhausted. The business health of the nation is by far the most important element in the unemployment problem. AFTER THE WAR The course of employment during the next few months and years cannot, of course, be accurately predicted in the present state of social statistics. Certain factors appear, however, to indicate that the peace industries of the country are likely to go through a depression in the near future. Past oscillations in employment show that a heavy demand for labor is usually followed by a marked slackening. Building permits usually decrease in the year preceding a depression. In 1917, building permits fell off in value in spite of a twenty per cent increase in the cost of building. On the other hand, the total value of contracts let, including Government work, increased, indicating that war demands were filling up a slump in normal requirements. Orders for freight cars usually fall off just before years of depression. These orders in 1917 were only half what they were in 191 8. If peace should come this year, the war activities which are now taking the place of declining normal business, would largely cease. A million and a half soldiers and sailors would be returned to urban occupations. Unless European countries were ready immediately with huge orders for rehabili- tation work, or unless active preventive steps were taken, demobilization Fluctuations in Unemployment in Cities of the United States, 1902-17 57 would in all probability accentuate the depression which is now due, and throw the country into a condition where our returning defenders would be left to hunt fruitlessly for work in a glutted labor market. If the war should go on, say for two years more, the probabilities are harder to foresee. Whether normal business would recover sufficiently to take over the war workers, cannot be determined without further observa- tion and research. REMEDIES The facts outlined above shed light on some of the remedies proposed for unemployment: Industrial Education. "Unemployability" has been announced as a leading cause of unemployment. Our facts show that 4,000,000 workers who were employed in September, 1907, were unemployed in January, 1908. If these had been unemployables, they would not have been working at the earlier date. Immigration has been urged as a safety valve for industry, adjusting the supply to the demand. While immigration is less rapid in bad years than in good, every year from 1900 to 1914 showed a net increase in the number of foreign-born workers, including the panic year of 1908. Dovetailing of seasonal industries is possible to a limited extent. The .250,000 coal miners idle in summer (though not in 191 7, when the failure •of transportation eliminated seasonal fluctuations in coal mining) might perhaps be induced to take up farm work or building labor. Most of the summer unemployed, however, are ill adapted to the summer-peak indus- tries. The 600,000 teachers, 610,000 salespersons and clerks, and the 50,000 women's clothing workers unemployed in summer are mostly women, while the summer demand is for carpenters, masons, building laborers, sailors, brickyard workers, and stone quarryers. It is true that 160,000 extra •chambermaids, waitresses and cooks are needed in summer, and doubtless some of the idle workers from stores help to fill this demand. Regularization of industries is a valuable remedy for seasonal fluctua- tions. The development of winter construction work, the reduction of •coal prices in the spring, and the filling of stock orders in dull seasans -are hopeful moves. ■ ~ .-. , Employment exchanges are invaluable machinery for carrying out such •dovetailing as is possible, and for decreasing the length of time between positions. If all employment could be handled through one system of ■offices, valuable data on unemployment could be secured.*" In order to achieve the full possibilities of such clearing houses, the employment busi- ness should be made a Government monopoly, and employiers should be persuaded or required to register all vacancies with the. public erti^loyrFient ■exchanges. It must be remembered, however, that empldyirienr offices di •flv .•"■, '\ a'. ^ ^r ■y '■'■ « .^..■.^v/'.:-^}'^^ WSSti'"'- 4 I, ■■■■;,( ':"[ ';»-■■■■.■'.'■- f. •~-.iv&J -. l^ H- ... ■' ■ c/V'^.-:;, /■-'-■■■ %»»„ ^^fe^^f^ ?.. '^ 9 J •'Bf '^%^s^.^;|j^^7i^' w^.; ^'"O^^