WOMEN

10

20

NUMBER FROM IO TO GENTEARS AND OVER

KING EMPLOYMENT

510

O

500

490

480

470

86

460

O

450

440

430

420

900

1200

1000 1100 1300 1400 1500 1600 1700 1800 AVERAGE CORRECTED REAL EARNINGS PER EQUIVALENT MALE WORKER (DOLLARS) CHICAGO AGE DISTRIBUTION

1900 2000

Source: "Studies in the Supply Curve of Labor; the Relation in 1929 Between Average Earnings in American Cities and the Proportion Seeking Employment," Erika H. Schoenberg and Paul H. Douglas, Journal of Political Economy, volume XIV, No. 1, February 1937, pages 77-79.

chart IV are considered for men and women separately, the number of women entering the labor market at the level of $1,000 of earnings per male then would be 80 percent greater than at the $2,000 level, whereas the number of men would be only 6 percent greater. Of the men, virtually all the additional workers would be between the ages of 14 and 18, although some additions would come from men over 65.

A third characteristic of the available manpower is the degree of skill. A very crude division of the total gainfully employed into groups according to skill is given in chart V. The chart shows those skills which, in 1930, were being used and takes no account of the fact that persons with professional equipment might be driving taxis or skilled carpenters might be running elevators. For the majority of male workers in 1930, the resulting distortion is probably slight, but for certain groups the distortion may be very considerable. Only certain types of jobs are ordinarily open to Negroes. No one knows how many persons with higher education and highly developed skills act as porters in railway stations and as elevator operators. Similarly, certain occupations are usually closed to women in spite of their training and equipment or are

available only to a limited number. In particular instances, prejudice or preference denies employment on grounds of sex, age, race or nationality, in spite of skill. Thus the chart may be somewhat misleading as to the degrees of skill which are actually available as a resource to be used. It is useful, however, as a rough guide to the characteristics of the available manpower in terms of skill.

So far the available manpower has been analyzed as of 1930. Actually it is changing through time with changes in the size and age distribution of the population and with the trends of social change. Chart VI shows the total number of persons between 20 and 65 years of age from 1850 to the present and estimates of the number of persons likely to be in this age bracket up to 1980. The estimates are based on the assumption of neither the highest probable nor the lowest probable birth and death rates but represent medium estimates. Though the peak of population on the

basis of the estimates used here would come in the 1970's, the peak of manpower in the more productive ages is likely to come in the 1960's. The changing composition of the population is shown in chart VII. From the point of view of production, the age composition of the population has been steadily improving, only 45 percent of the population being between 20 and 65 in 1850 and over 58 percent being in that age bracket now. Further decline in birth rates seems likely to increase the proportion slightly further, though the proportion of persons between 20 and 44 is likely to be declining, throwing a greater weight of production on persons between 45 and 64.

More important than the change in the size and age grouping of the population, are the trends of change in social attitude toward, and opportunities for, employment on the part of children, old people, and women. When Alexander Hamilton wrote his famous report on manufactures in 1791 he assured the Congress that manufactures could be developed without withdrawing men from agriculture because they could use the untapped labor resources of women and children. The first factories operated upon this principle. In 1814 a New England textile manufacturer advised that the most efficient mill construction provided one large room rather than several smaller ones because that made it possible to have only one adult in the plant—a single supervisor. Measured in terms of 125 years ago the manufacturing manpower of the nation was to a considerable extent the child power. Today child power is still a minor part of the manpower in agriculture but it no longer constitutes a significant part of the manpower in industry. In 1930 41⁄2 per

cent of workers in agriculture were under 16 years, whereas in no other line of work did child workers amount to as much as 1 percent of the labor force.

The tendency to eliminate child labor from industry and to retain it in agriculture is part and parcel of the process of industrial development which has drawn a sharp line between employment and lack of employment in industry where no such sharp line exists in agriculture. In agriculture the whole family has tasks to perform, running all the way from chores around the barnyard to a heavy day's work ploughing in the fields. This allows individuals to become fully productive through a gradual process of participating in the work of the farm, first in minor and then in major activities. A child worker on the family farm is not usually a full-time producer. On the other hand, in industry and in certain agricultural processes where hired labor is used, a child worker is usually a full-time employee. In the highly organized processes of production outside the home there has ceased to exist the gradual process of inducting individuals into the productive system which characterizes agriculture.

At the opposite end of the age scale, industry and agriculture again differ in the ability to adjust to the capacities of older workers. On the farm an individual's work tapers off toward the end of his life just as it develops gradually in his early years. A farmer may continue to work around the farm after his son takes over the heaviest burden, or may employ a hired man to work under his management. The practice in different industries varies as to the age at which older workers are retired but the break from employment to unemployment is likely to be sharp.

This difference between agriculture and industry is clearly brought out in chart VIII which indicates for each age group the proportion of the gainfully occupied attached to each major branch of industry. In this chart agriculture stands out in sharp contrast to other fields of activity in the occupation of persons under 20 while agriculture and the professional services stand out in the occupation of persons over 60. Although the bulk of employees in all fields are between 20 and 60 years of age, 28.5 percent of all the gainfully employed in agriculture were under 20 and over 60 as compared with 15.7 percent in manufacturing. More striking is the fact that the great bulk of employed persons in the very young and the very old age brackets are to be found in agriculture rather than in manufacturing and mining.

The increasing industrialization of economic activity, together with recognition that industry does not provide for a gradual induction into industry and gradual retirement, has brought strong social pressures against child labor and in favor of retirement pensions so that the age span from which manpower can be drawn is

Source: Based on Fifteenth Census of the United States: 1930, Population, volume V, page 116.

gradually narrowing. The work of children in industry has been very largely eliminated, a development accelerated by the heavy unemployment of recent years, while the development of old age pensions and social insurance gives prospect of reducing the number of older persons forced to seek employment. In the railway industry, for example, where it has been the policy to retain older workers on a seniority basis, there were hundreds of men in the seventies running the trains and even some over 80 when the railroad retirement act went into effect.5 In this case the introduction of a pension system for men over 65 permitted the withdrawal from industry of men who were too old to remain but who continued to work because of economic pressure. If these trends continue, the manpower of the country will more and more be restricted to those age groups well able to bear the burden of national production.

An estimate of the total available labor force, taking all these factors into account, is given in chart IX, together with the actual employment from 1920 through 1936. The difference between the labor force and the equivalent of full-time employment represents a crude approximation to the number of persons unemployed, indicating the extent to which the resource of manpower is not used.

Nonconsumable Resources

With these three resources which are consumed in the process of satisfying wants-natural resources, plant, and manpower-there must also be considered the three great resources which condition production without being consumed in the process-physical environment, technology and social institutions.

Annual Report of Railroad Retirement Board, 1938.

Physical environment as a resource conditioning production requires little discussion. The varying and on the whole favorable climate of the United States is in a very real sense one of its richest resources, with temperatures ranging from those necessary for the growing of cotton and citrus fruit to those suitable for spring wheat and fur-bearing animals, and a rainfall ranging from desert dryness to the heavy rainfall of The the Pacific Northwest and the Atlantic Coast. topography of the country, too, is on the whole favorable. Open land without insurmountable mountain ranges, open sea fronts with plentiful harbors, great lakes, and navigable streams provide a setting for the productive activity of the country's 50 million workers. Technology

The second great resource conditioning production is the existing technology-the knowledge of ways to apply manpower to physical resources for meeting human wants. Modern technology is the product of centuries of trial and error, of selection and adaptation. Each effective technique, whether physical or social is a tried and effective way of doing something, of acting to attain a given end, of getting from here to there. As such, it is a resource no less than the physical materials to which it is applied and the human skill and energy which apply it. Personal skill alone does not insure productivity. Often unskilled use of the best technique is more productive than skilled use of an obsolete technique. Unskilled but intelligent use of a steam shovel can be more productive than the most skilled use of pick and shovel. Understanding of the best

known way of doing things can make the difference between a high and a low level of living. The Indians on this continent had much the same natural resources as exist today and had great personal skills, but they did not have modern techniques.

By its very nature technology is a resource which cannot be measured. Whether a new technique is the result of the inventor's imagination or the recognition of a fortunate chance event, the time between the initial step and the adoption of a method as a common practice may be a matter of generations. At any given time, knowledge and skills, and their implementation in different fields, is at all stages from imagination or recognition to routine practice. It may be possible to trace for any particular technique the steps from the mind of the inventor or discoverer on. It is also possible to recognize, in the place held by science and the energy devoted to research, conditions favorable to the further development of techniques. But it is not possible to reduce to a common measure and express in meaningful terms the total technological resource of the country at a given time.

Yet modern technology is at the very heart of the basic economic problem of the day. Mass production, rapid transportation and communication, improved techniques of management, and mass financing are as characteristically modern as the automobile, the radio, and the talking movie. Both reflect modern techniques and typify modern production.

Social Institutions

Social institutions are a resource to which people are so accustomed that they seldom think of them in this light and often are unconscious even of their existence. Yet almost every productive act is conditioned by a complex of social institutions which have developed in the past. Without this complex of social institutions social living would be almost impossible.

In this chapter an attempt has been made to bring into focus the resources of the Nation. We have ample natural resources with no significant limitation except that involving tropical products; extensive plant, but plant which could be rapidly replaced if occasion arose; a labor force of over 50 million persons with varied skills and aptitudes only partly employed; an equable climate; effective techniques of production; and a complex of social institutions which bind the whole population into a functioning economy. It is not for lack of consumable resources that consumer wants are not more extensively satisfied. Nor is it due to unfavorable climate or to ineffective production techniques. The extent to which it arises from faulty organization of production will be considered in the third section of this report after the structure of production has itself been examined.

The two preceding chapters have sketched the structure of wants and of resources, the two elements basic to the process of production. In this and the following two chapters, the structure of production itself will be blocked in, first in terms of its geographical characteristics, then in terms of the functions performed, and finally in its financial aspects.

Location of Production in Relation to Resources and Consumers

The geographical structure of the American economy reflects three factors: The location of resources, the location of consumers, and the historical process by which economic activity has been carried on in the past. If there were complete mobility of people and capital, the location of resources might be the major, if not the sole, geographic factor giving structure to the economy. But neither labor nor capital has ever been completely

mobile and the inertia of both exerts a major force in giving to economic activity its geographic form. The net result of these factors, operating in the past and the present, appears in the distribution of population and more particularly in the distribution of purchasing power shown in chapter II, maps 1 and 2. The fact that consumers are distributed according to a geographical pattern of their own, at least partially independent of the distribution of natural resources, produces a situation in which they, equally with natural resources, constitute a basic element underlying the geographical structure of economic activity.

The geographical distribution of the principal lines of economic activity is shown in maps 1-5. Farming and mining are necessarily attached to the natural resources which they exploit. The distribution of land suitable for crops and for pasture was a major determinant

1 See ch. III, maps 3, 4, and 5.

1