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Northwestern
Unlverelty
Library
UOC, : ,r
RC'-'·
NOV 18 1936
No. 4 -- 1366
TH:E
W0P.KS
PP.OGP..AM
-- Works Pro~ress Admini~tration
For release in afternoon papers
Tuesday, November 17, 1936
The f ollowing a ddre ss was delivered by Harry L. Hopkins, A~ministrator
of the Works Progress Adm inistration , before t he United States Conference of
Mayo r s , at t he Mayflov.rer Hotel, Vfash ington , D. C., at 10 :30 A. M. Tuesday,
Novembe r 17th.
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THE REALITIES OF UJ:JEMPLOYMEUT
I am glad of tr_e opportunity to talk to you at this time, following
several months of detailed and sometimes acrimonious discussion of the Works
Program.
In a sense I am glad that our efforts to provide jobs for the
unemployed have been scrutinized so completely and so closely.
It is true
we sometimes felt that the criticism was not wa.rranted by the facts.
Mo re-
over, the blinding light which was focus ed on the WPA would have revealed
without question any basic or essential weakness in its structure.
I am happy to meet with the United States Conference of Mayors
because it has been a great and good fri end to this Program.
I haven I t for-
gotten the splendid endorsement of the WPA which your Conference gave to the
President fast March.
It was one of the finest testimonials we have received,
and we have pointed to it many ti me s during the intervening months with pride.
You said in the. t rep or t that the usefulness of WPA pro,jects in
your Cities, and the quality of the workmanship on them needed no apology
from anyone.
You said also th~t there is an ample supp ly of needed work of
this type to continue the Progra.m, and you concluded that your membership
would ne ve r consent to abandon1;1ent of the work principle for able-bodied
unemployed in favor of the dole.
I now want to discuss with you freely and
frankly the whole question of unemploym,,m t as it relP.tes to your job and
mine, in the hope that this meeting will promote a full e r and better understanding of the realities we must face.
It is perfectly plain from r ema,rks that can be h8ard on every hand
that very few people have even a good working 1-r..nowledge of the employment
situation in which this country finds itself today.
And why should they?
We have had unemployment in serious quantities for forty years, but all we
ever did about it officially until less than four years ago was to ignore
it.
The policy of the United States toward the twin questions of unemploy-
ment and relief has long been a source of amazement to economists and other
interested persons.
Let me quote briefly from a recent issue of the London
Economist:
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"Until the onset of the Great Depression, Ameriea prided itself
on giving no thought to unemployment.
Even in pe riods of abnormal
activity there was always a body of unemplo;red workers who may well
have been numbered in millions.
Indeed, unemployment is an inevitable
concomitant of any dynamic community, and in a country where conditions
change so _rapidly and so ruthlessly, and where 'labour turnover,' voluntary
and involuntary, is so high, the normal minimum of unemployment must
necessarily be considerable.
:But it was contrary to the established
social philosophy of the co1L-ritry to admit that any able-bodied and
efficient workman could remain out of work for more than a temporary
transitional period, or that he should be assisted by the community if
in want.
The older and more settled Stat es on the .Atlantic seaboard
had inherited from England a rudimentary Poor Law of an Elizabethan
character, but these ins ti tut ions were not intende,i for the able-bodied
poor and made little contribution to the relief of destitution arising
out of unemployment.
:Broadly speaking, the only rec ourse of the indigent
working man was to charity, and previous vis_i tat ions of depress ion had
always been surmounted, not without great suffering, by special efforts
on the part of private and semi- official chc1ritable institutions."
Whe.t about this indictment?
I think not.
Is t he ,j ournalist being unfair to us?
There has been an unemplo;rment problem in this country for
nearly half a century.
There a.re estimates of unemployment in four basic
industries (manufacturing, transportation, construction and mining) since
1897.
These show that an average of one able-bodied workman out of every ten
has been out of work.
In these four industries, in 1897, 1,200,000 Americans
were out of work---17% of all their labor.
There was a run of prosperity up
to 1908 and the number dropped to 600,000, but it skyrocketed to 1,650,000 in
that year.
It was a million in 1911 a.nd over 1,800·,ooo in 1914 and 1915.
Even in the war period of 1917 and 1918, there were 800,000 people out of
work in these four industries.
In the depression of 1921 the number of
unemployed in non-agricultural industries soared to over 4,200,000.
Through-
out the 1920's the estimates range from 1½ to 3½ million.
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All these fig,1re s , remembe r, cover only part of the total labor.
It is likely that total ,J.nemp loymer.t in the United States was consistently
well above the fi gures I have cited.
But the figures are only irnrortant in showing the wide spread of
the problem end how long it has been with us.
our social blindness.
They only help to dramatize
As a people we ought to know infinitely more than we
do ab out this ques tion.
We should have been discussing it publicly for at
least twenty years .
How many Americans were unemployed in March, 1933?
millions or 13 millions--the snw.llest figure is bc1.d eno1J_gh.
11 milli ons or 8 millions?
Call it 18
How many to day?
In any case it is nearly one employaDle worker
out of 5 and at the lowest point c,f this depression it was almcst one out
of 3 .
One major obstacle in the n11th of meeting the problem of unemployment has been the absence of really adequate unemployment figures.
Europe they know wr:.R t their :r r or' ler, is.
In
'The unern:oloyed must register at an
employment office to get their uner:1p lcym t=m t insurance benefits.
These
registrat ions stow how rr.any are 0ut of 'No r'-<: in the in sured {!'.ronps--and these
insured. gr o1.1ps include most of the total wo rkers.
Some clay when our unem-
ployment insurance plans get into operation , we will have information as good
as this.
We will know how many are out of wo r k anrl who they are .
At the present tim9 all we have are estimates of une1nployment in
addition to our relief figures, which show how many unemployed are receiving
public assistance.
But we know that mc>ny, certainly mill ions, of other
wo r kers have no jobs and receive no public aid .
don't know.
How large this group is we
We should find ou.t.
I am convinced that we ought to find out by taking an unem~loyrnent
census.
A census will give us a pretty exact picture of our present unemploy-
ment problem--a. much better picture than we have now.
lot of difficulties in taking a census .
ployment for pur poses of enumeration .
I realize there are a
It is no Pasy matter to define unemThe part-time workers, the self-
employed and othe rs cr eate census p r oblems .
B-ut the j ob must be done.
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the difficulties we would certainly know more about the :pr oblem than we kn ow
/!low.
!.'ore over, I think we should have censuses of unernployr1ent every few
years.
With periodic censuses of uner'.lployment it would be T)Ossible t o compile
good estimates for the periods in between enumerations on the basis of the
employment statistics.
This information woulc be a guide to policy .
It would eliminate
much of the popular confusion arisin~ out of the widely divergent es timates-both gcod and bad--we find at the present time.
In all fairness to the
public and to the unemployed we must know mo re about t his :pr ob lem.
What everybody wants to know, of course, is what we may expect in
the way of unemployment in the future.
I believe that under our present
system we will have t o f ace indefinitely the fact that many people will w::i.nt
jobs who cannot find them.
There will be differences of opinion as to how
many of these jobless are really able workers who could h0ld jobs if they
had them, and how many have been unable to keep up in the economic .scramble
and should be retired under security pr ovisions .
The facts for such discus-
sions should be developed as soi:,n as possible by an unemployment census, but
even these fact s will change from year to year with varying business conditions.
For example, there were many thou sands more sk illed people on the
rolls of the WPA at the outset of this year than there nrobably will be
in 1937.
A great many peonle keep voicing the hope that American business
can regain the p roduction levels of 1929 , and there is in these remarks the
ingenuous implication that when this hanpens our troubles will be over.
But
in reality we are right now only about 10% below 1929 production, and the
experts feel certain that we will r each it in 1937.
tr oubles seems a long way off.
Yet t he end of our
There were about 1,800,000 unemployed even
at the 1929 peak, but next year, with the same volume of production, carefully prepared estimates indicate that there will still be some 6½ to
unern-ployeJ.
I use the term "unemployed" to mean jobless workers.
7½
millions
You can
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subtract from it whatever number you feel are not employable.
is highly debatable.
This factor
I know there are now a vast number of our jobless
workers who are exceedingly able, and who have much t o contribute to the
American economy.
The various causes of this continuing unemDloyment are familiar to
all of us, but too often we discuss them inclividually rather than en masse,
despite the fact that their effe ct upon conditions is always a mass eff ect.
Due to the growth and improvement of machin es the average Ar,-;erican worker
can produce 3956 more than he c ould in 1 920 .
he could in 1929.
He cnn T:roc!.uce l{f;b more than
It follows that t o reduc e unempl oyr;,en t t o the 1929 level
we would have to produce l(r;b more goods than we did in 1 92 9.
But that is
on the assumption that we have the same number of worke rs now that we did
then, and this is a false assump ti on.
Our popu]J'.3,ti on i s growing steadily.
About one-half a million more yo ung peopl e ent er the labor narket each year
than the number retir ed because of a .o;e a:1d r.l.eath in the older brA.cke t s .
mean half a million net.
of Washington, D. C.
This is nearly the equiva l ent of
R
I
city the size
The se your1g people a r e eager and arnbi ti ous and willing
to start at the bottom.
They are particularly adap t ed to the high speeds
of mechRnized indus try.
They have l ong po t en tial peri ods of usefulness .
The result of t his competition has been to mc.1ke it very difficult f or men
over forty or forty-five t o obtain any kind of wo rk.
It is a growi ng
practice in indus try to l imi t the hiring age to f orty or forty-five, and
many of the olde r relief workers prcbably will ne ve r find nrivate work
again.
The increase in labor supply, therefore, is another major fa c tor
we must consider in the reduction of unemployment.
And it has been esti-
mated that with this element included, our total production would have to be
2oi
above the 1929 level to reduce unempl oyment to the prO T)Ortions of 1929,
or 45~ above what it is t oday.
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Of course, even then we could not stand still for any length of
time.
The vPry nature of American business is that it is constantly
surging, shifting and changing.
Machines will grow more and more efficient,
displacing more hand labor and requiring greater production to provi1.e the
same number of jobs.
The population will continue to increase, requiring
still higher levels.
As yet we have arrived nt no tested. method which can
prevent cycles of proeperity and depression.
will cause added unemployment.
Other types of business change
There will be stranded populations in the
areas from which industry has moved away, or in the sections where soil or
natural resources have been exhausted.
I don 1 t want to paint a picture that is all blue, but I think the
time has come when it is vital that the people of this nation should face
the facts and start considering what they want to do about them.
With
wisdom and foresight, the problem can be solved in a way that will hurt
nobody and will bring to the people as a whole the greatest era of health
and prosperity and happiness ever attained in any nation.
But it can be done only if Government works with business and
business works with Government toward a common end.
We cannot produce more
and more goods to employ our peo,le, unless ~e maintain the purchasing
power ~f these same people to buy the goods produced.
As we progress
along the line of industrialization, the problem becomes more and more
complex.
Fractice hRs shown us that the larger the industrial unit,
the less secure are the jobs of those who work in it.
price.
Monopoly controls
When price is not flexible and does not ri.rop to meet depressed
conditions the only alternative is wholesale dropping of production and,
therefore, of workers.
By the same token the greRtest industries produce
durable capital goods and durable consumers' goods such as radios, automobiles and electrical appliances.
As we progress industrially, more and
more labor is involved in the production of these durable goods,
when a crisis comes these are things we can do without.
but we can do it.
But
It is not pleasant,
The result is that these industries suffer heavy d'e clines
in production and throw increasingly large numbers of workmen into idleness.
And business itself can not do without the dollars which these workers spend
as consumers, but which they cannot spend when they are idle,
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Here are some examples of how fixed prices cau~e greater unemployment
than flexible prices.
Agricultural implements, motor vehicles an1 iron and
$teel are centralized industries which were able to control prices pretty
well.
The pri9e of agricultural implements dropped only 6% and as a result
production of these implements 1ropped BO%.
}rices of motor vehicles iropped
only 16% and here again their production went down 806/o.
Iron and steel prices
dropped only 20% with the result that production fell 83%.
In each of these
three industries far more than half of the total ,111orkers lost their jobs•
On the other hand, the prices of textiles, petroleum and farm products dropped
heavily to meet the reduced national income, with the result that their production and their workers suffered less.
production iropped only 14%.
off only 20%.
Textile prices dropped 49% ani their
Fetroleu.m went down 56% with production falling
The prices of farm products fell 63% so that their production
was off only 6%.
You can see that the necessary reductions in labor in these
industries were, therefore, much smaller.
I would not presume to detail the things that business and industry
can do of themselves to help work out the American answer, except to plead
that the key to it is the American worker.
His job must be as stable as
possible, his hours short enough to let others also have jobs, and his buying
power must be high.
The Government can do a great many things.
It can take the lead in
such security measures as unemployment insurance Pni aid for 1ependent children.
It can keep children out of the mills and sweat shops and help young people
to stay in school, out of the labor market.
The iiea of helping stud.ents to stay in school, so that they may
become better fitted for economic competition, should be continuei.
In fact,
we must cut into the labor supply at each end--keeping youngsters out of it
while they study, and also lowering the minimum age at which the veterans may
retire on old age pensions or insurance.
tempo.
Modern industry demands a higher
Why should not the work-period be shorter?
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The Government can strengthen public employm ent offices, an1 urge
priva te business to use them.
It can aid in fostering low-cost housing.
It can
attack the a ppalling health cond.it ions now widespread, particularly in rural
areas.
It can explore the desirability of health and disability insurance,
It
can appeal to the States to act auickly m1i. effectively on social security
provisions.
Finally, the Federal Gov ernment can continue to provide a program of
public works like the WfA for employable workers who cannot find jobs.
Laudable
as unemployment insura."'1.ce is, it only covers about half the workers, excluding
agriculture.
Its compensation period of 10 to 14 weeks will protect many from
job to job, but there will be many others whose unemployment periods will be
much longer.
We have always had a lahor reserve, perhaps becau se American business
demands it.
If so, this reserve may need to be larger as our industrial
structure becomes more complex.
In the first thirty yeRTs of this century,
this labor surplus was maintained in a meagre, pitiful way by private charity
and local public relief.
Industry paid the bill for this charity bec~use it
needed the reserve, but the workers thems elves paid the dearest price of all,
i n degradat i on and misery.
American i niustry, the most eff i c ient in t he
world along technical lines, was inefficient i n maintai ning its labor reserve.
It was willing to keep its machines well-oil ed and cared for even when they were
idle.
But it didn't see the ne ed for keeping its workers from going rusty.
"They also serve who only stand and wait."
In recent yeRTs it became a v ery tragic line.
That is a classic line.
The workmen who wait so that
industry can be served in its busiest periods have done more than their share
of the service.
They do not want to stand and wait, they want to work.
have had work under the WfA and they like it.
You are the city executives who
planned and sponsored the public improvements they have built.
money to help carry these improvements through,
in direct contact with this frogram.
They
You put up local
You have been in the front line.
You have declared that you like it and
want it continu ed,
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In such a plan the Government simply recognizes the p roblem, puts
it on a scientific basis and asks business to contribute--not hit-or-miss,
but on the tax ba sis of ability to pay.
The Government gives work to this
surplus labor, maintaining its skill and its self-respect.
insurance of reserve labor when it is needed.
This is industry's
The more labor which industry
absorbs within itself, the less its taxes will be--just as when you reduce an
accident risk or a fire risk, your insura.nce premiums are reduced.
I believe
industry is beginning to understand that these steps are as much in its interest
as in anyone's interest.
You may not know it, but in many sections of this country we literally
kept many indus trial organizations togethe r when they were not operating more
than a day in every week or two.
In those terrible times we employed. their
workers on Federal work projects so that they could live.
Thus we were in-
directly helping industry, for it was able to reach out for its traine d men
when the demand returned.
Large numbers of other skilled workers are leaving
the rolls of WPA to take private jobs everywhere.
Isn't it a terrible indictment of our way of doing things that there
are still millions of unemployed, and yet i<Je a re hearing repeated forecasts of
a serious shortage in skilled labor?
promptly?
Isn't th.9.t something to be worked on
Because the pa.ralyzed market
crafts, we did not train new craftsmen.
WRS
choked wi th i cUe men in the skilled
If such a shortage develops, ways must
be found to train men with the least possible delay.
For every possible job
is going to count, and every key po sition which goes unfilled will also leave
unfilled the numerous jobs for unskille1 peop le which generally supplement it.
This wholesale depert-i;.re of skilled workers from the WPA rolls, has,
I am sure, worriel those of you who "'ant us to do building-construction and
other similar projects.
I v1ant to remind you that four out of five WPA workers
have been unskilled or semi-skilled all along.
Yet they h:'1ve built parks and
roads and. 1.1Vater and. sewer lines and they can keep on building them indefinitely
without meeting the need.
Imp rovements of this type increase the actual dollar
value of all p roperty they touch.
This increases your local tax revenues, as
well as the liveability of your communities.
I believe you also will admit
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that the health, educational and recreational and cultural services of
our white-collar workers are reducing the costs of crime, and disease
and charity, and that they are raising the whole standard of American
living.
We must not lose sight of the fact that the WPA's job is to
create jobs -- useful jobs, of course, but jobs for people who can't
find work.
That must remain our concern, ahead of anything else.
Let me take up again for a moment some of the misunderstood
points about unemployment and its relation to the WPA.
Many people
still don't understand the fundamentals of this thing.
They are still
saying:
first, that the WPA is robbing the labor market, because workers
on our projects refuse to leave them even when offered private jobs.
Second, they say the administration's program is unsatisfactory because
there are still from eight to eleven million unemployed.
And third, they
charge that with the rapid pick-up in business, relief rolls have not
dropped as rapidly as they should.
These allegations illustrnte clearly
the welter of confusion which exists between the terms
and
11
11
unen;ployment"
relief 11 •
Unemployment and relief are en ti rely different things.
includes the unen:ployables.
Relief
The two r:roups rep resent different problems.
We have the facts about all the people who have been touched by any
public relief program--dole or work, Federal, State or local.
But all
of the relief programs never cared for anywhere near all of the unemployed.
of them.
Probably no form of public aid. ever reached more than half
The other half are the people who lost their jobs, but still
managed to fight their way through because they hAd savings they could
use, or relatives or friends who would help them.
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It is generally agreed that there are from eight to eleven million
unemnl oyed.
The WPA now employs only about 2,500,000.
Manifestly it is
ridicul ous to charge that the tail is wagging the dog.
There is another angle to this also, that ought to be ans werable
solely by plain horse sense.
fifty dollars a month.
allowable earnings.
The averag e eornint;s of a WPA worker are
His hours are lirni ted so that he crmnot exceed the
I ask you, is it reasonable to supDose that an American
worker who is the head of a family will reject desirable private employment
to remain in such a situation?
The answer, as we have found in investi-
gating thousands of cases, is that if there actually was a job--which in
many instances there was not--there was something wrong with it--sub-standard
wages, or the kick-back, or some other unreasonable requirement.
This brings us to the question of why we must have continuing
work-relief with industry booming at its present level.
Here again appears the confusion between unemployment and relief.
Leaving out those victims of depression who were unable to work because they
were too old or sick or handicapped, there were two distinct kinds of unemployed workers--those on relief and those not on relief.
peonle not on relief were the stronger.
came.
Obvi ously the
They had fared best when the crash
Either they had accumulated savings, or their relatives had accumu-
lated savings, or they had not been fired until after the others.
They were
the people industry was most reluctant to discharge, and those whom it discharged last.
By- the same reasoning, it took them back first.
All through
the neriod during which industry was getting under way again, these people
who never had been on relief were getting the bulk of the new jobs.
More-
over, a vast number of workers who never had been actually unemnloyed, but
who had. been reduced to part-time status, were recovering their full-time
work and pay.
Obviously when these non-relief unemployed returned to work or
when these part-time workers returned to full-time activity there was no reduction in the relief load.
When, on the other hand, one of them exhausted
his resources and was forced to go on relief, the relief burden was increased.
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A year or two ago, this out l ook was very discouraging.
it is vastly bett er.
peak--noss ibly 40%,
ally.
Today
Unempl oyment has dronped at lea s t one-third from its
At the same ti me t he relief load has dropped substanti-
In Augu st it 'Nas neA-rly 23% below the peak.
relief has pretty well paralleled unemployment.
For about two years,
Now it is dropping, almost
in the same ratio as unemployment; 417,000 heads of families and single
uersons have left the rolls in one year, and it is apparent that industry
is now reaching substantially into the relief group for labor.
I hope that in my eagerness to tell the whole story I have not
been too discouraging.
lick this thing.
business.
I am not discouraged, or even doubtful.
We need the help of business.
We can
We have no hostility toward
Those who say we have are doing a disservice, not only to business
and to us, but to the whole country.
business and business men.
Many business men are.
We have learned to distinguish between
Busi ness of itself is not altru istic in nature.
Som etim e s compe titive indus try may compel tusiness to do
certain things 8.gainst the public interest which many business men are hoping
that with government aid they will not have to do.
There are plenty of business men who r ealiz e that when milli on s
are in actual need it is stupid for the top one -t 0nth of one per cent of
the people to be ge tting as much income as the entire b ottom forty pe r cent.
It is as stupid as it was in the days of Loui s the Sixteenth when Marie
Antoinette said:
11
If they have no bread , l et them eat cake . 11
For the very life of busi ness, the mass of people must be able t o
buy, for mass p roduc tion is the heart of the syst em .
Wi th all this talk
about taking care of the unemployed, what is goi ng t o take care of the unemployed. empl oyer?
No thing except the consumer's dollar.
Tbe:re has been a. tendency to accuse the unemployed of being unpatriotic, of trying to ge t s omething for nothing.
What can the worker with-
out a job say to the landl ord when he comes to co llect the rent?
11
You be pat ri otic and don 't evi ct me? 11
Cari he say:
What can he say to t he milkman?
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he say:
11
I can 1 t afford to lmy milk for my babies so you be pat ri otic and
give it to them? 11
What can he say to the docto r when t he re i s de sperate
illness in his home?
Can he say:
11
You be pat ri otic anc. waive the bill"?
What we have been doing is putting the burden on the unemployed .
We have t old them to be pP triotic and to submit meekly to wtateve r comes,
taking what little is offered, let tine their humility pr ove, by some
strange yardstick, the mP.asure of their l oyal ty to the country.
In a word, we have asked them to be better citizens than their
landlords.
And unless we intend to ask ') th:ors to help them in something
like the way I have outlined, we must create a situation in which they are
able to pay their way.
The country is coming out of this d.epression.
It l ooks forward
confidently to a period of business activity and p r osperity.
The national
income is the best criterion of general economic well being, for it rep resents the money value put on all the goods and services p ro duced thro ugh
the joint efforts of labor, management and ca.p i t.al.
Adequate r ecove ry cannot be attained until the national income
exceeds that of 1929 by at l east 20;1.
income to that l evel?
But why should we limit our national
The re should be no limi t on our efforts to rais e
the general economic level of the American peonle.
Certainly we have no
ri ght to talk in t erms of any set figures until our neople are adequately
housed, properly clothed , fed with proper regard to nutrition, and educated
with a view to releasing their latent abilities.
When we emphasize only the fact that eight or ten million people
are still unemployed, we admit a defeatist attitude toward our nati onal
destiny.
That is another way of saying that we do not know how to util ize
their brains and brawn to produce the goods and services our people eagerly
demand.
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Unemployment has an economic as well as a human asp ect.
Beyond
what we owe to the unemp loyed, we owe it to our national economy to make
the maximum use of the energies which millions of unemployed are now
compelled. to waste.
The American nation cannot go for ward to the heights of economic
well-being on which it has a rignt to live unless its man-power is used.
The conservation of our human resources should be our guiding principle.
It is of greater importance, even, than t:1e conservation of our physical
resources.
Indeed, the former will automatica.lly include the latter.
We in the w~A r ecogniz e that it is not enough merely to provide
the able bodied unemployed with jobs at security wages.
emergency phase of our task.
reconstruction phase.
That is the
Now it is passing, and we move into the
Our aim will be to supply to industry as many
physically strong, mentally alert, skilled workers as we can.
We believe
that will prove to be one of the most effective ways of reducing the relief
rolls to a minimum.
We know from experience that the skilled man has a
much better chance of holding his job when business turns downward than
the unskilled man.
Increasing the skill of those nmv on relief would not
only be a service to them but a service to the na.tion by increasing its
productive power.
We ought to be able to go steAd.ily forward to an ever-rising
standard. of living, but in the meantim8 we must be realistic about it.
The
Federal Government cannot r9fuse responsibility for providing jobs to those
whom private industry does not hire.
I am sure America will win this fight where other nations have
failed.
It will win because it has the brains and the wealth and the
leadership.
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