Automation and Jobs

June 3, 1959

Report Outline
Automation in Factories and Offices
Automation and Employment Changes
New Job Openings and Organized Labor

Automation in Factories and Offices

Current Lag in Employment; Job Outlook

The Decline of unemployment, though substantial in recent months, has lagged far behind the rise in business activity that has been under way since the 1957–58 recession touched bottom in the spring of last year. Industrial production, business profits, personal income, and retail sales all have climbed to record highs. The nation's total output of goods and services reached an annual rate of $467 billion in the first quarter of 1959—well above the pre-recession record rate of $446 billion in the third quarter of 1957. For the first time in two years, the word “boom” has started to appear in the writings of economic analysts. Yet the number of people out of work is considerably larger today than it was on the eve of the recession in the summer of 1957.

It has become normal for employment to increase and unemployment to drop more slowly than business improves in a period of general recovery. The lag is accounted for by the fact that efforts by management to cut costs and trim waste when sales are poor do not ordinarily show up in the form of increased labor productivity while output remains low. As a rule, it is only when a revival of demand has led to increased production that technological improvements and cost-conscious policies initiated during the downturn begin to pay off. Ewan Clague, Commissioner of Labor Statistics, told the Joint Economic Committee, Jan. 29: “Our experience during the postwar period has been that the first full year of recovery after a recession has usually shown a higher-than-average increase in output per manhour.”

Unemployment totals, adjusted for seasonal factors, will probably remain substantial throughout 1959—not only because of a spurt in productivity that may exceed 6 per cent for the year (twice the postwar average), but also because the labor force tends to grow faster when job opportunities are expanding. Of greater concern is the possibility that the nation may have to face an unemployment problem for some years to come.

ISSUE TRACKER for Related Reports
Automation of Industry
Oct. 23, 1963  Cushioning of Automation
Jun. 03, 1959  Automation and Jobs
Jan. 05, 1955  Automation of Industry
BROWSE RELATED TOPICS:
Data and Statistics
Unemployment and Employment Programs
Unions and Labor-Management Relations