Defenses Against Unemployment

Report Outline
Business Activity and the Labor Market
Proposals to Strengthen Unemployment Insurance
Financing the Unemployment Insurance System
Secondary Defenses Against Unemployment
Special Focus

Business Activity and the Labor Market

Resent Decline from Full Employment of 1948

Business and government economists appear to agree that the peak of the postwar boom has passed; that economic activity in 1949 will fall below that of last year but will remain far above prewar. The current decline in business activity, which began in the late autumn of 1948, has again raised the spectre of serious unemployment, although nothing to date suggests an early recurrence of the unemployment crises of the 1930's.

The total number of persons out of jobs rose from 1,831,000 in November to 2,664,000 in January, according to Census Bureau estimates. The number without employment in November 1947 was 1,621,000 and in January of last year, 2,065,000. The mid-winter decline of 1948–49 has been somewhat more than seasonal and there has been a considerable increase in part-time employment. Ewan Clague, Commissioner of Labor Statistics, said Feb. 18 that “a good guess” on the number of persons out of work in mid-February would be 3,000,000. He added that the situation would not call for emergency action until between 4,000,000 and 5,000,000 had lost their jobs and remained jobless for some time.

Workers receiving unemployment compensation in mid-February numbered 1,784,000, a figure three-fourths above that registered in February 1948. Although initial claims for benefits during the first six weeks of 1949 exceeded 2,000,000, the number of continuing claims rose only 360,000 during this period, indicating that many workers were finding new jobs. That the present extent of unemployment is due in part to an increase in the labor force is shown by the fact that total employment remains above that of last year. The Census Bureau estimates that 59 million civilians had jobs in mid-December 1948, as compared with 58 million in December 1947. The January figure was 57.4 million, compared with 57.1 million in January 1948.