Unemployment-A By-Product of Prosperity

UNEMPLOYMENT no longer finds its cure in pros-perity. Not only is there surplus labor in over-developed industries -like coal -mining, but more and more man, power is being released by technical im-provements in production. A new problem in industry has arisen: What is to be done with the labor dis-pensed with by better methods and more highly de-veloped equipment? Are luxury industries the logical outlet for our new unemployed? There has been a marked decline in employment in the manufacturing industries during 1927. Its extent is shown by the Bureau of Labor Statistics index, which receded from a high of 91.4 in March to 87.3 in October, with an estimated figure of approximately 85 in De-cember. This was a drop between the high and low points in the year of about 7 per cent, which means roughly that at the close of 1927 there were approxi-mately 600,000 fewer persons employed in manufac-turing industries than in March -of 1927, and upward of 400,000 less than in December, 1926. Does this de-cline reflect a swing toward industrial depression? Paradoxically it does not; the cause of unemployment at this time does not lie in a lack of prosperity, but rather is largely traceable to prosperity. Capital has been abundant and has gone back into production in the form of great increases in mechanization and new processing. Management is more than ever on the alert to improve methods, as well as to cut costs through reduction of personnel. Properly applied incentives and employee cooperation also have increased produc-tion per man. A new phenomenon in the industrial world-technological unemployment-is the result. Of course, there are added to those unemployed be-cause of the reasons just considered those affected by the coal strike, the period of shutdown at the Ford plants, and the reduction in expenditures by railroads and public utilities. This whole situation suggests that the problem of unemployment is not entirely solved by ironing out seasonal variations or by achieving business prosperity.